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Monday, March 27, 2017

Moody's gives Azerbaijan's banking system a stable rating

Moody's Investors Service published a report last week that gave Azerbaijan's banking system a stable outlook.

Moody's expects Azerbaijan's banks to benefit from a favorable operating environment, stable asset quality and sufficient capital buffers over the next 12-18 months. Additionally, Azerbaijan could maintain its demand for credit through robust economic growth, helping banks to maintain lending margins and profitability.

Azerbaijan is expected to see stable oil prices in the outlook period, which could help the country's gross domestic product grow by five percent in 2014. The country saw a 5.8 percent GDP increase in 2013.

The report said that Azerbaijan's banks should also see stability in their funding and liquidity profiles during the next 12-18 months. Moody's said Azerbaijan's cross-border funding, which was mostly derived from bilateral or international financial institution arrangements, was more stable than market funding.

Azerbaijan has had a stable outlook since 2010. The country's supportive macroeconomic conditions could help it maintain its outlook.