Fitch Ratings has assigned Azerbaijan-based Pasha Bank (PB) a Long-term Issuer Default Rating (IDR) of 'B+' with a Stable Outlook, the agency said today.
The '5' Support Rating and 'No Floor' SRF reflect Fitch's view that support for PB from the Azerbaijan authorities and/or its owner cannot be relied upon.
At the same time, the ratings also consider PB's currently solid financial metrics, reflected in a sizable capital buffer, considerable liquidity cushion and reasonable performance. PB's credit profile has also benefited to date from the bank's powerful shareholder in terms of capital injections and access to funding.
At the same time, Fitch acknowledges that the bank's shareholder structure may benefit the bank in terms of potential liquidity support and favourable regulatory treatment.
PB's loss absorption capacity is currently substantial. At end-Q112, PB could have reserved just over half its loan book without breaching minimum regulatory capital requirements. Fitch estimates that the regulatory capital adequacy ratio of 37% at end-H112 is likely to gradually decrease to around 15% over four to five years, given anticipated 20%-25% annual loan growth rates and current internal capital generating capacity of 10%.
Azerbaijani PASHA Bank received the first international rating last week.
Standard & Poor's Ratings Services had assigned its 'BB-' long-term and 'B' short-term counterparty credit ratings to Azerbaijani PASHA Bank. The outlook is stable.
PASHA Bank was established in June, 2007 and operates under licence of the Central Bank of Azerbaijan dated Jan.28, 2007.
The Bank, along with Pasha Insurance, PASHA Life, Pasha Travel and Pasha Construction, is included in the Pasha Holding Company which is actually an investment company, but not a classic holding company.
Kapital Bank is also included in the structure of the Pasha Group. The Holding owns 99.75 per cent of the shares in Kapital bank.
Pasha Bank shareholders are: PASHA Holding with 60 per cent, ADOR Ltd with 30 per cent and Arif Pashayev with 10 per cent.