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ROA in banking system decreases sharply

01 February 2011 14:15 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-ECONOMICS. The return on assets (ROA) of Azerbaijan-based banks has decreased sharply, in 2010.

According to APA-Economicsâ€™ calculations this index was 1.1% on 2010â€™s results.

Thus, banksâ€™ pre-tax profit made AZN 140.1 mln in 2010, as of January 1, 2011, total assets was AZN 13.291 bln.

Note that, according to results of 2009, the banksâ€™ pre-tax profit stood at AZN 281.09 mln, total assets â€“ at AZN 11.665 bln. Thus, the ROA index was 2.4% in accordance to results of 2009. As you see, this index has been decreased by 2.2 times in 2010.

As you know, dynamics of profit and assets influenced on ROA index dynamics. Total profit of Azerbaijan-based banks decreased from AZN 281.1 mln to AZN 140.1 mln, in 2010. At the same time, assets rose 13.9% - from AZN 11.665 bln to AZN 13.291 bln. As a result of this, ROA index has decreased sharply.

Experts of Ekonomist magazine say this was related to no increase of assets, but to decrease of profit.