Bad Loans More than Indicated by Central Bank - Vugar Bayramov

Gross bad loans officially reached 1 billion 442 million manat, which is 8.9% of the total loan portfolio, the economist Vugar Bayramov said.

The expert on his profile in Facebook said bad loans accounted for about 5% of the loan portfolio initially when the world oil prices were falling.

“The monitoring indicates that the volume of bad loans is much higher than the Central Bank indicates. For various reasons, banks are not interested in pointing point late loans as a problem,” he said.

According to him, given the declining solvency of those who have taken loans, increase in problem loans is inevitable.

Bayramov said that, according to research, most of the problem loans could be already included in the list of non-performing loans.

“However, if in early 2015, the Central Bank, as we advised, paid the banks indemnity for foreign currency loans, benefits on consumer loans up to 10,000 dollars could be applied. Then the amount of compensation was exactly half of the current volume of bad loans,” the economist stressed.

In this case, according to Bayramov, the volume of bad loans would not increase.

“The current situation means that the volume of problem loans will increase until benefits are used,” he said. ---------71D