Bank Performance Rating (Stability assessment)

The Think Business Bank Performance Rating [BPR] is designed to be a simple yet credible measure of how stable a bank is. Our rating adopts 12 key stability indicators which essentially, are the standard measures used globally by rating agencies to rate banks. We have focused on the following key measures, which we have explained further below:

1. Asset Quality

Loan loss provisions to Operating Income
Gross NPL to Total Loans

2. Capital Adequacy

Core Capital to Total Deposits
Core Capital to Total Risk Weighted Assets
Total Capital to Total Risk Weighted Assets

3. Earnings

Return on Average Assets (ROAA)
Return on Average Core Capital
Average Funding Cost
Efficiency Ratio

4. Liquidity

Quick Assets to Total Liabilities
Quick Assets to Total Deposits

Rating Methodology

Assessment scores are assigned to each bank on each of the 12 parameters on the basis of grading benchmarked globally acknowledged optimal levels, industry averages or statutory CBK requirements, or all.

Depending on their individual scores, the banks have been graded as follows:

Grading

Very Good

Good

Satisfactory/Average

Below Average

Poor

Very Poor

Rating

A

B

C

D

E

F

Score

5

4

3

2

1

0

The grading for each bank in each of the parameters is summed up and averaged. This average becomes the overall rating of the bank for the year. Our overall rating of each bank and the industry follows the same scoring above.

We have adopted a double alphabetical rating style, with each rating referring to a specific year. For example, an AA rating implies a rating The grading for each bank in each of the parameters is summed up and averaged. This average becomes the overall rating of the bank for the year.. AA is the highest rating possible while FF is the lowest.