Second wave of crisis not to have major impact on Azerbaijani banking sector
Azerbaijan, Baku, Feb. 6 / Trend A. Akhundov /
The second wave of the global economic crisis will not have a major impact on the Azerbaijani banking sector due to some reasons, head of the Azerbaijani Bank Training Center Javanshir Abdullayev has said.
Speaking in an interview with EcoVision, published by the Association of Turkish and Azerbaijani businessmen (ATİB), Abdullayev said, "This is connected with several reasons. First, the sector is not much integrated into the global market."
He said that the country's financial market is underdeveloped and does not depend on external capital.
"The sector has a flexible and institutionalized regulator, as the Azerbaijani Central Bank (CBA)."
"The banks and the regulator have experience in crisis situation governance. Moreover, the country has reserves. They exceed the amount of the assets of all banks by three times. It will be sufficient to protect the sector."
According to the CBA, the total assets of Azerbaijani banks as of December 1, 2011 amounted to 13.665 billion manat or a 2.8% increase compared to early 2012.
The CBA official foreign exchange reserves during 2011 increased by 63.6%, amounting to $10.481.5 billion. The CBA foreign exchange reserves increased by $4.073.9 billion in 2011.
As of January 1, 2011, CBA's foreign exchange reserves amounted to $6.407.6 billion and as of July 1 - $6.947.5 billion. In 2012, the central bank also expects a significant increase in foreign exchange reserves.
The strategic reserves of the country as of this year exceeded $40 billion.
Abdullayev insists Azerbaijan's banking sector is stable with no "surprises" expected.
"There is excess liquidity on the market," he said. "The focus today is aimed at reducing the volume of bad loans that occurred mainly in 2009-2010. There is a very cautious approach to new investment, particularly to business loans and financing projects. The market tends to work more with the retail business."
There are 44 banks in Azerbaijan and according to the CBA as of January-September 2011, the top five banks in the country has total assets of 7.865.05 billion manat, or 57.97% of all assets of the banking system.
About 3.138.12 billion manat assets fall to the banks occupying 6-15 places or 23.13% of their total volume on the sector and 1.969.63 billion manat (14.52%) - the banks from 16-30 places.
About 4.38% of total volume (594.83 million manat) fall to the share of banks holding the places over 31.
The official exchange rate is 0,7863 AZN/USD as of Feb. 6.