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.
After the quarter ended March 31, 2016, the Company received approximately $3,061,000 in proceeds from the continued liquidation of certain assets serving as collateral for various
impaired credits, which will be recorded as a recovery in the second quarter of 2016.
The bank's diverse and strong loan book with no write-offs and
impaired credits making 1.07% of total loans, as well as its solid capital and its "position as a lender in its borrowing member countries (BMCs)" are supportive of its credit profile, S&P said.
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 last year.
"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.Aa
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 in 2009.
JAB had achieved relative success in resolving
impaired credits in the past through effective remedial measures.
