Azerbaijan, Baku, Nov. 10 / Trend , N.Ismayilova /
Moody's Investors Service has today changed to stable from negative the outlook on the B2 long-term foreign and local currency deposit ratings of Azerbaijan's Unibank, the agency reported.
The standalone bank financial strength rating (BFSR) of E+ and Not-Prime short-term local and foreign currency deposit rating were affirmed. Moody's assessment is based on Unibank's audited financial statements for 2010 prepared under IFRS and unaudited interim statements for Q3 2011 under IFRS.
According to Moody's, the outlook change to stable from negative is driven by a sustained trend of improving profitability in 2011, stabilisation of Unibank's asset quality; and the rating agency's expectation that Unibank, given the stabilised operating environment in Azerbaijan, will be able to restore its market share, and its asset quality and profitability will remain satisfactory in the medium term.
Moody's notes that during the first nine months in 2011, Unibank's loan portfolio grew by almost 27% as the bank increased its business activity in response to the improving credit conditions in Azerbaijan, restoring its market position.
Moody's observed a sustained trend of Unibank's improving profitability in 2011, and expects its financial results to remain satisfactory in the medium term.
Unibank posted net profit of 4.5 million manat ($5.7 million) for Q3 2011 under unaudited IFRS following a net loss of 8 million manat in 2010 (under audited IFRS). In Moody's view, Unibank's profitability in the medium term will be supported by an increased loan portfolio, stabilised asset quality and healthy net interest margin.
Moody's also notes a stabilisation of Unibank's asset quality. According to the bank's unaudited IFRS, the level of non-performing loans (loans 90+ days overdue) decreased to 14% as at 30 September 2011 from 16% gross loans in 2010, and is expected to further gradually decrease in 2011-2012 due to new lending and problem loan recoveries.
Unibank reported -- as at Dec.31, 2010 -- total assets of $465 million and shareholders' equity of $53 million, according to audited IFRS