Fitch: Bank of Azerbaijan on positive watch

Fitch Ratings said it placed International Bank of Azerbaijan’s long-term foreign-currency issuer default rating, viability rating and senior unsecured debt rating of BB on Rating Watch positive.

The bank’s short-term foreign-currency issuer default rating was affirmed at B.

The agency also placed on positive watch IBA-Moscow’s senior unsecured debt rating of BB.

The positive watch reflects the financial rehabilitation of the bank, which was announced by the authorities in July, along with subsequent clarifications made by the bank’s management that involve a substantial buy-out of problem assets at book value by end-2015, Fitch said.

This would represent tangible sovereign support for the bank and a material enhancement of the support track record, potentially resulting in a positive change in a view of the sovereign’s propensity to provide support, the agency said.

If the clean-up is completed as planned, Fitch said it will likely revise the bank’s support-driven long-term issuer default rating and senior debt rating by one notch.

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