Beynəlxalq kredit reytinqi agentliyi "Moody's Investors Service" "Xalq Bank" ASC-nin depozit reytiniqinin pornozunu dəyişib.
FED.az Agentliyə istinadən xəbər verir ki, Bankın yerli və xarici valyutada "B3" səviyyədə olan depozit reytinqinin proqnozu "mənfi"dən "müsbət"ə qaldırılıb. "Müsbət" proqnoz reytinqin yüksəldiləcəyi ehtimalını gücləndirir, eyni zamanda "Xalq Bank"ın vəziyyətinin yaxşılaşdığına işarədir.
Həmçinin, Bankın kredit ödəmə qabiliyyətinin baza səviyyəsi (Baseline Credit Assessments - BCA) "caa1" səviyyəsində, yerli və xarici valyutada qısamüddətli və uzunmüddətli kontragent risk reytinqi (CR Assessments) "B2/Not Prime" səviyyəsində təsdiq edilib.
Moody's qeyd edib ki, "Xalq Bank"ın reytinqinin proqnozunun "mənfi"dən "müsbət"ə yüksəldilməsi bankın aktivlərin keyfiyyətinin yaxşılaşmasını və bankın nisbətən yaxşı kapital buferini əks etdirir.
Moody's Investors Service has today changed to positive from negative the outlook on B3 long-term local- and foreign currency deposit ratings of OJSC XALQ BANK (Xalq Bank) (Azerbaijan) and affirmed these ratings. Concurrently, the rating agency affirmed Xalq Bank's Baseline Credit Assessment (BCA) and adjusted BCA of caa1, the bank's long-term and short-term local and foreign currency Counterparty Risk Ratings of B2/Not Prime, as well as its Not Prime short-term local and foreign currency deposit ratings. Xalq Bank's long-term and short-term Counterparty Risk Assessments (CR Assessments) of B2(cr)/Not Prime(cr) were also affirmed.
A full list of affected ratings can be found at the end of this press release.
RATINGS RATIONALE
According to Moody's, the change of Xalq Bank's ratings outlook to positive from negative reflects improving trends in the bank's asset quality and profitability metrics, coupled with the bank's relatively good capital buffer. The rating action is also underpinned by the bank's stable funding and liquidity profiles.
In 2017, Xalq Bank's asset quality metrics continued to improve. The problem loans decreased somewhat to 12.7% of the bank's gross loan book as of year-end 2017 from the 14.6% ratio reported a year earlier. Credit losses (defined as loan-loss provisions as a percentage of average gross loans) moderated to 1.9% in 2017, compared with 3.7% in 2016. The coverage of problem loans by loan loss reserves, although improved to 64% at the end of 2017 from 54% a year earlier, is still relatively low and Moody's therefore expects that the bank will continue to build up its provisioning coverage in 2018 with its credit losses to be at around 2% or slightly higher in 2018.
The moderating magnitude of credit losses will enable the bank to sustain profitable performance over the rating agency's outlook period of 12 to 18 months and beyond. In 2017, Xalq Bank's AZN16.9 million income posted under International Financial Reporting Standards (IFRS) translated into return on average assets (ROAA) of 1.0%, and Moody's expects the bank to be able to maintain similar level of ROAA in the next year or two.
Moody's also expects that Xalq Bank's capital buffer will be able to absorb any elevated credit losses, should these losses exceed the rating agency's central scenario. As of 1 June 2018, the bank reported regulatory Tier 1 and total capital adequacy ratios (CAR) of 15.7% and 17.3%, respectively, which remarkably exceed the regulatory minimum thresholds of 5% and 10%. Under Basel I, the bank's Tier 1 and total CAR stood at 12.6% and 13.5%, respectively. The rating agency expects that the growth of Xalq Bank's risk-weighted assets will be low over the next 12 to 18 months, owing to Azerbaijani borrowers' limited demand for new lending. This factor will also contain any risks of erosion of the bank's capital buffer.
Xalq Bank displays relatively stable funding and liquidity profiles, with customer deposits remaining the bank's key funding source and accounting for 76% of total liabilities as of year-end 2017, whereas other funding sources are largely represented by stable and long-term financing from the National Fund for Support of Entrepreneurship, Azerbaijan Mortgage Fund and other similar state-related sources.
Xalq Bank's B3 deposit ratings incorporate Moody's assumption of a moderate probability of government support to the bank, leading to a one-notch uplift of its deposit ratings from the bank's BCA of caa1. Moody's support assumptions are based on Xalq Bank's ranking as the forth-largest bank in Azerbaijan, with a 6.5% share in the sector total assets.
WHAT COULD MOVE THE RATINGS UP / DOWN
Moody's might upgrade Xalq Bank's deposit ratings if it observes continuing further improvements in the bank's asset quality and profitability metrics coupled with the still good capital buffer and stable funding and liquidity positions.
Xalq Bank's ratings might be downgraded, or the rating outlook might be revised to stable from positive, in case of the bank's failure to sustain the long-term improving trends in its solvency metrics, in contrast with Moody's current central scenario expectations.
LIST OF AFFECTED RATINGS
Issuer: OJSC XALQ BANK
..Affirmations:
....Long-term Counterparty Risk Assessment, affirmed B2(cr)
....Short-term Counterparty Risk Assessment, affirmed NP(cr)
....Long-term Counterparty Risk Ratings, affirmed B2
....Short-term Counterparty Risk Ratings, affirmed NP
....Long-term Bank Deposits, affirmed B3, outlook changed to Positive from Negative
....Short-term Bank Deposits, affirmed NP
....Adjusted Baseline Credit Assessment, affirmed caa1
....Baseline Credit Assessment, affirmed caa1
..Outlook Action:
....Outlook changed to Positive from Negative
Headquartered in Baku, Azerbaijan, Xalq Bank reported -- at year-end 2017 - total assets of AZN1.8 billion and total shareholder equity of AZN241 million, according to its audited financial statements prepared under IFRS. The bank's IFRS net profits for 2017 was AZN16.9 million.
