Another liquidated Azerbaijani bank may turn into non-bank credit institution
Baku, Azerbaijan, Dec. 26
By Azad Hasanli – Trend:
Azerbaijan’s Demirbank OJSC, the license of which was revoked on Dec. 23, may transform into a non-bank credit institution, a source on the country’s financial market and familiar with the situation in the bank told Trend.
The source said that currently, such an opportunity is being considered by the bank’s management. Meanwhile, the source noted that this option is unlikely, and such a decision will not be made.
The source added that one of the bank’s shareholders, the European Bank for Reconstruction and Development (EBRD), was firmly committed to providing financial support to Demirbank.
Initially, it was assumed that the EBRD will invest in the bank’s capital, thus returning it to a level that meets the minimum requirements of 50 million manats, said the source.
Moreover, it was expected that after the capital injection, the EBRD will obtain the controlling stake.
These plans could not be implemented, because the shareholders could not agree with the Financial Markets Supervisory Authority (FIMSA), added the source.
Demirbank’s license will be revoked on December 23, 2017.
The Financial Market Supervisory Authority (FIMSA) of Azerbaijan said that the license was liquidated due to the discrepancy between the total capital of the bank and the minimum requirement established for banks, and the adequacy ratio of the aggregate capital is lower than three percent stipulated by the legislation.
The bank also lacks the capacity to fulfill its obligations to creditors.
A temporary administrator was appointed in the bank under FIMSA’s decision. The Authority also appealed to the court in connection with the beginning of the bankruptcy process.