Baku, Azerbaijan, Jan. 19
By Azad Hasanli - Trend:
Consolidation in Azerbaijan's banking sector may affect five to seven banks, said Elman Rustamov, head of the Central Bank of Azerbaijan (CBA), speaking to reporters Jan. 19.
"This is a sensitive issue as the population's deposits have been placed in these banks," he said. "Therefore, the main issue to be resolved now is the insurance of deposits. This issue shouldn't cause any problems, as the banks, through their merger, become bigger."
Rustamov said international financial organizations, in particular, International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD), are also interested in the consolidation of banks in Azerbaijan.
"This will lead to financial recovery of the banks. International organizations can bring modern standards to the management of these banks," said Rustamov. "I consider that the consolidation process is in the interests of both the banks' owners and the population."
Currently, 42 banks operate in Azerbaijan.
There are already good examples of consolidation of banks in the country.
For instance, UniBank was formed by the merger of two commercial banks in 2002 - MBank and Promtexbank, where the EBRD acquired a 15-percent share, and 8.3333 percent is owned by the German Investment Corporation DEG.
Bank of Baku merged with IlkBank in 2005.