Azerbaijan, Baku, June 8 / Trend N.Ismayilova /
Major changes have been observed in terms of Azerbaijani bank lending activity due to continuing domestic and foreign risk reassessments by banks on the backdrop of global economic recovery, the Central Bank of Azerbaijan (CBA) stated in a recent report.
Bank lending grew by one percent to 8.302 billion manat in the first quarter of 2010. A stable exchange rate contributed to a loan growth in the national currency by 3.1 percent. As a result, potential dollarization in the loan structure was averted and the share of loans in the national currency increased from 58.5 to 59.8 percent during the year.
The share of long-term loans in the credit investment structure increased by 1.2 percent to 74 percent (6.1419 billion manat) by the end of the quarter. In addition to changes in the currency structure and lending terms, changes were observed in their structure in various sectors.
The highest loan growth was observed in energy, non-oil industry, production, trade and services sectors compared to the first quarter of 2009. Credit risk and diversification portfolio revaluation impacted loans issued to individuals. Loans to individuals grew by 0.6 to 27 percent. In total, loans granted to business entities and business and consumer loans nine and 71 percent in the first quarter of 2010. Fifteen percent of the loans accounted for real estate. During the quarter, the volume of loans for real estate purchase and construction increased by seven percent or 63 million manat. The quality of the loan portfolio remained at an acceptable level.
The share of non-standard loans amounted to 6.6 percent of the total portfolio compared to six percent early in the year. Broken loans increased by 0.3 to 3.8 percent. Reserves established for loans amounted to seven percent of the total portfolio and increased by 0.3 percent.