Standard & Poor's confirms Uzbek Ipoteka Bank 'B+/B' Ratings; Outlook Stable

Uzbekistan, Tashkent, May 30 / Trend D. Azizov /

Standard & Poor's Ratings Services affirmed its 'B+' long-term and 'B' short-term counterparty credit ratings on Uzbekistan-based JSCM Ipoteka Bank. The outlook is stable, Standard & Poor's said today.

According to the report, the rating was assigned to the bank in May 2012.

Ipoteka Bank demonstrated aggressive asset growth in 2012. It expanded its assets by 55%, well beyond the level that the agency previously forecast and the Uzbek banking industry average growth of 30% in 2012. Ipoteka Bank's Standard & Poor's risk-adjusted capital (RAC) ratio (before adjustments for concentrations) fell to 5.1% at year-end 2012 from 6.3% at year-end 2011.

"The growth was mainly fueled by the addition of a large new client, a government-related gas extraction and export company, which has placed large deposits with the bank," the statement said. "Moreover, the government increased funding of the country's largest state-owned metal producer, which is channeled through Ipoteka Bank."

Despite the bank's higher-than-average interest margins compared with other state-controlled Uzbek banks and good profitability (return on equity reached a high 23.4% in 2012), its internal earnings generation lags behind its rapid asset growth.

The bank plans an Uzbek sum (UZS15) billion new share issuance for 2013 to existing shareholders. The agency believes this capital increase will not significantly improve the bank's projected capital ratios.

The agency projects that the RAC ratio will stay in the range of 5.0%-5.5% over the next 12-18 months. Therefore, the agency has revised assessment of the bank's capital and earnings to "moderate" from "adequate," as our criteria define the terms.

Ipoteka Bank successfully recovered a number of construction-related problem loans, which resulted in the ratio of nonperforming loans to total loans decreasing to 1.4% at year-end 2012 from 3.3% at year-end 2011, the message said.

The bank has decreased its U.S. dollar open currency position to less than 20% as of Dec. 31, 2012, from 88% of total equity at year-end 2011.

Ipoteka Bank's single-name concentrations are very high by international standards, but in line with those of other state-owned Uzbek banks. The bank's top 20 borrowers accounted for 60% of total loans or almost 470% of total equity.

The bank's currently very high lending concentrations to decrease in the medium term, as the bank grows its retail and small and midsize enterprises (SME) portfolio.

The rating reflects the agency's view of Ipoteka Bank's "important" role in the domestic economy, given its public policy role financing residential mortgages in urban areas, its role as the main servicer of Uzbekistan's Treasury and utility companies, and its role as a finance provider for state-related entities.

S&P is unlikely to raise the ratings on the bank unless the agency revises upward our assessment of its stand-alone credit profile (SACP), and the creditworthiness of the Republic of Uzbekistan (not rated) improves.

At the same time, the agency could lower the ratings if capitalization continues to deteriorate, with the projected RAC ratio before adjustments falling to less than 3%.

Ipoteka-bank was established in April 2005 through the merger of Uzzhilsberbank and Zamin.
The bank specializes in the lending long-term individual housing construction and financing the enterprises producing the construction materials.

The bank has 15,200 shareholders - legal and physical entities, one of the main is the Uzbek Ministry of Finance (27.8 percent).

The official exchange rate is 2081,59 soums/$1 on May 30.

