Finance

Finance

Fitch recommends IBA to accelerate recapitalization

31 January 2012 08:03 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Fitch Ratings says that further delays with the recapitalization of International Bank of Azerbaijan (IBA) continue to weigh on the bank’s ratings and increase the risk of a further downgrade. IBA’s Long-term Issuer Default Rating (IDR) of ’BB+’ is currently on Rating Watch Negative, reflecting this downside potential.

IBA’s management has informed Fitch that the bank’s recapitalization plan will be approved and implemented during the next few weeks. However, no specific timeframe has been announced, and previously indicated deadlines for the bank’s recapitalization have repeatedly been missed. Fitch understands that as before, the plan foresees that new capital will be contributed primarily in the form of subordinated debt, although an equity injection also remains a possibility and may result in a temporary increase in the government’s stake in the bank.

IBA’s current ratings are as follows:

Long-term foreign currency IDR: ’BB+’ RWN
Short-term foreign currency IDR: ’B’ RWN
Viability Rating: ’cc’ RWN
Support Rating: ’3’ RWN
Support Rating Floor: ’BB+’ RWN