Azerbaijan, Baku, May 6 / Trend A. Akhundov /
The Azerbaijani Central Bank (CBA) is considering the recommendations of the International Monetary Fund (IMF) and other international organisations to the International Bank of Azerbaijan (IBA) as inexpedient, CBA chairman Elman Rustamov told Trend today.
"There is no need for decentralising," he said. I believe these recommendations are wrong. The non-state part of the banking sector is growing more rapidly. We see that competitiveness is gradually improving and the IBA is losing its market share. This process will continue and is inevitable. I think these are the correct dynamics.
Another part of the banking sector has serious competition, especially in the segments where the IBA is not involved, for example in consumer lending. It looks like the market is more diversified and the share of the International Bank falls.
There is another important point. A large share of IBA transactions fall to the agent's functions. Many state loans, for example SOCAR, are financed through it. Therefore, there is such a large portfolio. If the agent's functions are removed, then the IBA market share will be further decreased and these talks will stop."
The IBA also considers the IMF recommendations to restructure and reduce the largest International Bank in the country as unreasonable and contrary to the common vision of the fund to strengthen and capitalise on the financial and banking system.
The IBA was established in 1992 as the successor of the Azerbaijan branch of Vnesheconombank.
The IBA has a dominant position in the banking sector. The main shareholder is the Azerbaijani government which possesses 50.2 per cent of the company, while 49.8 per cent belong to private legal and physical entities.
IBA's assets increased by 25 times, the loan portfolio 30 times, customer deposits 58 times and the authorised capital 148 times over the past 12 years.
