Fitch affirms PASHA Bank's rating - UPDATED

***09:48

Baku. 7 September. REPORT.AZ/ Fitch Ratings has affirmed Pasha Bank's (PB) long-term issuer-default ratings (IDRs) at 'BB-'.

Report informs citing Fitch, the outlook on the bank is negative.

Notably, the agency has also affirmed PB's VR at 'b+'. 

***12:11

"PASHA Bank's IDRs, SR and SRF are underpinned by the moderate probability of support from the Azerbaijan authorities, in case of need. Fitch's view on support takes into account: PB's moderate systemic importance as part of the largest privately-owned banking group in the country, as together with its sister bank Kapital Bank (KB) they hold around 15% of sector deposits; the somewhat improved track record of sovereign support for the banking sector in light of the ongoing financial rehabilitation of International Bank of Azerbaijan (IBA, BB/Negative/b-); and the benefits of PB being ultimately owned by a structure closely connected to the Azerbaijani authorities, which at least in the near term should make support more likely", Fitch says.

"PB's VR reflects the bank's solid capitalisation, ample liquidity and so far manageable asset quality deterioration amid the downturn in the broader economy. At the same time, the rating remains constrained by fragile operating environment, which is currently in credit downcycle due to a fall in oil prices, only moderate operating profitability, if adjusted for one-off gains in 2015, the bank's still limited franchise and track record; and some uncertainty with respect to the long-term sustainability of the bank's sizeable related-party funding", the rating agency writes.