Central Bank provides largest Azerbaijani bank with second subordinated debt

Business Materials 17 December 2012 18:30 (UTC +04:00)

Azerbaijan, Baku, Dec. 17 / Trend's A. Akhundov /

The Central Bank of Azerbaijan (CBA) has provided the International Bank of Azerbaijan (IBA) with a second subordinated loan to the amount of 100 million Manat, CBA Director General Rashad Orujov told Trend today.

The first such loan is to the tune of 150 million Manat and was delivered to IBA earlier this year.

"The bank has been traditionally involved in large state projects," he said. "It is clear that a very strong capital base is required for the implementation of these projects. The base was constantly accelerated. Decisions on further IBA capitalization were made in 2011 and 2012. The state has already paid its share of capital to the tune of 50 million Manat within the announced issue. The bank's private shareholders must pay the remaining 50 million Manat.

We hope that this process will be over in early 2013. The IBA recently received its second subordinated loan worth 100 million Manat. These measures have been taken for additional capitalization and the creation of a strong capital base. This mechanism is involved with the bank's capital."

As of October 1st, the total capital of the bank amounted to 594.1 million Manat or 91 million Manat more than a figure as of October 1, 2011.

The IBA was founded in January 1992. Its main shareholder is the Azerbaijani government, which owns 50.2 per cent of the shares, while 49.8 per cent is owned by private physical and legal bodies.

The official exchange rate is 0,7849 AZN/USD on Dec. 17th.