Banks `gradually resuming growth` amid global crisis
Azerbaijan`s banking sector is gradually resuming
growth as the world economy continues to grapple with a dire
economic crisis, the country`s central banker has said.
Elman Rustamov, chairman of the Central Bank steering board, told a news conference last week that the credit portfolio of Azerbaijani banks increased 5.5%, while assets grew 9% from April to July. Local banks have maintained their competitiveness despite the ongoing world financial crisis.
``Though the situation in the domestic banking sector had initially raised concerns, it is currently heading in a positive direction,`` Rustamov said.
He emphasized that stability has taken hold in Azerbaijan`s banking sector. Banks have been placing an emphasis on repaying the borrowed foreign debt. Thus, Azerbaijani financial institutions have repaid funds amounting to $1.9 billion to foreign lenders since the crisis began.
According to Rustamov, overseas financial markets have begun to recover and Azerbaijani banks resumed drawing funds from abroad in 2009. The amount attracted from foreign markets this year has already exceeded $400 million.
``This shows that confidence in Azerbaijani banks has further increased. [International] financial institutions are witnessing the stability of our banks,`` the central banker said.
Rustamov noted that growth was posted in Azerbaijan`s banking sector in the second quarter of 2009, with both bank assets and loans and deposits increasing.
The Central Bank board chairman praised the growing loan allocations. He also pointed out that the profitability of local banks is quite high. According to Rustamov, the return on assets is currently at the level of about 2.9%.
Rustamov said the amount of banks` arrears is minute.
``This indicator is very low compared to [the banks of] other countries. Approximately 70% of the debt has been covered with the reserves created by banks. Thus, the total share of overdue loans in the gross portfolio constitutes only 3.6%, while capitalization of the banking sector has increased 11% this year.``
Regarding the ill effects of the global crisis, Rustamov said the Azerbaijani economy has withstood the crisis. He noted that the national economy has been reliably protected from the impact of the crisis, which is proven by the gradual resumption of growth.
``With these trends, Azerbaijan will be starting the year 2010 with stable economic dynamics and high financial sustainability,`` the banker added.
Elman Rustamov, chairman of the Central Bank steering board, told a news conference last week that the credit portfolio of Azerbaijani banks increased 5.5%, while assets grew 9% from April to July. Local banks have maintained their competitiveness despite the ongoing world financial crisis.
``Though the situation in the domestic banking sector had initially raised concerns, it is currently heading in a positive direction,`` Rustamov said.
He emphasized that stability has taken hold in Azerbaijan`s banking sector. Banks have been placing an emphasis on repaying the borrowed foreign debt. Thus, Azerbaijani financial institutions have repaid funds amounting to $1.9 billion to foreign lenders since the crisis began.
According to Rustamov, overseas financial markets have begun to recover and Azerbaijani banks resumed drawing funds from abroad in 2009. The amount attracted from foreign markets this year has already exceeded $400 million.
``This shows that confidence in Azerbaijani banks has further increased. [International] financial institutions are witnessing the stability of our banks,`` the central banker said.
Rustamov noted that growth was posted in Azerbaijan`s banking sector in the second quarter of 2009, with both bank assets and loans and deposits increasing.
The Central Bank board chairman praised the growing loan allocations. He also pointed out that the profitability of local banks is quite high. According to Rustamov, the return on assets is currently at the level of about 2.9%.
Rustamov said the amount of banks` arrears is minute.
``This indicator is very low compared to [the banks of] other countries. Approximately 70% of the debt has been covered with the reserves created by banks. Thus, the total share of overdue loans in the gross portfolio constitutes only 3.6%, while capitalization of the banking sector has increased 11% this year.``
Regarding the ill effects of the global crisis, Rustamov said the Azerbaijani economy has withstood the crisis. He noted that the national economy has been reliably protected from the impact of the crisis, which is proven by the gradual resumption of growth.
``With these trends, Azerbaijan will be starting the year 2010 with stable economic dynamics and high financial sustainability,`` the banker added.
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