Work with problem loans in 2019 summarized in Azerbaijan
BAKU, Azerbaijan, Jan. 2
By Eldar Janashvili - Trend:
The policy of protecting financial stability in Azerbaijan in 2019 covered banks, nonbank credit organizations, capital and money markets, and the insurance system, Trend reports referring to the Central Bank of Azerbaijan.
In 2019, as part of the banking sector restructuring, capital injections were implemented for several banks, and prudential standards were amended to increase the effectiveness of the risk management system.
In general, restructuring processes in the financial sector have not yet been completed.
In pursuance of the Decree of the Head of State on additional measures to solve problem loans in Azerbaijan, 602,000 citizens were compensated, and over 300,000 citizens were allowed restructuring of loans.
The volume of compensation amounted to $644.5 million manats ($379.1 million), loans of 123,000 borrowers worth 242 million manat ($142.3 million) were restructured on preferential terms (5 years with 1 percent yield). Under the decree, the amount of repaid interest and fine amounted to over 205 million manat ($120.5 million); loans of 42,000 borrowers were completely closed.
Execution of the decree positively affected the quality of banking assets. In November 2019, the share of overdue sector loans in the portfolio decreased by 3 percentage points compared to the end of 2018.
Consistent work on improving financial literacy in the country continued covering different target groups and regions.
In 2019, a data retrieval system has been created that stimulates access to financial services. Since the beginning of 2019, credit investments increased by 16.1 percent, which is mainly due to a 21 percent increase in loans to households, whose share in the loan portfolio reached 50.4 percent
The deposit insurance fund protects 84.4 percent of deposits. The incompleteness of restructuring processes in the financial sector has become one of the restraining factors for improving the deposit insurance system.
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