BAKU, Azerbaijan, Dec. 9
By Zeyni Jafarov – Trend:
Moody's International rating agency has raised the rating of long-term deposits in national and foreign currency of the Azerbaijani Bank of Baku, Trend reports citing Moody's.
As reported, the rating has been revised and raised from Caa1 to B3 with a stable outlook for these ratings.
According to the agency, the bank's base credit rating was revised and also upgraded from CA1 to B3 and the long-term counterparty risk rating in local and foreign currency from B2 to B3.
“In general, the financing of Bank of Baku is stable, and the liabilities mainly consist of customer deposits and financing from the Central Bank of Azerbaijan. As of early October 2020, the bank's liquidity buffer was strong at 30 percent of total assets,” said the agency.
The increase in the rating of Bank of Baku is associated with a significant improvement in the bank's solvency thanks to measures to resolve problem loans to individuals in Azerbaijan in 2019. This program provided for the payment of compensation to borrowers or banks for foreign currency loans that suffered from the devaluation of the Azerbaijani manat in 2015, and the restructuring of personal loans by banks that were overdue by more than 360 days, as well as compensation by the government of banks for losses from the restructuring of these loans.
According to Moody's, payments to borrowers on previously overdue loans, which began in 2020, will further strengthen Bank of Baku's solvency indicators, partially offsetting the negative impact of the coronavirus pandemic on the bank.