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Aftandil Babayev: Azerbaijanâ€™s banking sector able to confront global financial crisis

25 November 2008 13:02 (UTC +04:00)

Aftandil Babayev, Deputy Chairman of the NBA, said that the main purpose of the press conference is to provide comprehensive information on the current position of the banking sector against the backdrop of the global financial crisis.
â€œRecently, some media outlets have published inaccurate information about the banking sector. This misinformation can affect businesses operating in the country. I would like to emphasize that that Azerbaijanâ€™s banking sector is durable enough to confront the global financial crisis,â€ he said.
According to him, the amount of peopleâ€™s deposits in bank rose 22.2% from early this year to AZN 1.784 billion as of November 1.
â€œThis figure is a 34.3% year-on-year increase. However, the amount of bank deposits declined in October this year for the first time in 21 months. The monthly fall was AZN 94.7 million or 5%,â€ he noted.
The amount of deposits fell AZN 84.2 million or 10.2% in January, 2007.
Aftandil Babayev attributed the decline in deposits to the fact that the owners of deposits preferred using their deposits for investment rather than taking out loans.
â€œAlso, several depositors put their deposits to the share capital of the bank (approx. AZN 18 million). Other withdrew their deposits for capital investment,â€ he noted.
According to him, the total external obligations of the banking sector are AZN 2.2 billion. Banksâ€™ debt service was AZN 900 million during January-October.
Of these, AZN 210 million were repaid in September and October.
He noted that liquid assets account for 23% of total bank assets and this figure exceeds the total amount of deposits.
Aftandil Babayev also spoke about the country’s anti-inflationary measures.
â€œInflation appears to slow down in recent months. If this trend goes on, the annual inflation rate will reach 18-19% at the year-end,â€ he added.
Referring to the decline in the discount rate to 10% from 15%, he added that the central bank will further cut the interest rate in December.
Rashad Orujov, the central bankâ€™s officer for control over banks and non-bank lending institutions, said at the press conference that they have received a request from AzFinance Bank for the establishment of a bank in the country.