Total loans down 3.2% m/m in March 2016
The loan portfolio in AZN terms continued to contract in March 2016 for the 3rd month in a row. The 3.2% m/m decline (-4.6% y/y) in March was driven mainly by a 5.2% contraction in the state banks’ loan portfolio (-8.7% y/y). Foreign currency loans decreased 5.7% m/m in March 2016, following a 7.0% m/m decline in February, while the loan portfolio in local currency was roughly flat (-0.6% m/m). Looking at the distribution by sector, almost 80% of the contraction is attributable to the industry (-20.5% m/m) and household (-2.0% m/m) loan portfolio.
Deposit dollarization up to 81.0% in March 2016
As deposits increased in both local and foreign currencies, total deposits reached AZN 23.1bn (+8.7% m/m) in March 2016. However, as the increase in FX deposits was higher, the deposit dollarization ratio inched up 0.6ppts m/m to 81.0% in March.
Loan-to-deposit ratio down to 85.1% in March 2016
With deposits on the rise and the loan portfolio contracting, the loan-to-deposit ratio fell to 85.1% in March 2016, down from 120.0% in December 2014 (pre-devaluation level). The ratio is significantly higher in local currency (227.9%) vs FX (51.6%).
Net foreign assets of the banking sector up to AZN 1.9bn in March 2016
With gross foreign assets increasing and foreign liabilities flat, Azerbaijan’s banking sector net foreign asset stayed in positive territory for the second month in a row, reaching AZN 1.9bn (US$ 1.2bn) in March 2016.
Turnover on the Baku Stock Exchange down 11.1% m/m in March 2016
In March 2015, turnover on the Baku Stock Exchange was down 11.1% m/m (-81.2% y/y) to AZN 190.9mn on the back of reduced trade of debt instruments (-62.1% m/m to AZN 36.7mn). Overall, derivative instruments accounted for 80.7% of total turnover in March 2016. In US$ terms, turnover declined to 119.3mn (-87.7% y/y and -12.6% m/m).
