Azerbaijan, Baku, Feb. 2 / Trend I. Ismayilova /
Fitch Ratings has affirmed AccessBank's (AB) Long-term foreign currency Issuer Default Rating (IDR) at 'BB+'. The Outlook is Stable. A full list of rating actions is at the end of this comment, the agency said today.
The affirmation of AB's IDR reflects Fitch's view of the probability of support available from its international financial institution (IFI) shareholders, in particular KfW ('AAA'/Stable; 20% stake), the European Bank for Reconstruction and Development (EBRD; 'AAA'/Stable; 20%) and the International Finance Corporation (IFC; 'AAA'/Stable; 20%). At the same time, Fitch notes some uncertainty in respect to timely support always being provided in case of need, given the fragmented nature of the shareholder structure and the limited strategic importance of the bank for its IFI owners. For these reasons, AccessBank's Long-term IDR has been affirmed at 'BB+', one notch below Azerbaijan's Country Ceiling of 'BBB-'.
AB's Viability Rating (VR) of 'b+' reflects potential cyclicality in AB's performance stemming from the rather weak Azerbaijani operating environment, and the bank's still limited track record and franchise. Although AB's performance has proven resilient to the market downturn in 2009, its business model of SME lending would probably be adversely affected by a deeper and more prolonged recession. However, the VR also factors in AB's so far resilient asset quality, strong performance metrics, solid equity cushion, adequate liquidity and prudent credit risk management.
AB was established in 2002 as a bank specializing in microfinance lending. At end-2011, AB was the eighth-largest bank in Azerbaijan by total assets and seventh-largest by total loans.