Azerbaijan, Baku, 8 April / corr. Trend I. Khalilova/ It is important to open financial markets for foreign banks in order to increase the efficiency and competitive capacity of banks, said Francis Delaey, the head of Bank's Office during his speech in conference and exhibition 'Banks and Finances' on 8 April.
The growth of economy necessitates demand for financial services; therefore, private banks will be involved in system of competition with the entering of foreign banks to the domestic market. The domestic banks are required to be consolidated for this purpose. Apart from this, Delaey proposes to increase the minimal demands to the capital of banks.
The growth of credits in Azerbaijan is lower than the economic potential. It makes up 100% in Europe, while it is only18% in Azerbaijan. Such growth in the credit in case of European countries leads to rise in credit risks.
The Head of EBRD office commended the drop in government share in banking, as the entrance of foreign capital can lead to development.
The National Bank of Azerbaijan welcomes the entrance of reputed foreign banks to Azerbaijan. In 2007, the German bank Commerz Bank, and American Citi Bank opened their branches in Azerbaijan. The French Societe General intends to obtain share in domestic banks and the Turkish Ish Bankasi intends to open its branch. Furthermore, the Russian Foreign Trade Bank will obtain the control packet of shares in AF Bank. The Kazakh banks TuranAlem and KhaligBank are interested in entering Azerbaijani market.
At present, the foreign banks or banks with foreign share hold one third of the market. This figure rose for the last 5 years as EBRD, German Development Bank KfW, International Finance Cooperation, SIDT, and American Investment Fund Kazemir Partner Limited has purchased part of shares in Azerdamiryolbank, UniBank, Bank of Baku, Azerigasbank, Bank Respublika, Bank of Baku andTexnika Bank.
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