Baku, Azerbaijan, Feb.25
By Azad Hasanli - Trend:
The weakening of the manat exchange rate is not a direct threat to the financial stability of VTB Bank (Azerbaijan), the bank's chairman Yuri Yakovlev told Trend Feb.24, commenting on the latest report of the international rating agency Moody's Investors Service.
The agency's analysts believe that the weakening of the manat puts pressure on the quality of bank assets, deteriorating ability of the population to repay loans and devaluing the size of currency liabilities of the banks.
The weakening of the national currency will force clients to get their cash stored in manats reissued into foreign currency, and these factors pose a threat to the banking sector of the country, in particular, VTB Bank (Azerbaijan) and Bank Respublika because of the large share of foreign currency assets, according to the report.
At the same time it is noted that the International Bank of Azerbaijan, which is the largest bank in the country, also has a high share of foreign currency loans, however, its risk is mitigated by the fact that the bank has directed a substantial part of its foreign currency loans for crediting export oriented backbone companies with foreign exchange earnings.
Bank VTB (Azerbaijan) has the highest rating among the country's banks namely according to the ratings of Moody's agency, said Yakovlev.
"VTB Bank (Azerbaijan) is an international bank, and the bulk of borrowed funds accounts for foreign currency [70 percent]," he said. "Our bank provides loans in manats, dollars and rubles. Therefore, devaluation of the national currency doesn't threaten the financial stability of VTB Bank (Azerbaijan)."
Yakovlev said that the cooperation with VTB Bank in Azerbaijan does not threaten its customers by any risks.
At the same time, the head of the bank noted that the exchange rate changes will create some difficulties for clients who have loans in dollars, but the bank is going to look for opportunities to reduce the debt burden for them together with clients.
"We expect to resolve such cases as they arise," he said.
In accordance with the decision of the Central Bank of Azerbaijan, starting from February 21, the official exchange rate of the dollar against the manat was established at the level of AZN 1.05 / $1.
VTB Bank (Azerbaijan) JSC is a subsidiary of VTB Bank JSC. Shareholders of VTB Bank (Azerbaijan) JSC are: VTB Bank JSC and AtaHolding JSC. VTB Bank (Azerbaijan) JSC provides services to clients of corporate business, small business and private clients. Today, the bank is represented by 12 branches and the Office of customer service at the head office.
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