BAKU, Azerbaijan, November 28. Fitch Ratings said in its CIS+ Banks Outlook study, which covers banks in Azerbaijan, Armenia, Georgia, Kazakhstan, Ukraine, and Uzbekistan, that core credit drivers in Azerbaijan will be supported by real GDP growth, resulting in good loan growth prospects in 2024, Trend reports.
Fitch expects regional banks' operating circumstances and fundamental credit drivers, as well as most credit measures, to remain steady in 2024, while loan growth prospects in the region will be favorable.
"All six banking sectors covered in the report have neutral sector outlooks." "We believe Ukrainian banks' operating conditions have reached a low point, and as a result, we expect core credit drivers to stabilize in 2024," the agency said.
"For the other five markets, we expect core credit drivers to be supported by reasonable real GDP growth, translating into favorable loan growth prospects and still-strong profitability, underpinned by higher inflation and rates," Fitch stated.
"Azerbaijan and Kazakhstan, which are oil-producing countries, will also continue to benefit from the high oil prices," the report uttered.
In October 2023, Fitch revised the outlook on the ‘b+’ operating environment score for Azerbaijani banks to positive from stable.
"This reflects our assumption that financial stability in Azerbaijan's highly cyclical economy will improve further as domestic banks' financial profiles improve and regulatory supervision tightens. The latter is also lowering asset quality hazards," the agency emphasized.