The Central Bank of Azerbaijan (CBA) states that its foreign exchange reserves reduced in November, as in August-October.
According to the CBA, as of December 1, 2014, the CBA currency reserve volume totaled $14.996 billion compared to $15.033 billion as of November 1, $15.042 billion as of October 1 and $15.190 billion as of September 1, $15.19 billion (absolute record) as of August 1. They hit $14.152 billion as of January 1, 2014 and $11.694 billion as of January 1, 2013.
A decrease in reserves was 0.25 percent ($37.3 million) in November. However, they increased by 5.97 percent ($844.3 million) in that period of 2014. As of 2014, foreign exchange reserves were to reach $16 billion, according to the forecasts.
The CBA plans to increase its foreign exchange reserves to $17 billion. The CBA conducts a a policy of intervention aimed at purchasing the foreign currency from the market and increasing the foreign exchange reserves.
As of November 2014, its international reserves amounted to $17.192 billion compared to $17.745 billion as of October, $17.442 billion as of September, $17.782 billion (a record level) as of August.
For comparison, as of January they were assessed at $14.787 billion.
Currency market and AZN rate
The AZN rate has kept its stability versus the U.S. dollar since early 2014. The AZN rate versus the U.S. dollar appreciated by 1 point in January-November 2014. It amounted to 0.7844 AZN per dollar as of the end of the reporting period.
The exchange rate precession of 0.7843 AZN versus $1 has been recently observed. The exchange rate either drops to 0.7842 AZN or rises up to 0.7844 AZN.
The rate was set at 0.7845 AZN versus $1 on November 18 and 19, thereby returning to the index as of the beginning of the year. The dollar rate remained at 0.7844 AZN versus $1 during the rest days of November and until the end of the month.
The absolute minimum was established on January 30, 2014 at the level of 0.7842 AZN to $1 and since then it remained at this level several times.
As of 2013, the official exchange rate was 0.7845 AZN compared to 0.7850 AZN as of 2012 and 0.7865 AZN per $1 as of 2011. Thus, 2011 began with the official exchange rate of $1 to 0.7979 AZN.
The euro rate decreased by 8.7 percent versus 1 AZN in January-November 2014. Thus, the exchange rate dropped from 1.0691 AZN to 0.9763 AZN per euro in January-November.
A minimum rate for the reporting period - 0,9706 EUR / AZN was recorded on November 7, a maximum rate - 1,0932 EUR / AZN was reached on March 13. The fluctuations between maximum and minimum values were 1,226 points.
However, it should be stressed that EUR / AZN exchange rate was characterized by strong volatility of dynamics as opposed to the dollar.
Foreign exchange market
According to the Baku Interbank Currency Exchange (BBVB), the total trading volume in the USD / AZN (spot) currency section in November 2014 was 38.589 million AZN or $49.195 million.
Seven banks participated in the auction. Around 23 transactions at 38 trading sessions in Bourse E-System of Trades (BEST) in November 2014.
The trading volume in the currency section decreased by 6 percent or by 2.409 million AZN in November compared to October.
The average daily turnover in e-trading USD / AZN system was approximately $2.589 million in November, while the average amount of each transaction - $2.139 million.
The national currency exchange rate in USD / AZN_TOD in the reporting month remained unchanged - 0.7829 AZN for $1. The average rate of dollar versus AZN was 0.7844 AZN in November 2014.
The average monthly interest rate calculated on the basis of banks-market makers' bids for BakiBOR loans for up to 90 days, amounted to 9.81 percent per annum in AZN and 9.92 percent per annum in dollars in November 2014. BakiBID rate up to 90 days was 4.34 percent per annum in AZN and 4.27 percent in dollars.
As of 2014, BBVB turnover on dollars hits 346.098 million AZN or $436.373 million (spot). As of 2013, it was 403.644 million AZN or $512.752 million (spot), and taking into account the swap - 414.987 million AZN or $527.752 million.
Azerbaijani monetary market
The Central Bank's important objective is to manage the money supply at an adequate macroeconomic and financial stability level, in terms of continuous growth of foreign exchange reserves of the country and increased liquidity of the banking system.
