Russian rating agency RAEX (Expert RA) has affirmed ForBank's creditworthiness rating at A (high level of creditworthiness), with a stable outlook, RAEX said in a press release.
The bank's rating is backed by decent coverage of the credit portfolio (as of July 1, 2016 the bank's credit portfolio coverage ratio was 541%, excluding inter-bank loans granted and including collateral of securities, sureties and guarantees; and 130% taking no account of these components) and acceptable liquidity indicators (N2 equaled 59%, the ratio between high-liquidity assets and borrowed funds came in at 22.3%, and N3 was equal to 81% as of July 1, 2016).
"The rating is adversely affected, to a large extent, by unprofitable operations (from July 1, 2015 through July 1, 2016 ROE, excluding income from gratuitous aid, equaled negative 28.5%, and -37.5% taking no count of financial aid and a change in loan loss provisions) and, as a consequence, a reduction in the capital adequacy ratio (from the beginning of 2016 until July 1, 2016 N1.0 fell from 14.3% to 10.5%)," the press release runs.
The rating agency's analysts believe that the reason behind sustained losses is the bank's low operating efficiency. However, RAEX experts noted that it tended to improve (net interest income and net commission income covered 88.1% of operating costs in 2Q 2016 compared to 45.4% in 2Q 2015) as net interest margin jumped substantially.
