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Capital adequacy of Azerbaijanâ€™s banking system is higher than norm

08 June 2011 09:33 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Total capital adequacy of Azerbaijanâ€™s banking system made 16.6% in first quarter of 2011, up 12% from minimum norm defined by Central Bank. At the same time, first grade capital adequacy rose from 13.5% to 14.4% in comparison to a year ago, up 6% from minimum norm, CBAâ€™s â€œFinancial Stability Reviewâ€ reported.

According to review, Basel Committeeâ€™s regulatory requirement on capital adequacy was defined at the level of 8%. At the same time, CBAâ€™s 12%-requirement is considered as higher and CBA plans to reconsider the regulating frame on this index and approach to every bank privately.

Note that, total capital on banking system made AZN 1,911.4 mln and exceeded the last yearâ€™s level by 0.8%. Total capital rose 8.7% compared to a year ago. Stability of capital was provided on the account of shareholders. So that, the total authorized capital rose 1.2% in first quarter.

According to review, capitalization of banking system and increase of quality of banks management will be conducted by the CBA within the framework of Basel III standard. For this purpose, improvement of capital structure will be taken into consideration. IN addition, the application of leverage regulatory has already been started. According to regulatory, the banks must accord the balanced capital to assets and off-balance sheet assets.