Beynəlxalq reytinq agentliyi "Fitch Ratings" "AFB Bank"ASC-nin uzunmüddətli emitentin defolt reytinqini (İssuer Default Reytinqi - IDR) “B” səviyyəsində, "Stabil" proqnozla təsdiq edib.

Marja.az xəbər verir ki, bu barədə "Fitch Ratings" məlumat yayıb.

Həmçinin Banka “b” səviyyəsində Dayanıqlılıq Reytinqi (Viability Rating – VR) və  “dəstək yoxdur (no support)” statusunda Hökumət Dəstək Reytinqi (GSR) verilib. 

Qeyd edilib ki, "AFB Bank"ın “B” səviyyəli reytinqi yaxşılaşan kredit keyfiyyəti kimi amilləri nəzərə alır. Bank - qənaətbəxş rentabellik səviyyəsinə, güclü kapitala və yetərli likvidlik yastığına malikdir. 

Əlavə edilib ki, 2025-ci ilin 1-ci yarısının sonunda bank sektorunun ümumi aktiv və depozitlərinin 1%-dən azı "AFB Bank"ın payına düşüb. 2024-cü ilin sonunda Bankın ümumi kredit portfelinin 49%-ini istehlak kreditlərindən – əsasən risk səviyyəsi aşağı olan ipoteka kreditlərindən (76%) ibarət olub.

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Fitch Rates AFB Bank at 'B'; Outlook Stable

Fitch Ratings - Dubai - 06 Aug 2025: Fitch Ratings has assigned Azerbaijan-based AFB Bank Open Joint Stock Company (AFB) Long-Term Issuer Default Ratings (IDRs) of 'B' with Stable Outlooks. Fitch has also assigned AFB a Viability Rating (VR) of 'b' and Government Support Rating (GSR) of 'no support'. A full list of rating actions is below.

Key Rating Drivers

AFB's 'B' LT IDRs are driven by its intrinsic creditworthiness, as captured by its 'b' VR. The VR reflects a limited domestic franchise, business concentrations, and weak, although improving, loan quality. These factors are balanced by reasonable profitability, strong capitalisation, and adequate liquidity buffers.

Moderating Growth; Retail Lending Risks: We project Azerbaijan's GDP growth to decelerate to 3.5% in 2025 and 2.5% in 2026 (from 4.1% in 2024), reflecting a slowdown in the oil and gas sector amid lower global prices. The banking sector's average metrics have improved since 2017, with lowered loan dollarisation and reduced legacy asset-quality risks. However, the rapid expansion of retail lending since 2021 could pose overheating risks, although the central bank takes proactive measures to mitigate credit risk in this segment.

Limited Franchise: AFB is a small bank, making up less than 1% of sector assets and deposits at end-1H25. The bank is developing retail lending (end-2024: 49% of gross loans), dominated by low-risk mortgages (76% of total). The corporate franchise is designed around companies affiliated with a large local conglomerate, resulting in high business model concentrations. AFB is owned by a local prominent businessman, and its strategy for the coming years aims at improving performance through greater diversification of its banking operations.

Vulnerable Risk Profile: Fitch assesses AFB's underwriting standards as weak, due to sizable single-name loan concentrations, translating into volatile loan quality and growth. We estimate that the 25 largest borrower groups exceeded 70% of the corporate and SME portfolio at end-2024, with the bulk comprising relationship-based exposures. We expect loan growth to accelerate to above 20% a year in 2025 and 2026 (2024: 1.7%), in line with the bank's expansion strategy, mainly driven by retail and SME lending.

High Impaired Loans; Moderate Coverage: Impaired loans (Stage 3 under IFRS 9) decreased slightly to 14.4% of gross loans at end-2024 (end-2023: 15.6%), supported by large write-offs (2024: 7.6% of average loans). Stage 2 loans remained a low 1.4% of gross loans at end-2024 (end-2023: 2%). Total reserve coverage of Stage 3 loans reduced to an acceptable 60% at end-2024 (end-2023: 86%). We expect the bank's impaired loans ratio to decrease gradually to 10% in 2025 and 2026, supported by resumed loan growth.

Good Profitability But Volatile: The bank's pre-impairment operating profit exceeded 3% of average loans in 2022-2024, after being negative in 2021. However, this provides only a moderate buffer to absorb credit losses, given AFB's high loan concentrations. The operating profit/risk-weighted assets (RWAs) ratio gradually reduced to a still-adequate 2.9% in 2024 (2021: 7.3%), and we expect it to normalise at 2% in 2025-2026, due to higher credit losses.

Solid Capital Buffer: AFB's Fitch Core Capital (FCC) ratio declined to a still robust 36% at end-2024 (end-2023: 39%), due to full distribution of 2023 net income as dividends and 3% RWAs growth. The regulatory Tier 1 capital ratio was also high at 32% at end-1H25. In our view, AFB's capital buffer will be partly used for substantial loan growth in 2025 and 2026. However, the FCC ratio will likely stay above 20%, and could be supported by a capital injection from the major shareholder.

Concentrated Deposits; Ample Liquidity: Customer deposits made up 61% of liabilities at end-2024, while wholesale funds accounted for a notable 36%. The latter primarily comprises low-cost, long-term loans from state development institutions. The deposit base is highly concentrated by name, including related parties and companies affiliated with a conglomerate. The bank's liquidity buffer was adequate at end-2024, covering 48% of deposits.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

AFB's VR and Long-Term IDRs could be downgraded on a material weakening of capitalisation due to for instance, loss-making performance or rapid loan growth. Furthermore, a significant weakening of liquidity, particularly as a consequence of substantial deposit outflows from the largest corporate customers, could also be credit negative.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Upside potential for AFB's VR and Long-Term IDRs is limited and would necessitate a substantial strengthening of the commercial franchise, a more diversified business model, and material enhancements to its risk management framework.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

The bank's 'B' Short-Term IDRs are the only possible option mapping to the 'B' Long-Term IDRs.

AFB's GSR of 'no support' reflects our view that state support is unlikely to be available to Azerbaijani banks due to the authorities' patchy record of support to the banking sector, as well as AFB's limited systemic importance. Potential for support from the bank's private shareholders cannot be reliably assessed.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

The Short-Term IDRs are sensitive to changes in the bank's Long-Term IDRs.

Upside to the bank's GSR is limited unless there is a record of timely and sufficient capital support from state authorities being provided to privately owned banks.

VR ADJUSTMENTS

The earnings and profitability score of 'b+' is below the 'bbb' category implied score because of the following adjustment earnings stability (negative).

The capitalisation and leverage score of 'b+' is below the 'bbb' category implied score because of the following adjustment reason: size of capital base (negative).

The funding and liquidity score of 'b' is below the 'bb' category category implied score because of the following adjustment reason: deposit structure (negative).

Date of Relevant Committee

29 July 2025

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

AFB has an ESG Relevance Score of '4' for Governance Structure, due to weaknesses in governance and controls leading to risks of high relationship-based lending. This factor has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.