Privatization of Azerbaijan's largest bank removed from agenda

Business Materials 12 December 2012 18:46 (UTC +04:00)

Azerbaijan, Baku, Dec.12 /Trend A.Akhundov/

The Government of Azerbaijan isn't considering the privatization of the country's largest bank, the International Bank of Azerbaijan (IBA), Head of the Department of Economic Policy of the Administration of the President, Mail Rahimov said.

"Today, the issue is not on the agenda," Rahimov said.

Consulting services in preparation for the privatization of the IBA were implemented by a consortium consisting of PricewaterhouseCooper's Audit Azerbaijan (PwC) LLC and the law firm Salans UK.

The consultant completed work on the first preparatory stage of the privatization project of privatization of state share in the capital of IBA at the end of last year.

The consortium, in collaboration with a working group, established and analyzed the financial and legal issues of the bank and the banking legislation of the country and also prepared proposals for the optimization of the existing legislation for the privatization of the IBA. They also analyzed the financial and banking sector of Azerbaijan and made recommendations on the banks prospective development and the increase of its competitiveness, etc.

The consortium and the government are supposed to decide on the basic provisions and principles of the privatization strategy and the value of the bank according to the preparatory phase to determine the optimal price of a future sale, the share of privatized shares and the terms of sale.

The second phase of the project involves the preparation of the necessary documentation for the privatization of the bank and the final determination of the list of potential buyers. The final stage was to be the process of registration of sale of shares of privatized shares.

The IBA was established in 1992 as the successor of the Azerbaijan branch of Vnesheconombank.

The IBA has a dominant position in the banking sector. The state share of the authorized capital of the bank is 50.2%, the remaining shares are distributed among private legal and physical entities.

As of July 1st, 2012, the IBA accounts for 35 percent of the banking market of Azerbaijan, 30% of the loan portfolio of the sector, 35% of the total deposit portfolio, 21% of the total capital of 23% of profit before tax.