Weekly actual topics in Azerbaijan (Dec. 23-27)

Major events in Azerbaijan's banking market 2013

Azerbaijan's banking market continued its development in 2013. According to the Central Bank of Azerbaijan financial sustainability of banks was strengthened in 2012, the quality indicators of assets, liquidity and profitability were improved. Capital adequacy of the sector remained at a high level - 17.6 percent compared to required 12 percent.

Financial results were also positive, the number of profitable banks increased. Currently, return on assets (ROA) of the whole sector is two percent and the return on equity (ROE) is 15 percent.

The 2013 year was marked for the country's banking market primarily with the increase of capitalization of the sector and tightening of regulator's requirements for credit operations of banks.

Requirements for capital were deterred

The CBA prolonged the period for implementation of the requirement of increasing the minimal aggregate capital to 50 million manat till Jan.1 2015. According to the preliminary decision, banks operating in Azerbaijan would have to have minimum 50 million manat from Jan.1, 2014.

The banks' equity capital increased by 57 percent or by 1.2 billion manat and exceeded 3.4 billion manat in 16 months since the adoption of the decision.

Currently, some five of 43 operating banks do not meet the new requirement.

Banks must submit their own programs on capitalization to Central Bank of Azerbaijan till Jan.15.

The banks that still are unable to bring the capital to the required level will be able to transform into non-bank credit organizations. The Central Bank began working on an appropriate legislative framework in 2013.

Banks have stopped issuing loans out of branches and offices

The Central Bank banned the issuance of consumer loans by the commercial banks in retail trade centers in February. They can be issued in a centralized manner directly in the banks.

The Central Bank made this decision based on an increase in consumer credit defaults.

Earlier, many banks cooperated with the centers selling cars, furniture, electrical equipment, mobile phones and so on, while issuing the loans. The banks opened their offices in the trade centers to accelerate and simplify the loan issuance.

Later, the Central Bank announced that the banks have stopped rendering the banking services out of their branches and offices and the controller did not have to resort to any sanctions.

Control over consumer protection strengthened

The Central Bank charged the commercial banks to publish the actual annual interest rates on loans (FIFD) on their websites or in advertising campaigns.

When calculating FIFD, the payments on the main amount of the loan, interest and fees on the loan, insurance costs, administrative and all other costs must be taken into account.

Percentage ceiling on insured deposits reduced

The Azerbaijan Deposit Insurance Fund reduced the percentage ceiling on insured deposits from 12 to 10 percent. The fund has left the maximum level of insurance coverage for one contribution unchanged at 30,000 manats.

Payment of deposits of failed bank

This year for the first time in the history of the sector, deposits were returned in a failed bank.

In July 2013 the ADIF completed payment of compensation to depositors of RoyalBank, license of which was revoked in July 2012.

By court decision the bank was declared bankrupt, and its closure was a recognized insurance case.

As a result, the ADIF paid 88.8 percent from reimbursable amounts, namely 13 million manat.

Preparation for establishment of private credit bureau

Work on selecting a technical partner of the first private credit bureau in Azerbaijan is almost completed. According to the corresponding tender results, a shortlist has included two companies- Italian CRIF and Icelandic Creditinfo. Both companies have held a presentation of the technical part of their proposals.

A further step envisages a visit by representatives of the organizing committee, during which it will review the proposed solutions from candidates. The visit is scheduled for Jan. 26. The contract negotiations are to start in the first quarter of 2014.

The technical partner will have a controlling stake (51 per cent share capital) of the bureau, while the remainder will be distributed among the participants of the executive committee.

The bureau's potential shareholders include Access Bank, AGBank, Azerbaycan Senaye Banki, Bank Respublika, Demir Bank, Muganbank, PASA Bank, Turan Bank, Yapi Kredi Bank Azerbaijan and UniBank.

