CAMELS

CAMELS rating system, as one of the most effective supervisory techniques, is usually used to rank banks based on their performances. The six factors include Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity. A rating of one is considered the best, and a rating of five is considered the worst for each factor. In the following part, IVV status in each of the factors has separately been delineated within two spans of time.

CAPITAL ADEQUACY

Capital adequacy is the amount of capital a bank has to have as required by its financial regulator. This is usually expressed as a capital adequacy ratio of equity as a percentage of risk-weighted assets.  The capital adequacy is virtually assessed through capital trend analysis. The minimum ratio of capital to risk-weighted assets is 10.5% under Basel III. The capital adequacy of IVBB as of  2020/03/19 was 16%, which verifies its full financial readiness against any sort of financial shocks.

Asset Quality

Asset quality shows the quantity of existing and potential credit risk associated with the loan and investment portfolios, other real estate owned, and other assets, as well as off-balance sheet transactions.  The higher the credit risk of a bank, the lower the quality of the loan, or “asset quality”. When the asset quality of a bank decreases, they must hold more capital, higher capital adequacy, to cover the related credit risk. IVBB’s asset quality has been depicted below within two spans of time.

Management
Management assessment determines if a bank is able to properly react to financial stress. This item is reflected by the management's capability to point out, measure, look after and control risks of the bank’s daily activities. It covers management's ability to ensure the safe operation of the bank as they comply with the required and applicable internal and external regulations. IVBB’s management capability has been showed below within two spans of time.

Earnings
Earnings refers to a bank's ability to produce earnings to be able to sustain its activities, expand, remain competitive are a key factor in rating its continued viability. It is determined by assessing the bank's earnings, earnings' growth, stability, valuation allowances, net margins, net worth level, and the quality of the bank's existing assets. IVBB’s earnings has been showed below within two spans of time.

Liquidity

A bank's liquidity is assessed based on interest rate risk sensitivity, availability of assets that can easily be converted to cash, dependence on short-term volatile financial resources and Asset/Liability Management (ALM) technical competence. IVBB’s earnings has been showed below within two spans of time.

Sensitivity
Sensitivity covers how particular risk exposures can affect a bank. A bank’s sensitivity to market risk is assessed by monitoring the management of credit concentrations. In this way, it is observed how lending to specific industries affects a bank. These loans include agricultural lending, medical lending, credit card lending, and energy sector lending. Exposure to foreign exchange, commodities, equities, and derivatives are also included in rating the sensitivity of a bank to market risk. IVBB’s earnings has been showed below within two spans of time.


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