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MONETARY-CREDIT SECTOR

Politics Materials 9 February 2006 12:09 (UTC +04:00)

Major tendencies in different segments of monetary-credit system in 2005:

In December money mass Рњ2 reduced;

In December the banks of Azerbaijan increased crediting in economy;

In December deposit base of the Azerbaijani banks grew;

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 December 2005 the International Bank of Azerbaijan lost its top position at the Baku Interbank Currency Exchange. The IBA was a leader at the exchange currency market of Azerbaijan in 2003 (December, November, September, July, August) and 2004 (except October), in January to November 2005.

Table 1

Amount of currency trading sessions at BBVB in December 2005

Amount, in mln. USD

Rise in December 2005

Total, (BEST)

$105,919

+2,13 раза

Without consideration of the deals at the NBA, 36.38% of the currency turnover fell on TexnikaBank in December.

Along with TexnikaBank, the top five included Bank of Baku (12.03%), Kapital Bank (5.19%), Amrahbank (4.76%) and IBA (3.77%), according to BBVB.

As of totals of November the leaders were IBA (24.24%), Kapital Bank (24.11%), TexnikaBank (17.88%), Bank Standard (17.08%) and Bank of Baku (12.54%).

Banks

Share in total, %

International Bank of Azerbaijan

3,77

Amrahbank

4,76

KapitalBank

5,19

Technikanbank

36,38

Bank of Baku

12,54

In December 26 member-banks of the currency section participated in the auctions. They concluded 44 deals at 156 trading sessions with the total amount of 486,323bn manats, or $105,919m, which is 1.13 times up as compared to November 2005.

The exchange rate of the national currency rose 1 manats - from 4592 manats to 4593 manats per 1 USD. In the end, the average sustained rate of AZM in regard to USD made up 4591.46 manats per 1 USD in December, whereas in October was 4595.45 AZN.

Monetary market

In December monthly pace of money mass reduced 2.7%, while in 2005 a cut made up 9.4%.

As of 1 January 2005 money mass (M2) made up 3739.2bn manats, against 3841.6bn manats of 1 December and 3418bn manats as of 1 January 2005.

In December the amount of cash money (Рњ0) dropped 3.3%, while in 2005 a drop made up 14.6%. As of 1 January M0 turned out at 2737m manats against 2648.7bn manats fixed as of 1 December and 2389bn manats fixed as of 1 January 2005.

In December the amount of non-cash money grew 15.9%, rise in 2005 was equal to 15.9%. As of 1 January 2006 non-cash funds grew to 1192.8bn manats against 1192.8m manats fixed as of 1 December and 1029bn manats fixed as of 1 January 2005.

Parameters of the monetary market

Amount, 01.01.06

Money mass in extensive understating (Рњ3)

9177,1

Money mass on AZM (Рњ2)

3739,2

Cash in AZM

2737

Non-cash in manat

1192,8


In December the amount of the net international reserves (NIR) of the National Bank of Azerbaijan comprised dropped 3.94%, while since the beginning of the year it has grown 9.6%.

As of 1 January 2005 NIR comprised 5,261m manats against 5477m manats as of 1 December and 4800.2bn manats as of 1 January 2005. Net internal asserts constituted 4015.2m manats against 3524.5bn manats as of 1 December and 2715.1bn manats as of 1 January 2005.

As of 1 December the expanded money mass (M3) has amounted to 9177.1bn manats (incuding 3418m manats in the national currency) against 9001.5bn manats (including 3841.6bn manats in the national currency) as of 1 December and 7515.2bn manats (3418bn manats in AzM) as 1 January 2005.

Credit market

In December the Azerbaijani banks increased crediting economy by 6.07%, while it grew 45.6% in 2005.

As of 1 January 2006, 7204,816bn manats of total credits were allocated (including 2714,554bn manats in national currency and 4490,262bn manats in hard currency) against 6792.583bn manats (including 2653,804b manats I national currency and 4138,778bn manats in hard currency) as of 1 December and 4947,302bn as of 1 January 2005. Overdue credits and loans comprised 340,993bn manats as of 1 December against 344.4bn manats as of 1 December 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 4566.4bn manats (including 243bn manats of overdue loans) against 4332.8bn manats (including 246.4bn manats of overdue loan) as of 1 December and 3503.9bn manats (208.7bn manats) as of 1 January 2005. The long-term credits constituted 2638.4bn manats (98bn manats) against 2459.7bn manats (98bn manats) as of 1 December and 1443.4bn manats (66.6bn manats) as of 1 January 2005.

As of 1 January two public banks allocated credits for 3741.367bn manats (+9.3% in November and +65.16% in 2005), private banks 3265,356bn manats (+2.9% in December and +44.6% for 2005).

As of 1 January 2006 credit portfolio of banks with foreign capital made up 1317.6bn manats (+3.2% and +72.7% respectively), including 129.7bn manats loaned by foreign banks (+4.85% and +24.4% respectively). As of 1 January credit portfolio 85 NBKO comprised 198,094bn manats against 198,094bn manats 83 NBKO as of 1 December and 424.14bn manats 70 NBKO as of 1 January.

