Bancool, on the verge of collapse

Bancoal on the verge of collapse but not yet in default, Bancoe is facing a severe crisis, according to an analysis of key indicators showing its low profitability, excessive administrative expenses, high non-performing loans and a deteriorating repayment rate.

Ongoing operating losses continue to eat up the equity of the corporation’s shareholders. The bank’s financial margin was stagnant in part due to the unprofitable portfolio, which was down 2 percent compared to the previous month’s figures, the study reveals with figures as of July of this year.

This, along with higher filing costs (interest expense) and excessive administrative expenses (payroll), presents an inherent risk to the specialty banks business model.

As of July 2022, the quality of the main productive assets has deteriorated compared to the previous month (June 2022). The portfolio classified as stage 2 (turbulent) rose alarmingly by 3,154 per cent. Although it has not yet been considered a non-reimbursement, the probability of its exacerbation and progression to stage 3 (late) is high.

The default rate (IMOR) continues to deteriorate, reaching nearly 2.9% as of July 2022. The default rate in the financial system is 2.3.

Purchase cost is out of control. Going from 4.50 percent in January 2022 to 5.70 percent in July 2022 (+120 basis points), the bank is losing its competitive edge.

“The above – the analysis indicates – will undoubtedly put pressure on Bankaool and may have to increase the cost of its financial products, which will lead to an even greater contraction in its portfolio and loss of participation in the regional market.”

The capitalization index (ICAP) declines monthly from 14.07 to 13.78 percent. As a result of constant accumulated losses, shareholders’ equity (shareholders’ capital) has been depreciated against the assets at risk.

The ICAP is a key indicator when measuring the resilience a bank can show in the face of periods of stress (recessions), and any downturn increases the risk of bankruptcy and insolvency in the medium term.

The capitalization index improved in February of this year, moving from 14.30 in January to 14.58; However, it fell in March to 14.80, in April it reached 14.68 and reached its lowest level in May at 13.58, rising to 14.07 in June and dropping to 13.78 in July.

As of July 2022, its assets amounted to 6,658 million pesos, with liabilities of 5,765 million, of which 4,909 are deposits and 730 million are loans and others. The company’s shareholders’ equity decreased in one year from 907 million to 893 million pesos. (From the editorial office / El Diario)

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