Moody's  Azərbaycan Beynəlxalq Bankının depozit reytinqini  "Ba3"dən  "B1"ə endirib.

"Marja" Agentliyə istinadən xəbər verir ki, proqnoz "neqativ"dir.

Moody's downgrades International Bank of Azerbaijan's deposit ratings to
B1 from Ba3; negative outlook



London, 06 February 2017 -- Moody's Investors Service has today downgraded
the following ratings of International Bank of Azerbaijan (IBA):
long-term local- and foreign-currency deposit rating to B1 from Ba3,
senior unsecured debt rating to B1 from Ba3, and long-term subordinated
debt rating to B2 from B1. Concurrently, Moody's has downgraded the
bank's standalone Baseline Credit Assessment (BCA) to ca from b3, and the
Counterparty Risk Assessment (CRA) to Ba3(cr) from Ba2(cr). The
short-term deposit ratings were affirmed at Not-Prime, while short-term
CRA affirmed at NP(cr). The outlook on the long-term deposit and senior
unsecured ratings is negative.

A full list of affected ratings is provided at the end of this press
release.

RATINGS RATIONALE

The downgrade of IBA's BCA to ca reflects its significantly weakened
standalone financial position with reported negative capital as of
end-2016 according to local GAAP. Capital erosion was exacerbated by
foreign exchange (FX) losses given the bank's large open FX position of
AZN6 billion as of end-2016 amid 13% local currency depreciation in
Azerbaijan. The bank has not been able to hedge its FX risks with the
government in time, as it was previously anticipated. Consequently, even
following the recently completed state capital injection of AZN600
million as of 23 January 2017, the bank's estimated capital position is
still negative, given the previously accumulated FX losses in 2016 and
continued manat depreciation of around 8% in January 2017, which can
results in additional AZN470 million FX losses in January 2017 according
to our calculations.



Compliance with the regulatory capital requirements is a covenant for
certain foreign debt contacts. Bank's total foreign borrowings comprised
around AZN4 billion ($2.1 billion) as of end-2016. IBA currently has
tight liquidity in foreign-currency amounting to AZN830 million (USD430
million) as of end January 2017. Although the liquidity in local currency
is ample (IBA holds AZN4.7 billion at the Central Bank), a timely FX
conversion of these funds is challenging in the current environment and
depends on support from the state.



IBA's weakened standalone financial position exacerbates its need for
external support from the government of Azerbaijan (Ba1, Negative). In
addition to the already-provided capital injection and AZN10 billion bad
assets transfer, the government is committed to continuing to support IBA
to restore its credit metrics, while the bank is currently under
regulatory forbearance Further planned state support measures until end
of H1 2017 include:

- hedging of open FX position for future potential currency volatility
through a forward contact;

- covering of FX losses incurred since the beginning of 2017 through
additional government capital injection;

- additional planned transfer of bad assets of AZN5.3-6 billion to
state-owned non-bank credit organization Aqrakredit in exchange for
US-denominated assets, which will improve the bank's open FX position and
replenish capital through reverse of provisions.

GOVERNMENT SUPPORT

We continue to incorporate a very high likelihood of government support
for IBA's long-term ratings. Along with the downgrade of BCA to ca, we
have widened the government support uplift to six notches from previous
three notches given aforementioned enlarged support measures from the
state. The very high probability of government support is based on: the
controlling stake by the government, which increased to 91.3% from 82.2%
following the recent capital injection; still a significant market share
by assets being the largest bank in Azerbaijan; and track record of
providing financial support, including transfer of bad assets, capital
injection and funding, as well as anticipated further explicit support
measures.

WHAT COULD MOVE THE RATINGS DOWN / UP

The negative outlook reflects some uncertainty about the timeliness and
magnitude of future government support, as well as the negative outlook
on the sovereign ratings. A negative rating action could occur if support
from the government is not provided timely and in the full anticipated
amount, triggering us to reassess our government support assumptions.

Revision of the outlook to stable and upgrade of BCA could occur if IBA
improves its solvency credit metrics with recovery of capital adequacy
above minimum requirements, following anticipated government support
measures.

LIST OF AFFECTED RATINGS

Issuer: International Bank of Azerbaijan

Downgrades:

....LT Bank Deposits (Local & Foreign Currency), Downgraded to B1 from
Ba3, Outlook Changed To Negative From Stable

....Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Downgraded to B1 from Ba3, Outlook Changed To Negative From Stable

....Subordinate (Foreign Currency), Downgraded to B2 from B1

....Adjusted Baseline Credit Assessment, Downgraded to ca from b3

....Baseline Credit Assessment, Downgraded to ca from b3

....LT Counterparty Risk Assessment, Downgraded to Ba3(cr) from Ba2(cr)

Affirmations:

....ST Bank Deposits (Local & Foreign Currency), Affirmed NP

....ST Counterparty Risk Assessment, Affirmed NP(cr)

Outlook Actions:

....Outlook, Changed To Negative From Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in
January 2016. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this
announcement provides certain regulatory disclosures in relation to each
rating of a subsequently issued bond or note of the same series or
category/class of debt or pur