FIMBank CEO welcomes Fitch Ratings stable outlook ‘despite challenging market conditions’

FIMBank Group CEO Adrian Alejandro Gostuski on Thursday welcomed Fitch Ratings’ latest stable outlook for the bank, despite it facing “challenging market conditions” over the first half of 2023.

The American credit rating agency, ranked as one of the Big Three credit rating agencies, affirmed FIMBank’s Long-Term Issuer Default Rating (IDR) at ‘B’ with a stable outlook, while its Viability Rating (VR) was classed at ‘b’. The report was issued last Friday following a comprehensive assessment of the bank’s strategy, performance, risk management, funding, and liquidity.

According to Fitch Ratings, FIMBank has been progressing well with its balance sheet de-risking, while reducing the complexity of its organisational structure, which led to the closure of its operations in Greece and Chile. The freed capital should be deployed to growth, notably in the Maltese corporate segment.

The credit rating agency also expects the bank to improve its performance in the coming years by leveraging its expertise and geographically diversified business scope. Fitch Ratings praised FIMBank’s tightening of its underwriting standards, particularly by “exiting weaker credits and some riskier geographies”, a move which has strengthened its credit risk and control framework.

Fitch Ratings also noted that FIMBank is primarily funded by customer deposits, which have accounted for an average of two-thirds of the total funding over the past five years, and that the short-term nature of the bank’s balance sheet, reflecting its trade finance focus, “underpins the bank’s liquidity”.

Additionally, it also highlighted the challenges and uncertainties the global economy faces, including stubborn inflation, high interest rates, risks from credit tightening, trade restrictions, and regulatory challenges, with these expected to result in “subdued investments, weak productivity and decreasing international trade”, prompting to a “reduction in merchandise trade”.

Mr Gostuski stated that despite the challenging market conditions, FIMBank has formed an “encouraging upward trend” in its performance over the first six months of 2023.

“We are confident that we have the skills, resources, market position and scale to overcome the challenges and uncertainties that the global economy faces. We are committed to delivering value to our shareholders, customers and partners,” he continued.

He concluded by sayingg that the Fitch Ratings announcement “further validates” the business strategy that FIMBank has been “successfully implementing over the years”.

The rating represents a sustained and improved outlook for the bank, with two consecutive rating actions classifying it as ‘B’ with a stable outlook. Prior to that, it had experienced two negative outlook ratings in 2020 and 2021, the two years which were characterised by market volatility due to the COVID-19 pandemic.

With roots in 1994, FIMBank Group is a provider of trade finance, factoring and forfaiting solutions, with a global presence in various financial and trading centres. Mr Gostuski was first appointed acting CEO in April 2020, before he was then confirmed as CEO in the following year. Earlier this year, the group announced that he had requested to retire from the role, opting to act as an Advisor instead. Mohamed Louhab, an experienced Financial Advisor and Director, will replace him as CEO.

Social image: FIMBank Group’s offices / Google Images / Konstantin