Baku, Azerbaijan, Oct. 8
By Ilaha Mammadli - Trend:
Azerbaijani Bank Technique JSC plans to increase its capital by 40 million manats in order to restore activity, the bank told Trend Oct. 8.
The issues of capitalization and sources for funding attraction will be discussed at an extraordinary meeting of shareholders of the bank scheduled for Oct. 16.
The sudden erosion of the bank's capital cushion took place following the one-off foreign-currency revaluation loss of around 25 million manats ($23.8 million) in February 2015, Moody's International Ratings Agency said.
This caused Bank Technique's Tier 1 and total regulatory capital ratios to fall to 5.2 percent and 7.1 percent, respectively as of late March 2015. The bank held an unhedged open short position in foreign currency equaling 14 percent of assets, or 124 percent of equity, just before the 25 percent depreciation of local currency against the US dollar.
Bank Technique needs an equity injection of at least 28 million manats, of which 5 million manats would need to be in the form of Tier 1 equity in order to meet regulatory requirements.
The bank said that in order to increase the capital of Bank Technique, a variety of sources can be used along with the means of shareholders. Currently, the authorized capital of the bank is 50 million manats, while the total capital amounts to 75 million manats.
The shareholders of Bank Technique include investment company Beaufort Investissements S.A [head office located in Luxembourg] with 78.4421 percent interest, while 21.5579 percent belongs to individuals.
"At present, the issuance of loans and receipt of deposits of the population have been suspended due to the financial situation of the bank," the bank said, noting that the capitalization will make it possible for it to resume lending. We focus on the return of credits, the issuance deadline of which has expired."
Bank Technique JSC was created in Azerbaijan in 1994 (it was called Rashadbank earlier, and Texnika Bank since 1998). The bank received its present name after rebranding in 2012. The Bank offers a wide range of banking and financial services in Azerbaijan.
Edited by CN