Azerbaijan, Baku, Nov. 21 / Trend A. Akhundov /
Restructuring is required prior to privatising the International Bank of Azerbaijan (IBA), head of the IMF completed mission on Azerbaijan Raja Al Marzugi, who is also advisor to the IMF director on Middle East and Central Asia said at a press conference in Baku on Tuesday. The mission has been working since November 8.
"Several variants are being discussed with the country's government," he said. "There are different approaches or methods of restructuring. After the bank's restructuring, it is necessary to ensure its privatisation because it is unrealisable now."
The bank must be broken up into smaller offices in the future, he said.
"There are different variants to reduce it," he said. "We are developing a road map to reduce its impact on the banking sector. It is a heavyweight bank."
He added that the IMF continues to examine the market and the situation with the International Bank of Azerbaijan.
"These issues will be also discussed during the next mission to hold consultations in accordance with Article IV within the agreement on the IMF creation which has a preliminary scheduled for late February 2013," he said.
As of July 1, 2012, around 35 per cent of the Azerbaijani banking market, 30 per cent of the loan portfolio of the sector, 35 per cent of the total deposit portfolio, 21 per cent of the total capital and 23 per cent of profit before taxation fall to the IBA.
The bank is expanding its activity with the retail and corporate sector. At present, the bank has 846,000 clients which include individuals (excluding 1.5 million pension cards) and 13,000 corporate customers.
The IBA was established in 1992 as the successor of the Azerbaijan branch of Vnesheconombank. IBA has a dominant position in the banking sector. The state share in the authorised capital of the bank is 50.2 per cent and the remaining shares are distributed among private legal and physical entities.
A consortium consisting of PricewaterhouseCoopers Audit Azerbaijan (PwC) and Salans UK law firm is rendering consultative services for the IBA privatisation.