Baku, January 22, AZERTAC
Moody's Investors Service affirmed Kapital Bank's current BCA at b1 and long-term deposit ratings at Ba3, whereas changed the outlook to negative from stable reflecting the pressure on the bank's credit profile from deteriorating market conditions and expectations of worsening asset quality. Current deposit ratings incorporate a one-notch uplift based on the agency's estimate of a moderate probability of government support to the bank in the event of need, given its high market share and large customer base, as well as its ties to the government.
Moody's expects the bank to remain profitable in the next 12 months, although it will be under pressure from an increasing provisioning burden and higher funding costs. The bank's capital cushion is sound with regulatory total capital and Tier 1 ratios of 19.5% and 14.7%, respectively, as of January 1, 2016.