Fitch Ratings increases Unibank’s individual ranking

Fitch Ratings increases Unibank’s individual ranking
# 10 February 2010 11:32 (UTC +04:00)
Baku. Vahab Rzayev – APA-Economics. The international rating agency Fitch Ratings has increased the individual ranking of Unibank Commercial Bank from «E» to «D/E» level.
Fitch Ratings reaffirmed the former ratings of Unibank, as follows: the issuer’s default rating (IDR) as equaling «B - » (В minus) with the stable outlook, the short-term rating as equaling «B» and the support rating being «5».
The individual rating increase reflects on the increased liquidity and a larger scale of operations of the Bank following the increase of the charter capital to AZN 30 million and the improved financials, both accomplished in 2009. The analysts of Fitch Ratings believe that following the doubling of the capital by the shareholders, the Bank has the material ability to absorb possible losses and is fairly in a position to manage all risks and challenges of the operating environment. The ratings affirmed by «Fitch» also followed the consideration of the customer base size, the diversification of the liabilities and the funding base of the Bank, significantly expanded via receiving financing package in the amount of $83 million from EBRD, Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG), the Netherlands Development Finance Company (FMO) and the Development Bank of Austria (OeEB) in H2 of 2009.
“By raising the individual rating of the Bank the Fitch Agency passed the high evaluation of our up-to-date and professional actions at the time of the global financial crisis. The individual rating that we have been awarded reflect the independent financial stability and the short-term growth potential of the bank,” comments Faig Huseynov, Chairman of the Management Board of Unibank. According to him, the Bank will continue the adherence to the principles of transparency and independence that support the awarding of high ratings by the international agencies. “We are glad also that the rating actions of Fitch with regards to Unibank were the one of the first positive steps of the kind that concerned the banks of Azerbaijan in 2010,” noted F.Huseynov.
In April 2009, Fitch Ratings affirmed the long-term rating of Unibank as equaling «В-» («В minus») and the short-term rating of Unibank as equaling «В» with a stable outlook. Also, the support rating was set at «5» and the individual rating was set at «E» to characterize the Bank as a financial institution in need of external support.
The individual ratings of Fitch are awarded to help evaluate the positions of banks without taking into accord potential external support. These ratings are used to assess the banks’ vulnerability to risks and express the opinions of Fitch Ratings about the probability of emergence of considerable difficulties requiring external support. The main factors that are analyzed before the individual rating is assigned include profitableness, transparency, capitalization, the customer base, the size of the bank, management, operations’ diversification, the economic ambience and the development prospects.
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