Azernews.Az

By Nigar Abbasova

The International Bank of Azerbaijan (IBA), the largest bank and financial services group in the country, plans to attract international institutions in the process of its privatization.

Head of IBA’s Management Board Khalid Ahadov said that the participation of such financial organizations as the International Finance Corporation (IFC), the European Bank of Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), is deemed to be very important.

“We may also give preference to private foreign institutions, which are able to introduce certain changes and give a new breath to the IBA. Besides, local investors may be attracted by means of placing assets on the domestic securities market,” he told Reuters on February 7.

In July 2015, President Ilham Aliyev signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the IBA.

The shortcomings in the management, investment and loan policy of the IBA, as well as financing of less efficient, risky investment projects worsened the Bank's financial state, caused increase in the share of distressed assets and reduced its liquidity.

Talking about measures taken for restructuring the Bank, Ahadov said that the work covers three main directions, in particular, transfer of troubled assets to Aqrarcredit (the measure provided the bank with liquidity of some 10 billion manats ($5.23 bilion)), placement of a deposit worth some $1 billion by SOFAZ, as well as increase of a state share in the authorized capital.

The Finance Ministry earlier increased the state share in the Bank from 54.96 to 76.73 percent.

Ahadov went on saying that one of the main tasks is to transfer a remaining part of bad assets to Aqrarcredit, mentioning that the work is currently underway on the definition of a sum of the next tranche, which will be allocated for the bank.

“The next tranche will amount to nearly $3 billion, according to preliminary estimates. The financial means will allow the Bank to provide for a return of reserves worth some 500 million manats ($ 261.6) to the capital. The tranche is expected to be implemented in the first quarter of 2017,” he said.

The International Bank of Azerbaijan was founded in January 1992. Some 40 percent of Azerbaijani banking sector's assets account for the share of the IBA.

--

Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz