IBI-Rating has upgraded the credit rating of JSC «BANK FORWARD» to uaA– grade

The rating agency IBI-Rating informs on upgrading of the credit rating of JSC «BANK FORWARD» to uaA– grade, the outlook is «stable». 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. As of the beginning of July 2019, the Bank's customer base had 568.1 thou. customers, including 562 thou. individuals. 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 thou. and is represented by 17 branches, 4 credit centers and more than 60 offices.

The liquid assets of JSC «BANK FORWARD» are maintained at a sufficient level and with a significant margin exceeds the obligation on demand. Due to the increase of authorized capital in the previous year, the bank has a certain liquidity surplus - at the beginning of July 2019, temporarily free funds amounted to UAH 100 mln has been invested in NBU's deposit certificates. The balance of assets and liabilities to maturity is maintained at an acceptable level. 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. Also, an increase in equity is facilitated by the institution's profitable current activity. Additionally, regulatory capital is protected by the owned of the real estate.

In contradistinction to the previous year, the activity of JSC «BANK FORWARD» in the first half of 2019 was profitable - profit for this period amounted to UAH 31.4 mln. A positive financial result was due by an increase of quantity of loans to private individual, sales of credit cards, sales points, development of remote channels for attracting and servicing customers and so forth. The ratio of administrative costs to revenue is gradually decreasing, which contributes to improved profitability - the performance ratio for the January-June 2019 period was amounted to 108.2% (against 85% for 2018).

The upgrading of the credit rating grade of JSC «BANK FORWARD» is due to sufficient capitalization indicators, improvement of performance indicators (which contributes to the increase of the financial result), sufficient liquidity indicators, acceptable balance of assets and liabilities by maturity, and diversification of client loans major counterparties. In turn, it should be noted that the bank provides services in the high-risk segment of consumer lending, which 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 and the first half of 2019, 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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