Rufat Guliyev, Azerbaijani MP and a member of the country’s parliamentary committee on economic policy, industry and entrepreneurship, believes that the downgrade in ratings of the International Bank of Azerbaijan (IBA) by international ratings agencies Moody’s Investors Service and Fitch Ratings is temporary.
According to Guliyev, the decline in IBA ratings was expected.
“I believe that the downgrade is temporary, and will not affect other banks of the country, although the IBA is the largest bank in Azerbaijan. The economic and financial situation in Azerbaijan is quite stable and there are enough gold and currency reserves to fulfill all our obligations to foreign creditors,” he noted.
The MP said that currently, the Azerbaijani economy continues to grow, despite the global processes and the changes in ratings will not affect the financial sector of the country.
Touching upon the process of restructuring of the IBA’s foreign obligations, Guliyev stressed that this process will make the bank a healthy and strong financial institution.
“Restoration of the IBA’s financial stability is important in terms of providing relevant financial services to the economy. The steps that the bank is taking to ensure its financial stability are very important,” noted the MP. “I also believe that all retail and corporate clients of the IBA should be sure that the restructuring plan will not have any influence on them. Meanwhile, this will not affect other processes in the bank.”
As it was previously reported, the IBA commenced a process of voluntary debt restructuring as part of its rehabilitation. The bank has filed an appeal to the New York court to aid the restructuring of $3.34 billion in debt. Under the court’s decision made on May 12, 2017, foreign creditors will not be able to make claims against the IBA assets during the process of voluntary restructuring of the bank’s foreign liabilities.
Recently, a meeting of leadership of the IBA, Azerbaijan’s Ministry of Finance and Financial Market Supervisory Authority (FIMSA) with foreign creditors was held in London. The bank’s management offered creditors several options for restructuring its obligations. The IBA’s total debt to foreign creditors is $3.3 billion.
The International Bank of Azerbaijan has been operating since 1992 and is one of the country’s two state-owned banks.
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