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Fitch affirms International Bank of Azerbaijan’s ratings

Business Materials 23 November 2016 16:55 (UTC +04:00)
Fitch Ratings has affirmed International Bank of Azerbaijan's (IBA) Long-Term Issuer Default Ratings (IDRs) at 'BB'.
Fitch affirms International Bank of Azerbaijan’s ratings

Baku, Azerbaijan, Nov. 23

By Azad Hasanli – Trend:

Fitch Ratings has affirmed International Bank of Azerbaijan's (IBA) Long-Term Issuer Default Ratings (IDRs) at 'BB'. The Outlook is Negative. The agency has also downgraded IBA's Viability Rating (VR) to 'f' from 'b-'.

Fitch's view of the likelihood of support is based on: IBA's strategic state ownership (the government holds a 55 percent share in IBA directly plus an additional 27.3 percent through a state-controlled non-banking entity); IBA's high systemic importance as reflected by its considerable market shares and substantial funding from retail depositors and state-controlled companies; the sovereign's sizable FX reserves ($39bn at end-1H16) and significant financial flexibility.

According to Fitch, IBA remains highly reliant on wholesale funding (32 percent of end-1H16 liabilities), which is mostly sourced from foreign banks. Customer funding is dominated by placements of local state-controlled companies (37 percent of end-1H16 liabilities).

IBA
Long-Term Foreign Currency IDR: affirmed at 'BB'; Outlook Negative
Short-Term Foreign Currency IDR: affirmed at 'B'
Viability Rating: downgraded to 'f' from 'b-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'
Senior unsecured debt: affirmed at 'BB'

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