Consolidation of banks in Azerbaijan to increase system's ability to meet business needs

Business Materials 19 November 2012 20:54 (UTC +04:00)

Azerbaijan, Baku, Nov. 19 / Trend A.Akhundov /

Consolidation of Azerbaijani banks will increase the ability of the banking system to meet the needs of the entrepreneurship developing in the country, the head of the German Commerzbank's office in Azerbaijan Johann Engbrecht said.

According to the decision of the Central Bank of Azerbaijan (CBA) as of July 25, the requirement to the minimum total capital of operating banks and authorized capital of newly established banks was increased from the current 10 million manat to 50 million manat. The new regulation for the minimum total capital of existing banks will take effect on January 1, 2014.

"The capital increase was necessary. At first glance, a five-fold increase to 50 million manat is a large sum, frightening new players in the banking market. However, this was a forced decision in order to reduce the number of banks and enlarge the banks themselves, so they can implement large transactions. Today, banks can not service the business properly. In this regard, they have to grow," Engbreht told Trend.

According to him, a question on transformation of Commerzbank office into a branch or a subsidiary has not yet been raised.

"There are some minor issues that need to be addressed. We can not yet reveal our plans in this regard. We are open to this process, however, this does not mean that it will happen next year, in next five or ten years' Engbreht said.

Commerzbank has expanded cooperation with Azerbaijani banks, and today their number has reached 31, including the International Bank of Azerbaijan, PASHA Bank, Xalq Bank, UniBank and others. Commerzbank AG has received a license of CBA to open a mission in Baku in November 2007.

The official exchange rate on November 19 is 0.7848 AZN / USD.