Baku, Azerbaijan, Oct. 6
By Azad Hasanli – Trend:
The share of problem loans in Azerbaijan’s banking sector may reach 40 percent, Chairman of the Management Board of Accessbank Michael Hoffmann said.
He made the remarks Oct. 6 at the 8th Azerbaijan Microfinance Conference in Baku.
The share of overdue loans in the total loan portfolio of Azerbaijan’s banks reached 9.5 percent (1.59 billion manats) in January-August 2016, according to the country’s Central Bank.
Hoffmann said that Azerbaijan’s banking sector currently faces a number of challenges. First of all, it is the mobilization of funds in the country’s banking market, which is taking place, and the general deterioration of the situation on the market.
A sharp drop in oil prices, as well as deteriorating economic situation in the neighboring countries, of course, have had a negative impact on Azerbaijan’s microfinance market as well, he said.
Regarding the steps taken by the Accessbank in the current situation, Hoffmann noted that in 2015, the bank started to restructure loans, particularly foreign currency loans, and this process has been almost completed.
Accessbank has restored issuing of loans since June 2016 and intends to continue this process, he said, adding that the volume of manat deposits in the bank has increased for the last three or four months.
Hoffmann added that the lack of funds in manats is one of the main problems for Azerbaijan’s banking sector.
The interest for foreign currency loans has already faded and Azerbaijan’s population wants to receive loans in manats, he said.
AccessBank was founded in 2002 by organizations such as the Black Sea Trade and Development Bank, EBRD, IFC, KfW, a German consulting company LFS Financial Systems (LFS) and AccessHolding. AccessBank – one of the leading banks of Azerbaijan, offers a full range of banking services and has an extensive branch network, which employs about 1,800 people.