Leading Private Bank of Azerbaijan Suspended Mortgaging until Attracting External Loans
Azerbaijan, Baku, 26 September / corr Trend I. Khalilova / "One of leading private banks of Azerbaijan - joint-stock commercial Bank Respublika is prepared to resume mortgaging after attraction of long-term financing," Akshin Amirov, Director of the Risk-management Department of the bank said.
Presently, negotiations on attraction of long-term housing financing loans are conducted with the European Bank for Reconstruction and Development (EBRD) and Deutsche Entwicklungsgesellschaft (DEG, member of KfW banking group), he said.
EBRD is prepared to grant Azerbaijani bank $10 mln and DEG - $15 mln for mortgaging
"Long-term borrowings are necessary for housing financing to avoid American mortgage crisis and we temporarily suspended mortgage lending till their attraction", - Amirov said.
Credit agreements are expected to be signed at the beginning of October and the means of these credit institutes will be attracted during this month.
Credits will be allotted for the term from 7 up to 10 years, but interest rates are being agreed.
Bank Respublika is intended to follow exactly these terms in further crediting.
Bank Respublika continued housing financing within the frames of own program after mortgage issuance was suspended in July, 2007, by Azerbaijan Mortgage Fund (AMF), functioning under the National Bank of Azerbaijan (NBA).
Presently, volume of mortgage portfolio of bank exceeds AZN 20 mln.
Operating portfolio is financed through loans credits, issued under own program and funds, attracted through the line of Azerbaijan mortgage fund.
Bank Respublika's mortgage loan is issued for the term up to 10 years, with the rate of from 15% up to 18% a year.
The terms of crediting through AMF's funds after their revision at the beginning of 2007 and up to suspension of crediting in summer of last year are as follows: they were issued for the term of from 3 up to 30 years, at rate of 4%-8% per annum, with primary payment of 15%.
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