BAKU, Azerbaijan, Apr.30
By Zeyni Jafarov - Trend:
The long-term issuer default rating of Azerbaijan's Expressbank OJSC has been affirmed at 'B' with a stable outlook, Trend reports citing the Fitch Ratings international rating agency.
“Expressbank's ratings reflect a 'B +' cyclical and oil-dependent operating environment. These risks are further exacerbated by the economic slowdown caused by the COVID-19 pandemic and the sharp drop in oil prices in the first quarter of 2021,” said the agency report.
“The bank has had a moderate impact on earnings and equity so far due to the economic downturn in 2020. Its high asset quality risks and moderate earnings are offset by a sizable capital buffer, giving the bank a strong ability to meet up losses,” the report reads.
Fitch Ratings noted that Expressbank's profit remained modest in 2020, with an operating profit of 0.8 percent of assets.
“At the same time, the ratings of Expressbank may be downgraded if the bank's position in terms of capital deteriorates significantly as a result of increased costs in case of devaluation of loans or in the event of withdrawal of capital by shareholders,” said the agency.