Subscribe to Trend in Google News! Subscribe
SOFAZ significantly increases volume of currency sold at auctions
SOFAZ significantly increases volume of currency sold at auctions
Central Bank of Azerbaijan reveals amount of foreign currency sold via auction
Central Bank of Azerbaijan reveals amount of foreign currency sold via auction
Azerbaijani currency rates for December 3
Azerbaijani currency rates for December 3
Loading Bars
Latest
Azerbaijan allows 'UK Anglo Asian Mining' to develop Vezhnali deposit in Zangilan district
Kazakh national atomic company's subsidiary opens tender to buy pipes
SOFAZ significantly increases volume of currency sold at auctions
World community should support efforts to normalize Armenia-Azerbaijan relations – FM
Turkey discloses volume of cargo shipments via local ports from Algeria for 10M2021
Flight recorders to help reveal cause of helicopter crash in Azerbaijan – security expert
Natural gas prices may face headwinds from Omicron variant
OPEC+ decision adds substantial downside risk to oil prices
FLNG solutions could become more common in regions with large reserves of untapped natural gas
Azerbaijani, Turkish online portals sign memorandum of understanding
Belarus ready to participate in restoration of Azerbaijan’s liberated territories – FM
Georgia becomes member of UN World Tourism Organization Executive Board
Kazakh Ulba Metallurgical Plant opens tender for cargo insurance
Uzbekistan shares domestic COVID-19 data for December 2
Central Bank of Azerbaijan reveals amount of foreign currency sold via auction
Azerbaijani currency rates for December 3
Oil rises on OPEC+ plan to meet if Omicron hits fuel demand
Azerbaijan increases electricity imports from Iran, Russia, Georgia
Action plan underway within 'Peace4Culture' initiative - Azerbaijani minister
FMs of Azerbaijan, Greece talk current state of bilateral relations (PHOTO)
Icelandic companies ready to co-op with Azerbaijan in renewable energy field
SOCAR employee goes missing in Caspian Sea
France's Macron nears UAE Rafale fighter jet deal
Poland plans to cover all gas demand by supplies other than from Eastern direction in 2022 – ministry (Exclusive)
SpaceX delivers 50 satellites into orbit
724 new COVID-19 cases reported in Kazakhstan
U.S. to restart Trump-era border program forcing asylum seekers to wait in Mexico
Coronavirus cases in South Africa nearly triple in three days
Apple reveals 2021 App Store Award winners
Ronaldo passes 800-goal mark with double in win over Arsenal
Germany to introduce stricter COVID-19 restrictions for unvaccinated people
France, in letter to Boris Johnson, rejects idea of joint border patrol in Channel
Turkey's foreign trade turnover grows in October 2021
Egyptian Foreign Ministry expresses condolences to Azerbaijan in connection with helicopter crash (PHOTO)
Kazakhstan ratifies agreements on military-technical assistance with Tajikistan and Kyrgyzstan
European Peace Facility allocates €12.75 mln to Georgian Defence Forces
Turkey won't prioritize high interest rates: New Finance Minister
Iran intends to actively participate in negotiations in Vienna
Armenia did not provide Azerbaijan with all maps of minefields - FM
Azerbaijan to increase its transit potential within One Belt - One Road project - expert
Azerbaijan's oil production quota within OPEC + to increase in Jan. 2022
Armenia does not fulfill all obligations within trilateral statement - Azerbaijani FM
Karabakh conflict, which lasted for almost 30 years, is over – Azerbaijani FM
President Ilham Aliyev receives President of US-based Foundation for Ethnic Understanding (VIDEO)
Azerbaijan proposed measures for post-war co-op to OSCE and still awaiting response – FM
Meeting of leaders of Azerbaijan, Russia, Armenia in Sochi is huge step forward – FM
Azerbaijani FM meets with US Secretary of State (PHOTO)
Azerbaijan may increase funding for science and education sectors
Azerbaijani, Estonian FMs meet within 28th OSCE Ministerial Council in Stockholm
President Ilham Aliyev receives world-renowned scientist Aziz Sancar (PHOTO/VIDEO)
Azerbaijani investment company discloses projected net profit for 2021
Uzbekstan to acquire additional shares in IBRD and IFC
US Secretary of State welcomes resumption of direct dialogue between gov'ts of Azerbaijan, Armenia
Azerbaijan's Azerpost revises tariffs for some financial services
Price indexes of financial, industrial sectors at Uzbek stock exchange fall
Chinese corporation begins construction of new cement plant in Uzbekistan
Azerbaijan can build modern society through digital transformation – minister
Digital transformation in Azerbaijan is tool for improving society - minister
Uzbek Central Bank notes growth in volume of loans issued to individuals
Strategic partnership of Azerbaijan, Israel isn't only in diplomatic relations – ambassador
Russia imposes two-week quarantine for arrivals from South Africa
No desired result following talks with Armenia for 30 years – Azerbaijani MFA
Azerbaijan's Azerpost launches new project
Azerbaijan discloses oil exports to Tunisia over 10M2021
Turkey reveals data on vehicle shipments between its Tuzla, Italy's Trieste ports for 10M2021
Number of historical, cultural monuments recently discovered on Azerbaijan’s liberated lands revealed
Turkey discloses number of military vehicles transshipped via local ports for 10M2021
Azerbaijan discloses area of liberated territories de-mined by its military engineering-fortification units
Russia’s Gazprombank discloses factors determining economic recovery in Azerbaijan for 9M2021
Nar introduced renewed store in Gakh (PHOTO)
Opening of Azerbaijan’s trade mission in Israel is main achievement in ties - ambassador
OPEC+ monitoring committee makes no recommendation for January production level
Israel-UAE diamond dealing thwarted by banking regulations
Israel always supported territorial integrity of Azerbaijan – ambassador
OPEC+ monitoring committee starts discussing January plan
Swiggy valued at $10.5 billion in $700-million Invesco-led round
Israel highly values ​​strategic partnership with Azerbaijan – ambassador
Head of Turkic States Organization talks historic value of recent summit in Istanbul
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan discloses plans to reduce losses in energy transmission, distribution systems
FMs of Azerbaijan, Bulgaria hold meeting within OSCE Ministerial Council (PHOTO)
Azerbaijan confirms 1,772 more COVID-19 cases, 2,103 recoveries
EU fines HSBC, Credit Suisse, others over 'Sterling Lads' forex cartel
Azerbaijan reveals expected foreign investment inflow into renewable energy sector
Georgia ready to become platform for trilateral dialogue with Azerbaijan, Armenia - FM
Sustainability of energy supply that depends on only one energy source - unrealistic – minister
Hungarian State Folk Ensemble and Pál István Band and People's Artist of the Republic of Azerbaijan, pianist Murad Huseynov Charity concert and fair
Russia detects 33,389 daily COVID-19 cases, crisis center says
Azerbaijan, Pakistan sign protocol of seventh meeting of joint intergovernmental commission (PHOTO)
Azerbaijani defense ministry reveals number of found, neutralized mines in Tartar-Goranboy direction (PHOTO)
Netherlands calls for progress on demarcation, delimitation of Azerbaijan-Armenia border
Azerbaijan considers reconstruction of liberated territories as opportunity to speed up transition to climate resilient pathways – minister
Iran aims to create more job spots in agricultural sector
Head of Azerbaijan’s Civil Service gives adequate response to provocative statements of Armenia during UNESCO meeting (PHOTO)
Volume of industrial production in Uzbekistan increases
Canada concerned about recent clashes on Azerbaijani-Armenian border - FM
Armenia deliberately destroyed Azerbaijani cultural monuments - French photojournalist
ICESCO regional office to open in Azerbaijan
US calls on Azerbaijan, Armenia to resolve issue of delimitation and demarcation of borders - Secretary of State
Uzbek Central Bank names leading regions of Uzbekistan in terms of volume of loans issued
All news