Fitch: Azerbaijan’s capital/profitability buffers support stable outlook on banking sector
- 02 December 2020
Fitch Ratings believes the outlook for CIS and Ukrainian banks is stable for 2021, as recovering economies and a moderate revival of business activity will support their growth and revenue prospects, APA-Economics reports citing the Fitch Agency.
The agency’s improving sector outlook for Georgia captures its view of somewhat stronger-than-peers' upside for revenues, backed by healthy economic growth and better resilience to potential credit losses after proactive provisioning in 2020. However, Fitch’s forecasts for all markets remain highly sensitive to the duration of the health crisis and evolution of certain (related) external factors, including oil prices, tourism and remittances flows.
Fitch's Outlook for the portfolio of Issuer Default Ratings (IDRs) in the region is Negative, driven by similar rating outlooks on banks in four markets and reflecting downward pressure either on sovereign ratings (Belarus; where ratings are all support-driven), or banks' financial profiles as a result of the lagged impact of the stress in 2020 (Russia, Georgia, Armenia). Rating Outlooks on banks in the other four markets are Stable, mirroring either sovereign Outlooks (Ukraine and Uzbekistan, where bank ratings are largely support-driven) or reflecting sizeable capital/profitability buffers (Kazakhstan and Azerbaijan).