Standard & Poor's issues BICRA report on Azerbaijan

Standard & Poor's Ratings Services has reviewed the banking sector of the Republic of Azerbaijan (BBB-/Stable/A-3) under updated Banking Industry Country Risk Assessment (BICRA) methodology. S&P place Azerbaijan in BICRA group '8', along with Argentina, Kazakhstan, Uzbekistan, Nigeria, and Georgia.

The BICRA comprises two main areas of analysis--economic risk and industry risk--where Azerbaijan ranks '7' and '8', respectively.

According S&P's economic risk score of '7' reflects the opinion that Azerbaijan faces "high risk" in "economic resilience", "low risk" in "economic imbalances", and "extremely high risk" in "credit risk in the economy", as criteria define those terms.

S&P's industry risk score of '8' is based on our assessment that Azerbaijan faces "very high risk" in its "institutional framework" and "systemwide funding", while "very high risk" in its "competitive dynamics ", is "high risk", as criteria define those terms.

Azerbaijan has made important progress in recent years by stepping up bank regulation and supervision, and bringing them gradually closer to international best practices.

S&P classify Azerbaijan's government as "supportive" toward domestic banks. "We recognize the government's track record of providing support to the banking system in times of exceptional stress" report said.


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