Market Participant: Large Azerbaijani banks do not intend to participate in consolidation process
Azerbaijan, Baku, Jan. 7 / Trend, A. Akhundov /
Azerbaijan's Unibank is not considering participation in the banking sector consolidation process that is expected to take place in 2013, the company's Chairman of the Board Faig Huseynov told Trend today.
According to the Central Bank of Azerbaijan's board's decision dated July 25th, the minimum total capital of existing banks and authorized capital of newly established banks increased from its current level of 10 million Manat ($12.7 million) to 50 million Manat ($63.7 million). The new requirement for capitalization at existing banks will come into force from January 1st, 2014.
"We have normal capitalization," he said. "Joint capital hits around 60 million Manat. That is if capitalization is normal; consolidation or acquisition must bring something new to an existing bank. We do not know what our bank would potentially get after acquiring another bank."
He added that around 10-12 Azerbaijani banks with solid capital bases are not considering uniting with any bank currently on the market.
These banks, which cover 89% of all assets in the entire banking sector correspond to today's new capitalization requirements, the Central Bank said.
"Several banks cannot replenish their capital, so they must use the opportunity to consolidate to be competitive in the market, even against medium banks," chairman of the Central Bank Elman Rustamov said earlier.
"Of course, the remaining 13% will not be closed," he said. "They may be united, integrated or developed in a manner that allows them to compete with the big players in the market."
He added that international financial institutions such as the European Bank for Reconstruction and Development and the International Finance Corporation, are interested and willing to participate in the consolidation process, including in capital assistance of possible new groups.
Unibank was established on October 15th, 2002 as a result of the merger of two private commercial Azerbaijani, Mbank and Promteshbank. Unibank is a universal financial and credit institution that renders retail and corporate services. Among shareholders of the bank are the European Bank for Reconstruction and Development (15.152%) and the German Investment Corporation DEG (8.333%).
The official exchange rate is 0,7847 AZN/USD on Jan. 7.