BAKU, Azerbaijan, Feb. 25. Profitability of
Azerbaijani banks will remain stable, Trend reports via
Moody’s.
The latest report by Moody’s reveals that the average net income
to tangible assets ratio of the Azerbaijani banks we rate should
remain solid at around 2%-3%, supported by robust net interest
margins, solid fee and commission income, and contained loan-loss
provisioning charges.
“Margins have grown in recent years, reflecting an increasing
share of higher yielding loans to retail borrowers and small and
medium sized enterprises, with the economic recovery driving strong
loan demand from these segments. However, there may be margin
pressure, as declining Central Bank of Azerbaijan policy rates
decrease the rates on banks' interest-bearing assets while rates on
their funding remain fairly rigid because of fierce competition for
customers. Increased obligatory reserve requirements will somewhat
constrain still strong profitability,” reads the report.
Will be updated
