"Moody's Ratings" bu gün beş Azərbaycan bankının, o cümlədən Azərbaycan Beynəlxalq Bankı (ABB), Kapital Bank, Xalq Bank, Bank Respublika və Bank of Baku-nun reytinqlərini nəzərdən keçirib.

Bu barədə Marja.az Moody's Beynəlxalq Reytinq Agentliyinə istinadən xəbər verir.

Qeyd edilib ki, bu addım, 5 iyul 2024-cü il tarixində Azərbaycan Hökumətinin Ba1 uzunmüddətli emitent reytinqi üzrə proqnozun "sabit"dən "müsbət"ə dəyişdirilməsi və ölkənin makro profilinin yüksəldilməsi ilə bağlı olaraq biznes mühitinin gücləndirilməsi ilə əlaqədardır. 

Belə ki, Azərbaycan Beynəlxalq Bankının Kredit ödəmə (BCA) və Tənzimlənmiş kredit ödəmə (Adjusted BCA) qabiliyyəti reytinqləri b1-dən ba3-ə, Xalq Bankın və Bank of Baku-nun Kredit ödəmə (BCA) və Tənzimlənmiş kredit ödəmə (Adjusted BCA) qabiliyyəti reytinqləri b2-dən b1-ə yüksəldilib. Kapital Bankın Kredit ödəmə (BCA) və Tənzimlənmiş kredit ödəmə (Adjusted BCA) qabiliyyəti reytinqləri ba3 səviyyəsində, Bank Respublikanın Kredit ödəmə (BCA) və Tənzimlənmiş kredit ödəmə (Adjusted BCA) qabiliyyəti reytinqləri b2 səviyyəsində təsdiq edilib. 

Azərbaycan Beynəlxalq Bankının yerli və xarici valyutada uzunmüddətli depozit reytinqi Ba3-dən Ba2-yə, Xalq Bankın yerli və xarici valyutada uzunmüddətli depozit reytinqii B1-dən Ba3-ə, Bank Respublika və Bank of Baku-nun yerli və xarici valyutada uzunmüddətli depozit reytinqi B2-dən B1-ə yüksəldib, Kapital Bank-ın yerli və xarici valyutada uzunmüddətli depozit reytinqi Ba2 səviyyəsində təsdiq edilib. 

Həmçinin, Kapital Bank və Bank Respublika-nın yerli və xarici valyutada uzunmüddətli depozit reytinqləri üzrə proqnozlar "sabit"dən "müsbət"ə dəyişdirilib; “Xalq Bank” və “Bank of Baku” ASC-nin yerli və xarici valyutada uzunmüddətli depozit reytinqləri üzrə proqnozu "müsbət"dən “sabit”ə dəyişdirilib;  Azərbaycan Beynəlxalq Bankının uzunmüddətli yerli və xarici valyutada depozit reytinqləri üzrə proqnozu "müsbət"də saxlanılıb.

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Moody's Ratings takes positive rating actions on five banks in Azerbaijan

London, July 09, 2024 -- Moody's Ratings (Moody's) has today taken rating actions on five Azerbaijani banks, namely, International Bank of Azerbaijan, Kapital Bank OJSC (Kapital Bank), OJSC XALQ BANK (Xalq Bank), Joint Stock Commercial Bank Respublika (Bank Respublika), and OJSC Bank of Baku (Bank of Baku).

These rating actions follow the change of outlook on the Government of Azerbaijan's Ba1 long-term issuer rating to positive from stable on 5 July 2024 and upward revision of the country's Macro Profile to 'Weak" from 'Weak- driven by strengthened operating environment for the Azerbaijani banks, on the back of improvements in the country's economic strength and the banks' consistently sound solvency and liquidity metrics.

Specifically, we have:

(1) upgraded to ba3 from b1 the Baseline Credit Assessment (BCA) and Adjusted BCA of International Bank of Azerbaijan, upgraded to b1 from b2 the BCA and Adjusted BCA of Xalq Bank and Bank of Baku, affirmed the ba3 BCA and Adjusted BCA of Kapital Bank and affirmed the b2 BCA and Adjusted BCA of Bank Respublika.

(2) upgraded to Ba2 from Ba3 the long-term local and foreign currency deposit ratings of International Bank of Azerbaijan, upgraded to Ba3 from B1 the long-term local and foreign currency deposit ratings of Xalq Bank, upgraded to B1 from B2 the long-term local and foreign currency deposit ratings of Bank Respublika and Bank of Baku and affirmed the Ba2 long-term local and foreign currency deposit ratings of Kapital Bank.

(3) changed to positive from stable the outlooks on the long-term local and foreign currency deposit ratings of Kapital Bank and Bank Respublika; changed to stable from positive the outlooks on the long-term local and foreign currency deposit ratings of Xalq Bank and Bank of Baku and maintained the positive outlook on the long-term local and foreign currency deposit ratings of International Bank of Azerbaijan.

