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Brief overview of the results of the banking and insurance system for 2022
On February 10, 2023, the press conference on the results of the banking system activity for 2022 was held at the National Bank of Tajikistan under the leadership of the Chairman of the National Bank of Tajikistan Kholiqzoda Hokim Hikmatullo with local and foreign media in accordance with the Plan of arrangement and holding press conferences in ministries, agencies, organizations and institutions, executive bodies of state authority in BMAR (GBAO), regions, Dushanbe city and republican subordination districts by the Decree of President of the Republic of Tajikistan dated from September 15, 2011, No. AP - 1729.
Following the welcome address, the Chairman of the National Bank of Tajikistan Hokim Kholiqzoda emphasized that with the direct support of the Founder of Peace and National Unity- the Leader of Nation, President of the Republic of Tajikistan honorable Emomali Rahmon, the National Bank of Tajikistan continues to implement monetary policy in order to promote the growth of the national economy, maintenance of the stability of state banking system and domestic price stability.
In 2022, the National Bank of Tajikistan continued its activities in implementing reforms of the banking system, strengthening monetary policy, increasing the non-cash settlements and other financial instruments in order to ensure the stability of the national currency, increase the liquidity level of credit institutions and public confidence in the banking system, and maintaining efficient and uninterrupted operation of payment system.
Monetary policy
Later, he added that the inflation rate for the corresponding period was 4.2% decreasing with 3.8% (percentage point) compared to previous year, which occurred due to rise in prices of foodstuffs by 5.2%, non-foodstuffs by 4.0% and the cost of paid services to the population by 1.9%.
The relative increase in prices for goods and products in the country was mainly observed in March-May 2022 (3.1) due to the aggravation of the political, economic, and financial and trade situation in the world, as well as the imposing sanctions by Western countries against our main trading partner.
It was also noted that during the reporting year, the National Bank of Tajikistan held 103 securities auctions in the amount of TJS 9.6 billion, which is 21.5% more than the previous year while at the same time, the deposits of credit financial institutions daily attracted an average of TJS 0.7 billion through overnight deposit operations.
The refinancing rate, as the main instrument for implementing monetary policy, decreased to 0.5 percentage points from November 1, 2022 and set at 13.0% per annum.
Maintaining the stability of the national currency
The National Bank of Tajikistan in 2022 continued the exchange rate policy based on "managed floating exchange rate, without determining and declaring the limits of exchange rate changes." -, said the Chairman of the National Bank of Tajikistan, During this period, the official exchange rate of TJS against the US dollar strengthened by 9.7% (from 11.3000 as of 12/31/2021 to 10.2024 somoni as of 12/31/2022).
During 2022, the official exchange rate of TJS against freely convertible currencies and currencies of partner countries was stable, including against the Turkish lira by 36.5%, Belarusian ruble by 31.2%, the Kazakhstani tenge by 16.7% , the Chinese yuan by 15.9%, euro by 14.9%, the Uzbek sum by 12.9%, the Kyrgyz som by 10.7%, the US dollar by 9.7% and the Russian ruble by 4.1%.
Banking System
During the meeting with the country’s media representatives, it was noted that as of December 31, 2022, there were in total 64 credit financial institutions, 15 banks, 20 microcredit deposit organizations, 3 microcredit organizations and 26 microcredit funds functioning in Tajikistan. The number of structural subdivisions of credit financial institutions in 2022 amounted to 1,852 increasing by seven units compared to the same period in 2021.
Ensuring the growth of assets and liabilities
It was also noted that the assets and liabilities of credit institutions as of December 31, 2022 amounted to 30.0 billion somoni and 23.7% billion somoni, increasing by 34.0% (or 7 .6 billion somoni) and 36.9% (or 6.4 billion somoni) compared to the same period in 2021, respectively.
Non-performing loans for this period amounted to 1.6 billion somoni or 12.0% of the loan portfolio, the share of which in the total loan portfolio decreased by 1.4 percentage points compared to the same period in 2021.
