CBA: Azerbaijani banking sector does not need liquidity support
Azerbaijan, Baku, Aug.31 / Trend, N. Ismayilova /
The Central Bank of Azerbaijan (CBA) does not believe that the banking sector requires liquidity support, CBA General Director Khagani Abdullayev said today.
"There is moderate growth of five percent in the total lending investments in the country's economy," he said. "In view of the global financial crisis, the CBA has toughened its risk management system requirements for the banking sector. In accordance with the requirements, banks should fully cover all possible risks in their lending policies."
Abdullayev added that the resource base of banks - their attracted base of deposits - has a higher growth rate of 16 percent. The growth of deposits in banks is triple the growth of loans. The share of overdue loans in total loans is also no more than five percent.
"The CBA is conducting monitoring to analyze the connection between loan portfolio quality and the situation in the country's real sector," he said. "We have presented a model for stress tests to banks through which they can conduct a simulation, showing the impact of possible internal and external factors on the quality of their loan portfolios. This simulation showed that there is no serious basis for a meaningful change in the quality of the loan portfolio in the coming months."