Azerbaijan, Baku, November 30 / Trend, A. Akhundov /
The Finance Ministry's State Insurance Supervision Service has reported that the consolidated capitalization of Azerbaijan-operating insurance companies and one reinsurance companies reached to 208 million manat on November 1, 2011.
"Tax preferences provided to banks, insurers, and reinsurance companies over past 3 years contributed substantially to the development of Azerbaijani insurance market. The consolidated capitalization of local insurance companies and one reinsurance company has been increased from 80 million manat on January 1, 2009 to 208 million manat on November 1, 2011," the State Service said.
As reported, the bigger part of this growth was due to tax preferences.
"They in the Central Bank also think tax preferences yielded positive results," the report said.
The Central Bank of Azerbaijan (CBA) said these measures stimulate banks to spend profit for the reasons of capitalization, as a result of which in 2009 and 2010 banks spent more than 90 percent of their consolidated profit for an increase of capitalization.
"This has improved financial steadiness of banks and increased opportunities of extension of banking services," the CBA said.
On October 1, 2011, the consolidated capital of Azerbaijan-operating banks was 2.345 billion manat, the CBA reported.