BAKU, Azerbaijan, October 3. In Azerbaijan, the concentration in deposit and loan portfolios took a bit of a hit, even though there was a slight uptick in asset concentration compared to the end of last year, Trend reports via the Central Bank of Azerbaijan (CBA).
The CBA's statement noted that according to the HHI1 index, which is also widely used in international practice, the concentration of the loan portfolio in the first half of the current year decreased by six units compared to the end of last year and amounted to 1,201.
The concentration index of the deposit portfolio decreased by eight units compared to the end of last year and amounted to 1,645.
The HHI index indicator for assets increased by five units and amounted to 1,480.
"Thus, there is a low level of concentration in the banking system based on the loan portfolio, and a medium level of concentration based on the deposit portfolio. Based on the total amount of assets, the banking sector is on the border of low and medium concentration. Concentration in the banking sector is constantly monitored by the CBA," the statement emphasized.
To note, the HHI index is used in international practice to assess the level of competition and concentration in the markets. According to the experience of the US Department of Justice, this index divides markets into three groups: low-concentration markets (HCI<1,500), medium-concentration markets (1,500-2,500). The value of HCI varies between 0-10,000.
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