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Gross profit of banks decrease in Azerbaijan

23 August 2011 12:03 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Operating commercial banks in Azerbaijan have completed the January-June 2011 pretax profit to AZN 75.08 mln, up AZN 5.69 mln or 7% compared with the figures for the corresponding period last year.

Note that, the profit for January-June amounted to AZN 65.36 mln. Thus, in June, banksâ€™ profits amounted to AZN 9.72 mln, down AZN 2.79 mln or 22% lower than the average at the beginning of the year.

During January-June, 2011, interest income of the banks amounted to AZN 526.16 mln, interest expenses â€“ AZN 285.45 mln, net interest income â€“ AZN 243.72 mln. At the same time, non-interest income of banks amounted to AZN 141.06 mln, non-interest expenses â€“ AZN 243.1 mln, net non-interest loss â€“ AZN 102.06 mln.

Note that, interest profit rose 2.1%, non-interest loss â€“ 28.8% in comparison to January-June of the year earlier. As well, interest income rose 4.4%, interest expenditure soared 6.5%. The income and expenditure in non-interest operations rose 8.2% and 16%.

Experts of Ekonomist magazine says that, financial results of Azerbaijan banking system are still negative: â€œBecause the expenditures increase more quickly than income. In general, AZN 75 mln-profit on half year is a very low index for Azerbaijanâ€™s banking systemâ€.

Experts think that, it has two reasons: First, banksâ€™ YTM is low in crediting, because the loans are income source of banks. Second, the banks are very passive in non-banking operations.