RATINGS RATIONALE

IMPROVING OPERATING ENVIRONMENT IN AZERBAIJAN DRIVES CHANGE IN THE MACRO PROFILE TO 'WEAK' FROM 'WEAK-'

We have changed the Macro Profile we assign to Azerbaijan to "Weak" from "Weak-" to reflect the improvements in the country's economic strength. Consequently, our assessment of more favorable credit conditions for banks in Azerbaijan has resulted in upward pressure on these banks' intrinsic financial strength (or BCAs).

The rating actions reflect our view that the country's non-oil economy, where banks do most of their business, will continue to expand, driven by the government ongoing efforts to diversify the economy. Azerbaijan has seen a strong economic diversification momentum compared to other oil producers, recording higher cumulative non-oil real GDP growth since 2017 which accelerated in recent years. Azeri banks will benefit from an improving economic conditions and favorable operating environment which will translate into stronger business opportunities, supporting the banks' robust profitability and good asset quality, strengthening their standalone credit profiles. Furthermore, the improving quality of financial sector regulation in the country will foster greater resilience in the banking sector.

BANK-SPECIFIC FACTORS

-- International Bank of Azerbaijan

We upgraded the bank's BCA to ba3 from b1 and its long-term deposit ratings to Ba2 from Ba3. The outlook on the Ba2 long-term deposit ratings remains positive.

The upgrade of the bank's BCA to ba3 from b1 is driven by a combination of improved operating conditions in Azerbaijan, reflected in our raising the country's banking system Macro Profile to "Weak" from "Weak-" and the bank's strengthened solvency profile and in particular 1) gradually improving asset quality indicators in recent years with the problem loan ratio decreasing to 3.3% in 2023 from 4.6% in 2022, (2) a strong capital position with Tangible Common Equity (TCE)/Risk-Weighted Assets (RWA) ratio of 26.5% in 2023, (3) robust profitability metrics (the net profit over tangible assets increased to 2.7% in 2023 from 2.1% in 2022 and (4) ample liquidity and decreasing reliance on market funding.

The upgrade of International Bank of Azerbaijan's local and foreign currency long-term bank deposit ratings to Ba2 from Ba3 follows its BCA upgrade.

International Bank of Azerbaijan 's long-term deposit ratings of Ba2 are based on the bank's BCA of ba3 and our assessment of a high probability of government support from the Government of Azerbaijan in case of need, based on the bank's government ownership and its status as the largest bank in the country with large market shares in both loans and customer deposits. This support translates into one-notch rating uplift to the bank's long-term deposit ratings from its ba3 BCA.

The positive outlook on International Bank of Azerbaijan 's long-term deposit ratings reflects our expectations that the bank's credit profile will continue to benefit from improving economic conditions and a favorable operating environment which will translate into stronger business opportunities, supporting its robust profitability and good asset quality.

-- Kapital Bank

We affirmed the bank's ba3 BCA and Ba2 long-term bank deposit ratings. We also changed to positive from stable the outlook on the Ba2 long-term deposit ratings.

The affirmation of Kapital Bank's ba3 BCA and its Ba2 long-term bank deposit ratings follows the sovereign rating action on Azerbaijan and the improvement in Azerbaijan's banking system's Macro Profile to "Weak" from "Weak-".

Kapital Bank's BCA is underpinned by (1) good asset quality with problem loan ratio of 2% in 2023; (2) its solid capital position with a TCE ratio of 13-14% in 2023 supported by the bank's good internal capital generation capacity which will be supported by moderated asset growth; (3) strong profitability (the net profit over tangible assets was high at around 3% in 2023) that is supported by high net interest margins and strong efficiency and (4) limited reliance on market funding and good buffers of liquid assets with the proportion of liquid banking assets to tangible banking assets at around 30%.

Kapital Bank's long-term deposit ratings of Ba2 are based on the bank's BCA of ba3 and our assessment of a high probability of government support from the Government of Azerbaijan in case of need, based on the bank's status as the third-largest bank in the country with large market shares in both loans and customer deposits. This support translates into one-notch rating uplift to the bank's long-term deposit ratings from its ba3 BCA.

The positive outlook on Kapital Bank's long-term deposit ratings reflects our expectations that the bank's credit profile will further benefit from improving economic conditions and a favorable operating environment which will translate into stronger business opportunities, supporting its robust profitability and good asset quality.

-- Xalq Bank

We upgraded the bank's BCA to b1 from b2 and upgraded to Ba3 from B1 the bank's long-term bank deposit ratings. We also changed to stable from positive the outlook on the Ba3 long-term deposit ratings.

