Azerbaijan, Baku, Feb. 8 / Trend N. Ismayilova I. Khalilova /
The growth of non-performing loans in the Azerbaijani banking sector had a negative impact on the amount of Azerbaijani banks' profit in 2010, Azerbaijan Bank Training Center (ABTC) head Javanshir Abdullayev said.
"First of all, it negatively affected the yield and profitability of banks. So, if the profitability of banks grew at a considerable pace up to 2010 and the trend declined in 2010. The total profit of the banking system amounted to 120 million manat, which is a slight indication for such a major sector," Abdullayev said.
The total profit of the banking system for 2010 decreased by 52.5 percent, and increased by 10.3 percent last December compared to November, amounting to 120.27 million manat.
The Azerbaijani banks increased lending due to the economy in December 2010 by 0.8 percent, and by late 2010 by 9 percent. In late December 2010, the banks issued 9163.4 million manat, including 5,865.3 million manat in national currency and 3,298.1 million manat - in hard currency.
Of the total portfolio of loans and advances, 492.9 million manat were overdue compared to 458.1 million manat as of Dec. 1, and 303.5 million manat as of Jan. 1, 2010. In December, the volume of overdue loans and advances increased by 7.6 percent and 62.4 percent compared to January 2010.
CBA Credit Institutions Supervision Department Director Rashad Orujov said the situation of overdue loans in the banking system gradually began to stabilize since late 2009 and early 2010's.
"We think that the situation with problem loans is fixed at 5 percent, and growth portfolio is not observed. Today, banks are making more efforts to resolve the accumulated problems. I think that since mid-2011, we have observed a serious improvement in bad loans, because now banks spend a lot of time and resources on it to solve the problems," Orujov added.
"The main thing is that we see a trend toward improvement, but serious progress can be expected in the second half of 2011," he said.