Finance

Home page

Finance

Azerbaijanâ€™s banking system increases profit by 21%

10 November 2011 09:20 (UTC +04:00)

Note that, the profit of the banks in January-July amounted to AZN 100.04 million. Thus, in August, profit totaled to AZN 7.72 mln, which is AZN 5.8 mln or 43% less than the monthly average for this year (13.52 million manat).

In January-August 2011, interest income of banks amounted to AZN 716.80 mln, interest expense â€“ AZN 379.85 mln, net interest income â€“ AZN 336.96 mln. At the same time, non-interest income of banks amounted to AZN 197.25 mln, non-interest expenses â€“ AZN 330.97 mln, net non-interest loss â€“ AZN 133.72 mln.

In comparison with January-August 2010, interest income of banks increased by 4.6%, while non-interest loss increased by 20.7%. Besides, interest income rose by 4.7%, while interest expense increased by 4.9%. Non-interest income from operations increased by 14.5%, expenses increased by 17%.

Profit growth speaks about improvement of the banking system, but an analysis of interest income and non-interest operations indicates that the process is unilateral. Thus, the cost of interest transactions is 53% of revenues, profitability percentage of operations - 47%. Non-interest expenses from operations of 1.7 times the income. As a result, 40% of interest income goes to cover non-interest loss, 28.3% - on the charges on assets. Profits of banks are the same 32.1% rate of profit.