Fitch Ratings affirms Azerbaijani Kapital Bank’s ratings; Outlook Stable
Baku, Azerbaijan, Dec. 20
By Abbas Akhundov - Trend:
Fitch Ratings has affirmed the Long-term Issuer Default Rating (IDR) of Kapital Bank (KB) at 'B+', Stable Outlook, Fitch Ratings reported today.
Short-term foreign currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'
KB's two last ratings are driven by potential support from the Azerbaijan authorities in case of need, Fitch Ratings reported.
"This view is based on KB's systemic importance, resulting from its social role in distributing pensions and other budget payments through the largest branch network in the country; KB's active involvement in state-funded infrastructure development projects; and the close informal relationships between KB and/or its shareholders with the authorities," according to the message.
The rating also considers the bank's improving capitalisation - supported by the recent AZN30m and further planned equity injections, stronger profit generation and the healthy liquidity position.
At end-1H13, KB's reported non-performing loans (NPLs) were equal to around 15% of gross commercial loans (end-2012: 22%) and were 79% covered by reserves.
Kapital Bank has the widest network of branches and a large customer base. Today, there are 89 bank branches and 11 offices.
Kapital Bank was fully state-owned until summer of 2008. Currently, Kapital Bank's main shareholder is Pasha Holding, which owns a 97.75 percent stake. The authorized capital of the bank is 80 million manat.
The official exchange rate is 0.7845 AZN/USD on Dec. 20.