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Brief overview of the results of the banking system activity in the first half of 2024
On August 7, 2024, in accordance with the order of the President of the Republic of Tajikistan and on the basis of the plan of organizing and holding press conferences in ministries and departments on the summary of the first half of 2024, a press conference was held in the National Bank of Tajikistan underthe leadership of Chairman - Tolibzoda Firdavs Nazrimad with the participation of media reporters.
Chairman of the National Bank of Tajikistan Tolibzoda Firdavs first opened the event and stated that in the first half of 2024, the National Bank of Tajikistan carried out its activities in accordance with sectoral legislation and the objectives of the Address of the Founder of Peace and National Unity - Leader of the Nation, President of the Republic of Tajikistan, Honorable Emomali Rahmon “On the main directions of domestic and foreign policy of the Republic of Tajikistan”, as well as the Forecast of monetary policy of the Republic of Tajikistan for 2024 and the medium term period.
Bottom line target inflation
During the reporting period, the inflation rate was 1.9%, which is 0.4 percentage points less than in the same period last year. This indicator was mainly due to raise of foodstuffs prices by 1.3 percent, non-foodstuff prices by 1.6 percent and the cost of monetary services by 4.0 percent.
Annual inflation was in the bottom line target inflation in June this year (6±2 p.p. and amounted 3.5 percent, which is 1.1 percentage points more than in the same period last year.
The refinancing rate as a key instrument of monetary policy in connection with the ongoing stable process of increasing the level of domestic and world prices for goods and services, positive prospects for macroeconomic indicators, assessment of reducing the impact of potential risks on the economy, as well as low inflation during this period was gradually reduced by 0.75 percentage points and set at 9.25% per annum.
Internal exchange market state
It was pointed out that during the reporting period, the National Bank of Tajikistan continued its exchange rate policy based on «managed floating exchange rate without defining and declaring the limits of exchange rate changes”. The official exchange rate of the somoni against the US dollar in the first half of this year stabilized at 2.7%. Over the same period in 2023, this figure decreased by 7.0%.
Taking into account the state of the global economy during this period, the official exchange rates of the national currencies of most countries -the main trading partners of the Republic of Tajikistan, including the Turkish lira, Kazakh tenge, fell by 11.7 percent, the Uzbek sum by 1.8 percent and the Chinese yuan by 0.6 percent against the US dollar.
Growth in the number of structural divisions of credit institutions
Further it was pointed out that as of June 30, 2024, there were in total 63 credit financial institutions, including 14 traditional banks, 1 Islamic Bank, 1 non-bank credit organization, 19 microcredit deposit organizations, 3 microcredit organizations and 25 microcredit funds.
The number of structural units of credit financial institutions at the reporting date amounted to 1,899 units, which is 18 units more than at the same date of the previous year.
Increase in assets, liabilities and capital
Assets and liabilities of credit financial institutions at the end of June 2024 amounted to 41.2 billion somoni and 33.2 billion somoni increasing by 22.8 percent (or 7.7 billion somoni) and 25.0 percent (or 6.6 billion somoni) respectively.
Reported authorized capital of credit financial institutions as of June 30, 2024 amounted to 8.0 billion somoni and increased by 1.0 billion somoni, or 14.6%, compared to the same date in 2023.
As of June 30, 2024, the total balance of deposits amounted to 21.1 billion somoni, having increased by 24.1% compared to the same period in 2023, - F.Tolibzoda stressed.
It should be noted that of the total volume of deposit balances, its share amounted to 61.1% in national currency and 38.9% in foreign currency.
In the structure of total balance deposits, the share of legal entities is 8.8 billion somoni or 41.9%, and the share of individuals is 12.3 billion somoni or 58.1%.
The volume and number of loans issued
Credit investment is one of the main tools for ensuring sustainable economic development, expanding domestic production, stabilizing export potential and creating new jobs. The volume of loans issued in the first half of 2024 amounted to 10.6 billion somoni, which is 1.3 billion somoni or 14.5% more compared to the same period last year.
Of the total loans issued during this period, 46.3% account for the consumer sector, agriculture - 14.3%, foreign trade - 14.3%, industry - 11.9%, services - 7.1%, construction - 3.5% and other sectors - 2.6%. At the same time, it should be noted that of the total volume of loans issued during this period, 32.0 percent account for manufacturing enterprises, which amounted to 3.4 billion somoni.
During the reporting period, microcredits were issued in the amount of 7.9 billion somoni, which is 24.0% more than last year.
The weighted average interest rate on loans in January-June of this year was 23.1 percent in national currency and 11.9 percent in foreign currency.
Stable activity of the banking system
The capital adequacy ratio, which is one of the main indicators of the financial stability of the banking system, amounted to 21.4 percent as of June 30, 2024, exceeding the established threshold by 9.3 (12%) percentage.
The liquidity rate of the banking system as of June 30, 2024 amounted to 80.6 percent exceeding the establish threshold by 50.6 percentage points.
