Rating International Bank ceased to be a "negative"

International rating agency Moody `s Investors Service has changed the outlook on the ratings of the International Bank of Azerbaijan (IBA) from" negative "to" stable. "

As noted in the official report (http://www.moodys.com/research/Moodys-changes-outlook-on-International-Bank-of-Azerbaijans-ratings-to--PR_274139), confirmed standalone bank financial strength rating (BFSR) of IBA at E +. Long-term rating of the bank deposits in national currency amounted to Ba3. At the same level of long-term rating of deposits in foreign currency. Better position is on subordinated debt (in the case of its liquidation the unsecured creditor may recover after the claims will be satisfied for secured creditors) in foreign currency - its rating at B1.

The change in outlook is due to the stabilization of the IBA, in particular, the bank managed to improve its asset quality, strengthen the capital base and improve the generation of additional revenue. At the same time, the ratings remain constrained by very high levels of concentration in the credit portfolio, a low level of capital and moderate profitability.

According to the audited financial statements, the absolute volume of loans NPL (loans overdue by 90 days or more) declined by about 21% to about 7.6% of the total loan portfolio in 2012 (in 2011 - 12.4%), the amount of restructured loans decreased by 28% in nominal terms - up to 7.3% of the total loan portfolio (2011 - 13%).

According to the agency's expectations, asset quality MBA will remain stable over the next 12-18 months, which is associated with a favorable operating environment. During 2012, the IBA's capitalization has improved and was able to meet the minimum capital adequacy ratio of 12%.

The agency stresses that increase the capital of IBA issued additional shares for AZN 100 million, a subordinated loan from the Central Bank of Azerbaijan AZN 250 million and achieved improved internal capital generation.

In 2012, the IBA also managed to improve profitability. According to the financial statements, the net profit for 2012 amounted to 53 million manat against 19 million manat a year before.

Moody `s highlights the high probability of systemic support for the provision of the IBA, as the 50.2% stake in the bank owned by the state. In addition, the high probability of systemic support established significant market share of the bank and the importance to the economy of Azerbaijan.

IBA was founded in January 1992 and is the largest bank in the country. The main shareholder is the Azerbaijani government, which owns a 50.2% stake, 49.8% owned by private individuals and legal entities. - 17D-