Moody's: Azerbaijani government is well placed to support economy

“Probability of government support for the largest banks in Azerbaijan remains high”, Moody's international rating agency released information in this regard.

It was stated that total reserves accumulated by the sovereign wealth fund, State Oil Fund of the Republic of Azerbaijan, and the central bank exceeded 100% of GDP as of year-end 2023. Thus the government is well placed to support the economy and the highly dollarised banking system, which is small, with total assets at about 35% of GDP.

The agency noted that three out of five rated Azerbaijani banks' long-term deposit ratings incorporate an uplift from their Baseline Credit Assessments (BCAs) as a result of government support, reflecting their systemic importance: “We rate five out of 23 commercial banks operating in Azerbaijan, which together accounted for around 58% of the system total assets as of 31 December 2023. The banking sector held total assets of AZN 49 billion as of year-end 2023, which accounts for 35% of the country’s nominal GDP. Azerbaijani banks’ BCAs, our view of their standalone financial strength, are distributed over a three-notch range from ba3 to b2, with a weighted average BCA of b1. The weighted average long-term deposit rating is Ba3.”

News.Az