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Moody's keeps forecast for Azerbaijani banks as stable

Moody's Investors Service maintains the stable forecast for Azerbaijan's banking system that it gave last year.

Moody's said in a Banking System Outlook published on Monday that Azerbaijan's banks were likely to benefit from a favourable operating environment, stabilizing asset quality, improving profitability and adequate capital levels.

"We expect that the operating environment will remain favourable for the banks over the next 12-18 months, which will support their growth and profitability and lead to asset-quality improvements," the report's author, Lev Dorf, said.

Moody's forecasts that Azerbaijan's oil-based economy will produce solid growth in 2011 and 2012, driven by high oil prices. This will continue to support increased government spending that is boosting the non-oil sector and creating business opportunities for domestic banks.

"Supported by the favourable operating environment, banks' asset quality will likely continue to improve over the outlook horizon, after stabilizing during Q4 2010. Data received from the banks up to end-June 2011 indicates that asset quality has marginally improved during H1 2011, although problem loans remain high," Lev Dorf said.

Source: News.az

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