Fitch Ratings views International Bank of Azerbaijan’s recapitalisation plan as positive

Photo: Fitch Ratings views International Bank of Azerbaijan’s recapitalisation plan as positive  / Business News

Baku, Azerbaijan, Dec. 20

By Emin Aliyev - Trend:

Fitch Ratings has affirmed the Long-term Issuer Default Rating (IDR) of International Bank of Azerbaijan (IBA) at 'BB', Stable Outlook, Fitch Ratings reported today.

"The affirmation of rating reflects Fitch's view that there is a moderate probability of support for the bank, if needed, from Azerbaijan (BBB-/Stable)," according to the message.

Fitch's view factors are IBA's high systemic importance stemming from its large domestic franchise (the bank accounts for 35% of sector assets) and substantial funding from state-owned corporations; the bank's majority (50.2%) state ownership; its fairly small size relative to the available resources.

Fitch views as moderately positive the recapitalisation plan announced by IBA in October 2013. However, in the agency's view, planned loan growth (management targets 15%-20% per annum) and dividend payments mean that there is unlikely to be a significant improvement in capital ratios.

"In assessing IBA's liquidity position Fitch also takes into account potential liquidity support from the authorities in case of need," according to the message.

Long-term foreign currency IDR: affirmed at 'BB'
Short-term foreign currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '3'

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