KABUL: The Central Bank of Afghanistan (CBA) on Wednesday said that local banks in the country posted a AFs 930 million loss for last year.
A CBA spokesman said last year the banking system in the country was quite stable compared to a year before, but added that majority of the financial losses were incurred by three major banks. Some banking experts and economic commentators have said that the difficulty to obtain loans was one of the fundamental challenges which have been harming the banking system in the country.
Based on statistics of the CBA, banks in the country faced a 1.7 billion AFs loss in 2015 while their interest liability is around AFs 522 million.
But the figure for 2017 is a AFs 930 million loss. However, banking interests in 2017 were recorded at around AFs 4 billion.
“Interests and loss are common in banking systems and banking loses do not mean all banks in the country are facing financial problems. Some banks have worked at a loss due to the difficulty they face in obtaining the loans. Only three banks worked at a loss during the previous financial year,” said Emal Hashor, spokesman to CBA.
Economists say factors such as banking expenditures, increased operating costs, security measures and difficulties while obtaining loans are causing financial losses for the banks.
“Problems in banking operations and difficulties while obtaining the loans is part of the banking loses. Currently some banks have a lot of money, but they cannot invest. This issue also creates extra costs for banks,” said banking expert Mir Ahmad Razawi.
In the view of security turmoil in the country and difficulties of obtaining loans, some banking experts have said that these matters are undermining the growth and development of the banking sector.