Director General of the Central Bank of Azerbaijan, Rashad Orujov told Trend that the draft law, which will regulate the private credit bureaus' activity in the country, may be submitted to the Milli Majlis (parliament) of Azerbaijan for consideration at the next spring session. He expressed the hope that the first private credit bureau in Azerbaijan will begin operating next year.

Following the launch of private credit bureaus, the CBA will limit activity of the Centralized Credit Registry.

Recapitalization of the International Bank of Azerbaijan

Shareholders of the International Bank of Azerbaijan adopted the concept of increasing the authorized capital by 500 million manats over four years.

As a result, the authorized capital of the country's largest bank will exceed 868 million manats.

At the initial stage the capital was increased by 200 million manats and at later stages it will be increased to 100 million manats per year.

Conclusion

These are the main events that took place in the Azerbaijani banking market in 2013. The past year has once again highlighted the important role of effective regulation of the banking system in maintaining financial and macroeconomic stability in the country.

Official exchange rate for December 28 is 0.7845 AZN/USD.

Uzbekistan remains largest importer of Kazakh wheat
Uzbekistan remains largest importer of Kazakh wheat
Uzbekistan considers co-op with Caspian states as priority direction of foreign policy strategy
Uzbekistan considers co-op with Caspian states as priority direction of foreign policy strategy
Uzbekistan, US talk strategic partnership prospects
Uzbekistan, US talk strategic partnership prospects
Loading Bars
Latest
Method of enriching uranium relies on pre-scheduled plan
Armenia refuses to participate in event to resume dialogue with Azerbaijan
Azerbaijan’s AzerGold company opens tender to buy services
Turkey’s export of cars to Kyrgyzstan increases
Diversification of economy may increase Azerbaijan's credit rating - Unicapital
Kazakhstan, Malaysia eye closer co-op within Islamic Organization for Food Security
Georgia opens regional beekeeping center via support of Chezch investors
CNPC branch in Turkmenistan opens tender provision of supervision services
Moderna CEO says world faces 2022 COVID vaccine production surplus
E-auction for right to explore and produce hydrocarbons wraps up in Kazakhstan
Azerbaijan eyes to expand pomegranate export in 2021
Very ambitious reforms carried out in energy sector of Georgia - deputy minister
Azerbaijan, Hungary agree to cooperate in developing e-government
Uzbekistan remains largest importer of Kazakh wheat
United Airlines gets summer ready; to add over 480 flights to U.S. schedule
Israel's Health Ministry warns against travel to seven countries
Ambassador of Georgia to Ukraine returns to his duties
Georgia's import of tubes, pipes, hollow profiles from Turkey decreases
Georgia's Geostat reveals volume of ferroalloys exported to Turkey
Azerbaijan, Turkey to exchange experience on capital markets dev't
Georgia sees increase in volume of new mortgages - TBC Capital
Port of Baku may be transferred to private management - Director-General
Turkey reveals volume of cargo shipped through ports since early 2021
Kazakhstan suspends trade, economic co-op agreement with Croatia
Georgia can become one of 25 largest blueberry exporters in world
Public sector of Turkmenistan increases production volumes
Kazakhstan reveals physical volume of GDP for 2020
Azerbaijan announces date for export of domestic cars to Ukraine
Georgia's imports of medical products from Turkey down
Turkmenistan to participate in implementation of container line between Russia, Iran
Azerbaijan publishes data on number of vaccinated citizens for Apr. 23
Azerbaijani president appoints temporary Health Minister
IFC to provide assistance to Georgia in field of investment
Georgia sees increase in import of vehicles from Turkey
TAP implementing €800,000 worth program to reduce marine litter
Georgian exports of knitwear to Turkey up
Nar launches “Reading hour” Project for schoolchildren
Total volume of bank deposits of Azerbaijani population slightly decreases
