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Moody’s maintains stable outlook on Azerbaijan’s banking sector (Exclusive)

Finance Materials 30 March 2019 13:57 (UTC +04:00)

Baku, Azerbaijan, March 30

By Sara Israfilbayova - Trend:

The international rating agency Moody's Investor's Service maintains a stable outlook on Azerbaijan’s banking sector, Petr Paklin, vice president and leading analyst of the agency on Azerbaijan’s banking sector told Trend.

“Until August last year, for three consecutive years, the outlook was negative,” he said. “The change in valuation was associated with an improved operating environment, expectation of further clean-up of loan portfolios from problem loans, as well as improved capital adequacy thanks to the help of shareholders and restoring the profitability of banks.”

He noted that the agency positively assesses the decree by Azerbaijani President Ilham Aliyev on additional measures in connection with solving the issue of problem loans of individuals.

“These measures should improve household creditworthiness and reduce the volume of problem retail loans on banks’ balance sheets thanks to government support,” he said.

Azerbaijani President Ilham Aliyev signed a decree on additional measures in connection with solving the issue of the individuals’ problem loans.

The decree envisages the payment of compensation to citizens whose loan burden increased as a result of the devaluation of the manat in February and December 2015.

According to the decree, opportunities are created for restructuring concessional terms of both US dollar loans and manat loans with a delay of more than 360 days.

In January 2019, the assets of Azerbaijani banks amounted to 29.6 billion manats.

The loan portfolio of Azerbaijani banks amounted to 12.54 billion manats. Of this amount, the banks created reserves for 1.48 billion manats. Also, in the structure of assets, 1.19 billion manats accounted for cash held by banks, while 3.9 billion manats accounted for securities.

Total value of deposits in Azerbaijan in January 2019 amounted to 21.99 billion manats.

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