CariCRIS reaffirms “good creditworthiness” ratings of Finabank N.V.

?srA????? ??????????? (Suriname National Scale Foreign Currency)

srA+?? ?????????? ? (Suriname National Scale Local Currency)

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the Issuer/Corporate Credit Ratings assigned to Finabank N.V. (Finabank or the Bank) at srA (Foreign Currency Rating) and srA+ (Local Currency Rating) on the Suriname national scale. These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Suriname, is good.?

CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is premised on CariCRIS’ expectation that Finabank will continue to record operating profits, remain well capitalised and maintain adequate liquidity metrics over the next 12 to 15 months. This is expected to be underpinned by the Bank’s strong market position in Suriname, good asset quality and good risk management practices over the next 12 to 15 months.?

The ratings of Finabank reflect its strong market position in the Suriname banking sector, with regional expansion initiatives. Additionally, the Bank’s good governance structure and risk management practices also support the ratings. Furthermore, the Bank has a history of profitable operations, underpinned by income diversity and good operating efficiency, as well as high asset quality. Moreover, the Bank’s ratings reflect its adequate capitalization levels and strong liquidity profile. Constraining the Bank’s ratings, however, is its concentration risk, given its significant exposure to the highly speculative Suriname economy, where most of its earnings, assets and funding are domiciled. Also, Finabank’s small size and high reliance on wholesale funding ?temper its ratings.

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the ratings and/or outlook include:

• Improvement in the Government of Suriname’s (GOS’) credit risk profile, leading to an improved economic and business environment for Finabank
• Retail deposits ≥ 40% of funding base
• A greater than 100% increase in Profit After Tax (PAT) sustained for 2 consecutive financial years
• Improvement in Tangible Net Worth (TNW) to total adjusted assets to 12% or above sustained for 2 consecutive financial years

Factors that could, individually or collectively, lead to a lowering of the ratings and/or outlook include:

• Deterioration in the GOS’ credit risk profile, leading to a worsened economic and business environment for Finabank
• The deterioration of the gross Non-Performing Loans (NPLs) to gross loans ratio to 5% or more, leading to reduced earnings and increased provisioning, thereby affecting profitability
• Cost to income ≥ 50% sustained for 2 consecutive financial years
• A greater than 10% decline in total income sustained for 2 consecutive financial years
• The occurrence of any factors that may contribute to the deterioration of the Capital Adequacy Ratio (CAR) below the 10% minimum requirement for the Bank

For more information on Finabank’s ratings, please visit www.caricris.com or contact:

Dr. Kathryn Budhooram

Head, Rating Operations

Mobile: 1-868-706-6510

E-mail: [email protected]

OR

Keith Hamlet

Manager, Ratings

Mobile: 1-868-487-8356

E-mail: [email protected]

Note:

This rating release is transmitted to you for the sole purpose of dissemination through your agency/newspaper/magazine. You may use this rating release in full or in part without changing the meaning or context thereof, but with due credit to CariCRIS. CariCRIS has the sole right of d