Etibar Aliyev: Institutional development is Texnikabank’s priority

Etibar Aliyev: Institutional development is Texnikabank’s priority
# 31 October 2008 11:07 (UTC +04:00)
- How could Texnikabank’s current position be described in the banking and financial sector of Azerbaijan?

- During 15 years since the inception of Texnikabank, our banking activities have been fruitful. At present Texnikabank takes deposits from individuals and legal entities, provides banking services like money transfers and accounting-cash transactions, lends long- and short-term loans, offer bank guarantees, foreign currency conversion, and uses 15 fast money-transfer systems.
Texnikabank is the only bank in the country to issue Eurobonds that are traded on international exchanges.
At the same time, the bank has active participation in electronic card market. As a principal member of the VISA International and MasterCard International, our bank has issued 40 662 plastic cards for customers.
In addition, our bank has a stake in National Card Processing Center.
The number of our POS-terminals installed in trade and catering outlets has reached 327. Also, the bank’s subsidiary Texnikalizinq has had successful operation for three years. Another subsidiary - Texnika Kapital Management has been engaged in brokerage services in the securities market.
On more subsidiary - Alfa Insurance has been taking active part in the insurance market since 2006. Last year Texnikabank launched Visa Pos Acquiring Project. The project allows out bank to process international transactions in POS-terminals and offer this service to other banks. Last year our bank began to issue cards Cirrus/Maestro MasterCard Standard and Master Gold cards, as well as launched Visa VSDC Issuing and Visa Smart Platinum co-brand projects

- How has the past period of this year been for your bank?

- During January-September this year, our bank’s assets increased by 24.4% to AZN 439 644 353 000, up 48.35 on a year ago. Also, total capital reached AZN 57 438 330 000, up 55.20% on the same period last year. Since the beginning of the year, the net profit was AZN 20 041 911 000. We also pay attention to the expansion of branch network. Today Texnikabank provides services to some 60 000 individuals and legal entities through its widest branch network among private banks.

- Could you please give information about the bank’s lending policy?

- Over the past 5 years Texnikabank has seen a 34p-fold rise in its loan portfolio. In 2007, our bank has been a key player in the credit market, by issuing AZN 263 million in loan to corporate and individual clients, up 3.4 times compared to 2006.
This year we plan to bring the loan portfolio to AZN 330 million. One of our priorities in credit policy is to diversify the loan portfolio. 72% of the loans went to corporate clients and 28% to individuals engaged in business.
We also focus the broad diversification of the loan portfolio in terms of various sectors. Last year 19% of the loan portfolio went to the trade sector, 18% to services, 18% to manufacturing and 12% to construction.
Together with the Ministry of Agriculture, our bank has been involved in Shimal and Sharg Projects for the development of mountainous and highland areas.
In the future, we plan to increase the share of regional project financing in the loan portfolio.

- How about the mortgage lending program?

- During this period, Texnikabank became had the absolute lead in the mortgage market. Last year alone, our bank issued 501 mortgage loans of AZN 19.4 million in total. Of these, 217 loans (AZN 8.7 million) were funded through the Azerbaijan Mortgage Fund.
Given the relevance of mortgage loans and high demand for them, we launched our own mortgage program in 2007. The Black Sea Trade and Development Bank allocated $8 million to Texnikabank for mortgage loans last year.

- What are the future plans for institutional development?

- Institutional development is a priority for our bank. From this perspective, we are bringing our activities in all areas in line with international standards. In accordance with the standards of corporate governance has set up a new structure and developed a concrete delegation of the power among the management bodies. We set up a strategic planning group and approved a plan for the strategic development for 3 years. Another factor characterizing institutional development is that we created a committee and a department for effective risk management. In the near future, the bank will go live with T24 banking software from Temenos Group AG. The implementation of the new software is scheduled for completion in the first half of 2009.


- How do you think the global financial crisis will affect financial and banking structures in Azerbaijan?

- The cause of the financial crisis that began in the U.S. and then extended to countries around the world was troubled mortgage market. Certainly, growing political tensions in the international arena and other factors played a role too.
Currently, the United states, Europe and Asia are looking for new ways out of the crisis. We can say that Azerbaijan is well-positioned to protect itself against the effects of the crisis on world markets or to minimize the impact of these effects.
Finance and banking system of Azerbaijan is stable and this factor plays an important role in protection against the impact of financial crisis.




A flexible monetary policy pursued by the National Bank of Azerbaijan continues to further strengthen the stability of the country’s banking system. In my opinion, the central bank’s action to reduce the discount rate and interest corridor ceiling will bring good results.
One of the best ways to prevent any possible threat to the financial and banking sector, of course, would be to the central bank’s recent decision to decrease the reserve requirements for the commercial banks. The decline in the discount rate will allow commercial banks to keep up the credit portfolio. By the way, the recent widespread rumors about restriction of consumer lending in banks are groundless. Simply, banks have to some extent tightened their requirements for loans.
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