BAKU, Azerbaijan, September 11. S&P Global
Ratings has raised the long-term issuer credit rating of
Uzbekistan’s Davr-Bank to ‘B+’ from ‘B’ following its acquisition
by Azerbaijan’s ABB, while affirming the bank’s short-term rating
at ‘B’. The outlook is stable.


“We raised our ratings on Davr-Bank because we consider it a
moderately strategic subsidiary of the International Bank of
Azerbaijan (ABB),” S&P Global Ratings said.


According to the agency, Davr-Bank accounts for 10%-12% of ABB
Group’s total assets. The transaction is in line with ABB’s
long-term strategy of international expansion and positioning
itself as a regional player.


Davr-Bank is expected to be renamed ABB Davr-Bank.


“However, the level of operational integration between the two
entities is yet to be determined, limiting our assessment. We
believe ABB Group has higher creditworthiness than Davr-Bank
stand-alone and therefore incorporate a notch of uplift into our
rating on Davr-Bank,” the agency said.


S&P Global Ratings expects Davr-Bank to maintain its focus
on retail and small and midsize enterprise (SME) lending over the
next 12 months.


“While we anticipate the bank to develop its new growth strategy
before the end of 2026, we expect these segments to remain its core
pillars and to continue to fuel growth,” the agency said.


S&P Global Ratings also expects Davr-Bank to benefit from
new opportunities arising from its membership in the ABB Group,
including servicing Azerbaijani and Turkish corporates in
Uzbekistan and integrating ABB’s international money transfer
services.


The agency projects Davr-Bank’s loan book to grow by 20%-25% in
2026, accelerating to 30%-35% in both 2027 and 2028.


“We forecast the bank's net interest margin to remain robust at
10.0%-10.3%, bolstered by high interest rates and an expanded
footprint in higher-margin segments,” S&P Global Ratings
said.







The agency expects Davr-Bank to maintain adequate capital
buffers. Under its base-case scenario, S&P Global Ratings does
not anticipate capital injections from shareholders over
2026-2028.


The agency expects the bank’s risk-adjusted capital (RAC) ratio
to remain at 10.0%-10.7% over the next 12-18 months, supported by
solid earnings and 100% net income retention.


At the same time, integration with ABB could result in changes
in loan reclassification and higher provisioning needs. Changes in
ownership could also lead to adjustments to strategic plans,
potentially creating execution risks and affecting dividend
policy.


“This, in turn, could affect capital buildup and bring the RAC
ratio to below 10% over the next two-to-three years. This
constrains our assessment of Davr-Bank’s capital position at
adequate, although we expect capitalization will remain a rating
strength,” the agency said.


The stable outlook reflects S&P Global Ratings’ expectation
that Davr-Bank will maintain its focus on retail and SME lending
over the next 12 months while benefiting from its business
connection with ABB, supported by solid capital buffers and
adequate asset quality.


The agency also expects the bank’s liquidity position to remain
adequate and Davr-Bank to maintain access to funding from
international financial institutions.


The International Bank of Azerbaijan (ABB) has acquired a 51%
controlling stake in Uzbekistan’s Davr Bank for about 1.65 trillion
soums ($140 million), implying an equity valuation of roughly $280
million for the Uzbek lender.


The transaction was executed on September 10 through six
consecutive trades on the Tashkent Republican Stock Exchange. ABB
purchased 51 million ordinary shares at a single price of 32,281.28
soums (about $2,74) per share.