Fitch Ratings report: Azerbaijan banks stabilized
Baku, March 29 (AZERTAC). A conference on Azerbaijan’s economic potential took place March 29 at Hilton Hotel in Baku. The conference highlighted a Fitch Ratings’ newly-published report on Azerbaijan.
The document says that the credit metrics of Azerbaijan's banks have stabilized since the height of the global financial crisis, and currently high oil prices are supporting asset quality and liquidity in the sector.
Fitch expects loan growth in 2012 to remain broadly in line with the 21% expansion reported for 2011. New credit is being extended primarily to the retail and SME segments, an expansion supported by the currently moderate leverage in the economy: loans/GDP stood at 20% at end-2011, with loans/non-oil GDP at 45%.
Head of the Fitch Ratings Russia / CIS and Black Sea regional office Dmitry Surkov said that there is a dynamic growth of the economy of Azerbaijan. Given the large reserves of oil and gas potential, the medium-term economic growth of Azerbaijan is strong, and there is a financial stability. The level of non-performing loans (NPLs, 90 days overdue) estimated by Fitch based on a survey of rated banks stabilized at a high 14% at end 2011.
Associate Director for Financial Institutions, Dmitry Abramov presented an extensive report on "The Banks of Azerbaijan: a way out of crisis." He emphasized that the limited profitability and moderate capitalization constrain the ability of banks to absorb losses, and the banking system remains at risk of any significant adverse changes in oil prices.
Fitch expects loan growth in 2012 to remain broadly in line with the 21% expansion reported for 2011. New credit is being extended primarily to the retail and SME segments, an expansion supported by the currently moderate leverage in the economy: loans/GDP stood at 20% at end-2011, with loans/non-oil GDP at 45%.
In conclusion, the speakers answered questions from participants. The conference was attended by representatives of SOCAR, the Azerbaijan International Bank, as well as a number of local and foreign banks and businesses.
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