Baku, Azerbaijan, August 14
By Fakhri Vakilov - Trend:
Fitch Ratings has assigned Uzbekistan-based Joint-Stock Commercial Bank Qishloq Qurilish Bank (QQB) Foreign and Local Currency Long-Term Issuer Default Ratings (IDRs) of 'BB-', Trend reports with reference to the rating agency.
The Outlook on the IDRs is Stable.
The agency has also assigned the bank a Viability Rating (VR) of 'b'.
QQB's 'BB-' Long-Term IDRs reflect Fitch's view of a moderate probability of support from the Uzbekistan government (BB-/Stable) in case of need, as reflected in the bank's Support Rating (SR) of '3' and Support Rating Floor (SRF) of 'BB-', read the message.
"This view is based on the bank's 97 percent state ownership, which has a high influence on the ratings, the low cost of potential support relative to the sovereign's foreign currency (FC) reserves," Fitch reported.
Fitch stated that QQB's 'b' VR is heavily influenced by a challenging operating environment in Uzbekistan, potential deficiencies in underwriting standards, the bank's specialized franchise, and rapid loan growth.
Rating actions on QQB's support-driven IDRs, SR and SRF will likely result from a strengthening or weakening of the sovereign's credit profile and will mirror changes to Uzbekistan's sovereign ratings. A weakening of the state's propensity to support the bank may result in a downgrade, although this is currently not expected by Fitch, read the message.
QQB's VR could be downgraded as a result of deterioration in asset quality, excessive loan growth or capital weakness in the absence of fresh capital injections. An upgrade of the VR would require a substantial improvement in Uzbekistan's operating environment and strengthening of the bank's commercial franchise and business model, read the message.
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