BAKU, Azerbaijan, February 28. Azerbaijan’s banks are expected to see credit performance improve, thanks to high hydrocarbon prices and continued economic growth, Moody's Investment Service said, Trend reports.
At the same time, the agency expects capital reserves to decline through the current year, as the loan portfolio expands further.
Azerbaijani banks, as Moody's noted, are best positioned in the region, due to weaker trade links with Russia, as well as continued high oil prices, which will, eventually, have a positive impact on the banks' performance.
"The longer term impact of the military conflict is likely to be negative for CIS banks. We expect the deterioration to be gradual over the coming years - although a more rapid impact is possible. Banks in Ukraine and Belarus will likely see further deterioration of their financial positions over the coming year. The contracting Russian economy will mean reduced remittance flows for banks in Kyrgyz Republic and Tajikistan, and weaker trade flows for banks in Armenia, Kazakhstan, Uzbekistan, Georgia and Kyrgyz Republic," the agency added.
Meanwhile, the loan portfolio of Azerbaijani banks totaled 19.669 billion manat ($11.57 billion) as of January 31, 2023. At the same time, as of January 31, 2023, the total assets of banks amounted to 45.861 billion manat ($26.97 billion), while total liabilities stood at 40.2 billion manat ($23.6 billion).