24.May .2022 18:00

Fitch Rating Affirms Basisbank’s Credit Rating at B+

Fitch Rating Affirms Basisbank’s Credit Rating at B+
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Fitch Rating has affirmed JSC Basisbank's (Basis) Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook and Viability Rating (VR) at 'b+'.

According to Fitch, the core driver for affirming positive rating is Bank’s consistent, reasonable and sustainable growth.

Fitch focused on positive drivers, which ultimately ensure Bank’s strong financial and credit standing. Those positive drivers included, both elements pertaining operating environment, in particular, increase of 2022 GDP growth forecast from 3.2% to 5.8% (Fitch), and the results of the consistent and sustainable expansion policy, implemented by the Bank:

•Operating Profit recovered to 2.3% of regulatory risk-weighted assets (RWAs) from 1.7% and almost returned to the pre-pandemic mark – 2.9%;

•Pandemic 7.5% mark of Stage 3 loans were reduced to 4.7% by the YE 2021, followed by further improvement to the 3.4% in Q12022;

•Following the expansion of the franchise early in first quarter of the year, YE2021 assets market standing of 3.0% exploded by as much as 50% up to 4.5%. In addition, the share of retail portfolio in GLP also increased.

Economic environment remains the key risk factor. Operating environment in Georgia is sensitive towards external shocks, which increases pressure on banking sector.