Azernews.Az

Leading credit rating agency Standard & Poor's has reviewed the banking sector of Azerbaijan, granting it the BBB-/Stable/A-3 rating under updated Banking Industry Country Risk Assessment (BICRA) methodology. 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 -- where Azerbaijan ranks '7' and '8', respectively.

S&P's 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".

S&P's industry risk score of '8' is based on its assessment that Azerbaijan faces "very high risk" in its "institutional framework" and "systemwide funding", while "very high risk" in its "competitive dynamics".

Azerbaijan has made important progress in recent years by stepping up bank regulation and supervision, and bringing them gradually closer to international best practices, according to the report.

S&P classify Azerbaijan's government as "supportive" toward domestic banks. "We recognize the government's track record of providing support to the banking system in times of exceptional stress," the report said.