Weekly actual topics in Azerbaijan (Nov. 9-13)

Analysis Materials 16 November 2015 17:11 (UTC +04:00)

Ruble mortgage can be introduced in Azerbaijan by late 2015

The mortgage lending in rubles can be introduced in Azerbaijan by late 2015, Tural Veliyev, director of the bank's retail business development department and member of its board of directors, said.

He said that the bank is currently awaiting a response from the head office in Russia concerning the interest rates for this product.

"All technical issues have been resolved," he said. "We completed working with our partners and settled the disputed points a few weeks ago. The only unresolved issue is the interest rate on the loan. As you know, the mortgage lending rates increased on the Russian market. But it is wrong to offer a mortgage loan at a rate of 20 percent in Azerbaijan. Our customers have become accustomed to the interest rate on the mortgage at a rate of 8-10 percent. So we are negotiating with our head office in Russia to receive a concessional resource at a low rate for its further sale on the local market. I think that we will get an answer before the end of the month."

"The loan will be issued for a period of 10 years," he said. "The initial payment will be at the rate of 20 percent, but there will be also some options."

"The initial payment, depending on the builder, will drop to 10 percent," he said. "Today, we already have the mortgage projects in manat. The initial payment and the interest rate is 10 percent. The loan is issued for 10 years."

Veliyev said that this project is one of the main objectives of the bank, but this product will not be massive.

"This is another option for the bank to offer it to the customers," he said. "This project will not have a large market share. But given that we have close relations with Russia and a great number of our fellow citizens live in Russia, I believe that this product will be in great demand."

"Moreover, according to the information received from our partner-builders, some 20-30 percent of all new apartments in Baku are bought by Azerbaijanis living in Russia," he said.

"We came to the conclusion that this product will be very interesting and beneficial for the customers residing in Russia and earning rubles. We already have several applications. Our builders did some work and provided us with a list of customers who would like to purchase a mortgage loan in rubles."

"Bank VTB (Azerbaijan)" is a subsidiary of "VTB Bank". The shareholders of "VTB Bank (Azerbaijan)" are "VTB Bank" and "AtaHolding". "Bank VTB (Azerbaijan)" renders the services to the corporate business, small business and private clients. Today the bank is represented by 14 subsidiaries and the Customer Service Office under the main service.

As of late September, the registered capital of the bank amounted to 50.82 million manat, total capital - 53.07 million manat. The bank's assets amounted to 369.96 million manat, the loan portfolio - 347 million manat and the deposit portfolio - 60.7 million manat for the third quarter.