BAKU, Azerbaijan, Dec. 3
By Zeyni Jafarov - Trend:
The state of banks in four CIS countries (including countries with associated membership) - Azerbaijan, Kazakhstan, Ukraine and Uzbekistan - is stable, which allows for a "positive" economic outlook, Trend reports citing the Fitch Ratings international agency.
In particular, in Azerbaijan and Kazakhstan, banks make up a significant part of the countries' profit buffer, reads the agency’s report.
“The overall operating environment for Azerbaijani banks in 2021 is expected to remain less difficult. While Azerbaijan's GDP growth is expected to recover to 2.5 percent in 2021, the coronavirus pandemic (COVID-19) will continue to impact business volumes and the quality of banks' assets in 2021, with risks stemming from restructured claims and potential additional containment measures,” the report said.
“However, the "negative" outlook for the banking sector of other CIS countries, in particular, Russia, Belarus, and Armenia (separately including Georgia, which officially left the CIS on August 18, 2009) is due to the general "negative" economic outlook of these countries,” said the agency.
Earlier, Fitch Ratings confirmed Azerbaijan's long-term foreign currency issuer default rating at ‘BB+’ with a negative outlook.
Fitch's underlying assumption of a gradual rise in oil prices in 2021 and 2022 is that the risks of devaluation in Azerbaijan remain low, but the ongoing second wave of COVID-19 infection increases the downside risks to the outlook.