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Capitalization Azerbaijan’s banking sector increases by over 10%

The capitalization of the banking sector of Azerbaijan in October 2018 amounted to 4.7 billion manats, which is 12.43 percent more than the figure at the beginning of the year, Trend reports referring to the Financial Market Supervision Authority (FIMSA).

As the FIMSA report said, the total assets of banks since the beginning of the year increased by 6.34 percent, reaching 29.69 billion manats. In the reported period, the volume of cash at the disposal of banks amounted to almost 1.12 billion manats, the correspondent accounts at the Central Bank contained 2.455 billion manats and the funds on the nostro accounts (correspondent accounts with other banks) – almost 2.466 billion manats. Bank investments in securities reached 3.578 billion manats (a 43.23 percent increase since the beginning of the year).

Since early 2018, banks increased lending by five percent and by the end of October, the total loan portfolio of banks amounted to 11.9 billion manats. Provisions for these loans were created for 1.536 billion manats.

The total liabilities of the country’s banking sector increased by 5.4 percent to 25.518 billion manats. The largest share of liabilities fell on deposits – 72.7 percent, or 18.548 billion manats (9.79 percent growth since early 2018). The volume of deposits of individuals amounted to 8.1 billion manats, legal entities – 10.49 billion manats.

The liabilities of banks to the Central Bank decreased from 507.6 million to 394.6 million manats.

The net profit of the banking sector over the first ten months amounted to 238 million manats. Profit was formed at the expense of interest income at 1.445 billion (including one billion manats – income from interest on loans) and non-interest at 445.2 million manats. The interest expenses of banks amounted to 489.3 million manats, including the payment of interest on deposits – 320 million manats, non-interest – 819.4 million manats.

As a result, operating income of 581.8 million manats was formed. During the reporting period, the banks also allocated 315.4 million manats to cover potential losses on assets and paid 27.9 million manats as a profit tax.

As many as 30 banks operate in Azerbaijan, including two with state participation.

About Fidan Abdullayeva