Azerbaijan’s banks hold a stable position among the banks in the South Caucasus region, said Maxim Maliutin, Deputy Director for CIS+ and Middle Eastern Banks at the international rating agency “Fitch Ratings,” in an interview with APA-Economics.
He has noted that in recent years, the viability ratings of most Caucasian banks have increased. In Georgia and Armenia, this was largely due to post-pandemic economic recovery and as a result of the war in Ukraine significant deposit inflows from Russia. However, in Azerbaijan, positive rating actions were due to increase in oil prices, reductions in legacy asset quality risks and an improving regulatory framework.
Maksim Maliutin has also mentioned that all banks in the region remain below investment grade, with ratings ranging from B to BB. Key constraints include sovereign rating limitations—such as Armenia and Georgia both rated BB-—and structural issues, including high loan and funding dollarization, large balance sheet concentrations, and certain regulatory weaknesses compared to international standards.
