Moody’s: ROA of Azerbaijan's banking system in 2025 to be 2-3%

Moody’s: ROA of Azerbaijan's banking system in 2025 to be 2-3% The international rating agency Moody’s expects the ROA (return on assets) ratio at the level of 2-3% in 2025
Finance
February 28, 2025 13:25
Moody’s: ROA of Azerbaijan's banking system in 2025 to be 2-3%

The international rating agency Moody’s expects the ROA (return on assets) ratio at the level of 2-3% in 2025, Report informs.

Bank profitability improved in 2024, Moody's noted, adding that stable net interest margin, fee and commission income and reduced provisioning costs are the main sources of bank income.

However, a possible reduction in the key rate this year by the Central Bank of Azerbaijan (CBA) could put pressure on margins, as asset yields will decline and competition for customers will lead to high rates on liabilities, according to the update.

Overall, Moody’s maintained a positive outlook on the country's banking system, due to a favorable operating environment. The banking sector of Azerbaijan has strong capital reserves, and stable profitability ensures its high resilience to potential losses. At the same time, state support, especially for the largest banks, will remain significant, the agency's analysts believe.

Moody’s emphasizes that the strengthening of the government's creditworthiness and the country's significant reserves (the total volume of which, including the funds of the State Oil Fund and the CBA, exceeded 90% of GDP) allow for continued support of the banking system.

According to the CBA, for the first half of 2024, the ROA indicator of the banking system of Azerbaijan amounted to 2.5% against 2.4% in 2023, 2.2% in 2022.

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