Azerbaijan's banking sector needs to become more systematic
A Board member and the Director of Retail Business Development of Bank VTB (Azerbaijan), Ilnur Salyahov, said on December 12 that Azerbaijan's banking sector needs to be more systematic.
"The market of lending to individuals is in an active phase of development, and over the past year and a half it has grown substantially. Banks started working more actively with clients of this segment, often unreasonably reducing loan requirements. In this regard, the average number of active parallel loans to one borrower markedly increased," Salyahov said, Trend reported.
The expert said that such an approach may lead to very dangerous trends.
"Banks themselves, including a majority of corporate banks (working with clients of corporate segment only), did not manage to technologically and conceptually rebuild their businesses to organize qualitative assessment procedures for borrowers - individuals, properly measuring portfolio risks. On the other hand, there is also the desire of borrowers "to gain" loans for improving their welfare, but often without understanding and assessing how to return these debts later. This is a usual "disease" of the new younger market, although it is better not to step on the same rake again, and learn from others' mistakes," Salyahov stressed.
As the experts said, 2013 is remembered with the introduction of a ban by the Azerbaijani Central Bank on sale of banking products outside the branches, prolongation of terms on additional capitalization of country's banks for another year, as well as significant growth in assets and portfolio of Bank VTB (Azerbaijan).
"Azerbaijan's banking sector needs to be more systematic in the organization of business, stability of banking institutions, as well as improvement of the level and quality of customer service," the official added.
There are 43 banks operating in Azerbaijan. As of November 1, 2013, banks issued loans worth 14,991.4 million manat. Out of the total portfolio, loans worth up to 783.2 million manat were overdue (5.22 percent) compared to 763.7 million manat between January-October 2012. In the year, overdue loans increased by 2.55 percent.
VTB Bank (Azerbaijan) is a subsidiary of OJSC VTB Bank. VTB Bank and Ata Holding are shareholders of VTB Bank (Azerbaijan). VTB Bank (Azerbaijan) provides services to clients of corporate business, small business and private clients. Currently the bank is represented by four branches and the Office of customer service at the head office.