Reliable banks... Their SECRETS!? - News about real estate, Kiev, Kyiv region. Real Estate In Ukraine
We analyzed the reliability of the 30 largest Ukrainian banks...Secrets of reliability of banksWe analyzed the reliability of the 30 largest Ukrainian banks.We do not claim that the recommendations set out below are absolute guarantee against faulty Bank. Nevertheless, I hope that these tips will help to distinguish the troubled Bank from stable, reliable financial institution. To the extent possible under conditions of total crisis.The experts for these purposes, examine the Bank's financial statements, find out who is behind it, as well as the opinions of international rating agencies that put out the banks (and other companies) its evaluation for reliability and stability.We tried to go the same way and formed a table, where he gathered the most important, in our opinion, the information on the first thirty of Ukrainian banks in terms of deposits from individuals (according to AUB on 01.10.2008). Why to a table were these banks? Yes because they entrusted their savings to more than 80% of Ukrainians.1. FINANCIAL STATEMENTSBoring information about the assets, liabilities, profits, Bank capital in the conditions of crisis can be a first assistant in determining how things are going at the financial institution. Overall, it should be wary if the bankers do not have published such a document on its website. "If the Bank, even on its website, does not seek to disclose financial information, it should be alerted," says Executive Director FG "Consulting and investments" Dmitry Poddubny.However, the overall performance of the Bank can always be found on the website of the Association of Ukrainian banks. There, by the way, you can compare the performance of colleagues-financial institutions. The main indicators reflecting the financial condition of the Bank, is the capital, assets and profits. What they are higher, so, naturally, more stable Bank.The Bank's capital is his personal funds. This includes contributions to share capital made by the shareholders when the Bank was established, and in the process of its activity, various reserve funds, retained earnings. Capital serves as a safety net in case of unforeseen losses. Because all resources involved - interbank loans, financing through the parent structure, deposits of companies and citizens, are temporary funds, which the Bank can easily lose. Therefore, the more capital a Bank has, the more it is resistant to external turmoil.But in the assets of the Bank includes all the tools currently at its disposal, is the capital and deposits, and loans and securities, and real estate recorded on the balance sheet of the Bank. The more assets the Bank has, the bigger and more active in its activities.What is the profit, no need to explain. This is actually what the Bank was founded. But what should we care how much money the bankers? The fact that the Bank is not bringing profits, like any nonprofit enterprise that is subject to risks. First, it indicates a high probability of its bankruptcy. And, secondly, it is of little interest to the owner. Therefore, in the case of the financial crisis, the owner is more likely to save their highly profitable company than low-yielding Bank.The obligation of the Bank is its debts. It and external borrowing, and the funds raised in the domestic market (including our deposits). Ideally, the Bank's liabilities should be 80% -90% of its assets."An important indicator of reliability is the volume of attracted interbank loans," - says Dmitry Poddubny. Too great a share received by the Bank interbank loans indicates a significant dependence of the Bank on the current situation in the banking market. And this in conditions of instability of the Ukrainian economy is quite risky. At the same time, this situation is less risky for banks that were bought by large foreign financial institutions - money mostly they take in the "parent" companies.Should carefully study the structure of the Deposit portfolio of the Bank (it is on the Bank's website). "Too high a proportion of deposits of legal entities makes the Bank vulnerable. Companies and enterprises, on the one hand, place large sums on Deposit. On the other hand, quickly withdraw it from the Bank. In some cases, you may have a very negative effect on the liquidity," explains Mr. Poddubny.Also pay attention to the structure of Bank assets (Bank's website). "If the major share of Bank assets are loans to the mortgage, consumer, auto loans, it differentiates this Bank for safety compared to the Bank, at whom such asset share of less. Accordingly, the reliability of the second will be higher," says financial consultant, partner of the company "Financial Wizard" Vladimir Timchenko.2. THE OWNERS OF THE BANKSThe stability of the Bank depends on who owned it. More or less resistant to the wildness of the market are banks that belong to large domestic industrial groups. If the Bank start problems, the owners of the group will reallocate cash flows and will "feed" your Bank.Examples of such groups can be considered the Privat group, SCM group, group Mixed, group "Finance and credit" and others. These financial-industrial consortiumof, except banks, have influence on the metallurgical assets, and power facilities, and ore-processing plants, machinery plants, telecommunications companies, and oil and mining companies. This means that even in case of shutdown of one company of the group, all the rest will continue to work. That is, the Bank will have support from shareholders in the form of inflows.But, if the crisis will affect all areas of business, hope would have no one. So traditionally we believed that banks with foreign capital are more reliable than domestic banks. "It is particularly important the presence of a foreign shareholder with a rating of a and above. Since such shareholder will try to prevent the bankruptcy of his "daughter". Therefore, the reliability of such a Bank are much higher reliability 100% of the Ukrainian Bank", - said Vladimir Timchenko.But not every foreign Bank is reliable and stable, respectively, and its Ukrainian "daughter" is not sustainable. Again, if the parent Bank problems begin, he shamelessly displays the assets from all of its affiliated institutions.3. INTERNATIONAL RATINGSIn the international market has several well-known rating agencies - Fitch, standard&Poors, Moody's opinion listen in all developed countries. Each Agency has a number of ratings that they assign to the companies and their securities. Most of them are for investors, not customers appreciate the company (in our case, the Bank). For the analysis we selected only those indicators which reflect the financial stability of the Bank in the long term. Because that is what we want!According to Fitch, we chose the "long-term Issuer default rating".
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