Global turmoil in the financial markets of Ukraine and the world placed the domestic banks in the fight for survival mode. Korrespondent and Dragon Capital investment company determined 30 most reliable institutions on the banking sector.
Anastasiya Tuyukova, Chief Analyst at Dragon Capital, names four main groups presented in the recently compiled rankings: state-owned banks, financial institutions with European capital, Russian banks and almost half of the list – Ukrainian, which are owned by large industrial groups. The institutions in the rankings altogether account for 80% of the domestic deposit market. Of each 10 hryvnias deposited with a bank, 8 hryvnias were entrusted by customers to 30 banks recognised in the rankings as most reliable ones.
Tuyukova chooses the bank with extraordinary precision. Her methodology formed the basis for the rankings compilation. The first strength criterion – capital adequacy, i.e. the ability of the bank to compensate from its own resources, for instance, non-performing loans. The NBU set the minimum capital adequacy ratio at the level of 10%.
“The higher the ratio, the better,” explains Tuyukova and adds that these data can be always found in the quarterly financial statements. The second criterion – liquidity cushion. It includes the readily available own resources – cash in hand, correspondent accounts, investments in government bonds that enable the financial institution to fulfil its most risky obligations.
The third reliability ensuring criterion – strong parent company of a foreign origin or wealthy owners. The fourth safety anchor – ratio of loans to deposits. And if the volume of loans is well above the deposits, it is not very good for the bank’s image as a reliable partner. The expert is very laconic about the fifth criterion: it is the way the bank makes money in. Tuyukova’s advice is to see, if the bank is profitable, if it goes in extremes in lending. Concentration of borrowed funds in one business area, for instance, metallurgy or agricultural business, creates the dependence on price fluctuations in international markets.
Almost half of the banks included in the rankings of the most reliable banks of Ukraine are domestic commercial financial institutions. There are 14 of them out of 30 possible.
FUIB is No 15 in the rankings of “30 Most Reliable Institutions in the Banking Sector” compiled by Korrespondent.
Source: “Korrespondent” weekly, issue No 48 dd. 07.12.12.
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