Azerbaijan plans to reduce weight of non-performing loans twice

Baku. 15 December. REPORT.AZ/ Azerbaijan targets 60% financial depth (correlation of current loans to non-oil GDP) and to reduce non-performing loans (NPL) from current 14% to 8%, as a result of improvement of risk management in commercial banks.

Report informs referring to Strategical Road Map for development of financial services in Azerbaijan.

Loan risks hold main share in risk profile of banks. NPL indicator reached highest point from 2011 till 2015. Thus, NPL indicator in overall portfolio amounted 13.9% in 2015, while in Turkey the same indicator was 2.8%. In first quarter of 2016 NPL coefficient was 16.8% (11.3% in national currency, 22.4% in foreign currency portfolios).

Application of healthy risk management practice in banks is expected to have 235 mln AZN, including 205 mln AZN direct and 30 mln AZN indirect effect on GDP by year 2020.