"S&P Global Ratings" International Rating Agency has improved the risk assessment of Azerbaijan's banking sector for the first quarter of 2023, APA-Economics reports.
"We have revised our economic risk score for Azerbaijan to '8' from '9'. We believe the Azeri banking sector has shown better resilience to macroeconomic challenges over the recent years, with credit costs and nonperforming loans (NPLs) in the system remaining significantly below our earlier expectations.
Banks' asset quality metrics demonstrate sustainable improvement to historically low levels of NPLs and credit costs. We believe the banking sector successfully navigated a difficult 2020 economic slowdown and lower oil prices. The impact of the economic downturn and lower oil prices was milder than we anticipated, mostly thanks to a quicker economic recovery and a wide range of government support measures for the economy that affected borrowers. We consider the easing economic risk in Azerbaijan is more cyclical than structural and is largely supported by favorable commodity prices and better business dynamism," the report says.
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