Moldova-Agroindbank (MAIB) heads the banking performance rankings in Moldova, being followed by Mobiascanca, Moldindconbank (MICB) and Victoriabank (VB). The rankings were compiled by experts of the independent think tank “Expert-Grup”. For these banks, most of the calculated indicators continue to be within the limits accepted by the banking practice. In particular, these banks excel in profitability and market indicators and thus hold a significant share of the national banking market, IPN reports.
Also, the capital adequacy and liquidity ratios are close to the average recorded in the sector, but are slightly over the limits recommended by banking literature. This is actually typical of a number of banks. Solidly capitalized in the context of the process of transposing the Basel III norms and with liquid assets in excess following the constraints existing in the lending process, the banks incur opportunity costs. This reveals the reduced development level of the national financial system and general intermediation mechanisms.
At the same time, special administration regimes continue to be applied at three banks (MAIB, VB and MICB). These regimes imply intensive monitoring and early intervention and the conditions there are thus relatively different compared with the rest of the banks. The close monitoring of these banks is due to the continuous persistence of vulnerabilities related to shareholding, corporate governance or risk management in them. Also, the assets of these banks are of a poorer quality.
The next spots in the rankings are occupied by average banks and banks with a small market share and reduced profitability. The low level of profit and low quality of assets affect the general results of the banks from the lower part of the rankings. Thus, the low market share on most of the segments of banking services or the high level of toxic loans are the key elements that reduce, to a certain extent, the capacity of some banks to advance in the general banking performance rankings. Even so, these banks continue to be sufficiently capitalized and have enough liquidity in the context of the conservative and much more prudent investment and lending policy. Also, the formed provisions tend to sufficiently cover the eventual losses and risks in lending activity.
According to “Expert-Grup”, the banking performance rankings are not an indicator for adopting decisions about depositing or attraction of financing. They are rather a source of information about the results at each bank depending on the average level generated by the whole banking sector.
