Although impaired credits
grew further in Q1-Q3 2017 following an increase in the previous year, the NPL to gross loans ratio remained at a satisfactory level - albeit higher than the peer group average - while LLRs continued to provide more than full cover.
The bank's diverse and strong loan book with no write-offs and impaired credits
This is in view of the challenges associated with restoring net profitability to a solid footing following sustained net losses and the increase in impaired credits
Moody's understands that the impaired credits
include some of the bank's largest customers and relate to both domestic and regional high-profile corporate defaults," he said, adding that a decline in asset quality would continue in 2010.
So far, the noted increase in NPLs seen in FY17 mainly related to the translation of foreign currency (mostly $) denominated impaired credits
, and to a lesser extent newly classified accounts.
The agency also cut to BBB+ the lender's financial strength rating (FSR), in view of the challenges associated with restoring net profitability to a solid footing following sustained net losses and the increase in impaired credits
JAB had achieved relative success in resolving impaired credits
in the past through effective remedial measures.
Although asset quality remains weak as evidenced by a higher than sector average NPL ratio, impaired credits
started to decline in the final quarter of FY 2012, due to write-offs.