State remains major lender in Azerbaijan
Azerbaijan, Baku, March 29 / Trend A.Hasanov /
According to estimates of the international rating agency Fitch Ratings, in 2011 the Central Bank of Azerbaijan (CBA) provided loans worth two billion manat or 17 percent of total lending in the country, Deputy Director of Fitch Ratings for financial institutions Dmitry Abramov said in Baku on Thursday at presentation "The banking system of Azerbaijan: recovery from the crisis".
Half of these funds accounted for on-lending operations, accounted for the balance sheet of banks.
Azerbaijani Finance Ministry also placed at least 400 million manat on deposits (mostly in 2011) for directed lending, accounting for four percent of the total lending of commercial banks.
In 2010 the share of loans granted by Central Bank amounted to about 1.9 billion manat or 17 percent of total lending in Azerbaijan.
"The slow recovery of lending in 2011 occurred due to increased retail consumption, helped by government fiscal incentives, the impact of investments in the capital, funded by the state and the favorable monetary policy", Abramov said.
Fitch expects loan growth in 2012 will continue to be constrained due to weaker GDP growth, as the Central Bank focused on controlling inflation through higher interest refinancing rates and strengthening of the national currency.
"At the same time, the positive trend is supported by still moderate level of penetration of lending," Abramov said.
The official exchange rate is 0.7862 AZN to $1 on March 29.