BAKU, Azerbaijan, June 4
By Zeyni Jafarov - Trend:
"Stable" outlooks for banks’ ratings prevail in most countries in Asia and the CIS, Trend reports on June 3 referring to the statement of Fitch Ratings agency.
The main factors for "stable" forecasts are huge capital and liquidity reserves, a big margin of safety in terms of ratings and a factor of state support.
At the same time, Fitch stressed that the outlook on the ratings of almost half of banks in emerging economies remains "negative". The share of "negative" forecasts is especially high in Latin America, the Middle East and Africa.
The agency stressed that the "negative" outlook reflects pressure on banks' asset quality due to the COVID-19 pandemic, as well as the expected delayed impact of the economic downturns observed in 2020.
The increase in NPLs in most emerging markets was modest, while a decrease was observed on some markets.
At the same time, the deterioration in credit quality last year was restrained by regulatory and debt relief measures for borrowers, but these measures have either expired or are ending this year. This could lead to the continued pressure on credit quality indicators of banks in emerging economies.
Fitch has downgraded ratings of eight percent of banks in emerging markets and the outlook was revised to negative among eight percent of banks since the end of the first half of 2020. Most of these actions were caused by negative actions on sovereign ratings.
Earlier, Fitch Ratings revised the forecast on the long-term rating of the default of the issuer of Azerbaijan in foreign currency from "negative" to "stable" at the level of "BB +".
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