Azernews.Az

By Sara Israfilbayova

Local banks reduced their liabilities to the Central Bank of Azerbaijan (CBA) almost threefold compared to the figure at the beginning of the year, up to 609.3 million manats ($361.55 million).

Banks as a whole have reduced their liabilities by 10 percent since the beginning of the year, from 29.53 billion manats ($17.52 billion) to 26.57 billion manats ($15.77 billion), reads the report of the Financial Market Supervisory Body (FMSB).

The assets of the banking sector decreased by 6.05 percent during January-August, and as of September 1, 2017 amounted to 29.5 billion manats ($17.50 billion).

The main reason for asset reduction was a decrease in the volume of loan portfolios of banks - by 25 percent compared to the beginning of the year, to 11.9 billion manats ($7.06 billion).

The total capitalization of banks in Azerbaijan as of August 31 is 2.9 billion manats ($1.72 billion).

Currently, 31 banks are implementing their activities in Azerbaijan, including 16 banks with foreign capital.

In whole, these banks have 560 branches and 142 departments.

Two local banks- Atabank and Caspian Development Bank have been merged in June and Caspian Development Bank was joined to Atabank.

Earlier, Head of the Association of Banks of Azerbaijan (ABA) Zakir Nuriyev stated that to make the process [reduction of number of the banks] painless, it is necessary to consolidate banks, rather than declaring them bankrupt.

He stressed that other banks have to follow the banks’ example, further adding that banks’ services are more important than their numbers.

Director of the Center for Economic and Social Development (CESD) Vugar Bayramov earlier made a supposition that the number of local banks, which currently stands at 31, can be reduced to 20 by 2020.

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