IMF Recommends to Speed up Privatization of International Bank of Azerbaijan

As a priority to strengthen control over the financial sector and to ensure the financial stability, the International Monetary Fund is considering accelerating the privatization of OJSC International Bank of Azerbaijan (IBA). This was stated by the head of the IMF mission Raja Almarzogi after his visit to Baku.

The IMF insists on the restructuring of the International Bank of Azerbaijan on the basis of international principles to ensure the reduction of the bank. This should be followed by its privatization in a transparent manner.

"In conditions of incomplete property on IBA, subordinated loans given to it by the Central Bank of Azerbaijan complicate the control of the bank," the IMF said.

Note that the state controls over 51% of the IBA. Several years ago, the government started privatization of the state stake in the bank again. For this purpose, a consortium was created with international legal and auditing firms. However, since 2013 the process has been suspended. The formal reason was the increase in the bank's capitalization. At the same time it was clear that at certain levels of government there is resistance to the idea.

In March and May of this year there were major processes around the IBA in connection with problem loans, the total size of which, according to some estimates, is more than a few billion US dollars. The return of these loans involved law enforcement agencies, through which some of the loans were repaid. ----08D