Azerbaijani Hugest Bank Gets Recommendation for Capitalization to 1 Billion
Azerbaijan, Baku, 11 Dec / Trend corr. I.Khalilova/ The National Bank of Azerbaijan recommended the International Bank to increase the authorized capital to AZN 1bln, Jahangir Hajiyev, the chairman of the Board of the International Bank of Azerbaijan (IBA), said.
"Capitalization of the bank to this level depends on shareholders, who will make decision to set temporal frameworks," Hajiyev said.
The government's decision to release income tax in 2009, which targets to raise capital of banks, will enable the IBA to be capitalized by AZN 10mln a year, he said.
At present payment of emission is going on to increase the authorized capital of the IBA to AZN 200mln. Currently, 49% of stakes in capital practically are paid by private shareholders, the head of the International Bank said. The Ministry of Finance deposited AZN 50mln in 2009 public budget to pay 50.2% of state shares. He thinks state share will be paid in Jan.
"Position of both the IBA and NBA targets to increase capital of the IBA to support growth of assets, Hajiyev said. This process will take place gradually and stably."
A total of AZN 100mln emission has been deposited since 1 Sept. Nominal cost of one stake makes up AZN 0.20.
Earlier, it was offered to triple the authorized capital of the bank to observe norms of adequacy of the capital. Therefore, the NBA has recommended the IBA to raise the authorized capital to AZN 300mln.
On 1 Oct, assets of the banks rose by 79%, making up AZN 4.172bln as compared to the figure in 2007, while the authorized capital of the IBA amounts to AZN 150mln. According to standards of the NBA, demand for adequacy of the capital amounts to 12% and on Basel standards - 8%. Hajiyev believes that the IBA corresponds to standards of adequacy of capital on different calculations, whilst norms of issuing loan to one debtor and other norms are violated. Therefore, there is a necessity for additional capitalization.
The exchange rate for US dollar is AZN 0.80 on 11 Dec.
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