Where can I get information about the reliability of the bank
When choosing a servicing bank, potential clients first of all pay attention to the following factors: availability of the whole range of products and services they need and attractiveness of service conditions, branching and convenience of the banking infrastructure, level of service, as well as reputation and reputation of the bank.
A correct understanding of the financial condition of a bank is very important, but not every ordinary citizen has the necessary knowledge to analyze bank statements and draw adequate conclusions about the creditworthiness of a financial institution. And not always all the necessary information can be found in the public domain. How to make an informed decision in such conditions?
In this case, ratings of independent rating agencies can be one of the convenient sources of information. They are assigned by qualified agencies according to the results of a comprehensive study of the activities and development plans of banks. Information on assigned ratings and public rating reports are presented on the websites of rating agencies, and are also often posted on the Internet pages of the banks themselves. In addition to the level of the rating and conclusions about the creditworthiness of a financial institution, the rating report covers in a convenient and understandable form all the necessary information about the bank, and also focuses on strengths, weaknesses and existing risks.
There are several types of ratings assigned to banks. The most common is the credit rating, which reflects the ability of the bank to settle all its financial obligations. National authorized rating agencies for assigning credit ratings must apply the National Rating Scale, approved by the Resolution of the Cabinet of Ministers of Ukraine. International rating agencies in Ukraine use both their own international rating scales, which allow comparing the creditworthiness of rating objects in different countries, and their own national scales, intended for rating on the territory of Ukraine. For comparability of credit ratings, the National Securities and Stock Market Commission approved special matrices of correspondence between international agencies and the scale approved by the Cabinet of Ministers of Ukraine.
The second in terms of popularity is the deposit rating (or bank deposit reliability rating), which characterizes the ability of banks to timely return deposits. This kind of rating is intended for use by investors. Its assignment is not legally regulated, so each of the agencies for deposit rating has its own specialized scale. In the process of assigning this rating, the bank is compared exclusively with other banks, which makes it possible to more accurately distinguish between the level of reliability of investments in various banks than when using a credit rating, therefore depositors’ rating is more convenient than a credit rating.
The whole range of different types of credit ratings and rating scales is presented on the websites of rating agencies. You can also find explanatory information there: interpretation of scales, description of terminology, methodological approaches to rating, press releases, commenting on changes in the level of ratings of various banks, and so on.
Unfortunately, due to the low level of financial literacy of the population, the practice of using credit ratings in Ukraine is still not widespread. Improving financial literacy is currently one of the most important tasks aimed at strengthening confidence in the banking system. The Independent Association of Banks of Ukraine (NABU) also contributes to its solution – as part of its own project “Improving Financial Literacy of the Population”, a wide range of events are held – open doors for schoolchildren and pensioners, children’s financial quizzes, trainings for entrepreneurs and journalists, etc.
