In the current economic situation, characterised by an absence of emission activity and existing obligations to pay a subordinated loan in the amount of 700 million rubles, the banking system of the Republic experiences a constant lack of financial resources. Since, according to the Law of the Republic of Abkhazia “On the National Bank of the Republic of Abkhazia”, the main aim of the activity of the Bank of Abkhazia is to protect and ensure the stability of monetary circulation in the Republic of Abkhazia, maximising the profits of the Bank of Abkhazia as a result of effective use of existing resources is the only way of accumulating capital to continue crediting the economy.
I would like to remark that today the Bank of Abkhazia fulfils its obligations to pay the subordinated loan. 264 million rubles have been paid and by the end of 2020, the obligations will be paid in full. This will inevitably lead to the reduction in the total loan portfolio of the banking system. If there is no goal to maximise the profits of the Bank of Abkhazia and to replenish this amount in the loan portfolio of the system, then such a reduction of credit funds will be damaging to the banking system and the economy of the Republic as a whole.
Today the total loan portfolio of the banking system is 3 billion 687 million rubles, out of which 1 billion 607 million rubles are the funds of the Bank of Abkhazia.
I would also like to say a few words about the results of the activity of the Bank of Abkhazia and the credit institutions of the Republic. The financial result of the Bank of Abkhazia in 2014 was 28 million rubles, in 2015 – 48 million rubles, and in the 9 months of the current year – 77 million rubles.
On the whole, financial results of the credit institutions of the Republic demonstrate sustained growth. The number of unprofitable banks has declined. Of course, there are also problems in the system. Unfortunately, 2 big banks experience losses, which is caused by systemic problems (lack of enforcement of court decisions and real foreclosure of the mortgaged property) and also by wrong management decisions which are characterised by a high degree of credit risk.
Since a lot of our citizens need credit resources, starting from the second half of 2015 the Bank of Abkhazia uses specialised mechanisms of refinancing credit institutions. 173 million rubles was issued to credit small and medium-sized businesses. This year, consumer lending to citizens who possess APRA cards has begun. In order to develop consumer lending, the Bank of Abkhazia will allocate 300 million rubles for this purpose. Receiving credit in the amount of 6 months of income (salary, pension) is available to any citizen of Abkhazia who has an APRA card. This type of credit has been very popular. More than 2000 people have used this product in the last 6 months.
I would like to remark that there is a high quality of debt service issued on specialised programs of the Bank of Abkhazia. Lending to the holders of APRA cards is characterised by high quality debt service. Loans are being repaid fully and on time.
A similar situation can be observed in the crediting of small and medium-sized businesses: credits in the category “bad”, such as credits not used for intended purposes and debts overdue by more than 2 months constitute no more than 5 percent.
In conclusion, I would like to point out a good tendency: the deposits of individuals and legal entities in credit institutions of the Republic continue to increase gradually. The total amount of contributions to Abkhazian banks is close to one billion rubles. This signifies a growth of trust in the banking system of our state.
The Bank of Abkhazia will make every effort to justify and increase this trust. Thank you for your attention.