Banks in Azerbaijan closing down branches

Business Materials 5 February 2018 15:44 (UTC +04:00)

Baku, Azerbaijan, Feb. 5

By Azad Hasanli - Trend:

Banks in Azerbaijan increased the number of departments, but reduced their branch networks in 2017, the Financial Market Supervisory Authority said in a report.

According to the report, the number of banks’ departments increased from 131 in 2016 to 142 last year. The number of banks’ branches for the same period decreased from 569 to 509.

A source in Azerbaijan’s banking circles told Trend that the expansion of the network of departments and simultaneous reduction of branch networks is due to banks cutting down on their expenses.

“Maintenance of branches is more expensive and given high unprofitability of the banking sector, the issue of saving money became topical. Usually less money is needed to run a department, and the salary of employees in banks’ departments is lower than of those who work in the branches.”

The banks completed the year 2016 with losses worth almost 1.7 billion manats. Last year, the banking sector was able to restore its profitability, but now banks have started to pay more attention to cost optimization.

The source noted that there are also fewer requirements for the departments than for the branches, adding that, for example, obtaining certification is not necessary for heads of departments, unlike for heads of branches.

Against the background of the reduction of the branch network, the number of employees engaged in the banking sector is also decreasing.

In 2016, a total of 16,947 people were engaged in the banking sector. This is while in 2017, this figure decreased to 16,171 people.

The number of ATMs also decreased from 2,461 to 2,431 during the reporting period.

There are 30 banks, including two state-owned ones, in Azerbaijan.

(1.7001 manats = 1 USD on Feb. 5)