Fitch: Azerbaijan banking sector is still fairly weak

While there has been some improvement in credit fundamentals in recent years, the Azerbaijan banking sector is still fairly weak, reflected by Fitch's Banking System Indicator score of 'b', Report informs, citing Fitch Ratings.

The non-performing loan ratio fell to 3.5% at end-1H22 (from 6.1% at end-2020), Tier 1 capital is adequate at 16.1%, and the sector has remained profitable.

There is a low Russian presence in the sector, although correspondent banking relations were moderately disrupted this year.

The deposit dollarisation ratio has steadily fallen to 49.3% in August, from 60.4% at end-1H20, but is well above the peer group median of 16.5%.