Dependence on foreign loans reduces in Azerbaijani banks
Azerbaijan, Baku, Feb. 17 / Trend N.Ismayilova /
Total liabilities of Azerbaijani banks increased by 16.3 percent, or by 1.662 billion manat to hit 11.8 billion manat, the report of the Central Bank of Azerbaijan (CBA) on financial stability published on Friday said.
During the reporting period deposits of legal entities and individuals remained as the main source in the formation of the resource base.
Compared with early 2011, the total deposit base of banks grew by 23.9 percent to hit 9.45 billion manat. The share of deposits in total liabilities was 79.8 percent against 74.9 percent as of late 2010.
"The positive assessment by foreign investors of the economy and the banking sector of Azerbaijan enhances the ability of local banks to attract funds from abroad. In 2011 the amount of funds raised from non-resident banks and international financial institutions increased by 0.5 per cent to hit 1.86 billion manat," the report said.
The report noted the positive is the fact that the majority of external borrowings (53 percent) involved a period of one year. In 2011 the process of replacing the external liabilities by domestic resources continues, which began in 2008.
"Thus, if at the end of 2008 the share of foreign loans in bank liabilities was 24.3 percent, by early 2011 it declined to 16.6 percent by the end of last year - to 15.7 per cent," the report said.
The CBA report said reducing banks' dependence on foreign borrowings and replacing them with internal sources (deposits) of banks have increased resistance to external shocks and the financing of loans due to more stable resources.