Moody’s upgrades outlook on Azerbaijan’s banking system

BAKU AZERBAIJAN - SEPTEMBER 25: People goes by the seafront of Baku on September 25 2016. Baku is a capital and largest city of Azerbaijan.

International credit ratings agency Moody’s has upgraded the outlook of Azerbaijan’s banking system from stable to positive, the Azeri press has reported.

The agency’s experts said that Azerbaijan’s growing economy and the high level of state support contributed the most to the positive forecast on the country’s banking system.

Moody’s expects the profits of the Azerbaijani banking sector to grow, adding that credit costs are expected to decline, while liquidity has improved due to the dollarisation of liabilities through governmental support. The share of problem loans is expected to fall below 10 per cent by the end of 2020.

The agency estimates Azerbaijan’s economic growth to accelerate to three per cent in 2019 and 2020 on condition the global prices of energy resources, the country’s export growth and the increase of the non-oil sector of the Azerbaijani economy remain favourable, noting that the economy remains vulnerable to the changes of energy prices.