As of 1 January average annual rate of banking crediting the economy comprised 15.14% in national currency against 15.62% as of 1 December and 15.55% as of 1 January 2005. With consideration of inflation rate of 5.4% in 2005, real credit rate was equal to 9.74%. The average annual rate on banking crediting the economy made up 17.11% in foreign currency against 17.44% as of 1 December and 18.96% as of 1 January 2005.

As of 1 January the average annual rate of banking crediting of legal entities made up 14.36% in national currency against 14.78% as of 1 December and 16.06% as of 1 January 2005, while real rates 8.96%. The average annual rate of banking credit of legal entities constituted 15.57% in foreign currency against 15.74% as of 1 December and 17.12% as of 1 January 2005.

As of 1 January average annual rate on banking crediting of physical entities comprised 17.36% in national currency against 17.36% as of 1 December and 14.22% as of 1 January 2005, while real 11.96%. Average annual rate of banking crediting of physical entities made up 21.31% in foreign currency against 21.19% as 1 December and 22.89% as of 1 January 2005.

Banking sector

In December the deposit base of Azerbaijani banks grew 1.38%, while since the beginning of the year its growth has made up 25.6%.

As of 1 January the total amount of bank deposits and savings of legal and physical entities made up 6440.1bn manats against 6352.7bn manats as of 1 December against 5126.3bn manats as of 1 January 2005. 1222bn manats of the total sum fell on manat reserves, while 5218.1bn manats on hard currency. In December growth of deposits in manat made up 1.13% while currency deposits fell 2.45%.

As of 1 December the amount of savings and deposits of physical entities grew to 5.89%, while the savings and deposits of legal entities dropped 1.25%. The savings and deposits of legal entities of individual clients increased 22.7%, while deposits of corporate clients grew 27.5%

As of 1 January the amount of savings and deposits of physical entities at banks grew to 2472.7bn manats against 2335.2bn manats as of 1 December and 2015.6bn manats as of 1 January 2005. As of 1 January the amount of deposits of legal entities made up 3967.4bn manats against 4017.5bn manats as of 1 December and 3110.7bn manats as of 1 January 2005.

As of 1 January 279.2bn manats (+8.6%) of savings and deposits of physical entities was implemented in national currency, while 2078bn manats (+5.6%) in hard currency. 942.8bn manats of deposits of legal entities (+7.7%) were implemented in manats, while 3024.6bn manats (-1.9%) in hard currency.

As of 1 January 2006 the average rate of bank deposits of physical entities in the national currency comprised 8.92% against 8.41% as of 1 December and 6.93% as of 1 January 2005, while real rate 2.8% amid 5.4% inflations. The average rate of banking deposit in hard currency was 10.19% against 10.18% as of 1 December and 9.43% as of 1 January 2005.

As of 1 January the average rate of bank deposits of legal entities in the national currency comprised 7.41% against 7.05% as of 1 December and 5.89% as of 1 January 2005, while real rate was 2.01%. The average rate of banking deposit of corporate client in hard currency is 6.85% against 6.77% as of 1 December and 5.58% as of 1 January 2005.

As of 1 January the average rate of bank deposits of physical entities in the national currency comprised 10.7% against 10.42% as of 1 November and 9.61% as of 1 January 2005, while real rate 5.3%. The average rate of banking deposit of individual client in hard currency is 10.71% against 10.75% as of 1 December and 10.53% as of 1 January 2005.

As of totals of 2005 average statutory capital of the Azerbaijani bank dropped from 27.9bn manats to 29.5bn manats against 23.9bn manats as of beginning of the year and normative requirement for $5m as of aggravate capital of the bank, the National Bank of Azerbaijan announced. In December the net of branches of the banks grew 0.8%.

As of 1 January 44 banks had had 374 branches against 377 branches as of 1 December and 350 branches (44 banks) as of 1 January 2005.

In December the statutory capital of banks dropped from 1201.73bn manats to 1298.13bn manats, or 8.02%, while this year the statutory capital comprised only 23.5%. The capital of 42 commercial banks grew in December from 140bn manats to 179.1bn manats. The capital of two state banks was maintained at the level of 140bn manats. As of 1 January 2006 26.6bn manats of statutory capital falls per bank in average.

The total capital of 17 banks with foreign participation grew in December from 482.13bn manats to 489.9bn manats and their share in entire statutory capital comprised 37.7%, while net foreign investments (242.8bn manats) comprised only 18.7% of the total sum.

Stock market

In December the Ministry of Finances held two auctions on placement of T-bills. The auction with issue of 75bn manats resulted in the placement of 17.45bn manats (23.3% of the issue). Average sustained profitability rate of the auction comprised 12.57%. only one deal was fixed at the secondary market in the amount of 5,895m manats.

In December the National Bank of Azerbaijan (NBA) held 4 auctions on placement of short-term notes. The emitter succeeded to place only 157.63bn manats (95.5% of the issue) of the total of 165bn manats. The average sustained profitability rate on the results of three June auctions comprised 11.55% per annum.

16 deals were concluded at the secondary market on short-term notes with the total amount of 30,583bn manats.

In December placement at the secondary market of corporate shares made up 136,923bn manats, while in the secondary market it made up 1.6bn manats. Corporate bonds were placed in the amount of $1,785m, while in the secondary it was fixed in the amount of $181,100.

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