7 Azerbaijani Banks Have Problems with Capitalization

Business Materials 28 February 2008 17:35 (UTC +04:00)

Azerbaijan, Baku, 28 February / corr Trend I.Khalilova / In January the capitalization of the Azerbaijani banking sector rose by 1.4% as compared to December 2007, whilst it has reached 75.2% over the year, the National Bank of Azerbaijan (NBA) said on 28 February.

According to NBA's statistic data, from 1 February the capital of 38 banks exceeded AZN 10mln, whereas a month ago there was one more bank in the list stated above but it entered the category of credit organizations with the capital ranging from AZN 5 to AZN 10mln. Their special weight in the aggregate capital of all banks made up 94.6%.

Capital of six banks (with the special weight of 5%) has been formed in the amount ranging from AZN 5mln to AZN 10mln and one bank (0.4%) paid it in the diapason from AZN 3.5mln to AZN 5mln.

There are 46 banks in the country and only Poctbank does not carry out the accounts- because of the large number of limitations in its banking operations. Nine banks face the limitation of the license. Therefore, they could not become members of the Deposit Insurance Fund. Meanwhile, two banks informed the NBA about their fulfillment of the requirements, enabling NBA to remove sanctions implied on them [the sanctions were applied on banks due to their non-correspondence to the minimal amount of aggregate capital announced in the amount of AZN 10mln].

Initially, the sanctions were infused on Kauthar Bank, Euro Bank (former AzInvestBank), Azal Bank, Credo Bank, Atlant Bank, Birlik Bank, AFBank, Gunay Bank and Royal Bank. Following the improvement of capitalization situation, Gunay Bank and Royal Bank appealed the NBA to exclude these banks from this list.

However, only after the estimation of these banks (quality and quantity parameters of the capital), the issue on removal of limitations will be put for consideration to NBA, NBA reported. The term of limitations were injected for every bank in the individual order.

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