Deposit Insurance Fund Reported for H1, 2015

Azerbaijan Deposit Insurance Fund (ADIF) has extended the statistics for the first half of 2015.

Its insurance reserves as of July 1 this year were 103 million AZN, according to a press release (+ 17.6% to the beginning of the year, when they were at the level of 87 million 562 thousand manat).

As the economist Samir Aliyev told Turan, commenting on the situation, unfortunately, in this press release ADIF experts did not bother to post information on the aggregate amount of insured deposits. Nevertheless, it is clear from the statistics that over the last year there have been certain trends. For example, the share of reimbursable funds reduced from 31 to 28%. Slightly less (decrease from 91 to 90%) was the depositors whose accounts are independent of the bankruptcy and other negative consequences for the banks. As a result of dollarization of deposits (after the February devaluation of the manat), the share of deposits in dollars rose from 34 to 69% and, respectively, deposits in manat decreased from 62 to 27%.

Finally, the annual yield of the Fund, of course, was reduced from 4.34 to 4.2%. The declining trend continued in June (minus 40 million AZN), totaling 7.56 billion manat. During the last 4 months the total volume of deposits reduced by 5%, or 371 million manat.

85.5 million manat was placed in government bonds at an average yield of 4.2% per annum. Another 5 million Euros from the Fund is managed by the German company Deutsche Asset & Wealth Management International. Free funds at the end of the first half-year were 11.4 million AZN.

According to the Fund, at the end of the first half of this year, the bank deposits of the population were 7 billion 561 million manat. Since January the contributions of the population in general increased by 13.2%.

The Fund member banks provide services to 7,147,401 depositors, of which 6,444,188, or 90% have insured deposits. 69% of the insured deposits are placed in US dollars, 27% - in manat, 4% - in Euros.

ADIF revenues in the first half amounted to 12.4 million manat, of which 10.6 million was obtained in the form of insurance premiums from the member banks, and 1.8 million manat as interest income. The Fund's expenses for the reporting period amounted to 766,500 manat.

Members of Deposit Insurance Fund are 44 banks. ADIF was created by the decree of the President of 9 February 2007 as part of the approval of the law "On deposit insurance", adopted on 29 December 2006.

The Fund fully covers deposits in the amount of 30,000 manat. This structure is designed to guarantee the return of savings to depositors in case of the bank's bankruptcy and liquidation of its license to accept deposits. --17D-