Azerbaijani Trend news agency reports that Standard & Poor’s Ratings Services has reviewed the banking sector of the Republic of Azerbaijan (BBB-/Stable/A-3), under methodology updated by Banking Industry Country Risk Assessment (BICRA), and as a result S&P placed Azerbaijan in BICRA group ‘8’, along with Argentina, Kazakhstan, Uzbekistan, Nigeria, and Georgia.
The BICRA comprises two main areas of analysis–economic risk and industry risk—and according to the source; Azerbaijan ranks ‘7’ and ‘8’, respectively.
The source also informs that the banking sector of the Republic of Azerbaijan was “graded” by the following principle:
Economic risk score of ‘7’ reflects the opinion that Azerbaijan faces “high risk” in “economic resilience”, “low risk” in “economic imbalances”, and “extremely high risk” in “credit risk in the economy”, as criteria define those terms.
Industry risk score of ‘8’ is based on our assessment that Azerbaijan faces “very high risk” in its “institutional framework” and “system wide funding”, while “very high risk” in its “competitive dynamics “, is “high risk”, as criteria define those terms.
As reported, Azerbaijan has made important progress in recent years by stepping up bank regulation and supervision, and bringing them gradually closer to international best practices
