BAKU, Azerbaijan, October 17. The Fitch Ratings international agency has revised the outlook on the 'b+' operating environment score for Azerbaijani banks to positive from stable, Trend reports.
"This captures our expectation that the financial stability in a highly cyclical Azerbaijani economy will continue to improve due to the stronger financial profiles of domestic banks and tighter regulatory oversight. The latter is also leading to a moderation of legacy asset-quality risks," the agency added.
The data from the Central Bank of Azerbaijan (CBA) revealed that the net profit of domestic banks for the first eight months of 2023 amounted to 724.2 million manat, or $426 million (a year-on-year increase of 22.9 percent), and the operating profit was 1.06 billion manat, or $620 million (an increase of 25.2 percent).
During the reporting period, interest income of the banks stood at 2.27 billion manat or $1.3 billion (an increase of 32.8 percent), including 1.68 billion manat or $990 million on issued loans (an increase of 19.3 percent), and non-interest income of the banks equaled 860.9 million manat or $506.4 million (an increase of 12.9 percent).
Meanwhile, interest expenses of the banks amounted to 553.7 million manat, or $325.7 million (an increase of 35.1 percent), of which 395.2 million manat ($232.47 million) fell on deposits (an increase of 38.9 percent) and 1.48 billion manat ($870 million) were non-interest expenses (an increase of 25.4 percent).
Moreover, the profit of the banking sector before taxes reached 911.6 million manat ($536.2 million), and income tax payments amounted to 187.4 million manat ($110.2 million).
In general, the total assets of banks exceeded 45.4 billion manat ($26.7 billion) in Azerbaijan as of August 31, 2023.