Bank, the leading corporate bank in Azerbaijan, announced its financial results at its press conference for the six months ended June 30, 2018 and its subsidiaries (Bank Georgia and PASHA Investment Bank AS). Member of the Board of the Bank, Chief Financial Officer Bahruz Nagiyev made the keynote speech at the event.
Net profit of the Bank for the six months ended June 30, 2018 was AZN 35,394 thousand, which was AZN 50,324 thousand for the first six months of the previous year. Interest income on June 30, 2018 reached AZN 109,031 thousand. As at 30 June 2017 this amount was AZN 132,453 thousand.
Non-interest income amounted to AZN 15,586 thousand on June 30, 2018, which is a 16% share of total operating revenues. The Bank’s total operating revenues decreased by 10% to AZN 97,489 thousand compared to the previous year. The major part of non-interest income is income from dilutive transactions – AZN 7,952 thousand or 51%. This means that the share of net income in total operating income is 8%. Net fee and commission income amount to AZN 7,390,000, representing 47% of non-interest income and 8% of total operating revenues.
For the six months ended 30 June 2018, the total operating expenses of the Bank increased by 2% to AZN 43,606 thousand compared to the same period of the previous year. The rate of income ratio for the six months ended June 30, 2018, increased to 45%. For the same period of 2017 the same amount was 40%. PASHA Bank currently implements the cost calculation methodology. This initiative will provide more accurate information for product and segment analysis. This, in turn, will make a positive contribution to the price formation mechanism.
As a result of the strategic decision taken to diversify its portfolio of assets, the Bank has maintained a good balance of its services. As at 30 June 2018, the aggregate assets of Bank amounted to AZN 4,469,931 thousand, which is a 24% increase over the 3,614,019 thousand AZN registered in the respective year 2017.
The Bank’s assets as at 30 June 2018 are as follows:
Cash and cash equivalents – 36.1%
Loans to customers – 34.4%
Investment securities – 18.5%
Amounts due from credit institutions – 6.5%
Other assets – 4.5%
As of June 30, 2018, the Bank’s total loans reached AZN 1,566,498 thousand. It means a 11% increase compared to the end of 2017.
The effective interest rate of the loan portfolio at 30 June 2018 was 3.9%. This interest rate remained stable compared to 4.5% on December 31, 2017. The quality of the loan portfolio is one of the Bank’s main goals and is under strict control. PASHA Bank has a very comprehensive lending and risk assessment process. In addition, this process is constantly being improved by the Bank’s credit risk specialists. All these procedures prevent significant changes and unexpected results in the amount of reserve and provide reasonable predictions.
PASHA Bank continues to increase customer base based on its relationships and quality of its services over the years. As at 30 June 2018, customer accounts increased by 15% compared to the end of the year and reached AZN 3,320,558 thousand. As a result, the ratio of cumulative loans to customer accounts decreased by 47% compared with the 49% observed at the end of 2017.
As of 30 June 2018, the Bank’s total capital adequacy ratio was 11% (this figure was 15% at 31 December 2017). The liquidity ratio as of 30 June 2018 was 96%. It should be noted that this figure was 99% by the end of 2017.
PASHA Bank has maintained its position as the largest commercial bank in terms of its total equity capital of 542,821 thousand manats. At the same time, the bank paid 61,414 thousand Dividends for the first six months of 2018.
PASHA Bank is committed to increasing its share in corporate and KOS sector by maintaining competitive and progressive products to its customers and maintaining its leading position in the Azerbaijani market.
The quality of assets and the adoption of proper financial decisions for customers are still number one priorities and the Bank has continued to invest in improving this approach from year to year. Having become a regional local bank in Azerbaijan, PASHA Bank has introduced a concept of banking and credit risk researches that have been built on the relationships in local banking, which has resulted in asset quality and profitability in a changing economic environment.
As an ambitious bank, PASHA Bank has become a regional bank, overcoming recent peaks in recent years. The Bank, which operates on a larger scale, fully comprehends its responsibilities in every decision taken on a daily basis. Investment and financial aspects are based on appropriate measurement units and reflect the concept of long-term and sustainable growth. The Bank demonstrates the highest level of accountability to its partners by applying unique and sophisticated internal and external financial reporting standards in the local banking segment in accordance with the IFRS.