Baku, Azerbaijan, Nov. 3
By Azad Hasanli – Trend:
Azerbaijan’s Bank Respublika and NBCBank have started negotiations on merger, a source in the country’s banking market told Trend Nov. 3.
For Bank Respublika, which is looking for buyers of some of its shares, this is the second attempt of merger. Earlier, the bank negotiated the merger with Azerbaijan’s Rabitabank, however the talks were unsuccessful.
The reason is that Rabitabank was ready for merger only if it received 70 percent of shares of Bank Respublika. However, shareholders of Bank Repsublika don’t want to completely lose control of their bank.
“As a result, the parties couldn’t come to an agreement and it was decided to stop the negotiations,” the source noted. “At present, Bank Respublika is discussing the possibility of merger with NBCBank.”
The terms of the current talks are completely different, the source added. In case of successful negotiations, the shareholders of both banks will receive equal shares in a newly merged bank, and this satisfies Bank Respublika, said the source.
As of July 1, 2017, 14 individuals and five legal entities, including members of the Supervisory Board Natig Guliyev and Elchin Guliyev, as well as Deutsche Investitions und Entwicklungsgesellschaft and Sparkassen International Development Trust were Bank Respublika’s shareholders.
Nurgun Group company is the founder and one of the shareholders of NBCBank. In total, the bank has nine shareholders (seven individuals and two legal entities).
The source added that for Bank Respublika, the issue of merger is very important for the bank’s existence, and the decrease in the volume of capital was the reason for merger.
The regulatory requirement for the capital of banks is 50 million manats. The total capital of Bank Respublika at the beginning of July 2017 was 51.9 million manats, and by the end of the third quarter, this figure dropped to 46.2 million manats. In addition, the bank’s loss increased from 0.583 million manats in the first half of the year to 1.6 million manats at the end of the third quarter.
Unlike Bank Respublika, NBCBank keeps its profitability. In the third quarter of 2017, the bank’s profit amounted to almost 2.5 million manats, and the bank’s total capital amounted to 55.8 million manats.
(1.7003 manats = 1 USD on Nov. 3)