Gov’t reveals 3 directions of its support to Int’l Bank
Upon the presidential decree dated 15 July 2015, government support includes three directions—transferring the bank’s troubled assets to Aqrarkredit JSC, which is a state body and one of the IBA’s shareholders, and obtaining 10 billion liquid funds in return, increasing the ban’s charter capital by holding more shares in the IBA, and the Azerbaijan State Oil Fund depositing a billion US dollars in the bank.
Although government support is primarily aimed at heightening the quality of US credit portfolio, this process is believed to be going to open the US currency position by transferring the troubled assets to Aqrarkredit JSC and consequently the latest manat devaluations affecting the US financial position.
To eliminate these impacts and strengthen the bank’s financial positions, the IBA is closely cooperating with government agencies. As a result, thanks to the additional emission of US shares amounting to 600 million manats and the increased share of the Ministry of Finance in the charter capital, government-hold shares in the IBA has risen from 82.2% to 91.3%.
At present, the government is working on what further measures it can take to support the International Bank of Azerbaijan. At the same time, the presidential decree dated 27 December 2016 instructs the Financial Stability Council to implement the measures to accelerate the improvement of the IBA and to allocate the necessary amount of funds for this purpose.
Jointly with the government bodies, the IBA is currently appointing an advisor on bank’s activity. The advisor will assess impacts of normalization measures on IBA’s activity and determine necessary steps for future activity.
The statement also says that the IBA is working in close coordination with the Finance Ministry. Investors and creditors will regularly be given new information about the bank’s activity.
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