Time for Azerbaijani Banks to Penetrate into Turkish Banking Market

Business Materials 13 September 2008 16:42 (UTC +04:00)

Azerbaijan, Baku, 12 September/corr. Trend I.Khalilova/ Realization of joint strategic projects between Azerbaijan and Turkey increases the necessity for both countries' banks to integrate into markets of the two states.

"Turkish banks are good enough and it is not for a decade that they have been represented in Azerbaijani banking market., but now there is a chance for Azerbaijani banks to access Turkish market," Eldar Ismayilov, President of Association of Banks of Azerbaijan (ABA) said on 12 September at meeting with Turkish banking delegation led by Ekrem Keskin, Secretary General of Association of Banks of Turkey.

Ismayilov considers necessary the expansion of activity of Turkish banks in Azerbaijan. Today, two banks with Turkish capital operate in Azerbaijan - Yapi Kredi Banki and Azer-Turk Bank. Head of ABA said that Turkish Ish Bankasi shows interest in opening its branch in Azerbaijan in order to expand operations in the country. However, head of National Bank of Azerbaijan Elman Rustamov, said that NBA has not yet received an application from this bank.

ABA President considers that high growth rate of banking system development in the country contributes to diversification of business into Turkish market.

Ismayilov supposes that today, gold and exchange currency reserves of Azerbaijan (over $15 billion) and sufficient volume of money supply allow expansion of banking business.

"We must develop joint activity in Georgian market as well, where two Azerbaijani and a Turkish bank operate at present," he noted.

ABA President thinks that Baku-Tbilisi-Kars railway will allow expanding the scope of trade operations and amount of transportations, and thus the trade turnover between countries will go up.

"Today, oil and gas compose major part of Azerbaijan's export, therefore, for consolidation of Azeri manat, we can sell the hydrocarbons in Turkey in national currency, not in dollars. Thus the way to world market will be open for Azeri manat through Turkish currency market."

Among Azerbaijani banks, branches of the International Bank of Azerbaijan and the Caucasus Development Bank operate in Georgian market, and among Turkish banks - Ziraat Bankasi. If taking into consideration that 800,000 Turkish citizens passed Georgian borders in 2007, one bank will not be enough to serve them. ABA President says the activity of banking system should be intensified for more efficient use of relations between countries.

On 12 September, official exchange rate totalled 0.8155 AZN/USD.

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