The upgrade of the bank's BCA to b1 from b2 was driven by a combination of the improvement in Azerbaijan's banking system Macro Profile to "Weak" from "Weak-", lower downside risks in the current operating environment as well as the bank's strengthened funding profile. The upgrade of the local and foreign currency long-term bank deposit ratings to Ba3 from B1 follows its BCA upgrade.

Xalq Bank's b1 BCA reflects solid pre-provision revenue generation, a strong capital position with TCE/RWA ratio of 16.1% and a strengthened funding profile with a stable deposit base, decreased reliance on market funds, to 9% of total assets and a sound liquidity buffer of 24% of total assets at the end of 2023. These strengths are moderated by vulnerable asset quality because of a large proportion of foreign-currency-denominated loans (43% of gross loans) and substantial single-name credit concentration with the 17 largest borrowers accounting for 46% of gross loans or 178% of the bank's tangible common equity (TCE) at the end of 2023.

Xalq Bank's long-term deposit ratings of Ba3 are based on the bank's BCA of b1 and our assessment of a moderate probability of support from the Government of Azerbaijan in case of need, based on the bank's status as the fourth-largest bank in the country with large market shares in both loans and customer deposits. This support translates into one-notch rating uplift to the bank's long-term deposit ratings from its b1 BCA.

The outlook on Xalq Bank's long-term deposit ratings is stable, reflecting our view that the bank will maintain its sound fundamentals over the next 12-18 months.

-- Bank of Baku

We upgraded the bank's BCA to b1 from b2 and upgraded to B1 from B2 the bank's long-term bank deposit ratings. We also changed to stable from positive the outlook on the B1 long-term deposit ratings.

The upgrade of the bank's BCA to b1 from b2 was driven by a combination of Azerbaijan's higher banking system Macro Profile at "Weak" from "Weak-" previously, the lower downside risks in the current operating environment as well as the bank's improved liquidity profile.

Bank of Baku's b1 BCA reflects improved asset quality and profitability in recent years with problem loan ratio of 2.8% of gross loans at the end of 2023 and return on tangible assets at 3.5% in 2023. At the same time, the BCA is constrained by the bank's business model focused on the unsecured consumer lending segment, which is sensitive to economic cycles, as well as its modest liquidity cushion at 18% of total assets at the end of 2023.

Bank of Baku's long-term deposit ratings of B1 are based on the bank's BCA of b1 and do not benefit from any uplift from our assumption of a low probability of support from the Government of Azerbaijan given the bank's relatively small size and lack of systemic importance.

The outlook on Bank of Baku's long-term deposit ratings is stable, reflecting our view that the bank will maintain its robust credit metrics over the next 12-18 months.

-- Bank Respublika

We affirmed the bank's BCA at b2 and upgraded to B1 from B2 the bank's long-term bank deposit ratings. We also changed to positive from stable the outlook on the B1 long-term deposit ratings.

The upgrade of the bank's long-term deposit ratings to B1 from B2 reflects our reassessment of the probability of government support to "moderate" from "low". Bank Respublika is the fifth-largest bank in the country by assets, with a market share of 4.4% as at the end of May 2024. The proven sustainability of the bank's sizable market shares and importance of this bank to the banking system as well as country's legal advancements in default resolution practices lead us to believe that there is a higher likelihood of support from the Government of Azerbaijan to the depositors of Bank Respublika in case of stress. This support translates into one-notch rating uplift to the bank's long-term deposit ratings from its b2 BCA.

Bank Respublika's b2 BCA is underpinned by its solid asset quality with problem loans accounting for only 1.4% as of the end of 2023, ample liquidity and stable profitability demonstrated in recent years, supported by wide, higher than 7%, interest margin. These strengths are balanced against a weak capital position on the back of high business growth (TCE/RWA stood at 8.3% at the end of 2023), and high dependence on key large depositors.

The positive outlook on Bank Respublika's long-term deposit ratings reflects both (1) our expectation of growth moderation, that will benefit the bank's financial profile, in particular reducing pressure on capital, and (2) our view that improvements in the operating environment will positively affect the bank's solvency profile and will support its business lending model in the next 12-18 months.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Sustained improvement trend in the banks' creditworthiness, further improvement of the operating environment as well as upgrade of Azerbaijan's sovereign issuer rating may lead to an upgrade of the banks' BCA, deposit ratings or outlook change to positive.

A downgrade of Azerbaijan's issuer rating could exert downward pressure on the deposit ratings of International Bank of Azerbaijan, Kapital Bank, Xalq Bank, and Bank Respublika. The ratings of these banks could be downgraded if the likelihood of government support declines, which is not currently expected.

BCAs and deposit ratings of all five banks could be downgraded or the outlook on the long-term deposit ratings could be changed to negative if their solvency or liquidity were to deteriorate materially or in case of remarkable deterioration of operating environment.