Growth of deposits by 5.3 billion somoni
The total balance of deposits for the reporting period amounted to 15.5 billion somoni, having increased by 5.3 billion somoni or 52.6% compared to the same period of last year.
In the structure of total balances of deposits, the share of deposits in the national currency is 55.7% and in foreign currency 44.3%, which indicates a gradual decrease in the dollarization of the economy and an increase in public confidence in the national currency.
In the structure of deposits, 7.4 billion somoni or 47.9% are deposits of legal entities and 8.1 billion somoni or 52.1% constitute the deposits of individuals.
Increase in the volume and number of loans issued
It was noted that credit investment is one of the main tools for ensuring stable economic growth, developing domestic production, increasing export potential and creating new jobs in the country.
The total volume of loans issued in 2022 amounted to 14.4 billion somoni, which is 700 million somoni more than last year.
Of the total volume of loans issued during this period, 39.0% falls on the consumption sector, 16.9% on agriculture, 14.0% on foreign trade, 10.3% on industry, and 10.2% on the service sector, 3.7% for construction, 1.7% for transport and 4.2% for other areas.
Of the total volume of loans issued, 36.6% falls on industrial enterprises, the amount of which is 5.3 billion somoni.
It should also be noted that out of the total volume of loans issued during this period, 61.0% or 8.8 billion somoni accounted for entrepreneurs.
The volume of issued microcredits amounted to 10.5 billion somoni, having increased by 14.3% compared to the previous year.
The weighted average interest rate on loans in the national currency in 2022 was 23.3%, in foreign currency 12.0%, which is 0.6 percentage points less than last year in the national currency and in foreign currency by 1.0 p.p.
Sustainable operation of the banking system
As of December 31, 2022, the current liquidity ratio of credit institutions reached 95%, exceeding the established threshold by 65 percentage points.
In the reporting period, the capital adequacy ratio (CAR), which is one of the main indicators of financial stability of the banking system, amounted to 25.3%, exceeding the established threshold by 13.3 percentage points.
In general, the results of financial performance of credit institutions as of December 31, 2022 ended with a profit of TJS 1.2 billion, which is TJS 1.1 billion or 11.0 times more compared to the same period of 2021.
The return on assets (ROA) of credit institutions as of the reporting date increased from 0.5% to 3.9% compared to the same date in 2021, and the return on equity (ROE) from 2.1% to 18.7%.
In order to implement macroprudential policy, control and supervision of banking activities, the National Bank of Tajikistan at the beginning of the year determines and publishes on its website a list of systemically important credit institutions and potential systemically important credit institutions. In 2022, the State Bank of the Republic of Tajikistan “Amonatbonk”, OJSC “Orienbonk” and OJSC “Bank Eskhata” were included in this list as systemically important credit organizations, and CJSC MDO “Imon International" as a potential systemically important credit institution. This list remains unchanged in 2023.
Payment system
According to statistical data, as of December 31, 2022, the number of bank payment cards in circulation amounted to 5.1 million units, increasing by 45.5% compared to the same date last year. The total number of electronic wallets (e-wallets) of credit institutions is 6.3 million units, increasing by 2.8 million as of this date last year (79.1%).
As of December 31, 2022, in total 1,724 ATMs and 6,004 electronic terminals were installed by 21 domestic credit institutions to provide services to payment cardholders. Compared to the same date in 2021, the number of ATMs increased by 312 units and the number of electronic terminals by 1,126 units. Of the total number of electronic terminals, 2,132 units are cash points and 3,872 are retail and service points.
As of December 31, 2022, 17,433 QR codes (quick response code) were used in trade institutions and points of rendering services of the country, which is more by 6,397 (58.0%) as compared to this date of the last year.
In 2022, 33.4 million non-cash transactions on payment for goods and services to the amount of 8.2 billion somoni were made in trade institutions and service delivery points of the country through electronic means of payment (payment cards and e-wallets), which is more by 46.3% in terms of number and 2.3 times more in terms of volume of conducted transactions, compared to 2021.
