Fitch Agency affirms Kapital Bank’s rating

Fitch Agency affirms Kapital Bank’s rating
# 09 March 2011 09:52 (UTC +04:00)
Baku. Vahab Rzayev – APA-Economics. Fitch Ratings has affirmed Kapital Bank’s (Kapital) Long-term foreign currency Issuer Default Rating (IDR) at ’B+’. The Outlook is Stable. Agency says the affirmation of Kapital’s ’B+’ IDR reflects Fitch’s view of the moderate probability of support being available from the authorities in case of need, considering the bank’s important role in distributing pensions and other social payments through the largest branch network in the country. Fitch also notes that Kapital is involved in policy-related lending, in particular relating to road construction, funded by the Central Bank and the Ministry of Finance.

Fitch also notes uncertainty regarding the provision of such support, given the bank’s private ownership and its modest market shares.

The Individual Rating reflects the bank’s limited banking franchise, the challenging operating environment and risks stemming from rapid asset growth and weak asset quality. However, Kapital’s capitalisation and liquidity are adequate at present.
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