Azerbaijan, Baku, Feb. 18 / Trend N.Ismayilova /
The leverage of the bank system of Azerbaijan exceeded, following the results of 2011, the Central Bank of Azerbaijan-specified minimum requirement of 8 percent as it reached 10.7 percent, the CBA stated in a financial stability report on Saturday.
At the beginning of the second quarter this figure was 11.5 percent, as of October 1 - 10.9 percent. The CBA has been applying the new leverage coefficient since February 2011.
As the new coefficient has been introduced, banks will be obliged to observe capital/assets ratio.
Leverage coefficient is designed to restrain a strong growth of banks.
CBA key goal in the introduction of leverage norm is the provision of capital, liquidity, and credit risks management at a safe level. This will push banks toward capitalization.
In 2011 in terms of capital adequacy, banks exceeded the CBA-established minimum requirement of 12 percent of the combined capital and 6 percent of the first-level capital, up to 16.3 percent and 13.1 percent, respectively, on October 1, 2011.
In 2011 the combined capital of the banking system increased by 12.7 percent (241.6 million manat) to exceed 2.138 million manat. The share of the first degree capital in the total volume of combined capital exceeded 80.7 per cent. The main source of the capital's growth was authorized capital.
The authorized capital of Azerbaijani banks increased in 2011 by 14.5 percent, or 197.5 million manat, profits and reserves increased by 61.8 million manat, other components of capital - by 17.1 million manat. The growth of investments in nonfinancial assets and subsidiaries, as well as other credit institutions had downward impact on capital. Throughout 2011, these investments contributed to the reduction of capital by 19.6 million manat (including non-financial assets - by 7.7 million manat).
As many as 44 banks operate in Azerbaijan.
The official exchange rate is 0.7863 AZN to $1 on Feb. 18.