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Rates on Leasing Services Likely to Increase in Azerbaijan in 2007

Business Materials 2 November 2006 19:29 (UTC +04:00)

The portfolio of the leasing company AzeriLeasing, a branch company of IBWA (International Bank of Azerbaijan) is expected to be brought up to $45 mln. till the end of the year. Jeyhun Naghiyev, Director General of the Company told Trend that the increase in the portfolio by more than 100% is likely to be connected with a presence of potential leasing projects. Leasing services are carried out in the sphere of industry, construction machinery

and equipment, in the field of textile sector, and food industry. Presently, the leasing portfolio of the Company has already reached $40 mln. AzerLeasing finance project operates at the expense of the credit resources taken from IBA. These credits are attracted at 14-15%. The leasing operations are financed at the interest rate of 17-19%.

However, Mr. Naghiyev does not rule out that the leasing services can become more expensive starting from the next year due to the cancellation of tax privileges toward dividends on banking deposits. That may trigger increase in the credit rates, and increase in the rates on leasing operations as a result of it. That might be equal to 10% -19-21% per annum.

Azerileasing was founded by IBA. The Bank's share in the authorized capital of the Company is 90%, the rest 10% belong to the communication company of IBA Biznes-Rabita.

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