INCOMES OF BANKS DECREASE BECAUSE OF CONSERVATISM IN CREDIT POLICY, CENTRAL BANK OF AZERBAIJAN (CBA)

    BAKU/23.08.10/TURAN: Central Bank Of Azerbaijan (CBA) stated that conservatism in the credit behavior of banks continued in the first half of 2010, despite the incase of credit portfolio by 3,9%. ` careful approach of banks is expressed in the increasing the volume of created reserves for reimbursement possible losses on assets by 70,5% ( compared with January-June 2009) up to 78,8 million AZN,` according to the financial report of the CBA over the first six months of 2010 . The share of these reserves in the assets is on the level 1,3%.
     Profitability on the assets of the bank system in the first half of the year was equal to 1,2% ( last year - 3,1%), and profitability on capital was 8,8% (21,2%).
     Total income of banks over the reported period have not changed considerably, and totaled 637 million AZN. Ratio of income to average assets decreased from 13,6% to 10,7%.
     Percentage income of banks in January-June was 560,7 million AZN, and decreased by 1,2% compared with the same period of last year. According to specialists of the CBA, it is explained by the reduction of the share of consumer credits and the increase of the share of investment and hypothetical credits. Due to the increase of the size of commission charges for bank services, interest-free income have increased by 1,9% up to 130,3 million AZN.
     Due to the increase of obligations on deposits of physical and juridical persons, interest expenses increased over the reported period by 18,7% to 268 million AZN. --10D--