Azernews.Az

By Aynur Jafarova

The Azerbaijani banks increased their loans to the country's economy by 19.2 percent in January-September 2014, compared to the same period last year, the Central Bank of Azerbaijani (CBA) said in its recently published report.

As of October 1, the banks issued loans worth around 17.632 billion manats, including about12.981 billion manats (73.6 percent) in national currency and 4.651 billion manats (26.4 percent) in freely convertible currency.

The figure amounted to 14.793,3 billion manats (around 10.508,5 billion manats in national currency and 4.284,8 billion manats in freely convertible currency) in January-September 2013.

Of the total portfolio, loans worth 973.2 million manats (5.5 percent) were overdue compared to 795 million manats (5.4 percent) as of January-September 2013.

The statistics of overdue loans does not include similar loans of Aqrarkredit non-banking credit institution. Overdue loans increased by 22.4 percent in the past year.

Short-term loans amounted to about 3.627,2 billion manats compared to around 3.428,3 billion manats as of January-September 2013. The volume of short-term loans in the economy increased by 5.8 percent over a year.

The volume of long-term loans exceeded 14.004,3 billion manats, including 546.3 million manats in overdue loans compared to about 11.365 billion manats, including 420.5 million manats of overdue loans as of January-September 2013. The volume of long term loans increased by 23.2 percent over a year.

The credit portfolio of the International Bank of Azerbaijan, the only state bank in the country, exceeded 6.061,7 billion manats with the specific weight of 34.4 percent, while private banks issued loans worth around 11.067,8 billion manats with a specific weight of 62.8 percent.

The remaining 2.8 percent fell to the share of non-bank credit organizations. They issued 502.1 million mantas, the CBA said.

The CBA went on adding that the total profit of Azerbaijan's lucrative banks exceeded the total loss of unprofitable banks by 11 times as of September 2014.

The profit of 38 banks was 348.52 million manats, while the loss of six banks stood at 31.33 million manats. This allowed the banking system to earn 317.19 million manats of net profit.

There are 44 banks in Azerbaijan: 43 commercial banks and one state-owned bank. There are 22 banks with foreign capital. The share of foreign capital ranges from 50 to 100 percent in seven of them, while up to 50 percent in 13 banks. There are also two local branches of foreign banks.

CBA to keep unchanged national currency regulation regime

CBA Deputy Chairman Khagani Abdullayev told Trend Agency that the volume of monetary interventions carried out by the CBA amounted to ​​about $1.3 billion in the first 9 months of 2014.

"The volume of monetary intervention in 2014 will approximately amount to $1.5 billion, according to our forecasts," he said. "It amounted to about $1.3 billion for the first 9 months of 2014, which is a good indicator."

Abdullayev also noted in 2015 the CBA plans to allocate $1.5-2 billion for the operations in the domestic monetary market. Meanwhile, the ratio of currency will not change in the currency basket.

"We do not plan any change in the ratio of currencies in the basket so far," Abdullayev said. "The rate of manat will be regulated in the same mode. In fact, we tied it on the U.S. dollar, and it's a convenient option. Now the U.S. dollar prevails in all foreign trade operations, and recently there has been a trend of strengthening of the USD against the euro."

In 2010, the CBA purchased currency worth $1.385 million, in 2011 - $4.153 million, in 2012 - $1.584 million, in 2013 - $2.457 million, and in the first half of 2014 - $967.4 million.

Monetary intervention is carried out in order to prevent excessive reduction in price of a foreign currency or to strengthen the national currency. It is carried out by purchasing an excess amount of foreign currency.