Commercial banks in Azerbaijan increased net profit by 47.3 percent year-on-year to 107.7 million manats ($63.4 million) in the first two months of the year.
The central bank said that the operating profit of the banking sector rose by 18.1 percent year-on-year to 161.8 million manats, total assets rose by 0.06 percent to 38.5 billion manats, while total liabilities fell by 0.2 percent to 33.4 billion manats in January-February.
The loan portfolio of banks rose by 2.8 percent year-on-year to 17.1 billion manats as of March 1, the central bank said. Total capitalisation rose by 1.9 percent to 5.1 billion manats. The deposit portfolio increased by 0.4 percent to 27.1 billion manats, including deposits by individuals, which rose by 9.3 percent to 9.9 billion manats.
There are 26 banks in Azerbaijan, including 12 with foreign capital. The largest bank by assets, the state-owned International Bank of Azerbaijan, reported a 61 percent rise in its net profit year-on-year to 208.8 million manats in 2021.
Azerbaijan’s economy, traditionally reliant on oil and gas, was hit hard by the COVID-19 pandemic, as lower demand for oil and problems with curbing supply hurt global oil prices. Restrictions to curb the spread of the virus also impacted domestic consumption and spending as the economy shrank.
Restrictions have been eased last year, the economy started to rebound, prompting Azerbaijan’s government to raise its economic growth forecast for 2021, backed by recovering oil prices on world markets and growth in the ex-Soviet country’s non-oil sector.
The country’s banking sector continued to recover last year and lenders reported a rise in total net profit of 7.2 percent year-on-year of 609 million manats.
Azerbaijan’s economy expanded by 6.7 percent in the first two months of this year, up from a 3.2 percent contraction a year earlier, supported by the non-oil sector expansion and rising global oil prices.
The rise in the oil sector was 0.6 percent, while the non-oil sector grew by 10.1 percent in January-February. In nominal terms, gross domestic product (GDP) reached 19.2 billion manats ($11.3 billion).
Azerbaijan’s GDP grew by 5.6 percent in 2021, up from a 4.3 percent contraction a year earlier as the country eased the majority of the restrictions it had imposed to curb the coronavirus pandemic. The country projects economic growth of 3.9 percent in 2022.