Consideration of citizens' appeals in accordance with the law.
The National Bank of Tajikistan carries out constant and strict control over observance and fulfillment of the requirements of the Law of the Republic of Tajikistan "On Citizens' Appeals".
On this basis, in 2022, the National Bank of Tajikistan received 1,470 appeals for consideration, including 80 through the Executive Office of the President of the Republic of Tajikistan and other state bodies, 122 in written form, 731 through the telephone hotline, 532 at the reception of citizens and 5 appeals through e-mail, on which the necessary measures were taken within its existing authority.
Human resources policy
It was noted that the National Bank of Tajikistan pays special attention to attracting the largest number of women to work in the banking system and their promotion to senior positions.
As of December 31, 2021, of the total number of employees in the banking system of the country 6,936 (or 39.1%) constitute women. Out of this number, 3,372 women are directly involved in the provision of banking services to customers, of which 474 hold managerial positions (18.8% of the total number of managerial positions in the banking system).
Development of insurance sector
In the reporting year, 16 insurance organizations, including 1 state insurance company and 15 non-state insurance companies with 67 branches, provided insurance services to the population in the country. Assets of insurance companies as of December 31, 2022 amounted to 612.0 million somoni, which is 16.4% more compared to the corresponding period of the last year.
Liabilities of insurance companies reached TJS 226.0 million, increasing by 10.0% compared to the same period of 2021.
Balance capital of insurance companies as of December 31 of the reporting year reached TJS 386.0 million, which is by 20.6% more than in the same period of the previous year.
The total number of contracts concluded by insurance companies in 2022 reached 2.1 million units, increasing by 7.3 % (144,000) compared to the previous year.
As of December 31, 2022, the return on assets (ROA) of insurance companies was 3.1% and the return on equity (ROE) was 7.3%, up 1.6 p.p. and 3.1 p.p., respectively, year-on-year.
Effectiveness of international cooperation
The National Bank of Tajikistan closely cooperates with international financial institutions, including the International Monetary Fund (IMF), the World Bank Group, the European Bank for Reconstruction and Development, the Asian Development Bank, the Islamic Development Bank, the Eurasian Development Bank, the Interstate Bank, the Financial Inclusion Alliance, international funds, central (national) banks and banking structures of far and near abroad countries in order to attract foreign capital.
It should be noted that attracting the largest amount of domestic and foreign capital is one of the main tasks of the banking system.
In this regard, as a result of implementation of timely measures to attract foreign investments, the banking system of the country attracted USD1.3 billion in 2022. This is an increase of USD 268.7 million or 26.6%.
The National Bank of Tajikistan will continue to take appropriate measures aimed at effective implementation of monetary policy, strengthening regulation and supervision over the activities of credit institutions, protecting the rights of users of banking services, ensuring transparency in the activities of credit institutions, strengthening corporate governance, as well as maintaining public confidence in the banking system.
At the end of the event, representatives of domestic and foreign media received answers to their questions about the instructions and recommendations of the Founder of Peace and National Unity - Leader of the Nation, President of the Republic of Tajikistan, distinguished Emomali Rahmon, arising from the next Message of the Majlisi Oli of the Republic of Tajikistan on improving the services provided, implementing modern services, improving financial performance, increasing the volume of loans issued to various sectors of the economy, the level of stability of the national currency, changing the refinancing rate, expanding non-cash payments, the implementation of the National Strategy for Financial Inclusion of the Republic of Tajikistan for 2022-2026, attracting foreign investment into the banking system, increasing the level of qualifications of employees of the banking system, the process of implementing Islamic banking, issuing mortgage loans, selling jubilee and commemorative coins, increasing the financial literacy of the population and other important issues related to the financial and banking sectors.
In the final part of the event, Mr. Hokim Kholiqzoda, Chairman of the National Bank of Tajikistan, thanked the representatives of mass media for fruitful cooperation, objectively depicting the banking system activities and expressed readiness to continue effective cooperation.
NBT Press Division