Moody's positive about increasing competition in Azerbaijan bank market
Azerbaijan, Baku, February 21/ Trend N. Ismaylova/
International rating agency Moody's positively appreciates the increase in the share of the Azerbaijan private banking sector in the country's credit market, the agency reported on Tuesday.
"Last Monday, the Central Bank of Azerbaijan (CBA) reported that the share of credit investments of the private banks increased by 64 per cent in 2011, from 55 per cent in 2010. This is a positive tendency for the private banks," an agency spokesperson said.
"The increased scale of private sector operations has improved the banks pricing power and enables them to attract new clients, ultimately strengthening their aggregate financial indicators, including profitability and efficiency," the agency added.
"According to the CBA, private banks in Azerbaijan accounted for 63 per cent of the total banking system pre-tax profit in 2011, compared with 54 per cent in 2010," the agency added
Historically banking competition in Azerbaijan has been distorted by the dominance of the largest state bank, the International Bank of Azerbaijan (Ba1 negative; E+/B3 negative), the agency noted
The International Bank of Azerbaijan is a quasi-state bank and its main shareholder is the Azerbaijan government, which owns a 50.2 per cent stake with 49.8 per cent being owned by private individuals and legal bodies.