Azerbaijani Central Bank expects growth of banking sector capitalization to 20 percent in 2013
Azerbaijan, Baku, Dec. 19 / Trend A. Akhundov /
The Azerbaijani Central Bank (CBA) expects an increase in the total capitalization of the banking sector by 10-20 percent in 2013, CBA general director Rashad Orujov told Trend today.
According to the CBA board's decision dated July 25, the minimum total capital of existing banks and authorised capital of newly established banks increased from the current 10 million manat ($12.7 million) to 50 million manat ($63.7 million). The new requirement for the capitalisation of the existing banks will come into force from January 1, 2014.
"The dynamics is very positive and good," he said. "The banks started well. "The banks have different capitalization programs. There is one year to compete the capitalization process. One can say that the banks that do not meet the new requirements will increase capital by 70-80 percent in 2013. This will affect the growth by 10-20 percent on the market."
The Azerbaijani Central Bank (CBA) is conducting an active dialogue with the banks for consolidation of the banking system and institutional development through the expansion of the branch network, chairman of the Central Bank Elman Rustamov said earlier.
"We expect certain consolidation in the country's banking system," he said. "Today, nearly 87 per cent of the banks fulfill new regulatory requirements for capitalisation. Several banks cannot replenish their capital, so they must use the chance for consolidation to be competitive in the market, even with medium banks."
According to the CBA for the third quarter of 2012, the capitalization of the banking sector in Azerbaijan increased by 5.3 percent and by 0.07 percent compared to the third quarter of 2011, amounting to 2.346.6 billion manat as of Oct. 1.
The official exchange rate is 0, 7849 AZN/USD on Dec. 19.