Reserve coverage of NPLs had fallen to 39% at end H112 from

Canada Goose Outlet Fitch cuts FIBank VR rtg Canada Goose Outlet

canada goose clearance sale (The following statement was released by the rating agency) canada goose clearance sale

canada goose clearance Sept. 18 Fitch Ratings has affirmed First Investment Bank AD (FIBank) Long term Issuer Default Rating (IDR) at with a Stable Outlook. At the canada goose coats on sale same time, Fitch has downgraded FIBank Viability Rating (VR) to from A full canada goose store list of rating actions is at the end of this comment. FIBank market shares in assets, canada goose uk shop especially corporate loans, and retail deposits continue Canada Goose Outlet to increase. At Canada Goose Coats On Sale end H112, FIBank was the fourth largest bank in Bulgaria with an 8% market share in total assets, and the second largest retail deposit taker with a 14% market share. Canada Goose online The agency views favourably the country low government debt (Fitch forecasts this to stand at 18.5% of GDP at end 2012), significant available fiscal reserves (6.8% of GDP at end May 2012) and the relatively small size of FIBank balance sheet (total assets at 7.6% of GDP at end 2011). In addition, 83% of buy canada goose jacket these uninsured liabilities are customer deposits, which Fitch understands have been placed primarily by domestic clients. The ratings could be downgraded in case of any prolonged delay in providing assistance, should this be clearly needed, or if the Bulgarian sovereign ratings canada goose are downgraded. A marked change in canada goose factory sale FIBank liability structure to include more wholesale funding uk canada goose could also increase uncertainty with respect to support and result in a downgrade. An upgrade of FIBank ratings is unlikely in the foreseeable future. RATING ACTION RATIONALE AND DRIVERS: VR The downgrade of the VR to reflects further deterioration canada goose coats in reported asset quality, and weaker reserve coverage and buy canada goose jacket cheap therefore capitalisation. The VR Canada Goose sale considers weaknesses in corporate Canada Goose Parka governance, weak underlying asset quality, potentially high related party and relationship uk canada goose outlet lending, high loan concentrations and weak performance. Canada Goose Jackets However, the VR also considers FIBank broad and to date stable deposit base. The reported regulatory non performing (NPL) ratio, which incorporates 90 days overdue and loss loans, increased to 8% at canada goose coats end H112 canada goose uk black friday compared to 5.8% at end 2011 and 4.2% at end 2010. This ratio was still notably lower than for the banking system as a whole (16.9% at end H112). However, in Fitch view, FIBank underlying asset quality may be significantly weaker. Watch loans (overdue by 30 90 days) are a quite stable 7% 9% of the portfolio (7.4% at end H112) and Fitch calculates interest accrued but not received in cash as 11% of total canada goose uk outlet interest income in H112. Furthermore, the ratio of renegotiated and restructured loans to total loans is high, although some restructured loans may already be classified as NPLs and some renegotiations may not cheap Canada Goose necessarily reflect a deterioration in loan quality. In Fitch view, FIBank loan book is highly concentrated, with exposures to the largest 20 borrowers equal to 3.4x Fitch core capital (FCC) at end H112. Amortisation of these loans is very limited, and some borrowers have been granted cheap canada goose uk additional facilities, further increasing concentrations. Within the largest borrowers, Canada Goose Online there are already some signs of deterioration, with some exposures showing delays in repayment and others classified in categories lower than Three loans, EUR55m each, granted for the acquisition of a metals plant in Q211 equated to canada goose clearance sale 71% of the bank equity at end H111. This remains a concern for Fitch. In Fitch view, the risk of related party and relationship lending is high, given the two founding shareholders interest in capital intensive projects in the tourist industry, incomplete disclosure of the shareholder structure, and the quite high risk nature of some loan exposures. Reserve coverage of NPLs had fallen to 39% at end H112 from 67% at end 2010, with unreserved NPLs equal to 46% of equity (unreserved NPLs and watch loans together exceeded equity). Fitch is therefore concerned about the quality of capital, while the Tier 1 and total capital ratios, at 10.8% and 12.9% respectively, at end H112, were only slightly above the regulatory required and/or recommended minimums. Pre impairment profit is moderate, and net of accrued interest was negligible in H112, limiting the bank ability to strengthen its solvency through internal capital generation. The VR is supported by FIBank strong retail deposit franchise, the canadian goose jacket virtual absence of refinancing risk and the bank currently comfortable liquidity. At the same time, Fitch notes that the relatively high rates that FIBank has paid to date for its customer funding significantly constrain margins and canada goose clearance performance. Furthermore, a marked deterioration in asset quality could lead to greater instability in the deposit base. RATING SENSITIVITIES: VR The VR could be downgraded further in case of continued deterioration in FIBank loan performance and underlying asset quality, resulting in increased pressure on canada goose black friday sale the bank capitalisation. The VR could be upgraded if the bank is recapitalised. However, Fitch does not expect this given the absence of equity injections in recent years. (Reporting By Hilary Russ) canada goose clearance.

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