On 20 December, Moody’s Investors Service upgraded long-term local and foreign currency deposit ratings of Asia Alliance Bank to B2 from B3. At the same time, the rating agency also upgraded the bank’s baseline credit assessment (BCA) / adjusted BCA to B2 from B3, its long-term Counterparty Risk Assessment (CR Assessment) to B1(cr) from B2(cr) and affirmed short-term local- and foreign-currency deposit ratings of Not-Prime and its short-term CR Assessment of Not-Prime (cr). Outlook on all long term Bank Deposit ratings is stable.
The upgrade of Asia Alliance Bank’s ratings with a stable outlook is driven by the recent improvements in the bank’s risk profile and reflects the bank’s reduced appetite for credit risk, track record of strong financial performance; growing business diversification and strengthening business franchise.
Asia Alliance Bank continues to maintain strong capital ratios. As of 30 September, Asia Alliance Bank reported Tier 1 ratio (Basel I, reported under IFRS) of 23.4% up from 20.76% reported at year-end 2015.
Asia Alliance Bank reports a stronger (compared to B3/B2-rated banks) profitability metrics owing to the bank’s good access to low cost corporate deposits, limited reliance on expensive retail deposits; its robust fee generating capacity and operating efficiency.
For 9M 2016, Asia Alliance Bank reported net profit of UZS 29 billion, which translates into a high annualized return-on-average assets of 3.6% (3.9% in 2015 and 4.5% in 2014). The bank’s financial results in 2015−2016 were supported by a significant increase of net interest income driven by a larger income stream and lower funding cost.
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