Azerbaijani banking sector’s capitalization up 50% in 2008
Azerbaijan, Baku, Jan. 5 / Trend ,
N.Ismayilova/ Capitalization of the banking sector of
Azerbaijan rose by 1.1% in November, and as of Dec. 1 - by 48.8% compared with
the beginning of 2008, National Bank of Azerbaijan (NBA) said on Jan. 5.
According to the statistics of the NBA, on Dec. 1, capital of 41 banks exceeded AZN 10mln against the same level of capital of 38 banks at the beginning of last year. Consequently, percentage of this category of banks in the total capital of all banks rose from 94.6% to 97.9%.
Capital of three banks (with the percentage of 1.8%) varies between AZN 5mln and AZN 10mln, while one bank (0.3%) had paid its capital in a range from AZN 3.5mln to AZN 5mln.
During the reporting period, 46 banks had a license to carry out banking activities in the country. During the year, the number dropped twice as a result of revocation of licenses from Poctbank, which had been virtually inactive, and Atlantbank because of the failure to satisfy the requirements of market capitalization, but also doubled - Nakhchivanbank and Azfinans Bank were issued licenses.
To date, seven banks operate with limited licenses (do not have permission to receive deposits). For this reason they have not been able to become members of the Deposit Insurance Fund. [The sanctions were imposed on the banks due to lack of correspondence to the minimum aggregate capital - AZN 10mln]. Terms of restrictions were imposed for each bank individually.
Last year, the National Bank did not make new regulatory requirements to the capital of the banks, but now the bank intends to develop a strategy on their further capitalization. In general, the banks will be required to adhere to the capital adequacy requirement in line with international practice. As part of the NBA developed set of measures intended to protect the domestic financial market from the global crisis, requirement for bank capitalization (asset quality and capital adequacy) may change.
There are 23 banks with foreign capital operating in the country, while at the beginning of last year they numbered 21. In seven of them the share of foreign capital varied from 50% to 100%, in 14 banks - up to 50%. There are also two local branches of foreign banks.
Azerbaijani banks' structures operating overseas number eight, including five offices, two subsidiaries and one branch. Four representative offices of foreign banks operate in Azerbaijan.
On Jan. 5, official exchange rate totalled 0.8015 AZN/USD.
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