The money supply rate (M2) (cash in circulation (outside banks) and remainders in the domestic currency on accounts of non-financial organizations, financial (excluding credit) organizations and physical entities) increased by 15.2 percent in January-November 2014 compared to the same period of 2013, the Central Bank of Azerbaijan's report as of 11 months, 2014 says.
The money supply rate (M2) amounted to 17.525 billion AZN as of November 1, 2014 compared to 15.214 billion AZN as of December 1, 2013, according to the report.
The amount of cash money supply (M0) increased by 4.8 percent during a year and amounted to 10.318 billion AZN compared to 9.849 billion AZN as of early December 2013.
As of January-November 2014, Broad Money Supply (M3) totaled 21.689 billion AZN or 18.6 percent more compared to January-November 2013 (18.289 billion AZN).
The transaction money (M1) increased by 6.7 percent during a year and amounted to 12.775 billion AZN compared to 11.968 billion AZN as of November 2013.
The transaction money (M1) increased by 6.7 percent during a year and amounted to 12.775 billion AZN compared to 11.968 billion AZN as of November 2013.
Parameters of monetary market, in billion AZN:
|
Amount, Dec. 1, 2014 |
|
|
Money mass in extensive understating (М3) |
21 689,8 |
|
Money mass on AZN (М2) |
17525,2 |
|
Cash in AZN (М0) |
10318,3 |
|
Non-cash in AZN |
7206,9 |
The expanded monetary base in Azerbaijan totalled 11.601 billion AZN as of Dec. 1, 2014, according to the report.
In annual terms, the monetary base in Azerbaijan grew by 6.5 percent. For comparison, in late November 2013, this figure was 10.895 billion AZN.
According to the CBA, as of Dec. 1, 2014, the monetary base in AZN amounted to 11.519 billion AZN versus 10.787 billion AZN on Dec. 1, 2013.
In the mentioned period, the volume of money in circulation amounted to 10.955 billion AZN, while on Dec. 1, 2013 this figure was 10.372 billion AZN.
The ratio of the mass of cash in circulation to the monetary base was 94.4 percent as of Dec. 1, 2014, reducing by 0.8 percent versus the same indicator on Dec. 1, 2013.
Bank reserves stood at 627.7 million AZN, or 25.5 percent more than in late November 2013 (500.3 million AZN).
Azerbaijan's loan market
Azerbaijani banks increased lending to the economy in January-November 2014 by 19.06 percent compared to the same period of 2013.
The banks issued loans totaling 18.152 billion AZN, including 13.392 billion AZN (73.78 percent) in national currency and 4.760 billion AZN (26.22 percent) in freely convertible currency as of Dec.1, according to the CBA report.
By comparison, the figure amounted to 15.245 billion AZN (around 10.926 billion AZN in national currency and 4.319 billion AZN in freely convertible currency) in January-November 2013.
Of the total portfolio, loans worth 981.5 million AZN (5.4 percent) were overdue compared to 795 million AZN (5.21 percent) as of January-November 2013.
The statistics of overdue loans does not include similar loans of Aqrarkredit non-banking credit institution. Overdue loans increased by 23.46 percent during a year.
Short term loans amounted to about 3.716 billion AZN (including overdue loans worth 390.2 million AZN) compared to around 3.237 billion AZN (including overdue loans worth 366.6 million AZN) as of January-November 2013. The volume of short-term loans in the economy increased by 14.78 percent during a year.
The volume of long term loans hit 14.436 billion AZN, including 591.3 million AZN in overdue loans compared to about 11.826 billion AZN, including 428.4 million AZN of overdue loans as of January-November 2013. The long-term loans increased by 22.07 percent during a year.
The credit portfolio of the only state bank in the country, the International Bank of Azerbaijan, hit 6.138 billion AZN with the specific weight of 33.8 percent, while private banks issued loans worth around 11.489 billion AZN with a specific weight of 63.3 percent.
The remaining 2.9 percent fell to the share of non-bank credit organizations. They issued 525.2 million AZN, according to the CBA.
Azerbaijani banks increased the consumer lending volume by 24.7 percent in January-November 2014 compared to the same period of 2013, the report says.
The share of consumer loans in a total volume of the banks' loan investments amounted to 41.5 percent, or 7.528 billion AZN. For comparison: their share accounted for 39.6 percent, and the amount of issued loans - 6.035 billion AZN in January-November 2013 (with 42.17 percent annual growth).
