Azerbaijan, Baku, Feb.6 / Trend A.Akhundov /
Decrease of the margin between interest rates on loans and deposits in banks is expected in Azerbaijan in 2012, chairman of the board of the Azerbaijani-Turkish AzerTurkBank Sami Acarozmen told Trend on Monday.
"The Azerbaijani banks face serious problem, it lies in the fact that people's trust in them is only being formed. With a total volume of assets at 13.7 billion manat deposits of the population is 3.8 billion manat. For example, in Turkey share of deposits in banks liabilities is about 90 percent. But during the last two years this ratio is also increasing in Azerbaijan and will continue to grow. The more people will invest their savings, the more banks will reduce interest rates on loans. That is, if the banks do not receive money, if they have problems with finding the resources, the interest on their loans will be high," Mr Acarozmen said.
He said at present there is a problem with raising funds from abroad, which have become more expensive.
He noted the trend towards normalization of prices in the economy will affect the fact that interest rates on deposits will not grow in 2012.
"Today, they vary in the range from 8 to 12 percent. Interest on business loans today (with the exception of micro-credit), varies from 14 to 20 percent. This year we can expect decrease of interest on loans by 1-3 percent. This is because the interest margin will decline against the interests of banks. That is, for example, money, acquired at nine percent, I'll be forced to sell for 13-14 percent, whereas earlier in the pre-crisis years, I did it for 19 percent, which gave banks more money," Mr Acarozmen said.
He noted there is stiff competition today in the banking sector and it will grow.
"Competition has led to the situation that now there are banks, which attract deposits by ten percent and 13 percent for loans. This margin is not profitable for banks, but in Azerbaijan, as well as in developed countries, this difference narrows. That is, banks are facing the need to improve the efficiency of management, to focus on management,"- Mr Adzharozmen said.
As many as 44 banks currently operate in Azerbaijan.