Baku – APA-Economics. Fitch Ratings has affirmed AccessBank's (AB) Long-term foreign currency Issuer Default Rating (
A full list of rating actions is at the end of this comment.
The affirmation of AB's IDRs and Support Rating reflects Fitch's view of the moderate probability of support available from its international financial institution (IFI) shareholders, in particular KfW ('AAA'/Stable; 20% stake), the European Bank for Reconstruction and Development (EBRD; 'AAA'/Stable; 20%) and the International Finance Corporation (IFC; 20%). At the same time, Fitch notes some uncertainty in respect to timely support always being provided if needed, given the fragmented nature of the shareholder structure; the limited strategic importance of the bank for its IFI owners and their intention to gradually decrease their stakes in the bank in the medium-term. For these reasons, AB's Support Rating was affirmed at '3', and the Long-term IDR at 'BB+'.
AB's asset quality indicators remain favourable: loans 90 days overdue equalled only 0.7% of the end-2012 loan book, while restructured loans and write offs added a further 0.6% and 0.5%, respectively. Fitch notes that the average non-performing loan (NPL) ratio for the SME segment in Azerbaijan is closer to 10% and questions the longer-term sustainability of AB's solid asset quality metrics. The poor quality of financial information on AB's SME borrowers requires tight control of asset quality, which is more challenging with portfolio growth, while the ability to cherry-pick the best borrowers is narrowing as competition in the segment intensifies.