The trade and services (14.3 percent or 2.592 billion AZN) ranked second on the share in the total loan portfolio of banks. The construction and real estate sector (13.8 percent or 2.513 billion AZN) ranked third.
Around 11.4 percent of the total volume of lending to the real sector of Azerbaijan was directed to the industry and production. In nominal terms it amounts to 2.066 billion AZN.
The banks also increased lending to this sector in connection with the announcement of 2014 as the Year of Industry. For comparison: in January-November 2013 the share of lending to the industrial sector accounted for 9.6 percent of a total volume of funds transferred by the banks into the country's economy.
The share of transport and communication hit 3.1 percent (562.8 million AZN), agriculture and processing reached 4.6 percent (837.1 million AZN), energy, chemistry, and natural resources - 1.2 percent (216.4 million AZN).
The loans given to the population in Azerbaijan's districts totaled 3.033 billion AZN as of November 2014, or 16.7 percent of the banks' total loan portfolio, the report says.
This figure is 49.28 percent more than in the same period of 2013.
The figure hit 15.118 billion AZN in Baku. Here the loans in national currency (AZN) amounted to 10.992 billion AZN.
In November 2014, the average interest rate on loans throughout the country was 14 percent, while in Baku this index stood at 12.5 percent.
The lending volume in the Absheron Economic district totaled 584.1 million AZN at an average rate of 19.2 percent.
In other economic districts the lending index was as follows: Aran - 1.071 billion AZN at a rate of 21.7 percent, Mountainous Shirvan - 124.24 million AZN at a rate of 23.5 percent, Ganja-Gazakh - 413.05 million AZN at a rate of 21.7 percent, Guba-Khachmaz - 139.37 million AZN at a rate of 20.2 percent, Lankaran - 315.02 million AZN at a rate of 23.5 percent, Shaki-Zagatala - 167.17 million AZN at a rate of 20.8 percent, the Upper Karabakh - 78.25 million AZN at a rate of 20.8 percent, Kalbajar-Lachin - 31.58 million AZN at a rate of 25.6 percent, Nakhchivan - 109.36 million AZN at a rate of 13.5 percent.
Azerbaijani banks decreased interest rates on loans in local currency and slightly increased the rates in foreign currency.
The average rate on bank lending to the economy of Azerbaijan in national currency amounted to 13.84 percent compared to 14.14 percent as of December 1, 2013, the report said.
The average rate on bank lending in freely convertible currency made up 14.53 percent compared to 14.52 percent as of early December 2013.
The average rate on bank lending to legal entities in national currency amounted to 10.12 percent compared to 11.57 percent as of December 1, 2013. The average rate on bank lending to corporate clients in freely convertible currency amounted to 9.70 percent compared to 10.89 percent.
As of December 1, 2014, the average rate on bank lending to physical entities in national currency amounted to 18.52 percent compared to 18.34 percent as of December 1, 2013.
The average rate on bank loans to individual customers in freely convertible currency was 21.97 percent compared to 20.75 percent as of early December 2013.
Mortgage lending
The Azerbaijan Mortgage Fund (AMF) under the Azerbaijani Central Bank delivered loans amounting to 88.6 million AZN in January-November 2014 or 8.1 percent less than in the same period of 2013, the report says.
Mortgage loans worth 621.8 million AZN have been delivered since launching financing through the AMF, including 112.9 million AZN in 2013, 74.77 million AZN - in 2012, 95.64 million AZN - in 2011, 97.08 million AZN - in 2010, 76.9 million AZN - in 2009, 70.2 million AZN - in 2007 and 5.6 million AZN - in 2006.
The total amount of refinancing the loans delivered by the banks earlier, hit 120 million AZN in January-November 2014, according to the report.
The average amount issued by AMF authorized banks is 40,114 AZN, the average loan amount is equal to 279 AZN, with an interest rate of 6.81 percent, and the average monthly payment is 331.6 AZN.
Currently, the maximum amount of a common mortgage loan through the AMF is 50,000 AZN at a rate of 8 percent with a payback period of 25 years. Terms under the social mortgage are 50,000 AZN at an annual rate of 4 percent with a payback period of 30 years. The initial payment under a social mortgage is 15 percent, whilst a conventional loan is 20 percent.