Azerbaijan confirms 1,809 more COVID-19 cases, 2,191 recoveries
Georgia joins European Union's Eurodesk network
AmEx profit beats on over $1 bln reserve release boost
Azerbaijani president signs decree on dismissal of Health Minister
Azerbaijan publishes 1Q2021 data on gas exports to Italy
Businesses in Georgia to begin recovery in 2H2021 - Banking Association of Georgia
Lending to public organizations in Azerbaijan drops
Uzbekistan considers co-op with Caspian states as priority direction of foreign policy strategy
Azerbaijan cooperates with leading countries in robotics development - ministry
CNPC subsidiary opens tender in Turkmenistan for purchase of electrical materials
Deutsche Bank supports its Kazakhstan-based partner banks amid COVID-19 crisis
Turkey’s support of Georgia’s integration into NATO - crucial - Georgian FM
Azerbaijan shares data on bank deposits in foreign currency
Uzbekistan, US talk strategic partnership prospects
Panasonic to buy U.S. supply-chain software firm Blue Yonder for $7.1 bln
Iran's TPO expects trade growth
Germany’s biased attempt to undermine Azerbaijan - blatant hypocrisy - Azerbaijani political analyst
Kazakhstan-Romania trade plummets
Georgia sees surge in labor market
China-Europe Rail Transit Corridor to pass through Iran - RAI
Bank of Russia increases key rate to 5% per annum
N. Macedonia soon to ink deal for pipeline to get Azerbaijani gas
Azerbaijan sees annual decrease in deposits of local banks
Azerbaijan shares data on cotton sown area
Turkmenistan's Turkmenstandartlary opens tender for purchase of testing gas meters samples
SOCAR buys 3 oil tankers from Greek maritime corporation - sources
Iran's Mercantile Exchange to offer cars for sale
Azerbaijan's ASCO to engage tanker insurance services via tender
More joint border crossings could boost Iran-Pakistan trade ties - Chamber of Commerce
Iran's exports to Africa down
Azerbaijan hopes US Administration will not make historical mistake - Assistant to president
Iran's priority to provide COVID-19 vaccine from abroad than wait for domestic one - official
Turkey’s export of chemicals to US surges
Uzbek-Korean JV opens tender for compressors spares
Cargo turnover at Turkish Antalya Airport declines for 1Q2021
Students of Baku Higher Oil School become winners of ‘Enactus Azerbaijan Spring School’ project
Turkey discloses number of companies with Uzbek capital since early 2021
Iran receives new batch of Russian 'Sputnik V' COVID-19 vaccine
Azerbaijani IT company expands its range of solutions through int'l co-op
SpaceX rocketship launches 4 astronauts on NASA mission to space station
Turkey discloses number of Gemlik port-received ships in 2M2021
Decrease in bank lending observed in Baku and Azerbaijani districts
France should abandon OSCE MG co-chairmanship - French Senate member
Turkmenistan, Kazakhstan discuss issuing visas to drivers
TCO unveils timeframe plans for annual maintenance turnaround at Kazakhstan’s Tengiz
Azerbaijan discloses national team at Rhythmic Gymnastics World Cup
Defeat in Second Karabakh War - hard psychological point for Armenia, says Russian analyst
Germany ready to take part in gas production expansion projects in Kazakhstan
Uzbekistan's gold and foreign exchange reserves keep declining
Share of non-budgetary organizations in compulsory social insurance receipts increases in Azerbaijan
TOP-10 importers of Azerbaijani oil in 1Q2021
Uzbekistan’s volume of received cross-border transfers increases
Georgian reveals volume of funds spent on utility bill subsidy
Georgia, Ukraine to issue electronic permits for int'l cargo transport
Kazakhstan decreases production of raw sulfur over 1Q2021
Uzbekistan eyes exporting fresh and dried fruit, vegetable products to Latvia
Georgia increases imports of cars from Turkey
International Forum on Attracting Investment in Oil, Gas Industry of Turkmenistan select sponsor
JOCAP details plans for platform around Oil Rocks
Russia records another 8,840 coronavirus cases
JOCAP updates on progress in operations of PLBH for Absheron project
Turkey reduces exports of grain, legumes to Turkmenistan
All news