S&P expects Azerbaijani Kapital Bank’s market share to increase
Baku, Azerbaijan, June 8
By Azad Hasanli – Trend:
Standard & Poor’s (S&P) Global Ratings expects that Azerbaijan’s Kapital Bank OJSC will likely increase, its already material market share, while its operating revenues continue increasing progressively and its profitability remains high, according to an S&P report.
S&P confirmed the credit rating of the Azerbaijani bank at BB-/B level with a negative outlook.
Meanwhile, the company’s analysts believe that Kapital Bank will strengthen its business positions in the next 12-18 months, considering the successful restructuring of foreign debts of the International Bank of Azerbaijan (IBA) in the amount of $3.3 billion.
Kapital Bank is one of the country’s big banks. The bank’s share is 8.1 percent in the market in terms of loan portfolio, and 15.8 percent – in terms of the volume of deposits. As of today, the bank’s profitability exceeds 20 percent.
Kapital Bank’s operating revenues continue increasing progressively and its profitability remains high, says the report.
S&P experts noted that Kapital Bank will continue to develop also thanks to the customers of closed banks. As for problem loans, their volume won’t exceed 8-9 percent in the next 12-18 months, taking into account the restructuring of a large problem loan this year, said the company.
“We believe that Kapital Bank is a sustained outperformer in its peer group, thanks to the structural changes and competitive trends that are strengthening its creditworthiness, which is more consistent with a higher rating than its SACP, which we assess at 'b+',” said S&P analysts.
Confirmation of the rating reflects S&P’s opinion that the bank’s capitalization for the next 12-18 months will be moderate, according to the experts.
Founded in 1874 as Azerbaijan Savings Bank, today Kapital Bank is one of Azerbaijan’s largest banks serving more than three million customers. Kapital Bank provides services to people in 90 branches and two offices throughout the country and has the most extensive service network.