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Summary of Azerbaijan's banking sector for 2019

Finance Materials 2 January 2020 15:04 (UTC +04:00)
Summary of Azerbaijan's banking sector for 2019

BAKU, Azerbaijan, Jan. 2

By Eldar Janashvili - Trend:

A significant increase in the financial sector, by many indicators, such as expansion of the loan portfolio of the banking sector, growth in profits, assets and deposits, book capital, as well as a decrease in external debt were recorded in 2019 in Azerbaijan, compared to the previous year, an analyst at the country's Center for Analysis of Economic Reforms and Communication Masuma Talibova told Trend.

"So, in the first 10 months of 2019, assets compared to the previous year grew by 6 percent, while credit investments went up by 11 percent. Net profit of the banking sector doubled compared to the same period in 2018," she said.

"Another example of a recovery in the banking sector is the growth of the customer base. Thus, there has been an increase in the number of bank customers by 25 percent and customer accounts by 6 percent. At the same time, an increase of 7 percent was observed in the total volume of deposits, which reached 23.5 billion manat ($13.8 billion). Meanwhile, the growth of deposits among individuals increased by 5 percent," Talibova said.

"These indicators show that the reforms, carried out in the country, have increased confidence in the banking sector. This, in turn, leads to development of banks. It is no coincidence that the reforms led to the strengthening of the banking sector in terms of infrastructure. So, along with the increase in the number of bank branches and ATMs, a 10 percent hike was observed in the number of employees in the financial and banking sector," she noted.

"Correct implementation of monetary policy, the restoration of manat's stability led to increased confidence in the national currency and accelerated de-dollarization. Thus, the share of manat in the composition of deposits reached the highest level in recent years, having amounted to 37 percent," Talibova said.

"Comprehensive reforms carried out under the leadership of President Ilham Aliyev in 2019 led to such results as an increase in the level of capitalization and liquidity, an improvement in the management system, changes in legislation in accordance with the necessary and positive global trends, the development of digitalization, and a high assessment of the country's financial and banking system on the world stage. Reforms also contributed to the country's macroeconomic development," she noted.

"Currently, Azerbaijan's strategic currency reserves are five times higher than external debt. Another proof of macroeconomic stability is a decline in inflation to 2.6 percent. Against the background of these reforms, the current state of the banking sector and the steps taken towards economic development make it possible to predict the stability of the country's macroeconomic indicators and the realization of the economic potential of Azerbaijan, which in the near future can be compared with the leading countries of the world," Talibova said.

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