Baku, Azerbaijan, November 1
By Huseyn Veliyev - Trend:
The banking sector is able to independently resolve issues related to distressed assets, the Chairman of the Central Bank of Azerbaijan, Elman Rustamov, said at a meeting with members of the American Chamber of Commerce in Azerbaijan (AMCHAM).
Rustamov said the macroeconomic correction in 2015-2016 seriously influenced on the balance of business and population.
“The serious corrections were made in these balances both in the level of incomes and in other issues. In this regard, many people look at this issue from the point of view of banks, which is not exactly right. This issue also requires consideration from the point of view of the business circles and the public. This is the issue of the debts of the business sector and the population to the banks. On the other hand, it may be that the bank’s management in this period of development was not counter-cyclical enough, but was more pro-cyclical. And the problems in this area, including the macroeconomic correction and the external shock, led to growth of these debts," Rustamov said.
On the other hand, the chairman of the Central Bank believes that the narrowing of assets and loan portfolios of banks was observed over the past two years.
“Accordingly, if the loan portfolio is narrowing, and problem assets, on the contrary, are growing, then, of course, their share should definitely grow. These problems are still not solved. Nevertheless, the leading banks solve these problems on their own. The focus on the collection of debts and the management job has increased," Rustamov said.
The viewpoint of the Central Bank, Rustamov said, initially was that the problems of the troubled banks can be solved in the context of the return of the troubled debts of the business sector and the population, and this is the best available alternative.
"On the one hand, this will allow for vitalization of business sector and population, and for intensification of the overall economic and financial activities. On the other hand, the creation of a healthy environment for financial institutions could help activate business. That is, this is an integrated approach, and I believe that this is the most effective method," Rustamov said.
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