OREANDA-NEWS. January 05, 2016. Fitch Ratings is maintaining International Bank of Azerbaijan’s (IBA) Issuer Default Rating (IDR) of ‘BB’ on Rating Watch Positive (RWP).

Fitch’s decision to maintain IBA’s ‘BB’ IDR on RWP reflects Azerbaijani authorities’ improving propensity to provide support to IBA, due to ongoing asset clean-up program, and also that the state will support to offset the impact from recent currency volatility. Fitch expects to upgrade IBA’s IDR by one notch when the last problem loans transfer has been finalised and upon confirmation of the bank’s solvency and capital ratios remaining at reasonable levels, after the transition to a floating exchange rate for the manat.

IBA’s total capital adequacy ratio (TCAR) equaled 16%. Fitch therefore estimates that TCAR could have reduced because of the transition to a floating exchange rate regime, but should still be above the current regulatory minimum of 12%.

The IBA’s Support Rating Floor (SRF) of ‘BB’ reflects potential support from Azerbaijani authorities, in case of need. Fitch’s view on the probability of support is based on IBA’s high systemic importance (the bank accounts for 36% of sector assets), the bank’s majority state ownership, and other factors.