Banking Infusion into Economy Declined Due to IBA Loan Restructuring

By November 1, investment in the local economy by banks and non-banking credit organizations were at the level of 18 billion 566.4 million (0.1% YTD).

According to the Central Bank of Azerbaijan (CBA), in October, there was a decrease in financial investments at 547.1 million manats (-2.9%) due to the restructuring of loans in the International Bank of Azerbaijan (IBA). Note that since the beginning of the year for this reason the infusion into the economy has weakened 1 billion 529.4 million manats. At the same time the total volume of overdue loans by November 1 was 1 billion 301.9 million manats (+ 33.3%, which corresponds to the February devaluation of the manat), or 7% of total loans.

The share of investment banks with state participation is 5 billion 836.7 million manats (minus 5%), private banks - 12 billion 163.7 million manats (+2.4%), or 65.5% of total loans. Participation of NBCO is unimportant.

There is a trend of dollarization - loans in manats fell by 16.5%, dropping to 11 billion 281.7 million mantas, while in foreign currency on the contrary, there was a noticeable rise by 44.6% - up to 7 billion 284.7 million manats.

As always, consumer loans are in the first place - households owe banks 7 billion 557.1 million manats with a specific weight of 40.7% of lending. Traders and representatives of services have been issued 2 billion 546.7 million manats (13.7% of the total), construction and real estate have been invested 2 billion 468 million manats (13.3%). Industry and production have been invested 1 billion 610.3 million manats (8.7%), transport and communications - 1 billion 75 million manats (5.8%), agriculture and processing - 685.5 million manats (3.7%), energy, chemistry and natural resources - 247.1 million manats (1.3%),and  a small part has come to other sectors of the economy. --17D-