Fitch Ratings has affirmed Azerbaijan-based Expressbank’s Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook.
The affirmation of EB's ratings reflects only limited changes to its credit profile over the last 12 months. The ratings take into account EB's limited franchise in the difficult Azerbaijan operating environment and a high level of related-party lending. Positively, the ratings reflect EB's solid capital buffer, still reasonable, albeit moderately deteriorating, asset quality, limited exposure to foreign currency lending and ample liquidity. The Stable Outlook reflects Fitch's expectation that, despite the potential for some further asset quality deterioration, this should be covered by pre-impairment profits and additionally mitigated by the bank's solid capital buffer.
Although Fitch believes some regulatory forbearance may be available for the bank, in case of need, any extraordinary direct capital support from the Azerbaijan authorities is very uncertain.