Baku, Azerbaijan, Oct. 4
By Fakhri Vakilov-Trend:
S&P Global Ratings revised its outlook on Uzbekistan-based Hamkorbank JSCB to positive from stable on Oct. 4, Trend reports with reference to S&P's report.
Moreover, S&P affirmed 'B+/B' long- and short-term issuer credit ratings on the bank.
S&P reported that over the past two years, Hamkorbank has strengthened its position in retail business and continues to be a market leader in microlending and loans to small and midsize enterprises (SMEs).
In addition, the bank has demonstrated stable asset quality and strong operating performance with return on average equity (ROAE) sustainably exceeding 30 percent, read the message.
Therefore, S&P revising their outlook on Hamkorbank to positive from stable and affirming our ‘B+/B’ issuer credit ratings.
The positive outlook indicates that we could upgrade Hamkorbank in the next 12-18 months, if the bank continues to be one of Uzbekistan's leaders in commercial lending, demonstrating resilience to the intensifying competition and maintaining adequate asset quality and capital buffers, read the message.
A positive rating action in the next 12 months would hinge on the bank continuing to increase its business volumes in SME and retail banking, as per its strategy. Sustainably high earnings capacity, exceeding that of peers' and supporting the bank’s capital position, may also prompt us to upgrade the bank, read the message.
S&P could consider a negative rating action if the bank pursue a more aggressive capital policy that dropped S&P’s forecast on Risk-Adjusted capital (RAC) ratio to below 7 percent or with a buffer to minimum regulatory threshold remaining sustainably below 100 basis points, which could jeopardize compliance with the regulatory ratio, read the message.
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