Azernews.Az

By Gulgiz Dadashova

Standard & Poor's Ratings Services has announced that privatization of the International Bank of Azerbaijan (IBA), the country's biggest bank, is not expected in the near future.

S&P Senior Analyst Victor Nikolskiy told Trend news agency that so far the investors have been concerned with the issue of the IBA privatization. He said S&P understands that this will not happen in 2013 and is unlikely to happen next year.

The International Monetary Fund (IMF) and other international organizations continuously make suggestions on downsizing of the IBA, but the Central Bank of Azerbaijan declines them.

The IBA also opposes the recommendations, terming them unreasonable and contrary to the common vision of the fund to strengthen and capitalize the financial and banking system.

According to Nikolskiy, the improvement of the situation with capitalization of the IBA increased the stability of the whole system.

The IBA was established in 1992 as a successor of the Azerbaijani branch of Vnesheconombank. The IBA holds a leading position in the domestic banking sector. The main shareholder of the bank is the Azerbaijani government, which owns a 50.2 percent stake, and 49.8 percent is owned by private individuals and legal entities.

Over the past 12 years, the IBA assets have grown 25-fold, while its credit portfolio -- by 30 times, customer deposits 58 times, and share capital 148 times.

Currently the authorized capital of the IBA amounts to 368 million manats.

As of July 1, 2013, the total capital of the IBA amounted to 765.56 million manats, which is 61.4 percent over the figure posted on July 1, 2012.

Moody's has recently kept the rating of the financial stability of the bank at the level of E+, which is equivalent to the autonomous assessment of credit ability on B3 level.

It expects that the quality of IBA assets supported by the favorable operational environment will remain stable within the next 12-18 months.