13:01 - 28.11.2019

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November 28, Fineko/abc.az. The State Statistics Committee announced the amount of overdue loans at banks as of 1 October.

According to the Committee, overdue loans at banks amounted to AZN 1.447 bn for the reported term. If to take into account that the declared amount is not so small, then in the coming years there may appear a wave of new problem loans. In this regard, we tried to get the opinion of expert economist Parviz Heydarov.

In his exclusive interview for ABC.AZ the expert informed that the situation in the domestic banking system has not recovered after the fall in oil prices at world markets in 2015-2016.

Reminding about the recent economic meeting of the head of state, Heydarov noted that the Azerbaijan leader expressed dissatisfaction with the fact that such a banking sector has not yet provided assistance in the growth of the economy, the development of the real sector and the increase in consumer loans. Noting that problem loans at one time reached almost AZN 2 bn manats in general, the expert noted that by solving this issue in 2019, this brought banks out of "coma".

Heydarov, who considers the statistical indicators of this year satisfactory at first glance, touched upon the figures from September to October: "Since 30 September 2019 banks’ total assets of banks in the country amounted to AZN 31.36 bn, liabilities AZN 26.67 bn, balance sheet capital of the sector AZN 4.69 bn. The loan portfolio made up 44.2% of the sector's assets for Jan-Sept 2019 with a rise of 9.8% (AZN 1.2 bn).

By the end of the month banks’ total loan portfolio amounted to AZN 13.87 bn. The portfolio consisted of 61.6% of business loans and 38.4% of consumer loans. 46.4% of assets in foreign currency and 34.8% of loan portfolio - in foreign currency. The indicator of assets of the banking sector by 1 October 2018 made up 7.4% more. In general, for the past part of the year the credit portfolio of the banking sector grew by 20.8%, and the share of loans in assets increased from 35.1% up to 39.5%. The loans given to customers reached AZN 12.38 million of Bank's assets.

In addition, for Jan-Sept 2019 the banking sector generated AZN 642.9 million of operating profit, and the net profit of the sector amounted to AZN 522.7 million. Compared with the 2018 same term, interest income grew by 10.6% and interest income on loans by 14.4%. But the point is that the noted satisfaction and revival may not continue. That is, if banks do not lend to the nonoil sector, they may again fall into a "coma", as banks have previously fallen into such a state because of consumer loans," the expert thinks.