“Fitch Ratings” Beynəlxalq Reytinq Agentliyi ölkənin aparıcı banklarından olan AFB Bankın reytinqini təsdiqləyib. Mövcud reytinq bankın cari bazar şəraitində güclü mövqeyini əks etdirir.

Bankın uzunmüddətli emitentin defoltu reytinqi (EDR) "B” səviyyəsində təsdiq edilib. Bu reytinq ölkədə 100% yerli kapitala malik olan özəl banklar arasında ən yüksək reytinqlərdən biridir.

"Bankımızın reytinqinin belə nüfuzlu agentlik tərəfindən təsdiqlənməsi həyata keçirdiyimiz biznes strategiyanın bazar tələblərinə cavab verdiyini göstərir. “Fitch”-in təsdiq etdiyi reytinq bankın uğurlu maliyyə siyasətinin nəticəsidir və bu müştərilərimizə daha fərqli məhsullar təqdim etməyə və yüksək keyfiyyətli xidmət göstərməyə imkan yaradır”, - deyə AFB Bankın İdarə Heyətinin sədri Aydın Hüseynov bildirib.

Xatırladaq ki, “Fitch” beynəlxalq reytinqlərin verilməsi üzrə dünyada lider olan 3 ABŞ şirkətindən biridir.

Qeyd edək ki, AFB Bank Azərbaycanda bu reytinqə malik olan üç bankdan biridir

2008-ci ilin noyabr ayında Azərbaycan Mərkəzi Bankı tərəfindən 253 saylı lisenziya almış “AFB Bank” ASC öz fəaliyyətinə 2009-cu ilin fevral ayında başlamışdır. Müştərilərinə bütün növ bank xidmətləri və məhsulları təklif edən “AFB Bank-ın ölkə üzrə ümumilikdə 11 filialı və 5 şöbəsi fəaliyyət göstərir.

PULSUZ SEMİNARA QATIL, QAZANMAĞI ÖYRƏN!

Fitch Rates AFB Bank 'B', Outlook Stable

Fitch Ratings has assigned Azerbaijani AFB Bank Open Joint Stock Company (AFB) a Long-Term Issuer Default Rating (IDR) of 'B' with Stable Outlook. A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS 

AFB's 'B' Long-Term IDR is driven by its 'b' VR, which in turn, captures Fitch's view of the bank's standalone credit profile. It balances AFB's weak asset quality and profitability against solid capital and liquidity buffers. The rating also takes into account the bank's limited franchise and high level of related-party lending in Azerbaijan's challenging operating environment.

Fitch's views AFB's franchise as weak based on the bank's limited 2% share in the system loans and its historical focus on servicing companies connected to Gilan Holding (GH), a large diversified group with assets in construction, tourism, agriculture, logistics and FMCG. GH was the bank's majority shareholder prior to February 2019 when the bank was acquired by Mr. Hikmet Ismayilov. Despite the change in shareholder, we believe that AFB is still closely connected with the holding based on the fact that Mr. Ismayilov is a shareholder in some companies connected to GH.

Fitch assesses underwriting standards as weak due to a sizable related-party exposure and weak asset quality metrics. Market risk is adequately controlled with foreign currency position being negligible at few latest reporting dates. The bank closes it on the balance sheet without using derivative instruments. AFB did not book foreign exchange losses in 2015-2018 and the moderate respective profit is largely driven by conversion commissions. 

The IFRS-reported related party loans stood at a moderate 9% of total loans at end-2018. However, based on our review of the largest exposures we believe this amounts to about half of the loan book (or about 100% of Fitch Core Capital (FCC)) including loans to companies connected with GH (but not classified as related under IFRS rules). Some of these loans, amounting to 13% of total loans, are still in grace periods and therefore their performance is largely untested.

Impaired loans (Stage 3 under IFRS 9) stood at a high 34% of gross loans at end-2018, but this is tempered by adequate 73% coverage by specific reserves. The bank did not recognise Stage 2 corporate loans, while Fitch believes some of largest loans classified as Stage 1 are potentially risky. These represented 15% of gross loans and were weakly provisioned. We estimate that total potentially risky loans (including Stage 3 and some of Stage 1) net of total provisions amounted to 60% of end-2018 FCC.

AFB's profitability is constrained by high and volatile loan impairment charges consuming the bulk of the pre-impairment profit. The bank's operating profit to risk-weighted assets (RWAs) ratio was a high 24% in 2018 (negative 8% in 2017). It was driven by a reversal of loan loss allowances that we deem not sustainable. Pre-impairment profitability (3% of average assets in 2018) benefits from an exceptionally low cost of funding (0.7%) supported by a prevailing share of interest-free current accounts in the bank's liabilities. 

Capitalisation is the main rating strength for AFB given FCC of 56% of RWAs at end-2018. Fitch estimates the FCC ratio decreased to 37% at end-5M19 due to a dividend payout of AZN11.5 million and growth of RWAs. Regulatory capitalisation is also solid, with a Tier 1 capital ratio of 33% and total capital ratios of 34% at end-5M19 compared with 5% and 10% minimum requirements, respectively. We estimate the FCC ratio would fall to around 10% if fully adjusted for net exposure on the loans carrying high credit risk as per Fitch's evaluation.

AFB is mostly customer funded as customer accounts represented 67% of total liabilities at end-5M19. Of these, 74% were interest-free current accounts sourced from corporate clients and wealthy individuals. Deposits are highly concentrated with the largest depositor accounting for 16% of total customer funds and five largest for 33% at end-2018. Related-party funds made up a significant 36% of total customer accounts at end-2018 according to IFRS reports, although Fitch believes these may be even higher - 45%, including loans to companies connected with GH. The bank treats current accounts conservatively and keeps a substantial liquidity buffer (cash, interbank placements and government securities), which covered customer accounts by 75% at end-5M19.

AFB's Support Rating of '5' and Support Rating Floor (SRF) of 'No Floor' reflect the bank's limited scale of operations and market share. Therefore, Fitch's views sovereign support for the bank as uncertain. This view is supported by the default of Open Joint Stock Company International Bank of Azerbaijan (B-/Positive) in 2017, which is the largest bank in the country and owned by the government. As a result, state support for less systemically important, privately owned banks cannot be relied upon. Potential for support from the bank's private shareholders is not factored into the ratings.

RATING SENSITIVITIES

Negative rating action could stem from a deterioration in asset quality accompanied by a significant increase in unreserved Stage 3 loans as a proportion of capital. Weakening of liquidity and/or an increase in related-party financing could also pressure the rating. An erosion of capital with a substantial decrease in the Tier 1 ratio could trigger a downgrade. 

Rating upside for AFB is limited and would require substantial franchise development, accompanied by a diversification of funding away from related/connected parties, strengthening of asset quality and core profitability. 

The rating actions are as follows: 

Long-Term IDR assigned at 'B'; Stable Outlook
Short-Term IDR assigned at 'B'
Support Rating assigned at '5'
Support Rating Floor assigned at 'No Floor'
Viability Rating assigned at 'b'