International organization forecasts regarding banking sector of Azerbaijan

15:57 - 24.11.2023


November 24, Fineko/abc.az. The profitability of the banking sector of Azerbaijan (RoAA) will be 2.1% in 2023 and 2.0% in 2024.

ABC.AZ reports that this is stated in S&P Global Ratings’ forecast on the banking sector of Azerbaijan.

The international credit rating agency noted that the profitability of the banking sector is projected at about the level of 2022. New growth in lending aimed at retail products, normalization of risk costs and control of operating expenses will become the basis for stable profitability.

The rating agency has defined that the loan portfolio of the banking sector will grow by 15% in 2023 and by 10% in 2024. S&P also predicts that non-performing loans will grow by 4.0% this year and up to 4.5% in 2024.

"We hope that problem loans can grow from 3.5% on June 30, 2023 to 4.0% - 4.5% over the next 24 months, as the low growth season is coming, and banks will face additional reserve needs in 2023. In 2023-2024, loan losses will remain at the level of 1.0% -1.2% of average loan books," agency's forecast says.

 

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