Top banker dismisses bankruptcy reports

Recent unfounded media reports on the threat of bankruptcy faced by numerous banks in Azerbaijan have sparked tension and uproar, a top official at the country’s central bank has said.

“These reports stem not from bias, but, in most cases, from lack of awareness,” Aftandil Babayev, deputy board chairman at the National Bank of Azerbaijan (NBA), told a press conference held at the bank on Tuesday.

Local media reports circulating in the past few days said 10 private banks in Azerbaijan are facing bankruptcy.

Clarifying the situation in the domestic banking sector, Babayev noted that the “safety cushion” term has lately been widely used in the analysis conducted in the world’s leading countries affected by the global financial crunch.

“What we can be proud of is that the Azerbaijani economy has been quite successful with regard to the macro- and micro-economic ‘safety cushion’ issue,” Babayev said.

The NBA deputy board chairman went on to say that the Gross Domestic Product (GDP), a key indicator of growth, has been on steady climb in Azerbaijan in the past years. Whereas the country’s average GDP growth was 11% in 2000-2003, the figure rose to 24% in 2004-2007. As a result of rampant growth, the Azerbaijani economy tripled from 2004 to 2008. Per capita GDP has reached $6,000.

Babayev said the fact that state spending has increased nine times in the past five years, including a 33-fold increase in capital expenditure, clearly shows the dynamics of rapid economic development in the country.

The NBA official added that assets in the banking sector, the most dynamically developing sector of the national economy, have increased five-fold, while loans – 10-11 times, and deposits seven times.*