Aggregate debt of Azerbaijani banking sector shrinks to 3-year low

Baku. 10 October. REPORT.AZ/ An aggregate debt of Azerbaijani banking sector in the last three years decreased from $ 8 billion to $ 7 901,7 million.

Report informs referring to the report of the Central Bank of Azerbaijan (CBA), last time the debt of banking sector was below $ 8 billion level- $ 7 809,3 million in October, 2014.

Analytical Group of Report News Agency informs that the external liabilities of banking sector as of August, 2017 have decreased by AZN 462,7 million or by 6,7% as compared with previous month. The liabilities to the Central Bank shrunk by AZN 104,9 million or by 1,5%. As a result, the aggregate debt of banking sector fell by AZN 567,6 million or 4,05% on August as compared with previous month.

Analytic group states that the reason for decreasing banking sector’s debts is related with loss of external debts efficiency and paying off the debts due to their expiration. The reduction of credit investments in economy which has been observed for two years and toughening the credit terms decreased the bank’s need for additional funds.

According to analysts if the banking sector does not resort to softening of credit terms and decreasing of interest rates in the next two years the banking sector will become even smaller. In its turn it will lead to consolidation of a number of banks or leaving the market.