Baku, Azerbaijan, Sept. 15
By Anvar Mammadov – Trend:
The process of banks’ closure in Azerbaijan may continue until the end of 2016, said the report of the International Monetary Fund (IMF) published Sept. 16.
The Azerbaijan’s Financial Market Supervisory Body has concluded an asset and credit quality assessment of the banking sector loan portfolio, according to the report. The diagnostics included a top-down stress test exercise as well as on-site inspections, the report said.
The supervisory body report groups the banks in three categories: systemically important banks; medium-sized banks, some of which have capital and/or liquidity deficiencies that will need to be addressed by the banks following supervisory actions; and small and non-viable banks, which the supervisory body of Azerbaijan intends to close by the end of this year, the report said.
Banks in the third group represent 22 percent of the banking system’s deposits, according to the IMF report.
The licenses of nine banks were cancelled by Azerbaijan’s Financial Market Supervisory Body during 2016 as their assets were not classified in line with the law, they didn’t create adequate reserves and the aggregate capital of these banks doesn’t meet the minimum requirements [50 million manats]. In general, they haven’t fulfilled the regulator’s instructions.
As many as 33 banks currently operate in Azerbaijan, including two state-owned ones.