YEREVAN, December 6, /ARKA/. The sector outlook for 2022 for banks in the CIS+ region is neutral, Fitch Ratings said. According to it, business conditions will remain supportive for lenders in the region (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Russia, Ukraine and Uzbekistan), due to reduced pressure from the pandemic, healthy economic growth and the banks’ reasonable capital buffers, which support continued credit expansion. In 2022, we expect broadly stable trends in banks’ asset quality, profitability and solvency metrics.
Fitch believes the region’s banking sectors have largely recovered from last year’s disruptions, as suggested by healthy solvency metrics and the bounce-back of loan growth and performance ratios to pre-pandemic levels.
The impact of the downturn on asset quality was less severe than we had expected as a result of broadly stable macro environments. Banks’ cushions of pre-impairment profit and sizeable capital buffers absorbed an only moderate rise in loan impairment costs. In 2021, Fitch revised most of the Negative Outlooks on bank ratings in the region to Stable. The remaining few Negative Outlooks are concentrated in Belarus (due to the Negative sovereign Outlook) and Armenia (due to residual credit risks from the 2020 downturn).
‘We expect a few selective positive rating actions in 2022, as reflected by Positive Outlooks on nine banks in the region; most of these are support-driven ratings of Ukrainian banks which are linked to/constrained by the Ukrainian sovereign rating, which is currently on Positive Outlook,’ Fitch said.-0-
