MONETARY-CREDIT SECTOR

Monetary sector:

Major tendencies in different segments of monetary-credit system in November:

The rate of manat in regard to world leading currency - US dollar got consolidated in the currency market.

In November money mass in expanded implication (M2) reduced

In November the Azerbaijani banks increased crediting in economy.

In November deposit base of the Azerbaijani banks reduced

Trading sessions on placement of T-bills were held in the stock market. The NBA continued the placement of short-term notes in the Baku Stock Exchange.

Currency market and rate of AZM

In November exchange of AZM rate dropped 3 manats and dropped from 4597 manats to 4594 in regard to USD.

Amount of currency trading sessions at BBVB in November 2005

As of totals of trading sessions in the currency section the Baku Interbank Currency exchange defined 5 leader banks in November 2005. The leader-banks of the currency exchange market were the International Bank of Azerbaijan holding 24.24% of monthly currency circulation, Kapital Bank with 24.11%, Technikabank with 17.88%, Bank Standard with 17.08% and Bank of Baku with 12.54%.

In November 26 member-banks of the currency section participated in the auctions. They concluded 40 deals at 82 trading sessions with the total amount of 228,739bn manats, or $49,775m, which 44.9% down as compared to October 2005.

The exchange rate of the national currency rose 0.07% or 3 manats - from 4597 manats to 4594 manats per 1 USD. In the end, the average sustained rate of AZM in regard to USD made up 4595.45 manats per 1 USD in November, whereas in October was 4593.84.

*the data do not take into consideration the deals of the National Bank of Azerbaijan

In November the NAtionla Bank of Azerbaijan increased the presentation of the centralized credit resources. In Noveber the amount of placement made up 11bn manats against 9.5bn manats in October. Credits were approved at the rate of 9%. After the record creding of banks the NBA presented in September, placing 63.5bn manas at annual rate of 8%.

As of 1 November 2005 the placement of the centralized credit resurces grew 302.6bn manats, or 126,057% of the circulation for 40 credit auctions in 2004 (240.05bn manats).

Money market

In November monthly pace of money mass rose 3.1%, while in 2005 a cut made up 12.4%.

As of 1 December 2005 money mass (M2) made up 3841.6bn manats, against 3963.9bn manats of 1 November and 3418bn manats as of 1 January 2005.

In November the amount of cash money (Рњ0) dropped 6.29%, while in 2005 a drop made up 10.87%. As of 1 December M0 turned out at 2648.7bn manats against 2826.4bn manats fixed as of 1 November and 2389bn manats fixed as of 1 January 2005.

In November the amount of non-cash money grew 4.86%, drop in 2005 was equal to 15.9%. As of 1 December non-cash funds grew to 1192.8bn manats against 1137.5bn manats fixed as of 1 November and 1029bn manats fixed as of 1 January 2005.

Parameters of monetary market, in bn AZM

In November the amount of the net international reserves (NIR) of the National Bank of Azerbaijan comprised dropped 2.13%, while since the beginning of the year it has grown 14,099%.

As of 1 December 2005 NIR comprised 5,477bn manats against 5596.1bn manats as of 1 November and 4800.2bn manats as of 1 January 2005. Net internal asserts constituted 3524.5bn manats against 3710.9bn manats as of 1 November and 2715.1bn manats as of 1 January 2005.

As of 1 December the expanded money mass (M3) has amounted to 9001.5bn manats (incuding 3841.6bn manays in the national currency) against 9307bn manats (including 3963.9bn manats in the national currency) as of 1 November and 7515.2bn manats (3418bn manats in AzM) as 1 Januayr 2005.

Credit market

In November the Azerbaijani banks increased crediting economy by 3.56%, while it grew 37.299% in 2005.

As of 1 December 6792,583bn manats of total credits were overdue against 6557.982bn manats as of 1 November and 4947,302bn as of 1 January 2005. Overdue credits and loans comprised 344.4bn manats as of 1 December against 336.8bn manats as of 1 November and 275,271bn manats as of 1 January 2005. The statistics of overdue credits does not include the similar loans allotted by non-bank credit organization Agrarkredit.

The short-term credits comprised 4332.8bn manats (including 246.1bn manats of overdue loans) against 4128.4bn manats (including 239.5bn manats of overdue loan) as of 1 November and 3503.9bn manats (208.7bn manats) as of 1 January 2005. The long-term credits constituted 2459.7bn manats (98bn manats) against 2429.6bn manats (97.3bn manats) as of 1 November and 1443.4bn manats (66.6bn manats) as of 1 January 2005.

As of 1 December two public banks allocated credits for 3423.106bn manats (+4.48% in November and +51,12% in 2005), private banks 3171.383bn manats (+2.5% in November and +40.45% for 2005).

As of 1 December credit portfolio of banks with foreign capital made up 1275.9bn manats (+2.6% and +67.24% respectively), including 123.7bn manats loaned by foreign banks (+8.89% and +18.6% respectively). As of 1 December credit portfolio 83 NBKO comprised 198,094bn manast against 198,094bn manats 81 NBKO as of 1 November and 424.14bn manats 70 NBKO as of 1 January.

