IBI-Rating has affirmed the credit rating of JSC «BANK FORWARD» at uaBBB+ grade, as well as the rating of the bank deposit reliability at «5» grade (excellent reliability)

The rating agency IBI-Rating informs on the affirming of the credit rating of JSC «BANK FORWARD» at uaBBB+ grade, the outlook is «evolving». The rating of bank deposit reliability has been affirmed at «5» grade (excellent reliability).

JSC «BANK FORWARD» carries out its activity in the direction of retail business. The bank pays special attention to the segments of consumer lending, card products and deposit programs for the population of Ukraine. At the beginning of 2019, the customer base had almost 830 thousand people. The institution is actively developing the provision of services to customers through remote servicing channels. The regional network of the bank covers all settlements with a population of more than 50 thousand and is represented by 18 branches and 50 mini-offices.

The liquid assets of JSC «BANK FORWARD» are maintained at a sufficient level and twice exceeds the obligation on demand. Due to the increase of authorized capital in the past year, the bank has a certain liquidity surplus - at the beginning of 2019, temporarily free funds amounting to UAH 120 million has been invested in NBU's deposit certificates. Assets and liabilities are matched to maturity fairly. Due to the additional contributions of the shareholder, the capitalization of the banking institution is maintained at an adequate level and complies with the requirements of the legislation. Additionally, regulatory capital is protected by real estate owned.

The negative financial result of the bank at the end of the year amounted to UAH 165.2 million, which is due to the formation of additional provisions for active operations. Administrative expenses are covered by net operating income by 85%. In turn, the augmentation of equity in the structure of liabilities should help improve performance in the future. Also, it should be noted, that separately since the moment of capitalization, the bank has been operating profitable, as evidenced by the growth of its own (from UAH 231 million as of August 1, 2018 to UAH 241 million as of January 1, 2019) and regulatory capital (from 237 UAH million as of August 1, 2018 to UAH 250 million as of January 1, 2019).

The affirming of the ratings of JSC «BANK FORWARD» is due to the presence of financial support from the owner, sufficient liquidity indicators, balance of assets and liabilities by maturity, and diversification of the client loan and deposit portfolios by major counterparties. In turn, it should be noted that the bank provides services in the high-risk segment of consumer lending, which, given the decline in real incomes of the population, increases the vulnerability to credit risk. Also, the Rating Agency notes the high sensitivity of the banking system to operational risks, due to the volatility of the legislative field, the difficult situation in the economy and the limited financial capacity of the population and enterprises in the real sector.

In order to conduct the analytical research the materials provided by JSC «BANK FORWARD» have been used, including: annual financial statements for 2016-2018 years, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Financial Department
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