Azerbaijani banks raised interest in the stock market

Baku. 3 June. REPORT.AZ/ Currently, commercial banks that didn't resume the lending, have increased interest in the market of government securities. Report was told by the source of the capital market.

According to local experts, banks prefer to invest the funds in the stock market rather than send them to lending: "The state is the guarantor of repayment of short-term and long-term bonds issued by the state line, that's to say, they have no risk to lose money. At the same time, the profitability of these securities is quite high and sometimes reaches up to 20% per annum. In the case of the issuance, interest income will be approximately 10% as a result of the bank's lending at 20%. There is also a risk of loan default. Therefore, banks are willing to buy the bonds."

Experts point out that 80-90% of legal entities that invest in government bonds are commercial banks, and the others are insurance companies: "Insurers do not show interest in the market for the reason that most of them are 'subsidiaries of the banks and keep their money in the banks involved in that holding. Banks prefer themselves to actively participate in the stock markets than to allocate them to subsidiaries."