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IBI-Rating has affirmed the rating of bank deposit reliability of "FIRST INVESTMENT BANK" PJSC at grade 4+
07.10.2015IBI-Rating informs on the affirmation of the rating of bank deposit reliability of "FIRST INVESTMENT BANK" PJSC at grade 4+ (high reliability). The rating of bank deposit reliability at grade 4+ indicates that the financial institution is reliable, pays timely its obligations within the requirements established by the current legislation of Ukraine, including those of the National Bank of Ukraine. The likelihood of problems with a timely return of deposits is low, although there is a certain dependence of the financial institution on the impact of external and internal factors. The impact assessment of external factors does not apply to the situations involving force majeure circumstances.
The affirmed rating of "FIRST INVESTMENT BANK" PJSC is due to its maintaining of an adequate level of capitalization, as evidenced by the sufficient actual value of the capital adequacy ratio. It is worth noting that the amount of both own and regulatory capital is reduced by the amount of losses of both the past and current years. At the same time, the amount of regulatory capital meets the regulator’s requirements, however, it only partially covers the risks assumed. The Bank adheres to regulatory requirements, meets its obligations to creditors in a timely manner and in full, but the available concentration of the resource base by major creditors increases the Bank’s vulnerability to liquidity risk. It should be noted that during the analyzed period, the quality of the granted loans has been gradually deteriorating, resulting in an increase in overdue debts, but their share in the customer loan portfolio remains low.
At the same time, the vulnerability of the financial institution to the credit risk may increase as a result of the existing concentration of the customer loan portfolio by major borrowers. The amounts due to customers remain the main component of the resource base. At the same time, during the analyzed period, there have been changes in the structure of the amounts due to customers, due to the outflow of funds of individuals, which were offset by attracting funds of business entities mainly in the form of deposits, but the Bank has retained the status of a savings bank. In addition, the impact on sensitivity to financial risks may increase as a result of the persistence of negative trends in the economy and reduced solvency of borrowers.
The Rating agency «IBI-Rating» did not reveal any significant complaints from the customers to the Bank’s operations. According to the results of the operations in January - September 2015 the Bank’s activity was not profitable, and the Bank's performance indicators remained at a low level. However, in the opionion of the Rating Agency, if required, the Bank can count on the support of the owners.
A positive impact on the rating of bank deposit reliability may have the following: improved quality of assets and reduced dependence on the financial condition of the Bank's major borrowers, reduced concentration of the resource base by creditors, as well as the implementation of the main directions of the Bank’s development strategy. A negative impact on the rating of bank deposit reliability may have the following: deterioration of the Bank’s solvency (liquidity), the growth of credit risk due to deterioration in servicing of the granted loans, increased vulnerability of the Bank to market risks, maintaining low performance indicators and loss-making operations, as well as the deterioration of the political and economic situation in the country.
In order to carry out the analytical research the materials provided by "FIRST INVESTMENT BANK" PJSC were used, including the annual financial statements for the period 2011-2014 and January - September 2015, other necessary internal information as well as the information from 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 affirmed rating of "FIRST INVESTMENT BANK" PJSC is due to its maintaining of an adequate level of capitalization, as evidenced by the sufficient actual value of the capital adequacy ratio. It is worth noting that the amount of both own and regulatory capital is reduced by the amount of losses of both the past and current years. At the same time, the amount of regulatory capital meets the regulator’s requirements, however, it only partially covers the risks assumed. The Bank adheres to regulatory requirements, meets its obligations to creditors in a timely manner and in full, but the available concentration of the resource base by major creditors increases the Bank’s vulnerability to liquidity risk. It should be noted that during the analyzed period, the quality of the granted loans has been gradually deteriorating, resulting in an increase in overdue debts, but their share in the customer loan portfolio remains low.
At the same time, the vulnerability of the financial institution to the credit risk may increase as a result of the existing concentration of the customer loan portfolio by major borrowers. The amounts due to customers remain the main component of the resource base. At the same time, during the analyzed period, there have been changes in the structure of the amounts due to customers, due to the outflow of funds of individuals, which were offset by attracting funds of business entities mainly in the form of deposits, but the Bank has retained the status of a savings bank. In addition, the impact on sensitivity to financial risks may increase as a result of the persistence of negative trends in the economy and reduced solvency of borrowers.
The Rating agency «IBI-Rating» did not reveal any significant complaints from the customers to the Bank’s operations. According to the results of the operations in January - September 2015 the Bank’s activity was not profitable, and the Bank's performance indicators remained at a low level. However, in the opionion of the Rating Agency, if required, the Bank can count on the support of the owners.
A positive impact on the rating of bank deposit reliability may have the following: improved quality of assets and reduced dependence on the financial condition of the Bank's major borrowers, reduced concentration of the resource base by creditors, as well as the implementation of the main directions of the Bank’s development strategy. A negative impact on the rating of bank deposit reliability may have the following: deterioration of the Bank’s solvency (liquidity), the growth of credit risk due to deterioration in servicing of the granted loans, increased vulnerability of the Bank to market risks, maintaining low performance indicators and loss-making operations, as well as the deterioration of the political and economic situation in the country.
In order to carry out the analytical research the materials provided by "FIRST INVESTMENT BANK" PJSC were used, including the annual financial statements for the period 2011-2014 and January - September 2015, other necessary internal information as well as the information from 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