IMF offers to restructure Azerbaijani largest bank
Restructuring is required prior to privatising the International Bank of Azerbaijan (IBA), the International Monetary Fund (IMF) mission chief for Azerbaijan Raja Almarzoqi, who is also advisor to the IMF director on Middle East and Central Asia, told the press in Baku on Tuesday.
"Several options are being discussed with the country's government," he said. "There are different approaches or methods of restructuring. After the bank's restructuring, it is necessary to ensure its privatisation because it is unrealisable now."
Almarzoqi said the bank must be broken up into smaller offices in the future.
"We are developing a road map to reduce its impact on the banking sector. It is a heavyweight bank," he said.
He added that the IMF continues to examine the market and the situation with the International Bank of Azerbaijan.
"These issues will be also discussed during the next mission to hold consultations in accordance with Article IV within the agreement on the IMF creation which has a preliminary scheduled for late February 2013," he said.
An IMF staff mission visited Azerbaijan from November 8 until November 20.
As of July 1, 2012, 35 per cent of the Azerbaijani banking market, 30 per cent of the loan portfolio of the sector, 35 per cent of the total deposit portfolio, 21 per cent of the total capital and 23 per cent of profit before taxation fall to the IBA.
The bank is expanding its activity with the retail and corporate sector. At present, the bank has 846,000 clients which include individuals (excluding 1.5 million pension cards) and 13,000 corporate customers.
IBA was established in 1992 as a successor of the Azerbaijan branch of the Foreign Economy Bank. IBA has a well-developed branch network and provides banking services to large corporate clients and, to a lesser extent, to individuals.
The Azerbaijani government owns 50.2 percent of IBA's stock, while the other 49.8 percent of the shares are held by private stakeholders and legal entities.