Azerbaijani Central Bank: Banks have launched talks on consolidation
Azerbaijan, Baku, Oct. 8 /Trend A.Akhundov/
Azerbaijani banks have launched negotiations on consolidation. This was reported to Trend on Monday by general director of Azerbaijani Cetral Bank Rashad Orujev.
According to Central Bank administration decree as of July 25 the minimal amount of acting banks' associated capital as well as authorized capital of newly established banks has been increased from 10 million manat ($12 million ) to 50 million manat ($ 63.7 million). The new requirement to capitalization of acting banks will come into force on January 1 2014.
"According to our information, negotiations are currently led between different banking institutions. No official statements have been made yet, everything is at negotiation level," Orujev added.
In his words, the banks will establish contact with international financial institutions.
"We are supporting this process. We have been discussing the participation strategy of international financial institutions in capitalization process of country's banking sector for a long time, long before the decision on capital increase. Close and friendly cooperation with international institutions, including European Bank of Reconstruction and Development (EBRD), International Finance Corporation (IFC) and a number of other structures, has been established", Orujev stated.
In the opinion of Central Bank representative, international financial corporations will take active part in possible consolidation process of Azerbaijani banks.
According to the head of EBRD mission in Azerbaijan Neal Mckain, EBRD is planning to take active part in consolidation and acquisition processes, expected in Azerbaijan's bank market in 2013. In his words, the director on cooperation with financial institutions in Caucasus, Mongolia and Central Asia Mike Tailor will arrive to Baku, in this regard.
"He will arrive to lead negotiations with banks, not only local, but also interested in Azerbaijan's financial sector.," Mckain said.
The country's bank system already has successful experience of bank consolidation with EBRD assistance. UniBank was established due to unification of two commercial banks MBank and Promtexbank in 2002, EBRD got 15 per cent share. Unification of Bank of Baku and IlkBank took place in 2005.
Some 43 banks are currently operating in Azerbaijan.