Conditions of mortgage lending are as follows: Loans must be issued in Azerbaijani AZN and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house.
The volume of mortgage lending must not exceed 80 percent of the market price and the monthly payment must not exceed 70 percent of the debtor's monthly income. It is compulsory to have an agreement on life insurance.
Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs and those making special contributions to sport as well as to the military with at least a three-year service term. Each family having the right to such a mortgage can only use the opportunity once.
At present, the authorized banks of the Mortgage Fund are 28 banks [some 44 banks operate in the country].
Some 21 insurance companies [their total number is 27] and 14 appraisal organizations are the participants of the mortgage market.
Azerbaijan's banking sector
The economic cycles, seasonal factors and the attitude of investors, dictated by a variety of causes impact on the dynamics of deposits.
As of January-November 2014, the depositary base of Azerbaijani banks increased by 20.7 percent and 23.16 percent per annum, according to the report.
As of December 1, 2014, the total amount of bank deposits and deposits of physical and legal entities totaled 15.312 billion AZN compared to 12.432 billion AZN as of early December 2013, according to the CBA.
Around 7.643 billion AZN fell to cash, 2.484 billion AZN were demand deposits, and 5.158 billion AZN term deposits. The funds in foreign currency amounted to 7.669 billion AZN (2.048 billion AZN and 5.620 billion AZN, respectively).
The deposits of physical entities increased by 10.39 percent, while the volume of legal entities' deposits by 36.8 percent compared to January-November 2013. These indexes increased by 9.84 percent within 10 months and by 32 percent respectively.
As of January-November 2014, the volume of physical entities' deposits in the banks amounted 7.086 billion AZN compared to 6.419 billion AZN in January-November 2013.
Around 4.482 billion AZN of the population's funds were placed in the national currency, while 2.604 billion AZN in freely convertible currency, according to the Central Bank.
The Azerbaijani population's deposits in the national currency in the banks have prevailed over those in foreign currency since 2012.
The deposits of the population, being one of the most important indices of confidence in the banking system, also play a significant role as a resource for the banks to normally work.
The population's deposits to Azerbaijan's banking system from the country's districts (except for Baku), totaled 563.5 million AZN in January-November 2014, or 8 percent of the total bank deposits.
The figure increased by 18.5 percent compared to the same period of 2013, the report says.
The volume of deposits in Baku was 6.522 billion AZN, while some 4.044 billion AZN accounted for the deposits in the national currency.
In this period, the average interest rate throughout the country hit 8 percent, and 8.1 percent - in Baku.
Baku is still the leader on such indices of the population's deposits in the banks.
Among Azerbaijan's districts, the Aran economic district (171.34 million AZN, the average rate of 7.1 percent per annum) is leading in terms of drawing the population's deposits.
In the mentioned period the volume of deposits in the Absheron economic district totaled 170.81 million AZN at an average rate of 8.4 percent, Mountainous Shirvan - 15.9 million AZN at a rate of 6 percent, Ganja-Gazakh - 65.9 million AZN at a rate 5.7 percent, Guba-Khachmaz - 22.33 million AZN at a rate of 6.1 percent, Lankaran - 48.47 million AZN - the rate of 6.6 percent, Sheki-Zagatala - 24.01 million AZN - the rate of 5.3 percent, Upper Karabakh - 14.48 million AZN - 3.9 percent, Kalbajar-Lachin - 8.5 million AZN - 4.6 percent, Nakhchivan - 21.8 million AZN - the average rate of 4 percent.
As of January-November 2014, the volume of deposits of financial organizations amounted to 4.131 billion AZN compared to 3.250 billion AZN as of January-November 2013. The volume of deposits of non-financial organizations totaled 4.094 billion AZN compared to 2.762 billion AZN as of January-November 2013.
The total volume of deposits of legal entities totaled 8.225 billion AZN compared to 6.013 billion AZN as of December 1, 2013.
As of December 1, 2014, the Azerbaijani banks reduced interest rates on deposits both in national and in freely convertible currency, according to the report says.
The average rate on deposits in AZN for December 1, 2014 made up 8.78 percent compared to 9.51 percent in December 1, 2013, the statistical report of the CBA said. The average rate on deposits in foreign currency amounted to 9.37 percent versus 9.72 percent in early December 2013.
