S&P Global Ratings affirmed its 'B+/B' long- and short-term issuer credit ratings on Azer-Turk Bank OJSC (ATB). The outlook is stable, Report informs referring to S&P.
"The affirmation reflects our view that the bank's financial and business profiles will likely remain stable while it is formulating its new strategy. In October 2025, SOCAR's acquisition of a 51% stake in ATB from the government of Azerbaijan was completed through corporate registry and the charter amendment process. The new management team has been in place since mid-October and has two new board members in addition to two remaining board members, while the CEO position is vacant. A new supervisory board has two board members representing SOCAR and one board member representing the government, while two additional independent directors are in the process of being approved. The bank is currently formulating its new strategy focusing on transactional banking with SOCAR and increasing its lending to small and midsize enterprises in the non-oil sector. When the strategy is announced, we will evaluate how supportive it is to ATB's future franchise and profitable growth," reads the update.
It notes that S&P assesses as ATB's capitalization and risk position to remain stable over the next 12 months.
"We anticipate that the bank's capitalization, as measured by our risk-adjusted capital (RAC) ratio, is likely to remain at about 6.0%-7.5% in 2026 compared to 6.6% as of end-2024. RAC will remain highly dependent on planned future loan growth and possible capital injections. We expect that stage 3 loans could increase to 4% in the next 12-24 months as loans continue to season following rapid growth in 2022-2024. Stage 3 loans increased to 3.2% as of Sept. 30, 2025, from 2.2% as of end-2024, driven by the deterioration of corporate and consumer loans. The bank plans to further strengthen risk management in line with ongoing regulatory initiatives by the Central Bank of the Republic of Azerbaijan to move to Basel III in 2026," it further notes.
The rating agency noted that it considers ATB to be a nonstrategic subsidiary of SOCAR and do not incorporate any notches of support to the bank's stand-alone credit profile (SACP).
"This reflects the bank's very small size in the group's perimeter, limited importance for SOCAR's long-term strategy, no planned integration in the group's operations, no track record of support as a new acquisition, and no concrete planned capital injections. With time and depending on the level of integration into SOCAR's operations, strategy, and the track record of support through business generation or capital injections, we could reconsider the group's status," it said.
S&P said it considers ATB as a government-related entity.
"We think that ATB's link with the government is limited, which reflects the government's reduced ownership to 24% from 75% previously. We think ATB has a limited role for the government as a small commercial bank without any special social role, serving the same customer base of corporates and individuals as other Azerbaijani commercial banks. Therefore, we view ATB's likelihood to receive timely and sufficient support from Azerbaijan's government as low. We expect government support, if any, to come through SOCAR, ATB's majority shareholder. As a result, we do not incorporate any notches of government support above the SACP assessment into our ratings on the bank," it said.
The agency noted that the stable outlook over the next 12 months reflects its expectations that the bank's business and financial profiles will likely remain stable under the new majority ownership by SOCAR.