Fitch positively regards consolidation and privatization of Azerbaijani banks
Azerbaijan, Baku, July 6 / Trend N.Ismayilova /
Fitch Ratings has a positive attitude to the processes of consolidation and privatization of Azerbaijani banks, Fitch Ratings Banking Analysis Unit Director in Moscow Vladimir Markelov told Trend.
"Fitch positively regards the processes of consolidation and privatization of the banks. The consolidation leads to a decrease in the concentration of risks, as well as reduces costs, improves manageability, enhances professional skills of managers and staff and, ultimately, leads to the greater stability of banks. The experience of the past two years shows that the state should control risky operations of banks, but is not an effective owner it itself, therefore, privatization leads to increased efficiency, optimizing business and improved corporate governance," Markelov said.
He said reducing the state share in the banking sector in Azerbaijan could also lead to improved competitive environment.
The Central Bank of Azerbaijan has already announced the beginning of the preparation of a strategy to consolidate and optimize the banking system. CBA First Deputy Chairman Alim Guliyev said earlier that the banks will have three options: the banks, not systemized in terms of assets and accountings will have to either unite through merger of healthy assets in a single large bank or transform into non-banking credit organizations, and weak banks will be liquidated.
The consolidation of banks is a long process that has began since 1995. Since then, the number of banks in the country has reduced five times. The policy of consolidation of banks is long-term and conservative, and here it is not acceptable to have mandatory use of an administrative resource, CBA Head Elman Rustamov said earlier.
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