IMF: Azerbaijani government to resume analysing largest bank’s privatisation

Business Materials 12 March 2013 18:12 (UTC +04:00)

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

The Azerbaijani government will resume analysing the privatisation of the largest bank in the country - the International Bank of Azerbaijan (IBA) in the next two months, adviser to the department on the Middle East and Central Asia of the International Monetary Fund (IMF) Raja Al Marzouqi said at a press conference today following the IMF mission's visit to Baku.

The IMF mission to Azerbaijan, led by Raja Al Marzouqi has been in Baku from February 26. The main purpose of the visit was to conduct consultations on Article IV of the Articles of Agreement on an IMF establishment with the Azerbaijani government.

"At present, the process of the bank's capitalisation is underway," he said. "It will be completed in the next two months. Afterwards, the government will resume analysing the privatisation of the bank."

He added that the country's government supports the IMF recommendations on the IBA restructuring, fragmentation and privatisation.

"These measures will secure the bank's shareholders against possible risks," he said.
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 authorised capital of the bank is 50.2 per cent whilst the remaining shares are distributed among private legal and physical entities.

Consulting services in preparation for bank's privatisation is being carried out by a consortium consisting of PricewaterhouseCoopers Audit Azerbaijan (PwC) and law firm Salans UK.

The consultant completed work on the first preparatory stage of the privatisation project of the state share in the bank's capital at the end of 2011.

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

According to the schedule of the project, the transaction for privatization was planned to be completed in mid-2012.

The Azerbaijani government is not 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 told Trend earlier.

According to the CBA, the government is waiting for a convenient period to launch IBA privatization.

"Preliminary work on the privatisation process is underway, it was never suspended," CBA director general Rashad Orujov said earlier. "Consulting companies involved in this process carried out an evaluation of the bank, prepared a privatisation strategy and submitted their proposals. Now the main issue is to choose the right moment and time for privatisation. This is very important. Right now is not appropriate time for privatisation or sale of banks in the world. A strategic approach is necessary in regard to this issue with the right time being chosen."