Gubad Ibadoglu: IBA to Be Privatized in Same Way as Capital Bank

The International Bank of Azerbaijan (IBA) will be privatized by the scheme of Capital Bank. This opinion was expressed by a well-known economic expert Gubad Ibadoglu, commenting on yesterday's presidential decree on the privatization of the state share in IBA.

According to the document, the Ministry of Finance is in charge for 15 days to withdraw the bank's bad loans and transfer them to the balance of the non-banking credit organization CJSC Agrarkredit. Then the credit institution will issue long-term bonds under the state guarantees for the effective management of the assets. It is also envisaged due to the limit of public debt in the state budget to restructure obligations on the troubled assets of IBA.

The expert called nonsense transfer of control over the problem loans of IBA to a small credit institution, the total assets of which (29 million 521 thousand AZN) are below the level of even a branch of IBA.

"Usually, in such cases at first the credit institution is privatized and then the investor is required recovery of the assets. Here is the opposite. Even with the naked eye you can see that IBA expects the fate of Capital Bank, Ibadoghlu wrote on his page to Facebook.

"Today, the shares of the largest bank in the country belong to more than 800,000 legal entities and individuals. So the investors have to worry about everything. I suggest that, to avoid the rush, the Central Bank should make a clarification on the signed decree and give assurances to the shareholders and investors," the economist said.

Recall that Capital Bank was created on the basis of three state-owned banks and then opened to privatization. In the first phase its shares were acquired by several banks in the country and then the shares were resold to Pasha Holding, which was owned by Arif Pashayev, the father of the President’s wife. Then Arif Pashayev handed the holding to his granddaughters, the children of Ilham Aliyev. - 06D-