BAKU, Azerbaijan, November 4. S&P Global Ratings agency forecasts the return on equity (ROE) for Azerbaijan's banking sector to equal 16 percent for 2024-2026, compared to 17.7 percent in 2023 and 16.2 percent in 2022.
Data obtained by Trend from the agency shows that the return on assets (ROA) for Azerbaijani banks is expected to remain at 2.1 percent over the next three years, slightly down from 2.2 percent recorded in the previous two years.
The forecast for the loan-to-deposit ratio provides an increase to 105.1 percent in 2024, 110.7 percent in 2025, and 116.5 percent in 2026, compared to 100.9 percent in 2023 and 88.7 percent in 2022.
S&P also assessed credit risks, including the share of non-performing loans and credit losses.
The share of non-performing loans is forecasted to reach three percent in 2024, 3.2 percent in 2025, and 3.4 percent in 2026.
In comparison, this figure was 2.6 percent in 2023 and 3.6 percent in 2022. Expected credit losses for banks are projected to be at 1.2 percent during the period from 2024 to 2026, slightly higher than 1.1 percent in 2023 and 1 percent in 2022.
The share of corporate debt in GDP is expected to rise from 8.1 percent in 2023 to 9.1 percent in 2024, 10.2 percent in 2025, and 11 percent in 2026.
Additionally, the agency's data indicates that housing prices, adjusted for inflation, are projected to increase by 5.3 percent in 2024, 3.8 percent in 2025, and 3.4 percent in 2026.