BAKU, Azerbaijan, August 9. The sustainable economic activity in Azerbaijan will lead to larger business opportunities and higher asset quality for banks, improving their standalone credit profiles, Moody’s Investment Service said, Trend reports via the agency’s latest update.
“The rating actions take into account Moody's view that Azeri banks will benefit from an improving operating environment which is underpinned by stronger economic activity and a stable currency, thanks to high oil prices that are providing sufficient volumes of foreign currency inflows,” the report said.
According to Moody’s, the non-performing loans ratio of Azerbaijani banks at the end of 2021 declined to 4.7 percent, compared to 9.4 percent at the end of 2019. The agency also expects higher oil prices and economic performance to support banks' asset quality in the next 12-18 months.
Meanwhile, the agency also forecasts Azerbaijan’s real GDP to grow 4 percent in the current year.
“After having demonstrated resilience throughout the coronavirus pandemic - resulting in a smaller recession than peers and maintaining a stable currency - Azerbaijan is weathering the Russia/Ukraine crisis with a strong economic recovery bolstered by high hydrocarbon prices,” the report added.
---
Follow the author on Twitter: @mariiiakhm
