Azerbaijani banks must carefully assess borrowers’ solvency
Baku, Azerbaijan, March 17
By Emin Aliyev - Trend
Azerbaijani banks must carefully assess the solvency of clients, AccessBank chairman of board Michael Hoffmann told Trend on March 17.
"Therefore, any measures that strengthen this control are always beneficial for all market participants," Hoffmann added.
The Central Bank of Azerbaijan (CBA) urged the country's banks to tighten control over consumer loan issuance in late 2013. The regulator sent a letter to the banks operating in the country with the instructions to stop issuing the loans if the borrower does not submit an employment certificate. The lending conditions for car purchases were also tightened.
This is connected with the deterioration of the quality of the banking sector portfolio for this type of lending, the experts added.
"Auto-crediting takes a very small share in our portfolio," he said. "The volume of loans is extremely low, so the change of the situation in this market segment had virtually no impact."
"The bank always issued loans by strictly adhering to the necessary requirements, such as an income certificate submitted by a borrower as proof of the possibility to pay off the loan," he said.
"This is stipulated by the quality of our loan portfolio, which is growing from year to year," he added.
As of 2013, the share of AccessBank's loans, overdue for more than 30 days, was 0.36 percent of the total volume of the portfolio. This figure is being consistently improved from one percent in 2010, 0.76 percent in 2011 and 0.63 percent in 2012.
The loan portfolio of the bank amounted to $787 million in 2013. About 10 percent - 76 million manat of this amount fell to retail crediting.
AccessBank was founded in 2002 by BSTDB, EBRD, IFC, KfW, the German consulting company LFS Financial Systems (LFS) and Access Holding.
The bank concentrates on lending to micro and SME businesses. It has a wide branch network through Azerbaijan and employs 1,859 staff. AccessBank is rated BB+ by Fitch Ratings, the highest rating of any bank in Azerbaijan.
Translated by NH
Edited by CN