BAKU, Azerbaijan, March 15
By Zeyni Jafarov - Trend:
The process of bank restructuring was continued in accordance with the ‘Strategic Roadmap for the Development of Financial Services in Azerbaijan’ in 2020, Trend reports with reference to the Central Bank of Azerbaijan (CBA).
The capital adequacy of the banking sector exceeds the minimum regulatory demand by more than two times.
The statement says that in the reporting year, the Central Bank revoked licenses from four banks (AtaBank OJSC, AmrahBank OJSC, AGBank ASC and NBCBank OJSC), whose capital positions were in the negative zone and had no potential for recovery.
By a court decision, these banks were declared bankrupt, the bank said.
“In addition, the monitoring of the quality of banks' assets by sector was carried out. The monitoring results were discussed with the management of the banks and the relevant instructions were given,” said the statement.
“Also, in order to support the lending process, measures were continued to rehabilitate and capitalize Azerbaijani banks. So, during 2020, banks increased their share capital by 131.7 million manat ($77.1 million),” the CBA noted.
“Given the ongoing threats to the resilience of the financial sector due to the COVID-19 pandemic, the duration of the key decisions and recommendations included in the support package was changed twice and extended until April 1, 2021. Because of the pandemic situation in the country, banks restructured about 52,000 loans worth over 1.2 billion manat ($705.8 million), and this process continues. Of the restructured loans, 87 percent fell on business loans, 9 percent - on consumer loans, 4 percent - on mortgage loans,” the bank said.
Thanks to the synchronized measures taken by the government and the regulator, it was possible to avoid a sharp decline in lending activity. The loan portfolio of banks excluding closed banks at the end of 2020 amounted to 14.2 billion manat ($8.35 billion).
Excluding closed banks, in 2020, the mortgage portfolio of banks increased by 13 percent, the volume of business loans remained stable, and a decrease of 6.3 percent was observed for consumer loans.
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