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FIMBank Ratings Downgraded by Fitch

24.04.2020

In a recent announcement issued by Fitch Ratings, FIMBank was one of the five trade finance banks which had its ratings reviewed. Fitch Ratings downgraded FIMBank’s ratings, an action reflecting heightened risks to the Bank’s credit profile as a result of the COVID-19 disruption on its operations.

FIMBank’s long-term Issuer Default Rating (‘’IDR’’) was downgraded to 'B+' from 'BB-', with a negative outlook, and its Viability Rating (‘‘VR’’) to 'B+' from 'BB-'. At the same time, Fitch has confirmed FIMBank’s short-term IDR at 'B'.  In a statement, Fitch Ratings confirmed that it anticipates a severe downturn in the global economy in 2020, which would increase the risk of deterioration of the Bank’s operating profit, amid additional pressures.

Fitch Ratings announced that these downgrades are in view of the heightened risks to the institution’s credit profile resulting from COVID-19 disruption on its operations. Fitch Ratings stated that the downgrade of FIMBank’s Viability Rating, which drives the long-term IDR, was attributable to increased pressures on the Bank's business model, continued asset-quality deterioration and weakened profitability.  The negative outlook on the long-term IDR reflects Fitch Ratings’ view that the economic and financial market fallout from the COVID-19 outbreak will create additional downside risks to the Bank’s business model, asset quality and earnings. 

In his reaction to this announcement, FIMBank Group Acting CEO Adrian Gostuski, stated that “The COVID-19 pandemic is a new challenge facing all banks and FIMBank as well. FIMBank’s executive management, supported by a specialised team of employees, is closely monitoring developments. The Bank’s investment in a state-of the-art IT infrastructure has led to the smooth  transition where the majority of our employees, based both locally and overseas are now working remotely from home. This has permitted the continued delivery of our services to clients all around the globe. From a financial standpoint, FIMBank holds adequate capital and liquidity positions, which enable it to continue undertaking business with credit worthy borrowers.

In the short to medium term, we will be focusing on continuing to provide services to our clients under the economic and market conditions as they evolve, targeting improved ratings once the conditions normalize.”

Dr John C. Grech, Chairman of the FIMBank Group, stated that “In the midst of a global crisis caused by the COVID-19 pandemic, FIMBank’s resilience is once again put to the test. We will respond to developments as they unfold, taking timely and appropriate action when necessary. We are confident that the dedicated and sustained effort of the Bank’s management and all our employees, who have been extremely proactive in adapting to these  challenging circumstances, will allow the FIMBank Group to overcome these unprecedented challenges.”