Chairman: Fall in IBA’s ratings is temporary
By Sara Israfilbayova
The downgrade of the ratings of the International Bank of Azerbaijan (IBA) from Fitch and Moody's was quite expected, said IBA Board Chairman Khalid Ahadov.
"This is a quite normal decision for a bank in the process of restructuring. IBA ratings have been reduced only for a short period of time. Once the bank's financial position is strengthened, international rating agencies will raise the ratings again,” told the Chairman.
Ahadov noted that this decision will not affect the bank's activity in any way. IBA continues all operations and customer service in normal mode.
The Chairman said this process will ensure the strengthening of the bank's financial positions, both in Azerbaijan and abroad.
Fitch assigned the Bank a CCC rating, and Moody's rating was revised to Caa3.
In July 2015, President Ilham Aliyev signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the IBA.
The drawbacks in the management, investment and loan policy of the IBA, as well as financing of less efficient, risky investment projects worsened the Bank's financial state, caused increase in the share of distressed assets and reduced its liquidity.
The restructuring plan considers a restructuring process to be effected through an exchange of IBA’s senior and junior foreign currency obligations for direct sovereign obligations of the Republic of Azerbaijan.
The bank has been operating since 1992 and is one of the country's two state banks.
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