“Our sector outlooks are now stable in Russia, Armenia and Ukraine, where we do not expect further significant weakening of banks` financial metrics. Sector outlooks in Kazakhstan, Azerbaijan and Belarus remain negative. These countries have experienced sharp currency depreciations and foreign-currency (FC) lending is high, while regulators have yet to fully quantify asset-quality risks and promote recapitalisation. Outlooks in Georgia and Uzbekistan remain Stable.
Russian banks` sector outlook mirrors the stabilisation in the Russian economy and the rouble.
Azerbaijan`s banks face capital and liquidity pressures from currency mismatches and asset-quality deterioration in heavily dollarised loan books: “Material capital shortfalls and large losses mean we expect further bank failures and clean-up measures next year. However, substantial state support for International Bank of Azerbaijan remains in place and we expect the clean-up of the bank`s balance sheet to be completed next year”.
Fitch expects clean-up measures in Azerbaijan’s banking sector next year
13 December 2016
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Banking sector outlooks for CIS and Georgian banks for 2017 are diverging, reflecting how far recent recessions and currency devaluations will continue to affect lender performance, Fitch Ratings says.
