Baku. 19 May. REPORT.AZ/ Moody's Investors Service has today placed on review for downgrade IBA-Moscow's (IBAM) long-term foreign- and local-currency deposit ratings at B2, the Baseline Credit Assessment (BCA) at b3, adjusted BCA at b2, and the long-term Counterparty Risk Assessment (CRA) at B1(cr). In addition, Moody's has affirmed the Not Prime short-term deposit ratings and the Not Prime(cr) short-term CRA.
Today's rating action primarily reflects the placement of the long-term foreign- and local-currency deposit ratings on review for downgrade of its immediate parent -- International Bank of Azerbaijan on 15 May 2017. The review will focus on the outcome of IBA's restructuring plan, receipt of details on further possible government support for IBA group, and the impact on IBA's deposit ratings.
The placement of the long-term deposit ratings on review for downgrade reflects uncertainty regarding Azerbaijan government support for IBA group as well as existing inter-linkages between IBA and IBA-Moscow. As of Q1 2017, IBAM held a significant liquidity cushion of 75% of its assets placed in the form of an interbank loan at IBA, and funding from the parent bank amounted to 20% of IBAM's liabilities.
The rating agency will resolve the review for downgrade following the finalization of the IBA restructuring plan and upon receipt of details of possible further government support for IBA group.