PASHA Bank Summarized Results of Operations in H1 of 2013

Today at the Four Seasons Hotel held a press conference one of the largest banks in Azerbaijan OJSC PASHA Bank, on the results for the first half of 2013. The speakers at the press conference were the Chairman of the Board Farid Akhundov, Member of the Management Board, Chief Financial Administrator Shahin Mammadov, Member of the Management Board  Chief Investment Officer Taleh Kyazimov and the head of Ernst & Young Advisory Services Farhad Guliyev.

At the press conference, Chairman of the Board Farid Akhundov said the Bank has successfully completed more than half of the strategic period 2012-2014 years. It is aimed at strengthening the Bank as a corporate body, and the provision of a wider range of services to corporate clients operating at the international level, as well as businesses small and medium-sized businesses. During the current year it is planned to put into operation a business center in Ganja and Zagatala. Unlike branches, these centers have a stronger infrastructure, and will provide corporate customers with loans to carry out operations in trade finance, etc., added Akhundov.

CFO of the bank Shahin Mammadov noted that the Bank maintained its position as one of the largest commercial banks in terms of equity capital, which reached 193.727 million manat ( 246.943 million U.S. dollars). In the context of the strategic decision to diversify its portfolio of assets , the Bank has successfully supported the balance of services offered to clients of the bank.

On 30 June 2013 the total assets of PASHA Bank amounted to 659.57 million manat ( 840.753 million U.S. dollars), ie there was a decrease of 9% compared with 2012 ( 721 075 000 AZN / 919 152 000 U.S. dollars ), mainly associated with decreased activity in customer accounts .

The structure of the Bank's assets as of 30 June 2013 was as follows:

Loans to customers - 48 %

Securities portfolio - 35 %

Cash and cash equivalents - 11%

Funds allocated to credit institutions - 2%, and the rest relating to

negotiable and non-negotiable assets ( 4%).

The Bank has provided stable lending growth, with total loan portfolio that grew by 17 % to 331.69 million manat ( 422.804 million U.S. dollars). The corresponding figure at the end of 2012 amounted to 282.837 million manat ( 360.532 million U.S. dollars). The effective rate reserve portfolio was 4.9 % ( at the end of 2012 - 3.1%).

The Bank has achieved significant growth in its customer base to the totals 360.838 million manat ( 459.959 million U.S. dollars). These customer accounts were mainly focused on deposit accounts and demand deposits , respectively, at a ratio of 6 % and 34 % ( at the end of 2012 - respectively 58 % and 42 %).

Net income for the six months ended in 2013 amounted to 5.49 million manat (6.999 million U.S. dollars), which is almost identical to the corresponding period of 2012 (5.472 million manat / 6,975,000 U.S. dollars). Profit before tax amounted to 7.999 million manat (U.S. $ 10,196,000) - a 12% increase compared with the results of the previous period. General (operating) income from operations for the six months of 2013 amounted to 25.95 million manat ( 33,078,000 U.S. dollars), i.e. a 31% increase compared to the result for the corresponding period in 2012 ( 19.802 million manat / 25.242 million U.S. dollars).

Interest income increased by 21% and amounted to 27.647 million AZN (35,242,000 U.S. dollars ), while non-interest income increased 19 % to 4,613,000 AZN ( 5.88 million U.S. dollars).

As a result of extensive negotiations with international financial institutions PASHA Bank was able to provide more financial trade financing to their corporate clients, thanks to better access to financing and the best customer financing arrangements as a result of the international credit ratings from two leading agencies. Simultaneously, at the institutional level, the Bank conducted various seminars and training sessions for clients to enhance their capacity to provide services at a professional level. On 30 June 2013 the volume of trade finance rose to 103.018 million AZN (131,317,000 U.S. dollars). Currently, PASHA Bank's strategic objective is to increase its portfolio of documentary financial transactions to 140 million AZN (178.458 million U.S. dollars) in 2013.

On 30 June 2013 the Bank was first syndicated term loan for trading purposes , with the participation of four foreign banks in the amount of 23,947,000 AZN ( 30,525,000 U.S. dollars).

The Bank achieved strong growth of capital by providing capital adequacy ratio in accordance with the requirements of the Central Bank of the Republic of Azerbaijan at the level of 31% ( at the end of 2012 - 34 %), which means better use of the Bank's share capital . The primary objective of the Bank is Basel II compliance and Basel III to the levels of capital and liquidity support, and the return of capital to shareholders of the Bank in the form of dividends. In 2013, the Bank paid dividends to shareholders from net profit for 2012 in the amount of 20,515,000 AZN (26.15 million U.S. dollars). -15D -