Fitch Affirms Georgia's Basisbank at 'B-'
Azerbaijan, Baku, Aug. 8 /Trend A.Badalova/
Fitch Ratings has affirmed Georgia's JSC Basisbank's (BB) Long-term Issuer Default Rating (IDR) at 'B-' with a Stable Outlook, and its Viability Rating (VR) at 'b-', the agency reported on Wednesday.
According to the report, the affirmation reflects BB's generally reasonable financial metrics, quite conservative management to date and the currently favourable Georgian operating environment. "However, the ratings also consider the bank's small size and limited franchise, significant non-core assets on the balance sheet and uncertainty resulting from the expected takeover of the bank," the report said.
Fitch considers BB's current loan quality as csatisfactory, with exposures in arrears more than 90 days accounting for 1.8 percent at the end of the first quarter of 2012 gross loans, and a further 4.1 percent of loans restructured.
"However, foreclosed assets and investment property at the end of 2011 were equal to a sizable 17 percent of gross loans at the end of 2011, or about half of Fitch core capital (FCC). Capitalisation is satisfactory, with the FCC/risk-weighted assets ratio standing at 16.8 percent at the end of 2011, and local regulatory ratios of 15.3 percent and 15 percent (total) at end of the first half of 2012," the report said.
According to Fitch, the loan/deposits ratio was a low 77 percent at end of 2011, and liquid assets (including cash, placements with the National Bank of Georgia, short-term commercial interbank placements and unencumbered government securities) accounted for 33 percent of total assets at end of the first quarter of 2012. "However, the short-term and somewhat concentrated funding base (the largest 20 deposits accounted for 37% of end-Q112 customer deposits) mean that some liquidity risk remains," Fitch said.