Moody's: Bad loans in Azerbaijan to reach 20% by year end

Baku. 24 May. REPORT.AZ/ "Moody's" international rating agency not expect next reduction in rating of Azerbaijan. Report informs, assistant vice president of agency, analyst Maria Malyukova said: "All the negative factors have been taken into account and the rating was already reduced at the beginning of the year."

According to him, the positive changes are expected in Azerbaijan's banking sector in next 12-18 months: "Azerbaijan has entered a period of economic recession. We expect GDP to decline by 3.3% this year. Fiscal situation has worsened."

"Bank lending will be reduced. Problem loans are projected to reach 20% by year-end. In the first quarter, the loan portfolio decreased by 9%. Excluding International Bank of Azerbaijan (IBA), problem loans make 20% of the banks and it will reach 25% by year-end. As of March 1equity to assets ratio reached 10.9% from 11.2% at the beginning of the year ",the Moody's official said.