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IBI-Rating has affirmed rating of bank deposit reliability of "BANK FORWARD" PJSC at 5+
12.11.2015IBI-Rating informs on affirming of the rating of bank deposit reliability of "BANK FORWARD" PJSC at 5+ grade (excellent reliability).
The rating of bank deposit reliability at 5+ grade indicates that the financial institution is reliable, meets its obligations in a timely manner and within the requirements established by the current legislation of Ukraine, including those of the NBU, and has a good reputation. The bank is reliable with its vulnerability to adverse commercial, financial and economic factors being low. The probability of failure to return deposits is extremely low, as the financial institution is insensitive to adverse external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances.
The affirmed rating of "BANK FORWARD" PJSC is due to a sufficient level of capitalization of the financial institution, but the capital only partially covers the credit and investment risks that the Bank undertakes. At the same time, it is secured in full by the available real estate property owned by the Bank. However, according to IBI Rating, if necessary, the Bank can count on the owner’s support, as evidenced by the substantial amount of funds of the owner in the structure of the Bank’s liabilities. Over the analyzed six months a deterioration in loan quality was observed, which led to an increase in the overdue debt and channelling of a significant amount of funds for provisions for the granted loans. However, the customer loan portfolio remains well diversified by major borrowers.
Also, the impact on susceptibility to certain financial risks may increase as a result of negative tendencies in the economy and reduced solvency of borrowers, which is inter alias due the Bank operating in the riskier segment in the circumstances of the decline in real incomes of the population. Currently, the actual value of the Bank's liquidity ratios are at a sufficient level. "BANK FORWARD" PJSC meets its obligations to creditors in a timely manner and in full. Assets and liabilities are well balanced by the terms to maturity to 31 days. However, the realization of credit and market risks can exert pressure on the Bank's liquidity.
The owner’s funds and amounts due to customers remain the key component of the resource base. Amounts due to customers are formed mainly by the term deposits of private individuals, whose amount gradually reduces. However, the Bank’s resource base and the customer deposit portfolio remain well diversified by major lenders and depositors, respectively. The Rating agency «IBI Rating» did not reveal any significant complaints from customers to the Bank’s operations. During the analyzed period the Bank's activities were profitable. Performance indicators declined due to the large charges to provisions for reserves due to the deteriorating quality of the granted loans.
A positive impact on the credit ratings may have as follows: increased authorized capital, improved quality of the customer loan portfolio. A negative impact on the credit ratings may have as follows: worsening of the Bank’s solvency (liquidity); growth of credit risk due to continued deterioration in asset quality, increased vulnerability of the Bank to market risks, decline in performance indicators and unprofitable activities, as well as worsening of the political and economic situation in the country.
In order to carry out the analytical research the materials obtained from "BANK FORWARD" PJSC were used, including the annual financial statements for 2011-2014, and the first half of 2015, performance targets for the second half of 2015, other necessary internal information, as well as the information from the public sources which the Rating agency considers reliable.
Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
The rating of bank deposit reliability at 5+ grade indicates that the financial institution is reliable, meets its obligations in a timely manner and within the requirements established by the current legislation of Ukraine, including those of the NBU, and has a good reputation. The bank is reliable with its vulnerability to adverse commercial, financial and economic factors being low. The probability of failure to return deposits is extremely low, as the financial institution is insensitive to adverse external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances. The affirmed rating of "BANK FORWARD" PJSC is due to a sufficient level of capitalization of the financial institution, but the capital only partially covers the credit and investment risks that the Bank undertakes. At the same time, it is secured in full by the available real estate property owned by the Bank. However, according to IBI Rating, if necessary, the Bank can count on the owner’s support, as evidenced by the substantial amount of funds of the owner in the structure of the Bank’s liabilities. Over the analyzed six months a deterioration in loan quality was observed, which led to an increase in the overdue debt and channelling of a significant amount of funds for provisions for the granted loans. However, the customer loan portfolio remains well diversified by major borrowers.
Also, the impact on susceptibility to certain financial risks may increase as a result of negative tendencies in the economy and reduced solvency of borrowers, which is inter alias due the Bank operating in the riskier segment in the circumstances of the decline in real incomes of the population. Currently, the actual value of the Bank's liquidity ratios are at a sufficient level. "BANK FORWARD" PJSC meets its obligations to creditors in a timely manner and in full. Assets and liabilities are well balanced by the terms to maturity to 31 days. However, the realization of credit and market risks can exert pressure on the Bank's liquidity.
The owner’s funds and amounts due to customers remain the key component of the resource base. Amounts due to customers are formed mainly by the term deposits of private individuals, whose amount gradually reduces. However, the Bank’s resource base and the customer deposit portfolio remain well diversified by major lenders and depositors, respectively. The Rating agency «IBI Rating» did not reveal any significant complaints from customers to the Bank’s operations. During the analyzed period the Bank's activities were profitable. Performance indicators declined due to the large charges to provisions for reserves due to the deteriorating quality of the granted loans.
A positive impact on the credit ratings may have as follows: increased authorized capital, improved quality of the customer loan portfolio. A negative impact on the credit ratings may have as follows: worsening of the Bank’s solvency (liquidity); growth of credit risk due to continued deterioration in asset quality, increased vulnerability of the Bank to market risks, decline in performance indicators and unprofitable activities, as well as worsening of the political and economic situation in the country.
In order to carry out the analytical research the materials obtained from "BANK FORWARD" PJSC were used, including the annual financial statements for 2011-2014, and the first half of 2015, performance targets for the second half of 2015, other necessary internal information, as well as the information from the public sources which the Rating agency considers reliable.
Finance department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua