Azerbaijan, Baku, May 29 / Trend , N. Ismayilova/ Moody's Investors Service has placed the Baa2 global local currency deposit rating and Baa3 foreign currency subordinated debt rating of International Bank of Azerbaijan (IBA) on review for possible downgrade.
The review of the global local currency deposit rating and foreign currency subordinated debt rating will look at the extent to which Azerbaijan's ability to provide support to its banking system, should such support be needed, has changed in the midst of the ongoing global economic and credit crisis.
Factors that the rating agency will consider in its assessment of systemic support include the size of the banking system in relation to government resources, the level of stress in the banking system and the foreign currency obligations of the banking systems relative to the government's own foreign exchange resources.
The total foreign borrowings of Azeri banks amount to around a manageable US$2 billion, with approximately one-half to be repaid this year; the bulk of this amount is due from IBA as the largest bank in the system.
Moody's notes that the review is unlikely to lead to more than a one-notch change in IBA's debt and deposit ratings. It expects to conclude the review over the next few weeks.
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