Why is this important
Fitch assessment is a key benchmark for investors and regulators, especially in a highly competitive environment and with increasing oversight of the banking sector.
What happened
- IDR Universal Bank was confirmed at B-, Viability Rating at b-.
Fitch warns:
- the bank is sensitive to the deterioration of asset quality,
- overdue payments may increase to 4% within 2 years,
- 10% of the portfolio — loans to affiliated persons, which creates risks of underestimating the exposure,
- Core Capital decreased to 16.8%, remaining above the regulatory minimum.
What’s positive:
- Moderate delay rate — 2% (Stage 3), coverage — 100%.
- ROAE — high: 27%, due to the share of commission income (57%).
- Moderate dollarization of the portfolio — 18% versus 42% for the sector.
- Liquidity is high — 30% of assets in liquid instruments, covering 50% of deposits.
Context
Universal Bank is a small player, with a market share of less than 1%. Focus on SMEs and retail, while risk concentration remains high.
There is potential for improving the rating, but with increased transparency and a decrease in the share of affiliated loans.
