Moody's: negative outlook for Azerbaijan banking

The medium-term credit outlook for the Azerbaijan banking system is negative, reflecting recent developments in the Azerbaijani banking sector, said Moody's Investors Service said it in a new banking system outlook.

The outlook takes into account Moody's concerns that the deceleration in Azerbaijan's economic growth, the weakening operating environment coupled with funding constraints are likely to adversely affect banks' asset quality, liquidity and ultimately capitalization, the agency added.

Moody's said that its negative outlook for the Azerbaijani banking system expresses the rating agency's view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months.

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