BAKU, Azerbaijan, August 10. The share of market funds in the total assets of Azerbaijan's Bank of Baku from 2019 through 2020 decreased from 23–24 percent to 19 percent by the end of 2022, Trend reports.
The primary source of market borrowing is a five-year loan from the Central Bank of Azerbaijan with a planned maturity in 2024, according to a report by the international rating agency Moody's Investors Service (Moody's) in connection with the confirmation of long-term ratings of bank deposits in national and foreign currencies at the B2 level.
"In addition, the bank has received long-term loans from Azerbaijan's National Entrepreneurship Support Fund, the Mortgage and Credit Guarantee Fund of Azerbaijan, as well as the Agency for Agricultural Lending and Development of Azerbaijan," according to the article.
Moody's considers these sources of financing stable and risky from the point of view of refinancing.
"The ratio of loans to the bank's deposits remains high and will reach 153 percent by the end of 2022. The bank's liquidity cushion at that date was 13 percent of total assets and is supported by a diverse retail customer base, which accounts for more than 90 percent of all deposits," said the report.
In general, the Bank of Baku's liabilities to the Central Bank of Azerbaijan and national funds on the first of July 2023 amounted to 42.7 million manat ($25.1 million), which is significantly lower compared to 63.9 million manat ($37.6 million) a year earlier.
The Bank of Baku began operating in 1994. The authorized capital of the bank is 52.9 million manat ($31.1 million).
In addition, Moody's Investors Service affirmed Azerbaijan's Bank of Baku's B2 long-term local and foreign currency bank deposit ratings and changed the outlook on these ratings to positive from stable.
Moody's also confirmed the bank's b2 Baseline Credit Assessment (BCA) and Adjusted BCA, NP (Not Prime) short-term ratings of bank deposits in local and foreign currencies at the NP level, long-term and short-term counterparty risk ratings (CRRs) in local and foreign currencies at the B1/NP level, as well as long-term and short-term credit risk assessments (CR Assessments) at the B1(cr)/NP(cr) level.
