Page 25 - bne IntelliNews 26th May

Weekly Lists
May 26, 2017 www.intellinews.com I Page 25
bne:Banker
Ukraine’s central bank cuts key policy rate to 12.5%
Fitch cuts Azerbaijan’s crisis-hit IBA to ‘restricted default’
The National Bank of Ukraine (NBU) will cut its key policy rate by 0.5 percentage point (pp) to 12.5% per annum from May 26. The move is consistent with the pursuit of inflation targets set for 2017- 2018 and will help propel the economic growth in Ukraine, the regulator said in a statement published on May 25.
The central bank last month cut its key policy rate by 1 pp to 13% per annum. The move followed the NBU’s decision in early March to leave its key policy rate unchanged at 14% per annum in order to mitigate risks for inflation targets in 2017-2018.
Fitch Ratings on May 24 downgraded International Bank of Azer- baijan’s (IBA’s) long-term issuer default rating from ‘CCC’ to ‘RD’ (restricted default), the rating agency said in a press release. The downgrade was in response to IBA’s May 23 announcement of its debt-restructuring plan. On May 15, Fitch had downgraded the lender from ‘BB’ to ‘CCC’.
IBA, Azerbaijan’s largest bank, announced on May 11 that it would halt foreign currency-denominated loan repayments in order to restructure its forex obligations and swap them for sovereign debt. The state-owned bank appears to be trying to put pressure on its creditors ahead of the restructuring. It has $3.33bn of outstanding debt, with US-based food giant Cargill and Citibank amongst its largest creditors.
Russian banks are still vulnerable to negative changes in macro- economic conditions, such as external shocks or commodity price fluctuations similar to that experienced in 2014, Sergei Voronenko, head of financial institutions ratings at S&P, was quoted as saying by Prime on May 23.
“Today we see the level of the overdue loans and bad assets that had matured in the three-year credit cycle and we don't expect further deterioration,” Voronenko said.
Nevertheless, according to Voronenko, 80% of loans provided by Russian lenders are to face delays in repayment of more than 90 day this year, while between 14% and 16% of loans restructured in 2014-2016 are regarded as “toxic”.
S&P says Russian banks still vulnerable to external shocks