Azerbaijani Central Bank considers acceptable level of banking system’s capital adequacy
Azerbaijan, Baku, Aug. 15 / Trend I.Khalilova /
Indicators of capital adequacy of the banking sector of Azerbaijan exceed the minimum limit (12 percent), set by the Central Bank of the country, reaching 14.2 percent as of July 1, the Central Bank of Azerbaijan said on Wednesday.
In the first half-year Tier I capital adequacy increased from 11.7 percent to 12.1 percent, exceeding twice the norm (the minimum rate of Tier I capital adequacy is six percent).
"During the reporting period strengthening of the capital base of the banking system continued, indicators of capital adequacy of the system were at an acceptable level," the report says.
During January-June, the total capital of banks, increasing by 10.5 percent, or 198.5 million manat, totaled 2.084.8 billion manat. As stated in the CBA report, the main source of increase in the total capital was authorised capital, whose share in total capital rose to 92.7 percent (in early 2012 the figure was 82.6 per cent).
At the same time, the authorised capital of the banking system increased by 24 percent, or 373.6 million manat. Total reserves increased by 15 percent (23.9 million manat).
Investing in stocks (equities) and intangible assets of subsidiaries and other credit institutions amounted to 105.1 million manat (for the corresponding period the figure was 152.8 million manat).
In 2011, the Central Bank started to apply leverage ratio, whose minimum rate was set at eight percent. At the end of June, the leverage ration in the banking system was 10.2 percent, and as of July 1 last year, this figure stood at 11.1 percent.
The official exchange rate is 0.7855 AZN to $1 on Aug. 15.