Another 5 troubled banks in Azerbaijan under special control

Baku. May 30. REPORT.AZ/ The double devaluation of manat in 2015 led to an increase in volume of non-performing loans in the banking sector, withdrawal of deposits from banks last year.

Report informs, Chairman of the Financial Market Supervision Authority (FIMSA) Rufat Aslanli said at a conference "Economic Reforms: Results and Recommendations” in Baku.

According to him, relevant measures were taken aimed at recovering the banking sector, excluding banks that have problems with capital from the system, insuring 100% of bank deposits.

“Five banks with capital problems are under special control, they must solve this problem until mid-year. At the same time, International Bank of Azerbaijan (IBA) is recovering, restructuring its external obligations. The quality of the loan portfolio of banks has stabilized”, he added.

R. Aslanli noted that currently there are some problems with business loans, entrepreneurs face tough requirements for loans. In addition, annual interest rate on loans in manats is 22-26%, foreign currency - 13-15%. These rates are high compared to the profitability of real sector.

"The high loan rates are associated with their high cost. Banks accept deposits at 15% per annum. This covers operational costs, probability of non-repayment of the loan, exchange rate and other risks, which justifies high interest rates," chairman added.