Azerbaijani banks may face new problem in 2019

Finance Materials 27 February 2019 09:28 (UTC +04:00)

Baku, Azerbaijan, Feb. 27

By Huseyn Veliyev - Trend:

In 2019, Azerbaijani banks may face problems with returning interest on deposits, Samir Aliyev, an expert at the Center for Support of Economic Initiatives, told Trend.

Aliyev noted that if many were inclined to consider the return of problem loans to be the main problem of the year, this issue would have already been resolved.

"The next most important issue is the deposits. Today the volume of deposits exceeds the volume of loans. That is, the debt of banks exceeds the volume of loans issued by them. Accordingly, this may lead to the fact that banks may face problems of returning interest on deposits. This is the main problem that banks may face this year," the expert said.

In order not to face this problem, as the expert noted, banks should intensify their lending activities.

"Perhaps this will give a certain "respite" to the banks and avoid this problem. If banks are not activated in this direction, they may end up in a difficult situation. Overall, growth in lending is expected in 2019. Of course, we are not talking about significant growth, but, nevertheless, there will be growth. A certain increase in lending was observed last year and this trend will continue in 2019," Aliyev added.

According to the Central Bank of Azerbaijan, as of Jan. 1, 2019, the loan portfolio of banks is 12.6 billion manats, which is 11 percent more than on Jan. 1, 2018. The volume of deposits in banks over the same period increased by almost 6.2 percent, and reached 21.87 billion manats.


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