IBAR to restructure its debt
On May 11, 2017, International Bank of Azerbaijan (IBAR), majority government-owned commercial bank, announced its intention to restructure its foreign obligations totaling US$ 3.3bn, including Eurobond in the amount of US$ 0.5bn maturing in June 2019. Restructuring will include an exchange of IBAR’s senior and junior foreign currency obligations for direct sovereign obligations of the Republic of Azerbaijan.
Non-performing loans up to 10.2% in March 2017
Total loans by commercial banks were down 2.2% m/m (-21.1% y/y) to AZN 15.5bn, on the back of 2.7% m/m contraction of local currency loans, while FX loans were down 1.6% m/m. In US$ terms, FX denominated loans were down 0.2% m/m to US$ 4.3bn. Non-performing loans (NPL) were up 2.2% m/m to AZN 1.6bn, and NPL ratio reached 10.2% in March 2017, with the local currency NPL ratio up to 8.9% and FX NPL ratio up to 11.8%.
State owned banks’ loan portfolio was up 22.6% m/m to AZN 5.3bn, while private commercial banks’ loan portfolio contracted 11.9% m/m.
Deposit dollarization down to 75.8% in March 2017
Commercial bank deposits were down 2.1% m/m to AZN 21.3bn in March 2017, as appreciation of the local currency led FX deposits in AZN terms down 3.2% m/m, while local currency deposits were up 1.4% m/m to AZN 5.2bn. In US$ terms, FX deposits were down 1.9% m/m to US$ 9.4bn. With FX deposits decreasing and local currency deposits increasing, deposit dollarization retreated to 75.8% in March 2017. Excluding central government and non-residents’ deposits, dollarization ratio was down to 64.9% in April 2017.
SOCAR’s tax payments increased for the fifth consecutive month in April 2017
In April 2017 SOCAR paid AZN 133.7mn (+11.5% y/y) to the state budget and AZN 13.2mn (+0.8% y/y) to the state social protection fund (SSPF). In 4M17, its total tax payments and contributions to SSPF reached AZN 579.8mn (+18.3% y/y).