As of December 1, 2014, the average interest rate on deposits of individuals in AZN made up 9.45 percent, while on December 1, 2013, it was 9.46 percent. The average rate on deposits from individual customers in foreign currencies amounted to 10.02 percent versus 10.30 percent in early December 2013.
The average rate on deposits of legal entities in AZN made up 5.35 percent at the beginning of December 2014 versus 6.04 percent for December 1, 2013, the report said. The average rate on deposits from corporate clients in foreign currency amounted to 5.35 percent versus 3.08 percent in early December 2013.
The Azerbaijani population's dividends on deposits in banks amounted to 450 million AZN in January-November 2014, the CBA statement in the main areas of monetary policy and financial stability for 2015 says.
"The Azerbaijani population is a net lender in relation to the banking sector," the statement says. "The amount of deposits in the banks exceeds the loans granted to the households by 2.3 billion AZN."
Around 473 depositors account for 1,000 people in Azerbaijan. The amount of the deposit per capita is 745 AZN and the number of bank accounts of physical entities reached 6.4 million.
During the first 11 months of 2014, corporate deposits increased by 35.3 percent, reached 8.2 billion AZN. The population's deposits increased by 10.8 percent - up to 7.1 billion AZN during this period.
According to the statement, the deposits in national currency increased by 15 percent, while the deposits of the population in the regions - by 12.4 percent.
Banks' financial activity
There are 44 banks in Azerbaijan: 42 commercial banks and 2 state-owned banks as of the third quarter of 2014. There are 22 banks with foreign capital. The share of foreign capital ranges from 50 to 100 percent in seven of them, while up to 50 percent in 13 banks. There are also two local branches of foreign banks.
The total profit of Azerbaijan's banks exceeds the total loss by 15.4 times as of November 2014, Central Bank of Azerbaijan (CBA) said in its report.
The profit of 39 banks was 439.44 million AZN, while the loss of five banks stood at 28.55 million AZN, according to the report. This allowed the banking system to get net profit of 410.89 million AZN.
The number of profitable banks increased by 1 compared to October 2014, and their total profit increased by 11.64 percent. The number of unprofitable banks decreased by 1 and their total loss increased by 11.5 percent.
The number of profitable banks increased by 1 in November 2014 compared to the same month of 2013, while the total profit of this sector increased by 26.7 percent. The number of unprofitable banks remained unchanged, while their total loss increased by 2.2 times.
|
Periods |
Number of profitable banks |
The total profit of the banking system (profitable banks) |
Number of unprofitable banks |
The total loss of the banking system (unprofitable banks) |
Total profit (+) or loss (-) obtained by banks |
|
01.12.2013 |
38 |
346,89 |
5 |
-12,73 |
334,16 |
|
01.12.2014 |
39 |
439,44 |
5 |
-28,55 |
410,89 |
The Azerbaijani banking sector's capitalization rose by 21.5 percent in Nov. 2014, standing at 4.029 billion AZN (over $5 billion) on Dec. 1 as compared to the same period of 2013, according to the report.
The report said there were 42 banks with a capital exceeding ten million AZN [a regulatory requirement of the CBA active in Nov.] in the reporting period, one bank more as compared to Nov. 2013.
The specific weight of this category of banks in the total capital of all banks in Azerbaijan stood at 99.8 percent in the reporting period.
One bank's capital was formed within a range from five million AZN to ten million AZN, and another one's capital - in a range from 3.5 million AZN to five million AZN.
The specific weight of these categories of banks in the aggregate capital of all the banks in Azerbaijan was 0.1 percent in the reporting period.
The CBA's requirement for the banks' minimum total capital was set at 50 million AZN by late 2014.
As of December 1, 2014, the assets of the Azerbaijani banking sector amounted to 24.7 billion AZN compared to 20.2 billion AZN as of November 2013, the report said.
The bank assets increased by 22.28 percent during a year, according to the Central Bank of Azerbaijan.
The basis of the assets of the banking sector (67.9 percent) accounted for loans delivered to the clients in the amount of 16.78 billion AZN (20.2 percent growth during a year), investments (2.15 billion AZN with 8.69 percent weight and 32.7 percent growth during a year) and funds on correspondent accounts (1.74 billion AZN with 7.1 percent weight and 52.6 percent growth during a year).
