Growth of centralization is observed in banking sector of Azerbaijan

11:31 - 31.03.2023


March 31, Fineko/abc.az. There is tendency in the banking system of Azerbaijan to increase the level of centralization (concentration in one or several hands).

ABC.AZ reports that according to Financial Stability Report 2022, index HHI widely used in international practice indicates that in recent years there has been an increase in assets and deposits, and a decrease in loans.

However, at the end of 2022, centralization in the banking sector was at average level on assets and deposits (1,584 and 1,819, respectively) and low on the loan portfolio (982).

The dynamics of the market share in the system of the three largest banks indicates that centralization has increased in recent years. Thus, compared with 2019, the market share of the assets of the three largest banks increased by 9 p.p. to 65%, the market share of the deposit portfolio by 13 p.p. to 70%, and the market share of the loan portfolio by 8 p.p. - an increase of 48%.

Over the past 3 years, there has been an increase in centralization in the banking sector.

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