Details added (first version posted at 11:19)
Baku, Azerbaijan, Nov. 24
By Azad Hasanli – Trend:
Privatization of the International Bank of Azerbaijan (IBA) will be announced in 2017, Chairman of the Board of Directors of the Financial Markets Supervision Chamber of Azerbaijan Rufat Aslanli said Nov. 24 at a banking conference in Baku.
He said that the work together with Azerbaijan’s Finance Ministry is underway to complete the preparatory procedures.
Both local and foreign investors will be able to take part in the privatization process of the IBA, he added.
The main goal is to diversify, reduce the size of the bank’s assets in the first half of 2017, he said.
“About 40 percent of Azerbaijani banking sector's assets account for the share of the IBA, and it is a threat to the banking system. Therefore, it’s necessary to bring the assets size of the IBA to a level that will not threaten the banking system.”
On July 15, 2015 the President of Azerbaijan Ilham Aliyev has signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the International Bank of Azerbaijan JSC.
The shortcomings in the management, investment and loan policy of the International Bank of Azerbaijan in recent years, as well as financing of less efficient, risky investment projects worsened the bank's financial state, caused increase in the share of distressed assets and reduced its liquidity, said the decree.
In order to overcome the current situation, restore the bank's financial position and ensure its sustainability, the distressed assets of the bank were transferred to the state-owned Aqrarkredit CJSC non-banking credit organization. Bonds for three billion manat were issued under the state guarantee to ensure IBA's liquidity instead.
Aqrarkredit CJSC is the biggest non-banking credit organization operating since 2001, whose shares are owned by the state.
The International Bank of Azerbaijan was founded in 1992 and is the largest bank of the country. Some 54.96 percent of stake in the bank's capital is owned by the state.