Finance

Finance

Fitch says potential support available to PASHA Bank from Azerbaijan authorities

10 March 2016 08:19 (UTC +04:00)

According to the agency, the bank’s IDRs, SR and SRF are underpinned by the potential support available to the bank from the Azerbaijan authorities, in case of need: “Fitch's view on support takes into account: (i) the combined market shares of PB and its sister Kapital Bank (KB) in considering systemic importance, as they are part of a single group; (ii) the somewhat improved track record of sovereign support for the banking sector in light of the ongoing financial rehabilitation of IBA; and (iii) the benefits of the banks being ultimately owned by a structure closely connected to the Azerbaijani authorities, which at least in the near term should make support more likely, in Fitch's view.

PB and KB, which are both owned by Pasha Holding, at end-1H15 had combined market shares of 14.1% in deposits (6% KB; 8.1% PB) and 8.8% of loans (5.6% KB, 3.2% PB), making them comfortably the second-largest banking group in Azerbaijan after IBA. In Fitch's view, any sovereign support would likely be available to both of the banks, in case of need, rather than one of the institutions in isolation.