As of 1 December average annual rate of banking crediting the economy comprised 15.62% in national currency against 15.57% as of 1 November and 15.55% as of 1 January 2005. With consideration of inflation rate of 3.1% in January to November, real rate was equal to 12.52%. The average annual rate on banking crediting the economy made up 17.44% in foreign currency against 17.28% as of 1 November and 18.96% as of 1 January 2005.

As of 1 December the average annual rate of banking crediting of legal entities made up 14.78% in national currency against 15.08% as of 1 November and 16.06% as of 1 January 2005, while real rates 11.74%. The average annual rate of banking credit of legal entities constituted 15.74% in foreign currency against 15.65% as of 1 November and 17.12% as of 1 January 2005.

As of 1 December average annual rate on banking crediting of physical entities comprised 18.01% in national currency against 17.03% as of 1 November and 14.22% as of 1 January 2005, while real 14.91%. Average annual rate of banking crediting of physical entities made up 21.19% in foreign currency against 21.98% as 1 August and 22.89% as of 1 January 2005.

Banking sector

In November the deposit base of Azerbaijani banks reduced 1.98%, while since the beginning of the year its growth has made up 23.92%.

As os 1 December the total amount of bank deposits and savings of legal and physical entities made up 6352.7bn manats against 6480.5bn manats as of 1 November against 5126.3bn manats as of 1 January 2005. 1192.8bn manats of the total sum fell on manat reserves, while 5159.93bn manats on hard currency. In August growth of deposits in manat made up 3.43% while currency deposits fell 4.87%.

As of 1 November the amount of savings and deposits of physical entities grew to 2.14%, while the savings and deposits of legal entities dropped 3.45%. The savings and deposits of legal entities of individual clients increased 13.42%, while deposits of corporate clients grew 4.22%

As of 1 August the amount of savings and deposits of physical entities at banks grew to 2335.2bn manats against 2286.3bn manats as of 1 November and 2015.6bn manats as of 1 January 2005. As of 1 December the amount of deposits of legal entities made up 4017.5bn manats against 4194.2bn manats as of 1 November and 3110.7bn manats as of 1 January 2005.

As of 1 December 257.2bn manats (+3.2%) of savings and deposits of physical entities was implemented in national currency, while 2078bn manats (+2%) in hard currency. 935bn manats of deposits of legal entities (-5.27%) were implemented in manats, while 3081.9bn manats (-6.8%) in hard currency.

As of 1 December the average rate of bank deposits in the national currency comprised 8.41% against 8.16% as of 1 November and 6.93% as of 1 January 2005. The real deposit rate for the first time made up 5.31% in January to November when inflation ratio was equal to 3.1%. The average rate of banking deposit in hard currency constituted 10.18% against 10.32% as of 1 November and 9.43% as of 1 January 2005.

As of 1 December the average rate of bank deposits of legal entities in the national currency comprised 7.05% against 6.65% as of 1 November and 5.89% as of 1 January 2005, while real rate was 3.95%. The average rate of banking deposit of corporate client in hard currency is 6.77% against 7.73% as of 1 November and 5.58% as of 1 January 2005.

As of 1 December the average rate of bank deposits of physical entities in the national currency comprised 10.42% against 10.36% as of 1 Novemer and 9.61% as of 1 January 2005, while real rate 7.32%. The average rate of banking deposit of individual client in hard currency is 10.75% against 10.66% as of 1 November and 10.53% as of 1 January 2005.

As of totals of November 2005 average statutory capital of the Azerbaijani bank dropped from 27.3bn manats to 27.9bn manats against 23.9bn manats as of beginning of the year and normative requirement for $3.5m as of aggravate capital of the bank, the National Bank of Azerbaijan announced. In November the net of branches of the banks grew 2.27%.

As of 1 November 43 banks had had 377 branches against 376 branches as of 1 November and 350 branches (44 banks) as of 1 January 2005.

In November the statutory capital of banks dropped from 1173.9bn manats to 1201.73bn manats, or 2.37%, while this year the statutory capital comprised only 14.3%. The capital of 41 commercial banks grew in June from 1033.9bn manats to 1061.73bn manats. The capital of two state banks was maintained at the level of 140bn manats. As of 1 December 2005 25,895bn manats of statutory capital falls per bank in average.

The total capital of 17 banks with foreign participation grew in November from 476.4bn manats to 482.13bn manats and their share in entire statutory capital comprised 40.12%, while net foreign investments (229.9bn manats) comprised only 19.13% of the total sum.

Stock market

In November the Ministry of Finances held two auctions on placement of T-bills. The auction with issue of 40bn manats resulted in the placement of 25.13bn manats (62.8% of the issue). Average sustained profitability rate of the auction comprised 12.42%.

No deal on T-bills was held in the secondary market.

In November the National Bank of Azerbaijan (NBA) held 5 auctions on placement of short-term notes. The emitter succeeded to place only 218.2bn manats (92.9% of the issue) of the total of 235bn manats. The average sustained profitability rate on the results of three June auctions comprised 11.91% per annum.

No deal with short-term notes was held in the secondary market.

In November the no placement was fixed at the market of corporate shares and T-bills.