SOFAZ 2017 budget approved with a deficit of AZN 6.1bn
State Oil Fund of Azerbaijan 2017 budget was approved last week. Based on the assumption of US$ 40.0/bbl, revenues are set at AZN 8.4bn (US$ 4.7bn at the current exchange rate), up 82.8% compared to 2016 budgeted revenues, while expenditures are set at AZN 14.5bn (US$ 8.2bn), up 35.8% y/y. Transfers to the state budget are set at AZN 6.1bn (US$ 3.4bn) and a new expenditure item, “Transfers to the Central Bank to support macroeconomic stability,” at AZN 7.5bn (US$ 4.2bn) is introduced in the budget, while AZN 0.9bn (US$ 0.5bn) is assigned for other categories.
According to the 2017 budget, the fund is set to face an AZN 6.1bn (US$ 3.4bn) deficit in 2017.

Ministry of Taxes receipts down 1.4% y/y, Customs Committee receipts up 44.0% y/y in 2016
Ministry of Taxes tax receipts were up 16.4% y/y in December 2016 to AZN 719.4mn, while Customs Committee receipts were up 17.0% y/y to AZN 235.0mn. In US$ terms, Ministry of Taxes tax receipts were down 18.0% y/y to US$ 411.1mn in December 2016, while Customs Committee receipts were down 17.5% y/y to US$ 134.3mn.
In annual terms, Ministry of Taxes tax receipts were down 1.4% y/y to AZN 7.0bn, while Customs Committee receipts were up 44.0% y/y to AZN 2.3bn in 2016.

CBAR reserves decreased by US$ 36.6mn m/m in December 2016
Central Bank reserves were down 0.9% m/m (-20.8% y/y) to US$ 4.0bn in December 2016, the lowest level since 2007.

Non-performing loans up to 8.9% in November 2016
Total loans by commercial banks were up 2.9% m/m to AZN 16.3bn, driven by the depreciation of the local currency. Loans in local currency were up 1.1% m/m to AZN 8.6bn, while FX loans were up 5.0% m/m to AZN 7.7bn. In US$ terms, however, FX loans were down 0.7% m/m to US$ 4.4bn. Non-performing loans (NPL) were up 4.9% m/m to AZN 1.4bn, again driven by the depreciation. While in AZN terms NPLs in FX loans were up 8.2% m/m, in US$ terms they were up 2.4% m/m. As a result, the NPL ratio increased to 8.9% (up 0.2 ppts m/m) of gross loans. 

Deposit dollarization flat at 75.6% in November 2016
Commercial bank deposits were up 1.9% m/m to AZN 22.7bn in November 2016, helped by the depreciation of the local currency. Local currency deposits were up 1.6% m/m to AZN 5.5bn, while FX deposits were up 2.0% m/m to AZN 17.1bn. In US$ terms, however, FX deposits were down 3.5% m/m to US$ 9.9bn. Deposit dollarization remained flat at 75.6% in November 2016.