Azerbaijani banks increase reserves by nearly 40 percent
Azerbaijan, Baku, Feb. 28 / Trend N. Ismayilova /
The increase in the assets of the banking sector of Azerbaijan was stipulated by the growth of deposit base in the fourth quarter of 2010, a report on the financial stability of Azerbaijan Central Bank (CBA) said.
The asset growth is also associated with an increase in the loan portfolio (46 percent). In 2010, loans accounted for 68-71 percent of total assets.
The profit of the banking system in the country (before paying taxes) in the first half of 2010 amounted to 140.1 million manat, while profit after paying taxes - 120.3 million manat.
Interest expenses of banks in 2010 increased by 18.4 percent and totaled 551.6 million manat at the end of the year. Their share in total assets reduced from 4.6 percent to 4.5 percent compared to 2009.
As a result of reducing interest rates on loans in the banking system, interest income of banks increased by 2 percent and amounted to 1055.3 million manat. Non-interest income increased by 5 percent and hit 271.6 million manat.
Total revenues of banks amounted to 1002.9 million manat, the costs - 124 million manat.
The deductions of the banks to establish reserves to cover low-quality assets increased by 38.5 percent and hit 184 million manat per year.
The official exchange rate is 0.7941 manat to $1.