BAKU, Azerbaijan. Nov.23
By Zeyni Jafarov - Trend:
The assets of Azerbaijani banks will depend on the impact of the COVID-19 pandemic on the banking sector as a whole and the decline in oil prices, Trend reports on Nov.23, referring to the Fitch Ratings Agency.
Problem loans are expected to rise to more than 10 percent in 2021, as part of the loans that were restructured due to the pandemic may become overdue.
Besides, according to the Fitch Banking System Indicator (BSI), Azerbaijani banks are vulnerable to external shocks. So, the International Bank of Azerbaijan (IBA) has returned to profitability with large capital buffers and improved asset quality after a debt restructuring in 2017 but still has an unsecured foreign exchange position of $700 million in June 2020, versus $1.9 billion in 2017.
As of early October 2020, the volume of problem loans in Azerbaijan on an annualized basis decreased by 25.9 percent (373.4 million manat, or $219.6 million), amounting to 1.07 billion manat ($630 million).
(1 USD = 1.7 AZN on Nov.23)
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