Azerbaijani bank assets show slight decrease in Q1 2020

By Azernews

By Ofeliya Afandiyeva

Total assets of the banking system of Azerbaijan as of March 31, 2020 amount to $18.9 billion, local media reported, citing the Central Bank of the Republic of Azerbaijan (CBA).

As previously reported, as of January 1, 2020, the assets of banks in Azerbaijan amounted to $19.2 billion. It implies that in the first quarter, bank assets decreased by 1.5 percent.

Based on the statistics provided by the CBA, the loan portfolio of banks at the end of the reporting period is $8.9 billion (an increase of 2.2 percent compared to the appropriate figure at the end of 2019).

Moreover, the total capitalization of banks in Azerbaijan as of March 31, 2020 is $2.7 billion (an increase of 3.4 percent).

In addition, it was informed that bank liabilities at the end of March 2020 amounted to $16.1 billion (a 2.4 percent decline). At the same time, liabilities of banks to the Central Bank of Azerbaijan are estimated at $206.8 million (an increase of 7.5 percent).

The deposit portfolio in banks at the end of March amounted to $12.1 billion (a decline of 3.5 percent), including household deposits – 4.8 billion (a decrease of 4.1 percent).

According to the regulator, the total net profit of banks in January-March amounted to $96 million, which is 31.6 percent higher than the same period in 2019.

In January-March 2020, the interest income of banks amounted to $295.6 million (an increase of 3.8 percent compared to January-March 2019), including $235.2 million on loans issued (an increase of 16.4 percent).

In the meantime, non-interest income of banks for the reporting period amounted to $102.5 million (an increase of 19.8 percent).

CBA reported that the interest expenses of banks in the reporting period amounted to $79.5 million (a decline of 4.1 percent), including deposits – $53.9 million (a decrease of 1.7 percent) whereas non-interest expenses of banks amounted to $179.5 million (an increase of 22.4 percent).

Based on to the results of January-March, operating profit of the banking sector of Azerbaijan amounted to $128.3 million (an increase of 21.6 percent). At the same time, in the reporting period, banks allocated $17.5 million (decrease by 2.1 times) to form reserves.

As a consequence, the total pre-tax profit of banks in the first quarter of 2020 is estimated at $110.7 million (an increase of 34.8 percent compared with the appropriate figure for January-March 2019), income tax payments for the reporting period amounted to $14.6 million (increase by 60.6 percent).

Note that as of March 31, 2020, 30 banks had banking activity licenses in Azerbaijan, including 14 banks with foreign capital.

In general, at the end of March, banks have 506 branches (a 0.6 percent decrease compared to the end of 2019) and 126 departments (a 5.3 percent decrease).

It should be mentioned that at the end of the reporting period, 19.846 thousand people work in the banking sector of Azerbaijan (an increase of 2 percent compared to the indicator at the end of 2019).

Earlier, Financial Analyst at the Center for Analysis of Economic Reforms and Communication Ayaz Museyibov said that despite all challenges, the general dynamics of the financial and banking system of Azerbaijan shows that it has demonstrated quite successful development trends in all the main financial elements - depth, stability, efficiency and inclusiveness over the past years.