Galt&Taggart Publishes Report on Main Developments that Took Place in Azerbaijani Economy Last Week:
Non-performing loans up to 9.0% in December 2016 Total loans by commercial banks were up 1.0% m/m (-24.3% y/y) to AZN 16.4bn, driven by 0.7% m/m increase in local currency loans and continued depreciation, which led to a 1.4% increase in FX loans in AZN terms. In US$ terms, however, FX loans were down 0.8% m/m. Non-performing loans (NPL) were up 2.1% m/m to AZN 1.4bn, driven by a 7.0% m/m increase in overdue local currency loans, while the FX NPL balance was down. Overall, the NPL ratio reached 9.0% in December 2016, with the local currency NPL ratio up to 7.9% and FX NPL ratio down to 10.2%.
Deposit dollarization down slightly to 75.3% in December 2016 Commercial bank deposits were down 2.5% m/m to AZN 22.1bn in December 2016, driven by a retreat in FX deposits. Local currency deposits were down 1.3% m/m to AZN 5.5bn, while FX deposits were down 2.9% m/m to AZN 16.6bn. In US$ terms, however, FX deposits were down 5.0% m/m to US$ 9.4bn. With FX deposits declining more, deposit dollarization retreated slightly to 75.3% in December 2016.
Exports and trade surplus up in December 2016 According to the Statistical Committee, Azerbaijan’s exports were up 4.1% y/y in December 2016 to US$ 1.2bn, while imports were down 20.4% y/y to US$ 0.8bn, leading to a US$ 0.4bn trade surplus (+166.6% y/y). In 2016 exports were down 20.8% y/y to US$ 13.1bn, while imports were down 7.5% y/y to US$ 8.5bn, resulting in a US$ 4.6bn surplus (-37.5% y/y).
Customs Committee receipts up in January 2017 Customs Committee’s receipts were up 67.9% y/y in January 2017 to AZN 174.0mn. In US$ terms, receipts were up 45.8% y/y to US$ 95.3mn. In 12-month cumulative terms (12mcs), receipts in AZN terms were up 48.4% y/y in January 2017 to AZN 2.4bn, while in US$ terms they were down 1.0% y/y to US$ 1.5bn.
SOCAR’s payments to the budget up in January 2017 SOCAR’s tax payments to the state budget and payments to the State Social Protection Fund were up 10.1% y/y in January 2017 to AZN 140.7mn. In 12-month cumulative terms, payments were down 4.0% y/y in January 2017 to AZN 1.6bn.
Oil price: Brent oil price was down 0.2% w/w to US$ 56.7/bbl (up 83.9% y/y), while WTI oil price increased 0.1% w/w to US$ 53.9/bbl (up 96.2% y/y). In AZN terms, Brent oil price was down 10.1% w/w to AZN 98.9 (up 102.2% y/y).
Exchange rate: On February 10, 2016, Central Bank’s AZN/US$ rate was 1.7301 (-9.5% w/w) and AZN/EUR rate was 1.8445 (-10.3% w/w). At Bloomberg AZN/US$ was trading at 1.7445 (-9.9% w/w) while AZN/EUR was trading at 1.8556 (-11.1% w/w).
Monetary policy rate: Monetary policy rate was unchanged at 15.0%.
Corporate Eurobonds: State Oil Company of Azerbaijan (SOCAR) Eurobond (SOIAZ 03/30) closed at 6.2% yield, trading at 107.1 (+0.5% w/w). International Bank of Azerbaijan Eurobonds (IBAZAZ 06/19) were trading at 100.4 (-0.1% w/w), yielding 5.4%.
Azerbaijan Sovereign Eurobonds (AZERBJ 03/24) closed at 101.1 (+0.9% w/w) at 4.6% yield to maturity.