In order to implement macroprudential policy, regulation and control of banking activities, the National Bank of Tajikistan has identified systemically important credit institutions (SUE SB RT “Amonatbank”, JSC Orienbank and JSC Bank Eskhata) and potential systemically credit institutions (CJSC International Bank of Tajikistan) for 2024 and approved by the Resolution of the Board of the National Bank Tajikistan No. 12 dated January 16, 2024.
Payment system
As of June 30, 2024, the total number of bank payment cards amounted to 7.6 million units, which is 28.7% more than on the same date last year. Also during this period, the total number of e-wallets reached 10.4 million units, an increase of 39.0% compared to the same period in 2023.
As of the reporting date, 7,939 POS terminals were installed in trade institutions and service delivery points for making non-cash payments, which is 71.2% more than on the same date in 2023. Also, 16,472 thousand QR-codes have been installed in trade institutions and service delivery points.
In order to provide cash to payment cardholders in the first half of 2024, domestic credit financial institutions installed a total of 2,654 ATMs and 3,597 electronic terminals in the exchequers of structural divisions of banks, which is 36.3% and 28.6% more, respectively, compared with this date in 2023.
During the reporting period, non-cash transactions for payment of goods and services in the amount of 12.8 billion somoni were carried out in trade institutions and service delivery points of the country using electronic means of payment (payment cards and electronic wallets). In the first half of this year, the ratio of the shares of cash receipt transactions and non-cash transactions amounted to 75 percent to 25 percent, compared with the same period in 2023, the share of non-cash transactions increased by 8.4 percentage points.
Citizen’s appeal
It was pointed out that compliance with the requirements of the Law of the Republic of Tajikistan ”On the Appeals of Natural and Legal persons" and its execution are constantly under strict control of the National Bank of Tajikistan. In this regard, during the reporting period, the National Bank of Tajikistan received 832 applications, including 460 through the telephone hotline, 225 at the reception of citizens, 132 in written form (applications) and 15 by e-mail, all of which were reviewed and resolved at the proper level.
It should be noted that of the 832 applications received, 705 or 84.7 percent related to the functioning of the banking system, and the remaining 127 or 15.3 percent related to issues unrelated to the banking system.
Insurance system development
During the reporting period, 16 insurance organizations function in the republic, including 1 state insurance organization and 15 non-governmental insurance organizations with their 66 branches, provided insurance services to the population of the republic.
Aggregate result of the country's insurance system activity for the first half of 2024 showed that the main industry indicators increased stably, including the assets of the system increased by 4.6 percent compared to the same period last year, capital by 1.0 percent, authorized capital - 15.5 percent, insurance reserves - 5.8 percent, insurance premiums - 2.2 percent insurance payments and compensation -31.0 percent, investments - 22.2 percent, savings in credit and financial institutions - 61.3 percent and taxes paid - 31.7 percent.
In general, during the reporting period, the share of insurance system assets to GDP amounted to 1.3%, which is 0.7 percentage points more than in the first half of 2023. The total number of contracts concluded by insurance companies in the first half of 2024 amounted to 974,199 units.
International cooperation
In the reporting period, the sovereign credit rating of the Republic of Tajikistan was confirmed by the international rating company “Standart&Poor's” with an assessment of the country at the “B-/B” level with the prospect of “sustainable development”.
During the same period, the Board of Governors of the International Monetary Fund approved the Policy Coordination Instrument (PCI) program for the Republic of Tajikistan. This program has been approved for a period of 22 months for Tajikistan and is aimed at sustainable macroeconomic support, strengthening the political foundations of the country's authorities and supporting their efforts to ensure more sustainable and inclusive development.
It should be noted that attracting more domestic and foreign investments is one of the main tasks of the banking system. In this regard, as a result of timely measures to attract foreign investment in the first half of 2024, 1,676.0 million US dollars of foreign investment were attracted to the country's banking system, which is 63.8% more than in the previous year.
The National Bank of Tajikistan will continue to take the necessary measures to effectively implement monetary policy, strengthen regulation and control of the activities of credit institutions, protect the rights and interests of users of banking services, ensure transparency of the activities of credit institutions, strengthen corporate governance and, thus, maintain public confidence in the banking system, - said Firdavs Tolibzoda, Chairman of the National Bank of Tajikistan.
During the question-and-answer segment of the press conference, media representatives addressed inquiries regarding the evolution of the securities market, the growth of the "green" financing sector, international resources, initiatives to promote non-cash transactions, the availability of various payment services, the current status of the foreign exchange market, factors contributing to currency devaluation, interest rates in financial institutions, mortgage loans, and other significant matters concerning the banking system, all of which received detailed responses.
In conclusion, Firdavs Tolibzoda, Chairman of the National Bank of Tajikistan, thanked the media representatives for their valuable collaboration and accurate portrayal of the banking system's activities. He also expressed his willingness to further enhance this effective partnership.
NBT
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07.08.2024