Nearly a third of Azerbaijanis do not trust the banks in the country, a poll has found, while eight in 10 would not take out a loan with any of them.
The “Lifestyle of Baku Residents” poll, conducted by Business Insight in January this year, asked respondents to say which bank in Azerbaijan they found the most reliable. 33.1% answered “none of them”, up from 25.4% in May last year.
Only 34% said that they would approach a bank in Azerbaijan if they were to fall into financial difficulty.
The highest-rated bank was Unibank with only 14.1% of those polled, followed by Kapital Bank with 11.3%. The same poll found that only 15.7% of respondents would feel confortable taking out a loan from an Azerbaijani bank in the next six months.
After spending over $8bn of reserves in 2015 to prop up the manat, the Central Bank of Azerbaijan decided to let the currency float in December, leading to a sharp depreciation against the dollar.
However, for oil-exporting Azerbaijan this did not mean a windfall in domestic currency revenues, as the price of oil continued to plummet well below the $50 per barrel price that the government budget was based upon.
Since then, a 20% levy has been imposed on any foreign exchange withdrawals aimed at hampering the volume of foreign capital flight – a move that has clearly dented people’s confidence in the Azeri banking sector.
Despite the lack of faith in the wobbling banking sector, respondents appeared optimistic about their financial futures. 48% said that they expect their financial situation to improve in the next year.
28.9% said they believe the exchange rate of the manat will remain stable this year. Far more of those polled predicted that manat will continue to weaken, with 47% expecting the US dollar to strengthen over the coming 12 months – nearly double the 25% who thought the same last May.