FIMSA takes under control five more Azerbaijani banks (UPDATE 2)
Details added (first version posted on 11:58)
Baku, Azerbaijan, May 30
By Anvar Mammadov – Trend:
Azerbaijan’s Financial Market Supervisory Authority (FIMSA) has taken under control five more banks due to capital deficiency, said Chairman of FIMSA Board of Directors Rufat Aslanli.
He made the remarks at a conference titled “Economic reforms: Achieved Results and Recommendations” in Baku on May 30.
“Licenses of 11 banks were revoked after starting the process of the banking sector’s recovery. Twelve out of 26 banks managed to achieve significant capitalization. Today, under our supervision, there are five banks, capitalization programs of which should be completed by mid-2017,” said Aslanli.
He noted that one of those five banks is AtaBank OJSC.
“This bank had a number of problems with capitalization, payments were made with delays, but the bank is now in the process of consolidation, and after completion of this process its authorized capital will be about 85 million manats, and the capital adequacy ratio – about 40 percent, which significantly exceeds our requirements,” added Aslanli. “The other four banks are small enough – their assets make about five percent of the total assets of the entire banking sector of Azerbaijan. I think that their capitalization will also be completed in the near future.”
The merger of AtaBank and Caspian Development Bank was announced on April 18, 2017. As it was reported, Caspian Development Bank will be reorganized and liquidated, and its assets will be transferred to AtaBank.
PwC multinational accounting firm was attracted to evaluate the assets of the two banks due to their reorganization.
Synergy Group is the main shareholder of Caspian Development Bank. Since April 2017, the holding is also the owner of AtaBank, which was previously owned by AtaHolding (76 percent of shares) and individuals (26 percent).
According to Aslanli, as a result of capitalization, Azerbaijan’s banking sector, with the exception of the International Bank of Azerbaijan (IBA), achieved positive results.
“To date, banks generally comply with the requirements for the adequacy of capital. However, we must take into account that if banks resume active crediting and thus increase the volume of risky assets, then, according to our calculations, there will be need for additional capitalization,” FIMSA head added.
Total capital of Azerbaijan’s banking sector amounted to almost 2.76 billion manats in the 1Q17. According to FIMSA, total volume of banks’ capital increased by 44.6 percent during the period.
Total assets of the banking sector amounted to 29.98 billion manats in late March 2017 as compared to 31.44 billion manats in late 2016.
Loan portfolio of Azerbaijani banks reached 15.053 billion manats in January-March 2017, while it was 15.94 billion manats in late 2016. The volume of reserves created to pay off possible losses on loans increased by 1.96 percent during the period and amounted to 1.73 billion manats.
Thirty-two banks operate in Azerbaijan, including the two state-owned ones.
(1.7020 manats = $1 on May 30)