Commerzbank portfolio up six-fold since launching ops in Azerbaijan
By Seymur Aliyev
Germany's second biggest lender, Commerzbank, has increased its Azerbaijan portfolio six-fold over five years of its representative office's operation in the country, head of the bank's Baku office told Trend news agency on Tuesday.
"We provide short-term financing to purchase goods, equipment and so on," Johann Engbrecht said. "Moreover, we are actively developing long-term financing guaranteed by the countries, from which Azerbaijani companies buy equipment -- often goods are purchased from Germany, as German commodities are very popular here. Azerbaijan has high demand for special equipment.
"We provide long-term funding for 5-7 years through local banks. The bank participates in the mobile operator Bakcell's project on 3G development, expansion of the car fleet at the airport, construction of AzMeCo's methanol producing plant. At present, the bank as a long-term investor is involved in ten such projects," Engbrecht said.
He added that the bank's total portfolio on Azerbaijan is at a good level.
"We started working in Azerbaijan five years ago, when there was a weak dynamic here," he said. "After three years we achieved all we expected from this market. This market is growing rapidly, but unfortunately, faster than banks. Our portfolio on Azerbaijan has increased six-fold during this period. Our profits have also increased. We are satisfied with the results."
Engbrecht stressed that the Baku representative office also conducts money transfer transactions.
"Mainly these are transfers in euros, but also with dollars and 40 other currencies," he said. "I would not say that there is a very strong flow of euro payments. We don't have that many money transfers in euros, because Azerbaijan is actually a dollarized country. However, the cash flow in euros is rising year on year and at a good pace."
Director General of the Central Bank of Azerbaijan (CBA), Rashad Orujov, said last week at an event marking the fifth anniversary of the Azerbaijani representation of Commerzbank that its operation was an indication of strengthening economic ties between Azerbaijan and Germany.
"The opening of Commerzbank came amid hard times for the global economy. But the banking sector of Azerbaijan has successfully overcome the crisis. Importantly, Commerzbank went down this road together with Azerbaijan," Orujov said.
Commerzbank was founded in 1870 in Hamburg. Commerzbank has a strong international presence, with offices in 50 countries and a Relationship Management function that operates across the world. Total assets of the bank are about 600 bln euros.
The bank has received a licence of the Central Bank of Azerbaijan to open its Baku office in November 2007. Commerzbank cooperates with 31 Azerbaijani banks, including such big local banks as International Bank of Azerbaijan, PASHA Bank, Xalq Bank, UniBank and others, Engbrecht said earlier.
According to Engbrecht, Commerzbank may participate in financing projects to transport Azerbaijani gas to Europe.
"We will be ready to participate in financing the Trans-Anatolian gas pipeline (TANAP) and other projects on Azerbaijani gas transportation in case of a need for investments," he said on Monday. "However, the issue is still to be discussed."
The TANAP project envisages the construction of a gas pipeline from Turkey's eastern border to the western border to transport gas from Azerbaijan's offshore Shah Deniz field to European markets through Turkey.