Baku, Azerbaijan, Dec. 12
By Emin Aliyev - Trend:
Azerbaijan's banking sector needs to be more systematic, a Board member, Director of Retail Business Development of Bank VTB (Azerbaijan), Ilnur Salyahov said.
"The market of lending to individuals is in an active phase of development, and over the past year and a half it has grown substantially. Banks started working more actively with clients of this segment, often unreasonably reducing loan requirements. In this regard, the average number of active parallel loans to one borrower markedly increased," Salyahov told Trend on Dec.12.
The expert said that such an approach may lead to very dangerous trends.
"Banks themselves, including a majority of corporate banks (working with clients of corporate segment only), did not manage to technologically and conceptually rebuild their businesses to organize qualitative assessment procedures for borrowers - individuals, properly measuring portfolio risks. On the other hand, there is also the desire of borrowers "to gain" loans for improving their welfare, but often without understanding and assessing how to return these debts later. This is a usual "disease" of the new younger market, although it is better not to step on the same rake again, and learn from others' mistakes," Salyahov stressed.
As the experts said, 2013 is remembered with the introduction by the Azerbaijani Central Bank of a ban on sale of banking products outside the branches, prolongation of terms on additional capitalization of country's banks for another year, as well as significant growth in assets and portfolio of Bank VTB (Azerbaijan).
"Azerbaijan's banking sector needs to be more systematic in the organization of business, stability of banking institutions, as well as improvement of the level and quality of customer service," Director of Retail Business Development of the bank added.
There are 43 banks operating in Azerbaijan. As of November 1, 2013, banks issued loans to 14 991.4 million manat. Out of the total portfolio, loans to 783.2 million manat were overdue (5.22 percent) compared to 763.7 million manat between January-October 2012. In the year, overdue loans increased by 2.55 percent.
VTB Bank (Azerbaijan) is a subsidiary of OJSC VTB Bank. VTB Bank and Ata Holding are shareholders of VTB Bank (Azerbaijan). VTB Bank (Azerbaijan) provides services to clients of corporate business, small business and private clients. Currently the bank is represented by four branches and the Office of customer service at the head office.
The official exchange rate is 0.7843 AZN/USD on Dec.12.
Translated by M.L.
Edited by C.N