Baku, Azerbaijan, July 22
By Fakhri Vakilov - Trend:
Fitch Ratings has assigned Uzbekistan-based Ipoteka-Bank Foreign the Local Currency Long-Term Issuer Default Ratings (IDRs) of 'BB-', the Outlook on the IDRs is Stable, Trend reports via the agency's report.
Fitch has also assigned the bank a Viability Rating (VR) of 'B'.
Ipoteka-Bank is the fourth-largest bank in Uzbekistan, where it controlled a 9-percent share of system assets and deposits and 10 percent of system loans at end-1H19.
The bank’s 'BB-' Long-Term IDRs reflect Fitch's view of a moderate probability of support from the Uzbekistan sovereign (BB-/Stable) in case of need, as reflected in the bank's Support Rating (SR) of '3' and Support Rating Floor (SRF) of 'BB-'.
Ipoteka's 'b' VR is heavily influenced by the challenging operating environment in Uzbekistan, potential deficiencies in underwriting standards, the bank's limited commercial franchise, rapid loan growth and high single-name concentrations in the loan book, said the report.
VR could be downgraded as a result of deterioration in asset quality, excessive loan growth or capital weakness in the absence of fresh capital injections, Fitch said.
An upgrade of the VR would require a substantial improvement in Uzbekistan's operating environment and strengthening of the bank's commercial franchise and business model.
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