Loans and deposits delivered by the banks to the financial sector amounted to 1.098 billion AZN as of November 2014 (4.4 percent).
The lion share in the structure of liabilities accounts for deposits standing at 10.82 billion AZN (43.79 percent) as of December 1, 2014, showing an increase of 21.2 percent compared to the same period of 2013. Loans and deposits from the financial sector amounted to 8.21 billion AZN, increasing by 21.8 percent during a year.
As a result of the measures, the stability of the banking sector of Azerbaijan improved, as well as its financial security in relation to the various risks strengthened, the CBA statement in the main areas of monetary policy and financial stability for 2015 says.
According to the statement, at present, the capital adequacy, which is the main index of the stability of the banking sector in Azerbaijan is 18.7 percent. This exceeds the CBA 12 percent standard. The total capital of the banking sector for 11 months of 2014 increased by 21.3 percent.
"The liquidity of the banking sector of Azerbaijan is at a high level," the document says. "The commitments and payments are carried out constantly. The current liquidity ratio exceeds the minimum requirement twofold."
The quality indices of the bank assets are at a satisfactory level.
"The share of overdue loans of the population and the real sector of the portfolio is 5.5 percent," the document says. "This figure is fully covered by the banks' reserves."
The CBA stressed that the obligations on external debts account for only 22 percent of the bank resources, which is a safe level in terms of sustainability.
"The profit of Azerbaijani banks in 2014 increased by 23 percent compared to 2013," the statement says. "The yield on the assets of the sector was two percent, return on equity - 13.8 percent."
Payment card market
The number of payment cards in Azerbaijan has increased by 3.4 percent since early 2015 and hit 5.948 million units as of November 2014, the report says.
Their number increased by 7.9 percent compared to the same period of 2013.
Some 4.683 million units of the total number of cards were debit cards, in particular, 2.483 million - social cards, 1.429 million - salary cards, 771,000 - other cards. The number of credit cards was 1.265 million units.
The total turnover on payment cards via ATMs and POS-terminals amounted to 10.624 billion AZN and the total number of transactions to 71.199 million units in January-November, according to the report.
The number of transactions on debit cards equaled 55.754 million units totaling 8.523 billion AZN.
Of the total number of transactions, around 44.621 million transactions amounting to 7.671 billion AZN were implemented on debit cards via ATMs within the country, and around 3.134 million transactions amounting to 539 million AZN via POS-terminals.
Some 15.446 million transactions worth of 2.102 billion AZN were made on credit cards in January-November 2014.
As many as 4.889 million transactions worth 1.111 billion AZN, of the total number of transactions on credit cards, were implemented via ATMs and there were 6.547 million transactions worth of 458 million AZN via POS-terminals.
As of December 1, 2014, around 2,586 ATMs operated in the country of which 1,460 are located in Baku and 1,126 in other cities and regions of the country. Their total number increased by 175 units or 7.3 percent during a year (compared to early December 2013).
The number of POS-terminals amounted to 68,676 units of which 47,250 are installed in Baku and 21,426 units in other cities and regions as of December 1, 2014.
The number of POS-terminals increased by 35,375 units or 2.06 times compared to January-November 2013.
Stock market
The Baku Stock Exchange's turnover increases by almost 1.13 times from year to year although earlier the growth reached 1.57 times.
According to the Baku Stock Exchange, the turnover hit 593.793 million AZN in the fourth quarter of 2014 compared to 1.454 billion AZN in the third quarter, 2.023 billion AZN for the second quarter and 3.887 billion AZN in the first quarter.
February's turnover remains the best turnover in 2014 (1.759 billion AZN). A record turnover was observed in December 2011 (1.873 billion AZN) and the best turnover was in July 2012 - 1.287 billion AZN.
The turnover hit 7.959 billion AZN in January-November 2014. It is equivalent to 93.91 percent of its turnover for the entire 2013 (8.475 billion AZN). The current turnover hit by 1.13 times more than the turnover in January-November 2013 (7.041 billion AZN).
If the current trends remain, the turnover for 2014 can hit 8.683 billion AZN. The best turnover was registered in 2008 - 9.519 billion AZN.