17:51 - 31.03.2023

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March 31, Fineko/abc.az. The composition of liabilities and the structure of terms limit the creation of non-current assets. While the bulk of business loans and consumer loans are loans for up to 5 years, deposits are mainly placed for the period of 1 to 3 years, ABC.AZ informs with reference to Central Bank's financial stability report for 2022.

The formation of 60% of the deposit portfolio of the sector at the expense of demand deposits limits the ability of banks to finance the economy in the long-term prospect, provided that banks maintain a large amount of liquidity.

The deposit portfolio of legal entities and individuals plays a leading role in financing the banking system. Over the past year, the deposit portfolio of the sector grew by 25.1% (AZN 6.8 bn) and amounted to AZN 33.8 bn. The volume of the deposit portfolio is 81.5% of the liabilities of the banking sector. 66% of the deposit portfolio consists of deposits of legal entities (AZN 22.3 bn), 34% - the deposit portfolio of individuals (AZN 11.5 bn). The deposit portfolio of the sector is formed mainly by demand deposits (74% of the portfolio). The high share of demand deposits in the financing of the banking system determines the preservation of the sector's liquidity buffer in large volumes.