Kapital bank's asset quality will likely remain stable and better than the system average, and that the bank will maintain its adequate capital buffer and significant liquidity cushion, Standard & Poors Global Ratings reported.
The agency says it expects that the bank will demonstrate only moderate lending growth, which will unlikely exceed 5%-7% per annum over the next two years: ‘We assume that a capital injection of Azerbaijan manat (AZN) 40 million ($23.5 million) from shareholders in the form of preferred shares, which the bank will receive in the first half of 2018, will support the bank's capitalization’.
‘In 2017, Kapital Bank's asset quality metrics improved, with NPLs declining to 7.2% of its gross loan portfolio as of Sept. 30, 2017, versus 14.7% a year ago. Last year, the bank restructured its largest problem loan, which has been serviced well since then. We expect that the bank's asset quality will remain broadly stable and likely superior to that of most banks in Azerbaijan. At the beginning of 2018, almost all funding and liquidity metrics were better than those of peers’, the agency said.