Spectator on facebook

Spectator on facebook

CORPORATE BRIEFS

Standard & Poor's assigns Istrobanka Bpi Rating

International rating agency Standard&Poor's (S&P) assigned a single -"B"- pi (public information) rating to Istrobanka on November 18. A statement provided by S&P's London office said the rating reflected concerns over the bank's asset quality, its impaired performance and low capital levels.

The "pi" subscript indicates that S&P performed its analysis based on public information only, and highlights the restricted nature of the research done on Istrobanka compared with a standard, full ratings procedure.

S&P stresses that Istrobanka, holding about 3% of Slovak lending and deposit markets, benefits from its current ownership structure, with a large, local insurer - the state-controlled Slovenská Poisťovňa - holding a 72% stake. This alliance gives the bank access to the insurer's large network, customer base and liquidity.

In the near future, Slovenská Poisťovňa plans to sell a large portion of its stake to a strategic foreign investor. This improves Istrobanka's business prospects considerably, with regard to possible technology upgrades and expertise. Istrobanka's other shareholders are the municipality of Bratislava (18%), and Erste Bank der Osterreichischen Sparkassen (10%), based in Vienna.

S&P believes that Istrobanka's asset quality remains vulnerable to its uncertain operating environment. Its loan portfolio is subject to credit-risk concentrations, given the limited number of quality borrowers on the market. For example, during 1998 the financial situation of Istrobanka's two largest borrowers, which accounted for 4% of the bank's loan portfolio, suddenly deteriorated. As a result, Istrobanka's nonperforming loans more than doubled by year-end 1998, to 9%, prompting the bank to increase provisions to cover its classified loans fully with reserves.

Top stories

Russian spies allegedly recruit also Slovaks

They are using martial art clubs in Germany and dozens more in other EU states, in the Western Balkans, and in North America.

Illustrative stock photo

EC scrutinises state aid for Jaguar Photo

There is a question whether the scrutiny may impact the carmaker’s plans to invest in Slovakia.

The construction site of a brand new plant of Jaguar Land Rover near Nitra.

GLOBSEC forum will host guests from 70 countries

The 12th year of the conference will be attended by the highest number of participants in its history.

Slovak President Andrej Kiska gives the opening speech of The Globsec 2016 security conference.

Armed forces need new armour, and more

Slovakia's armed forces need to modernise their military technology, but also improve infrastructure and make soldiers' salaries more competitive.

Illustrative stock photo