...

Fitch Ratings upgrades four Uzbek banks’ ratings

Business Materials 17 November 2016 18:13 (UTC +04:00)
Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of Uzbek Industrial and Construction Bank Joint-Stock Commercial Bank (Uzpromstroybank; UPSB), Asaka Bank, OJSC Agrobank and Microcreditbank (MCB) to 'B+' from 'B'.
Fitch Ratings upgrades four Uzbek banks’ ratings

Tashkent, Uzbekistan, Nov. 17

By Demir Azizov– Trend:

Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of Uzbek Industrial and Construction Bank Joint-Stock Commercial Bank (Uzpromstroybank; UPSB), Asaka Bank, OJSC Agrobank and Microcreditbank (MCB) to 'B+' from 'B'. The Outlooks are Stable.

The upgrades of the four banks' Long-Term IDRs and upward revision of their Support Rating Floors (SRFs) to 'B+' reflect the strengthening of the sovereign's ability to provide support to them, Fitch Ratings said.

Fitch's positive reassessment of the sovereign's credit strength in turn reflects Uzbekistan's economic resilience to the regional downturn; and moderately reduced political risks following a smooth political transition.

Average real GDP growth over last 10 years was 8.3 percent and is forecast to hold up at around 6 percent in 2016 and 2017 despite lower commodity prices and lower demand from Uzbekistan's main export markets.

The state's ability to provide support in foreign currency is also sound, due to significant sovereign foreign-currency reserves of around $24 billion at end-2015 (equal to about 2x the banking sector's total foreign-currency liabilities or 11x its external debt) and the only moderate potential cost of any future foreign-currency support.

The four banks' IDRs, Support Ratings and SRFs continue to be underpinned by potential support from the Uzbek authorities.

In Fitch's view, the authorities would have a high propensity to provide support, if needed, because of the state's majority ownership; the banks' systemic importance (to a lesser extent in MCB); tight supervision of their activities; and their policy roles.

A change in UPSB's, Asaka's, Agrobank's and MCB's support-driven IDRs could result from a strengthening or weakening of the sovereign's credit profile.

A change of the banks' controlling shareholder could lead to a downgrade of their support-driven ratings.

The rating actions are as follows:

UPSB

Long-Term Foreign and Local Currency IDRs upgraded to 'B+' from 'B'; Outlook Stable

Short-Term Foreign and Local Currency IDRs affirmed at 'B'

Viability Rating: 'b' unaffected

Support Rating affirmed at '4'

Support Rating Floor revised to 'B+' from 'B'

Asaka

Long-Term Foreign and Local Currency IDRs upgraded to 'B+' from 'B'; Outlook Stable

Short-Term Foreign and Local Currency IDRs affirmed at 'B'

Viability Rating: 'b' unaffected

Support Rating affirmed at '4'

Support Rating Floor revised to 'B+' from 'B'

Agrobank

Long-Term Foreign and Local Currency IDRs upgraded to 'B+' from 'B'; Outlook Stable

Short-Term Foreign and Local Currency IDRs affirmed at 'B'

Viability Rating: 'b-' unaffected

Support Rating affirmed at '4'

Support Rating Floor revised to 'B+' from 'B'

MCB

Long-Term Foreign and Local Currency IDRs upgraded to 'B+' from 'B'; Outlook Stable

Short-Term Foreign and Local Currency IDRs affirmed at 'B'

Viability Rating: 'b-' unaffected

Support Rating affirmed at '4'

Support Rating Floor revised to 'B+' from 'B'

Microcreditbank was established in May 2006 to render banking services to small businesses. As of early October 2016, the bank’s assets reached 1.382 trillion soums (official exchange rate on Nov. 17 is 3138.95 soums/$1) and the authorized capital - 250 billion soums. The bank’s largest shareholders are the Finance Ministry and the Central Bank.

The main direction of Uzpromstroybank is to provide banking products and services. As of early October, the bank’s assets reached 9.306 trillion soums, the authorized capital - 691.2 billion soums. The bank’s largest shareholders are the Ministry of Finance and the Fund for Reconstruction and Development of Uzbekistan.

Agrobank is the largest bank of Uzbekistan, with an extensive network of branches throughout the country. The largest shareholders of the bank are the Ministry of Finance and the Fund for Reconstruction and Development of Uzbekistan.

Asaka bank was established in 1996. The bank is mainly involved in lending to the automotive industry.

Tags:
Latest

Latest