“Profitability of Azerbaijan’s banking sector in the next 12 months will remain broadly on par with 2022 levels,” was noted in the forecasts of international credit rating agency S&P Global Ratings on the banking sector of Azerbaijan, “Paralel.Az-Economics” reports.

It was noted that new lending growth, with a focus on retail products, normalizing cost of risk, and control over operating expense will be the pillars for stable profitability.

However, S&P Global Ratings considers that nonperforming loans could increase to 4.0%-4.5% over the next 24 months from 3.5% at June 30, 2023. Agency, as well as added that credit losses in 2023-2024 will remain at 1.0%-1.2% of average loan books.