BSTDB fore­casts fur­ther con­sol­i­da­tion of lo­cal banks

Azer News - - Business - By Sara Is­rafil­bay­ova

The Black Sea Trade and De­vel­op­ment Bank (BSTDB) ex­pects the con­tin­u­a­tion of the con­sol­i­da­tion process in Azer­bai­jan’s bank­ing sec­tor, said Orhan Aytemiz, the BSTDB Gen­eral In­dus­tries Di­rec­tor and the Chair­man of Su­per­vi­sory Board of the Azer­bai­jani Ac­cessBank.

He noted that the process of con­sol­i­da­tion and re­con­struc­tion of the Azer­bai­jani bank­ing sec­tor is now strictly con­trolled by the Fi­nan­cial Mar­ket Su­per­vi­sion Body (FMSB).

"The sit­u­a­tion on the global fi­nan­cial mar­ket has af­fected Azer­bai­jan’s bank­ing sec­tor. A num­ber of banks faced liq­uid­ity prob­lems, 11 banks' li­censes were re­voked. We think that the process of con­sol­i­da­tion and re­struc­tura­tion will con­tinue in the Azer­bai­jani bank­ing mar­ket. This process is now ac­tively mon­i­tored by the FMSB," Aytemiz stated.

He went on to say that ex­ter­nal chal­lenges also af­fected the cap­i­tal­iza­tion process in Azer­bai­jan.

"Some banks have faced a short­age of cap­i­tal, which led to their clo­sure, and the re­main­ing banks need to be ready to raise cap­i­tal at the reg­u­la­tor's re­quest, oth­er­wise they can leave the mar­ket," Aytemiz con­cluded.

Li­censes of 11 Azer­bai­jani banks have been with­drawn in 2016. For some time, the Cen­tral Bank of Azer­bai­jan (CBA) tried to stim­u­late con­sol­i­da­tion in the mar­ket, how­ever, it did not give vis­i­ble re­sults. As a re­sult, the CBA re­voked the li­censes of banks.

Cur­rently, 31 banks are op­er­at­ing in the coun­try, after the con­sol­i­da­tion of two banks- Ata­bank and Caspian De­vel­op­ment Bank.

The BSTDB is a mul­ti­lat­eral de­vel­op­ment bank serv­ing 11 coun­tries (Al­ba­nia, Azer­bai­jan, Bul­garia, Ge­or­gia, Greece, Moldova, Ar­me­nia, Ro­ma­nia, Turkey, Ukraine and Rus­sia) that are mem­bers of the Or­ga­ni­za­tion of the Black Sea Eco­nomic Co­op­er­a­tion (BSEC).

It sup­ports eco­nomic de­vel­op­ment and re­gional co­op­er­a­tion by pro­vid­ing trade and project fi­nanc­ing, guar­an­tees, and eq­uity for de­vel­op­ment pro­jects. The Bank sup­ports both public and private en­ter­prises in its mem­ber coun­tries and does not at­tach po­lit­i­cal con­di­tion­al­ity to its fi­nanc­ing.

The BSTDB com­menced its op­er­a­tional ac­tiv­i­ties in June 1999.

The bank’s au­tho­rized cap­i­tal to­tals €3.45 bil­lion. Un­til to­day, the BSTDB has al­lo­cated €360 mil­lion for im­ple­men­ta­tion of 40 pro­jects in Azer­bai­jan.

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