BAKU, Azerbaijan, November 14. Bank Respublika-AccessBank merger will create Azerbaijan’s fourth-largest bank, says Moody's.
On November 3, Bank Respublika and AccessBank have announced the successful completion of a strategic transaction under which Bank Respublika acquired 100% of AccessBank’s shares, while AccessBank’s former shareholders became shareholders of Bank Respublika by receiving newly issued preference shares in Bank Respublika.
"Following completion of the acquisition, Bank Respublika and AccessBank will initially continue to operate as separate banks, with their subsequent integration into a single bank subject to applicable regulatory requirements. The merged entity will have a market share of around 7-8% of banking system assets in Azerbaijan, making it the country's fourth-largest bank by assets," said the rating agency.
Moody's analysts expect Bank Respublika's asset quality to come under pressure in 2026-2027, driven by the consolidation of AccessBank's loan book, which had a problem loan ratio of 7.4% at year-end 2025, and by differences in the two banks' underwriting standards.
"Before the merger Bank Respublika reported problem loan ratio of 1.4% at mid-2026 and problem loan coverage of 109%. Notwithstanding these immediate integration risks, we see potential for Bank Respublika to realize cost savings and synergies over the longer term. Both banks have similar business models and overlapping customer bases, with a focus on micro, SMEs and individuals. The combination of Bank Respublika's and AccessBank's franchises in Azerbaijan will give Bank Respublika greater scale and stronger bargaining power as the largest player in the micro and SME segments," reads the latest report by Moody's.
The rating agency expects the combined bank's funding profile to be more reliant on customer deposits than Bank Respublika's current funding profile.
"We also expect the combined bank to maintain adequate liquidity buffers over the next 12-18 months, supported by slower loan growth. The negative outlook on Bank Respublika's long-term deposit ratings indicates that an upgrade is unlikely over the next 12-18 months. The outlook could return to stable if we become more confident that the bank will successfully integrate AccessBank and realise the intended cost savings and profitability improvements, while maintaining robust capital adequacy and resilient asset quality," the report says.
