Fitch Ratings comments on state of Int’l Bank of Azerbaijan (Exclusive)

Finance Materials 10 April 2019 16:30 (UTC +04:00)
Significant clean-up of problem assets of the International Bank of Azerbaijan (IBA) has been implemented in the process of the bank’s restructuring

Baku, Azerbaijan, April 10

By Sara Israfilbayova - Trend:

Significant clean-up of the balance sheet of the International Bank of Azerbaijan (IBA) has been implemented in the process of the bank’s restructuring, Director of Fitch Ratings Sovereign Group in Europe Marina Stefani told Trend.

Problem loans were transferred to the state-owned institution Aqrarkredit.

The Long-Term Issuer-Default Rating of the bank was upgraded in November 2017 following the completion of IBA’s debt restructuring and further transfer of bad assets off the bank's balance sheet she noted.

However, dollarization is high and the bank is still vulnerable to a change in the exchange rate due to its large unhedged short foreign currency position, she added.

The International Bank of Azerbaijan, founded in 1992, is at the stage of recovery since July 2015, which is associated with the preparation for the privatization of state-owned shares of the bank. To restore the bank's financial position, its distressed assets were transferred to the non-bank credit institution Aqrarkredit.

In exchange for distressed assets, the NBCO provides the IBA with liquid funds. At the same time, the restructuring of IBA's foreign obligations has recently been completed. Over 95 percent of the Bank's shares are owned by the government.

As of December 31, 2018, the assets of the IBA amounted to 7.9 billion manats, the volume of loans - 1.9 billion manats, liabilities - 6.8 billion manats, capital - 1.2 billion manats, deposits in banks - 3.4 billion manats.


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