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Azerbaijan sees higher bank capitalisation so far this year

posted onOctober 30, 2018

The capitalisation of the Azerbaijani banking sector amounted to 4.1 billion manats, as of September 30, 2018 which is 10.8 percent more than the figure at the beginning of the year, the Financial Market Supervision Authority said in a report. 

The total assets of banks since the beginning of the year increased by 20.6 percent, reaching 29.2 billion manats while the total loan portfolio amounted to 11.9 billion manats. The total liabilities of the country's banking sector increased by 3.6 percent to 25.1 billion manats.

During September 2018, total assets rose by 3.8%, total liabilities by 4.2% and total capital by 1.6%.
The loan portfolio did not exhibit any major growth shifts during the month. The year to date growth rate of the loan portfolio amounted to 5%. 

Retail deposits increased by 2.2% in September. Overall, retail deposits increased by 7.6% over the first nine months of 2018.

The banking sector generated a total of 509.1 million manats in operating profits, and  171.8 million manats of net profits over the 9 months of the year. 

As many as 30 banks operate in Azerbaijan with 511 branch offices, 143 divisions and 2479 ATMs. Banking staff increased by 0.8% in September (138 people) to 17066. Overall, the number of banking staff increased by 5.5% (895 people) during the first nine months of the year, the report said.

Meanwhile, the Central Bank of Azerbaijan (CBA) decided to reduce the refinancing rate from 10% to 9.75%, while the ceiling and the floor of the interest rate corridor were set at ±2% range (the ceiling 11.75%, the floor 7.75%) from 30 October 2018 onward, the Bank said in a statement.

Nine-month average annual inflation (2.6%) stood below the CBA’s current target range (6-8%). The CBA is forecasting 3-4% inflation for the current year in the environment of softer external and internal risk factors. 

Regarding the domestic FX market, the Bank said it remained balanced on the backdrop of improved external sector indicators – strategic foreign exchange reserves reached $45 billion. 

Economic growth in the country was 0.8% in January – September 2918, including 1.1% growth in the non-oil sector. The non-oil industry grew by 10.7%, agriculture by 4.3%, the Bank said.

The CBA Management Board will discuss interest rate corridor parameters again in late December 2018. 

Earlier this month, Trend News Agency reported that CBA and IBM will collaborate on implementing blockchain technology in the country’s economy.

The agency stated that Farid Osmanov, director of the IT Department at the CBA, revealed news of the five-year program at the Azerbaijan-Germany Business Forum on Energy and ICT in Baku held on October 9.

Osmanov repotedly said the initiative involved the cooperation of “around” 10 commercial banks and 15 government agencies.