BANDEX passes international certification with good marks

The international credit certification firm Fitch Ratings highlighted “the significant reduction in operating losses” of the National Export Bank (BANDEX) in its reconversion process of the former National Bank for the Promotion of Housing and Production (BNV).

In its Rating report submitted in October, Fitch Ratings reports that the reduction in operating losses achieved by BANDEX to 7.56% of risk-weighted assets as of June 2018 compared to December 2017, which was -32.4%, is the result of the absence of expense for provisions and the reduction of operating expenses.

Likewise, the firm believes that the Bank will maintain the favorable trend in reducing losses, given that it has assumed the non-recurring expenses related to the dismissal of personnel, the establishment of credit reserves, the amortization of payment damages and the lawsuits, among others.

Fitch Ratings maintains the positive very low long-term risk ratings of Banco Nacional de las Exportaciones (BANDEX) with a grade of 'AA+ (dom)' with a stable outlook and a short-term national rating of 'F1+ (dom)' referring to the strong capacity to make timely payments on its financial commitments.

It states that BANDEX's liquidity is adequate considering that cash and easily realized investments cover 97.11% of deposits and short-term commitments as of August 2018. The Bank reported in October that it reached balance for the first time between its liquid assets and liabilities.

Berne Union brings together export agencies and banks from relatively less developed countries.

Fitch Ratings maintains BANDEX's positive, very low long-term risk ratings

Fitch Ratings indicates that as of June 2018 the loan-to-deposit ratio was 15.5%, which denotes that the entire portfolio is being financed with deposits. It stands out that BANDEX has alternative sources of financing that are used to support foreign trade operations.

The entity places the delinquency indicator at 48% for last August and predicts that it will tend to reduce in the short term given that the sale of all overdue loans has been projected at the end of 2018, when the portfolio that will remain on the books will be which currently has a current and restructured status.

It highlights that the loan portfolio contracted 23% and 30% during 2017 and the first half of 2018, respectively as a result of the sale and write-off of impaired commercial loans of the former National Bank for the Promotion of Housing and Production (BNV). ), actions that are part of the BANDEX sanitation process established in Law 126-15.

Subsidiary and unlimited guarantee of the State

Fitch Ratings also highlights that BANDEX's ratings include subsidiary and unlimited guarantees from the State for all securities and financial obligations issued to the institution, highlighting that, in the firm's opinion, the Dominican Government would provide timely support, if if necessary, so BANDEX's risk is the same as that of the sovereign.

It stands out that, since its conversion, the National Export Bank has received various capital contributions from the Dominican State, which shows that the Government is not only in the capitalization program established in the Law of Creation of BANDEX, but also The willingness to provide timely support to the entity is evident.