Global Financial Crisis May Affect Strategic Investors’ Plans to Join Azerbaijani Agricultural Bank
Azerbaijan, Baku, 27 October / Trend , corr. N.Ismayilova /The European Bank for Reconstruction and Development (EBRD) is to reconsider the plans to join the shareholders of the Azerbaijani sgricultural bank, which is formed on the basis of non-banking credit organization - Agrarcredit, Francis Delaey, the head of EBRD, said in the bank's Baku representative.
"EBRD on a par with other finance organizations wanted to aid the reconstruction and privatization of the Agrarcredit non-banking credit organization. EBRD held preliminary talks with the authorities related the joint participation with strategic partners, but with fewer shares. However, the participation of foreign strategic investors in the project is impossible in the near future due to the current financial crisis. This means that the plans on Agrarcredit should be reconsidered," Delaey said.
EBRD announced the plans on purchase of 25% +share package in Agrarcredit.
The International Financial Corporation and German development KfW bank also demonstrate interest to acquire shares in Azerbaijan's agricultural bank. The consultations with these banks still being held and they might be proposed 10-15% shares each.
The Government plans to change the status of the agricultural bank in 2009.
At present, the credit organization is functioning on the limited license basis. The Government will continue capitalization of the Agrarcredit before its privatization, like it did with the International Bank of Azerbaijan and Kapital Bank. AZN 1mln was invested in the state budget to increase organization's capital. The organization's capital touches AZN 18mln after investing AZN 6.3mln at the expense of the state budget in 2007.
As for the first half of the year, the assts of Agrarcredit totaled AZN 25.2mln, and credit portfolio has increased from AZN 15.4mln to 16.3mln as for 1 July. Bank's indexes have increased insignificantly due to the limited capabilities of the credit organization.
The Government is interested in development of the agrarian sector because of its financial resource demands are $1.2-1.3bln. Therefore, the Government understands the inevitability of opening of agricultural bank soon. These plans are envisaged in the State program on provide of food security in the country.
The main shareholders of Agrarcredit are the Azerbaijani Finance Ministry (99.9%) and the rest shares are distributed amongst the state insurance Azersigorta company and Land-reclamation and water industry organization.
On 27 October, the official currency rate is 0,8116 AZN/USD.
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