Baku, Azerbaijan, Dec. 19
By Azad Hasanli – Trend:
Shareholders of Azerbaijan’s Bank Respublika OJSC are discussing capital replenishment plans including 10 million manats additional share issue, Moody's Investors Service international rating agency said in a message.
Moody's believes it may materialize early next year, if approved by the shareholders, according to the message.
The bank’s regulatory capital decreased to 39.8 million manats as of 1 December 2017, which is below the minimal threshold of 50 million manats, said the message.
The bank's non-performing loans (NPL) overdue by more than 90 days accounted for 8.9 percent of gross loans at the end of 2016 and restructured loans comprised another 20 percent according to bank's audited IFRS report.
Loan loss reserves at 8.8 percent of gross loans fully cover NPLs, but provide only limited coverage of restructured loans suggesting additional provisioning might be required in the next 12-18 months.
Moody's has downgraded Joint Stock Commercial Bank Respublika's (Bank Respublika) long-term foreign- and local-currency deposit ratings to Caa1 from B3. The bank's baseline credit assessment (BCA) and adjusted baseline credit assessments were downgraded to caa1 from b3. The outlook on the long-term local- and foreign-currency deposit ratings remain negative.
Moody's has downgraded the bank's long-term Counterparty Risk Assessment (CR Assessment) to B3(cr) from B2(cr) and affirmed its short-term CR Assessment of Not Prime(cr).