30/03/2012At the end of February, Ernst & Young submitted the audit report on last year key financial performance of one of the backbone participants of the Azerbaijan banking market - PASHA Bank.
Summarizing the results of 2011, Bank maintained its position as one of the major market players. Aggregate capital reached 149,182 thousand AZN ($ 189,679 thousand), with bank assets being 573,879 thousand AZN ($ 729 662 thousand), which is 12 % higher than the results of 2010 (512,040 thousand AZN / $ 651,372 thousand).
The structure of PASHA Bank assets in 2011 is as follows:
- Securities Portfolio - 46%
- Loan Portfolio - 41%
- Cash and cash equivalents - 6%
- Funds for financial institutions - 4%
- Other assets - 3%
During the reporting period the loan portfolio of the Bank has increased by 26%, i.e. from 196,081 thousand AZN ($ 249 308 thousand) to 246 769 thousand AZN ($ 313 755 thousand). The ratio of nonperforming loans (NPL) in total loan portfolio was 10.75%. Most of the nonperforming loans (65%) are outstanding liabilities of two corporate clients. However, taking into account strong competition and temporary difficulties in the economy sectors represented by these clients, Bank management decided not to change the status of the said loans. The situation is under close attention and control of the Bank management.
Effective reservation rate was 5.2% against 4.2% in 2010. In 2011 the number of customer accounts increased: their financial equivalence was 371,499 thousand manats as compared to 338,598 thousand manats in previous year.
By the end of 2011 the interest revenue of PASHA Bank increased by 12%, reaching 37,758 thousand AZN ($ 48,007 thousand), and the non-interest income increased by 16% (to 6,076 thousand AZN ($ 7 725 thousand)). Bank profit (before income taxes) was 15,150 thousand AZN ($ 19 262 thousand) and net profit was13,359 thousand AZN ($ 16,985 thousand). Return on assets (ROA) during the reporting period was 3.4%, while the return on equity (ROE) constituted 15.8%. Trade finance volume of PASHA Bank increased by 18% last year and constituted 43,689 thousand AZN ($ 55,548 thousand) as compared to 37,114 thousand AZN ($ 47,189 thousand) in previous year.
Considering 67% growth of securities' portfolio, this year Bank reached desired level of liquidity: 260,975 thousand AZN against 156,578 thousand AZN in the previous year. At year-end 2011, Bank increased the credit provision by 26%: 246,769 thousand AZN as compared to 196,081 thousand AZN in 2010. During the year Bank paid 981 thousand AZN dividends to its shareholders, which is more than 7% the overall net profit.
According to the member of the Board of Directors, director of the financial management department Shahin Mammadov, this year was the end of the first strategic period for PASHA Bank, and fairly good year in terms of financial performance. "Last year we managed to maintain profitability at the 2010 level; our efforts in credit reservation were very successful. We need to specifically mention the implementation of a new accounting system for securities transactions fully conforming to the International Accounting Standards (IAS); start of activities as underwriters and market-makers. This allowed to increase both the commission fees and the income from treasury operations, thus increasing the share of non-interest income of the Bank.
Under new strategy for the period of 2012-2014 the Bank will be mainly focused on further development of 3 areas: corporate sector, treasury operations and private-banking. PASHA Bank plans to further develop and maintain close contacts with representatives of both small and medium businesses (SME) and large organizations; to continue its activity in the securities' market and the regional expansion. Bank expects to obtain international rating in the nearest future as well.