"Fitch" beynəlxalq reytinq agentliyi "PAŞA Bank" ASC-nin emitentin uzunmüddətli defolt reytinqini (IDR) "B+" olaraq müəyyən edib.

Bankın reytinq üzrə proqnozu ˝Sabit˝ olaraq müəyyənləşdirilib.

Bundan əlavə, "Fitch" elan edib ki, kommersiya şərtləri çərçivəsində "PAŞA Bank"la əməkdaşlıq dayandırılıb.

Fitch Affirms Azerbaijan's Pasha Bank at 'B+'; Withdraws Ratings

Fitch Ratings-Moscow/London-28 May 2019: Fitch Ratings has affirmed Azerbaijan-based Pasha Bank's (PB) Long-Term Issuer-Default Rating (IDR) at 'B+' with Stable Outlook and subsequently withdrawn the ratings for commercial reasons.

KEY RATING DRIVERS 

PB's ratings are driven by its standalone profile, as captured by its 'b+' Viability Rating (VR). The ratings are constrained by the operating environment, PB's dependence on significant related-party funding and the bank's limited track record in foreign operations, especially in Turkey (equal to 8% of PB's end-2018 consolidated assets). 

The ratings also consider PB's relatively low risk balance sheet with non-loan exposures (comprising cash, bank placements and debt securities) representing 67% of total assets. In our opinion, PB remains reasonably capitalised despite a modest decline in capital ratios due to fast asset growth and high dividend payments.

PB's loan book remains small, comprising around 29% of assets at end-2018. Loan concentrations are high. The 15 largest exposures amounted to a significant 40% of total loans, but a comfortable 1.1x Fitch Core Capital (FCC). On day one of IFRS 9 implementation, the impaired (Stage 3) loans spiked to 14.5% of total loans from 7.2% at 31 December 2017 (previously defined as individually impaired loans). However, by end-2018, the impaired loan ratio had fallen to 9.3% of gross loans due to recoveries. The stock of PB's impaired loans is concentrated, particularly to a single related party exposure that is cash collateralised. Based on management guidance, this loan will be classified as Stage 1 or Stage 2 by end-2019, which will improve asset quality metrics.

Loan loss coverage of impaired loans (net of the above cash-secured exposure) was only 37% at end-2018, although most of them were secured with tangible collateral (mostly real estate and cash).

PB has performed well with a return on average equity of 14% in 2018. This was underpinned by low funding costs of below 1% (market average of 2.5% in 2018) due to a high share of interest-free on-demand customer accounts (75% of total customer accounts at end-2018) and low loan impairment charges (0.3% of average loans in 2018).

We estimate PB's FCC ratio was around 18% at end-2018, a 3pp decrease from 22% at end-2017 driven by significant 32% growth of the consolidated total assets. A capital injection of TRY245 million (equivalent of AZN116 million) into PB's Turkish subsidiary (Pasha Yatirim Bankasi, BBB(tur)/Stable) made by parent Pasha Holding in May 2018 had only a moderate impact on consolidated capital position as it was largely offset by substantial depreciation of the Turkish lira. We expect the FCC ratio to be managed at close to current levels in 2019 as planned aggressive loan growth (over 20% in 2019) will largely be supported by good internal capital generation as PB plans a lower dividend pay-out of only 60% of its earnings in 2019 (80% in 2018, 70% in 2016).

PB is funded mostly by customer deposits (85% of total liabilities at end-2018), which are highly concentrated by name; with the 20 largest deposits representing 73% of the total, including 37% raised from related parties. Liquidity risks are mitigated by PB's large liquid asset cushion, which comfortably covers over 80% of the bank's end-2018 customer accounts.

The affirmation of the Support Rating of '5' and Support Rating Floor of 'No Floor' reflects Fitch's view that support from the sovereign or PB's shareholders, although possible, cannot be relied upon. 

Fitch stopped factoring in support from the Azerbaijan authorities into local banks' ratings (including those of PB) after the default of International Bank of Azerbaijan (IBA) on its foreign currency non-deposit obligations in May 2017. In Fitch's view, IBA's default, which is the largest bank in the country, and government-owned, means that state support for less systemically-important, privately-owned banks cannot be relied upon. PB is part of the largest privately-owned banking group in the country, and together with its sister Kapital Bank, holds over 35% of sector deposits.