Finance

Home page

Finance

Fitch Rating expects serious steps from Azerbaijan on recapitalization and privatization in IBA

10 March 2011 11:57 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Fitch Rating included the International Bank of Azerbaijan in Rating Watch Negative â€“ RWN with its BBB- long-term ratings..

Agency says this is related to serious non-confidence in operatively support of bank by Azerbaijani government. According to Agency, delays are observed in recapitalization and fitting of it to prudential normative.

Besides, the Agency has taken the discussion about strategy of bank in the future into account.

Fitch Rating does not exclude the relation of this delay to financial difficulties of non-governmental shareholders. Note that, 50.2% of bankâ€™s shares concerns to state (Finance Ministry), 49.8% to legal and individual persons.

At the same time, the Agency stresses the bankâ€™s leading positions in the market are supported. Bank has 40% of total assets, 24% of deposits. But, its total liabilities made 13% of GDP, foreign liabilities â€“ 4% of GDP, in 2010. Thatâ€™s why Agency can drop the bankâ€™s rating to BB+ level.

Besides, Agency worries about some performances of bank. Thus, capital adequacy is lower than norm, overdue credit reached 14.4% and only 55% of them was provided by stocks.

Agency says it expects serious steps from Azerbaijan on recapitalization and privatization in IBA.