COUNTRY PROFILES
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Print article international bank of azerbaijan
IBA is the core
of Azerbaijan
banking
By J. Hajiyev, Chairman-of-Board, the International Bank of Azerbaijan
 J. Hajiyev |
A coeval of our state’s independence, the International Bank of Azerbaijan (IBA) is considered one of the most effective financial-credit institutions in the country. In fact, assets increased by 30.9% and exceeded AZN 1,110 million, and the shareholders equity by 31.7% and AZN 60.3 million, respectively, during as compared to the same period of 2004. For this period, credit portfolio increased by more than 62.6% and reached AZN 731.1 million, and net profit increased to AZN 14.2 million, or by almost 25%. The return on equity (ROE) made 26.8%, and return on assets (ROA) 1.5%.
The IBA also dominates in the country’s financial market: its share in total operations and assets of banking is more than 53%, and that is 52% in credit portfolio and 32% in net profit. Along with a well-spread domestic network-of-service (36 branches and over 120 divisions, and more than 450 ATMs), the bank has two offices abroad (in London and Frankfurt-am-Main), a subsidiary in Moscow with two branches (in Saint-Petersburg and Yekaterinburg) and a number of other subsidiary structures (the International Insurance Company, InterProtect Re AG reinsurance company, “Azerileasing” Company and “Azericard” Processing Company). The high-quality and experienced staff, working at the bank and throughout the network, provides the clientele with more than 150 products and services. A generator of reforms in the financial-crediting segment of the economy, the IBA, in general, holds a leading position on applying new banking products, services, and advanced service and information technologies, which all meet international standards; many of these have been developed in the domestic market thanks to the bank’s innovations.
In 2005, all these enabled Fitch IBCA to approve the rating of the bank’s long-term operations BB–, which is only one step lower than Azerbaijan’s international country rating (BB). An effective mechanism to reach national goals, and a catalyst of economical activity and structure advances, the IBA directly influences the forming and development of the new, market-based economy and, first of all, domestic business. Consistently applying innovative products, services and advanced technologies of banking, information and financing large-scale national and regional projects, the IBA thereby demonstrates having, as a credit organisation, own sufficient funds, due to depositors’ loyalty (that of individual and corporate clientele). Steadily expanding the scope of its activity and providing corporate clients with such services as credit and documentary operations, leasing, factoring, insurance and consulting at a high level, the bank, in fact, is working together with entities of the real sector of the economy and is, thus, directly engaged in the process of increasing their return.
The IBA, which provides banking service all over Azerbaijan, participates in accomplishing tasks to increase the nation’s living standards, thus, the bank is society-oriented. For example, the IBA, taking into consideration people’s high trust, quickly developed and started a pension project, by which this layer of society was, for free, provided with plastic cards to get pensions by ATM.
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With planned expansion of its activity abroad and in the world’s financial markets (first, in the financial centres of regional unions), foreign correspondent relations and contacts with international financial organisations, the IBA promotes Azerbaijan’s integration into the world and attracts foreign investments to the country. During the last few years, the bank has developed and created correspondent relations with trustworthy banks of the CIS, Europe, USA, Canada and Australia. All operations are carried out with the correspondent network of 64 banks from 25 countries. The IBA’s high credit rating lets it set up stable and long-term relations with the largest international financial organisations. The bank serves all international projects in the region including energy projects, such as the Baku-Tbilisi-Jeyhan oil and Baku- Tbilisi-Erzurum gas pipelines and, transport communications TRACECA and the Silk Road.
All these strengthen the IBA’s leading position in the Caucasus and promote Baku as the Caucasian financial investment centre. The IBA co-operates with regional financial institutions including the Black Sea Bank of Commerce and Development ($6.5-million active credit line), Islamic Bank of Development ($4.5 million), Iran Bank of Export Development ($10 million), Société Générale (�45 million), and Commerzbank (�25 million). In 2005, 479 letter-of-credit operations were done with the turnover more than $2.47 billion (in 2004, $1.69 billion). In August 2005, the IBA concluded an agreement on attracting a $56 million syndicated credit with 19 banks from 10 countries, which is undoubted proof of an essentially new level of development of the bank’s international contacts and the foreign “donors” growing trust in the IBA. In May 2006, a loan agreement for CHF15 million to be signed between the IBA and UBS AG.
In addition, the IBA supports a lot of Azerbaijan banks in solving their problems connected to contacting foreign financial systems. For instance, the IBA as the first domestic bank with membership in international payment systems supported 26 local crediting organisations on getting such a status and provided a total of $1.1 million cover funds. Letters-of-credit and insurance arrangements for the total of $10 million were launched for other domestic banks’ clientele.
The IBA paid special attention to increasing its activity in the EC countries, which provided the bank’s engagement into the European financial market and promoted larger interaction with leading European businesses. The bank’s office in London has now been working more than two years, and a further office was opened in Frankfurt-am-Main at the end of the last year. Their future development to the status of the IBA’s independent subsidiaries is supposed.
Opening the first Azerbaijan bank abroad, the subsidiary “IBA-Moscow” in 2002, followed by its branches in Saint- Petersburg and Yekaterinburg, can be considered a noteworthy event both for the bank and all national banking.
Contact details:
The Internationl Bank of Azerbaijan, 67 Nizami street, Baku AZ1005, Azerbaijan Republic
Tel: +994 (0) 12 4930091 / 4989127 / 4987593 - Fax: +994 (0) 12 4934091 / 4989128 Website: www.ibar.az