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IBA chairman: Azerbaijan's banking market is highly transparent

Business Materials 21 October 2010 15:20 (UTC +04:00)

Azerbaijan, Baku, Oct. 21 / Trend N.Ismayilova /

Azerbaijan's banking market is highly transparent, chairman of the International Bank of Azerbaijan (IBA) Board, Jahangir Hajiyev, said. He was commenting on the results of the Standard & Poor's Transparency and Disclosure Study of the Azerbaijani banks presented in Baku today.

"The Azerbaijani banks pass the international audit each year, which indicates a high level of transparency in their activities. Regarding IBA, the bank passes audit every six months," Hajiyev said.

In addition, Hajiyev said, sale and purchase of the Azerbaijani banks' shares is conducted through the Baku Stock Exchange. So, foreign investors can freely purchase securities emitted by local banks.

The Rating Services of the Standard & Poor's Corporate Governance Services with the support of the IFC introduced the first document on "Transparency and Disclosure of Azerbaijani banks: low regulatory discipline hinders progress in the area of disclosure." In the document, the index of information transparency Standard & Poor's, which is calculated as an average point on 30 huge banks, was 30 percent.

"This is a quite low level compared to similar indexes of banks in the CIS region. For example, according to a similar study in 2010, the index of transparency of 30 largest Ukrainian banks was 43 percent, in 2007 the average point of 30 largest Russian banks amounted to 52 percent," Service Director Svetlana Borodina said at the presentation.

Relatively low average points of Azerbaijani banks are mainly linked with a weak disclosure of information on web sites, an almost complete absence of annual reports, and low requirements for formal reporting.

In addition, the level of information in English is limited, which is one of the criteria for determining the point.

According to Standard & Poor's, AccessBank, MuganBank, AmrahBank, RabitaBank and DemirBank demonstrated the highest rates of transparency among the 30 largest banks in Azerbaijan. Each of them received a point of not less than 40 percent. The most transparent bank in terms of Standard & Poor's is AccessBank.

The analysis also showed that information about the structure of ownership, as a rule, is disclosed to a greater extent than about other components, the average point for this component is 48 percent. Financial disclosure ranks the second among the major components of the analysis - the average point is 36 percent. The document noted the low level of disclosure of information about operations and about the process of governance.

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