11:21 - 12.06.2023
June 12, Fineko/abc.az. In 2023, the share of overdue loans in the total loan portfolio of Azerbaijani banks will increase moderately to 3.5-4%.
ABC.AZ informs with reference to the report of international rating agency S&P Global Ratings on the confirmation of Azerbaijan's sovereign credit ratings.
"Azerbaijan's banking system is generally stable, and overdue loans reached 2.9% by the end of 2022," the agency notes.
However, according to S&P analysts, the financial sector remains small, with total assets of less than 50% of GDP, which limits the possible risks of contingent liabilities for the State.
"Nevertheless, Azerbaijan's banking system is characterized by a number of persistent structural vulnerabilities, including the still high level of deposit dollarization, despite the recent decline; weak governance and transparency in the international context; and relaxed lending and underwriting standards," the agency emphasizes.
There are 24 banks operating in Azerbaijan. The government owns a controlling stake in the International Bank of Azerbaijan (ABB) and in 2017 restructured the bank, taking over part of its debt. The government also transferred overdue loans to ABB with a book value of about AZN 10 bn the state non-bank credit organization AqrarKredit.
"There is a state guarantee on loans given to AqrarKredit by the Central Bank. Thus, we include state-guaranteed loans from AqrarKredit in the amount of AZN 9.5 bn in the total state debt," the report says.
