FIMBank highlights affirmed Fitch rating at ‘BB’

22.02.2012

FIMBank Group President Margrith Lutschg-Emmenegger has expressed her satisfaction at Fitch Ratings re-affirming FIMBank’s Long-term Issuer Default (IDR) at 'BB', particularly in the light of the fact that many leading banks are being downgraded. She stated that “considering the current deterioration in the global economic performance and the negative impact this has had on the rating of several financial institutions, I am pleased that we have successfully avoided such a scenario.” Ms Lutschg-Emmenegger was reacting to the recent announcement by Fitch whereby the agency affirmed FIMBank’s rating at ‘BB’ while placing the outlook from ‘Stable’ to ‘Negative’.

The Bank’s President explained that difficult conditions in some of the markets where FIMBank operates have caused a reduction in net commission income. This was being compensated by income emanating from its forfaiting business, which had experienced a steady increase in momentum. FIMBank’s President highlighted the fact that: “Despite challenging market conditions, including the political turmoil in some of our core markets, retaining our Fitch rating further validates the business model which we have been adopting successfully over the years.”

Meanwhile, with regard to the revision of Fitch’s outlook to ‘Negative’, where the agency showed concern over the Bank’s tightening capital ratios over the past two years, Ms Lutschg-Emmenegger explained that this was the result of business expansion, growth in factoring business and the introduction of new factoring joint ventures: “FIMBank is building a network of international factoring joint ventures with reputable partners in emerging markets. The investment made in emerging markets such as India and Brazil, will not only ensure diversification in terms of markets for the Group but will also give these the potential to develop to the extent that they will fund our continued growth.”

The Bank’s President explained that apart from remaining prudent, adopting a vigilant risk management approach FIMBank is also determined to maintain a sound core capital: “It is critical to ensure the continuing growth of the Group, maintain adequate  capital ratios and in the coming months seek ways to further strengthen our capital base. In the meantime the Group has continued to manage its balance sheet in a prudent manner and enjoys healthy capital and liquidity ratios.”

---