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Moodyâ€™s puts International Bank of Azerbaijan on review for possible downgrade

27 May 2009 13:24 (UTC +04:00)

Baku. Vahab Rzayev, Elmin Ibrahimov â€“ APA-Economics. Moody’s Investors Service has placed the International Bank of Azerbaijanâ€™s Baa2 global local currency deposit rating and Baa3 foreign currency subordinated debt rating on review for possible downgrade, reported BNE (www.businessneweurope.eu).

Moodyâ€™s will review the level of systemic support for the bank, and the Azeri governmentâ€™s ability to support the countryâ€™s banks as the crisis deepens. It will determine whether the systemic support the IBA receives needs to be more closely aligned to the government’s local currency bond rating.

Moodyâ€™s notes that the banks debt and deposit ratings are unlikely to be downgraded by more than one notch, since while credit risk in the banking system has increased significantly, the Azeri government has been supportive by providing short-term liquidity to a number of banks facing repayments of foreign debt, and total foreign borrowings of Azeri banks are around a manageable $2bn, of which half must be repaid this year.

The IBA is the largest bank in the country and responsible for around half of all debt repayments due. Other banks are not being reviewed.