![Binding of Authorized Capital of IBA to Ministry of Finance Makes Its Long-term Default Rating Dependent on Sovereign State Rankings](https://turan.az/resized/media/2016/main/031100149530-750-500-resize.webp)
Binding of Authorized Capital of IBA to Ministry of Finance Makes Its Long-term Default Rating Dependent on Sovereign State Rankings
The proportion of the Finance Ministry in the authorized capital of the International Bank of Azerbaijan increased from 51.1 to over 80%, which is another step making its long-term default rating closer to the similar indicator of a sovereign state.
However, according to the authors of the forecast from the international agency Fitch Ratings, the difference is that the country's sovereign rating is at 'BB +', and the IBA - BB (a little worse, both with a negative outlook).
Experts see the reasons for lowering the ratings of IBA in the forced sale of impaired loans and riskier assets in the amount of AZN 3 bn, although the planned increase of the authorized capital by 500 million AZN is to maintain the solvency of the bank.
The bank's reputation is confirmed by the following factors: approximately 1.5 billion manats was invested in it by state structures, its high systemic importance continues in view of its advantages in the securities market, and the government declares the need to privatize the entity after the recovery of its assets. In addition, the IBA assets at the end of 2015 amounted to a quarter of GDP.
The agency says the poor quality of the assets due to the high level of dollarization of loans (60% last year), weak profitability and high refinancing risks, and this is despite the fact that the level of risk (loans with overdue payments for 90 days or more) loans in the last year It was 7%, which is acceptable, but not desirable. Thus all overdue loans accounted for 20 of the largest tranches plus 3 bn manats of unfinished projects in the field of real estate in Russia.
In addition, a third of the commitments falls on financing corporate clients with the tenth part of the outflow of retail funding. --17D-
-
- Markets Review
- 11 March 2016 11:11
-
- Economics
- 11 March 2016 11:20
Economics
-
On July 26, the Ministry of Economy hosted a meeting with entrepreneurs from the non-oil industry to explore ways to stimulate local production and enhance export potential.
-
Azerbaijani internet service providers Aztelekom and Baktelekom will introduce substantial changes to their pricing structure starting August 15, the companies announced today. Under the new tariffs, the minimum internet speed will rise to 100 Mbit/s, with the cost per Mbit/s decreasing from 0.45 AZN to 0.25 AZN. As a result, monthly charges will be set at 25 AZN for 100 Mbit/s, 30 AZN for 150 Mbit/s, and 36 AZN for 250 Mbit/s.
-
Independent experts suggest that Azerbaijan may be on the verge of another devaluation of its currency, the manat, due to a shrinking trade and payment surplus. The anticipated economic adjustments come amidst a decline in foreign currency inflows and reduced oil production.
-
Azerbaijan’s Foreign Minister Jeyhun Bayramov met today with Ahmed Moallim Figi, the Minister of Foreign Affairs and International Cooperation of Somalia, at the Azerbaijani Foreign Ministry. This meeting followed a discussion held the previous day between Figi and Azerbaijan’s Economy Minister Mikail Jabbarov.
Leave a review