Azerbaijani AccessBank strives to bring profitability of its equity to 20 percent in 2023 - David Tsiklauri

Azerbaijani AccessBank's main goal for 2023 is to bring the profitability of the bank's equity to 20 percent, David Tsiklauri, Chairman of the Management Board of AccessBank, told Trend.

"Last year was quite successful and critical for AccessBank in every sense. During 2022, our team was able to achieve significant changes that allowed the bank to improve its financial performance. It is worth noting profitability on equity, because it will not be entirely correct to measure the results in the banking sector by absolute figures. The profitability on equity of our bank in 2020 and 2021 was close to zero, and in 2022 it amounted to 17 percent," Tsiklauri said.

Referring to profitability, Tsiklauri noted that for shareholders in Azerbaijan, the expected return on equity (ROE) for financial institutions is about the same 20 percent as throughout the region. In addition, such profitability gives impetus to the further continuous growth of the financial institution, which positively affects the entire economy of the country.

"Many Azerbaijani banks have crossed this threshold, and we expect that our profitability on capital will only grow in the future. For 2023, we set ourselves the task of improving AccessBank's performance compared to 2022, which was very positive for us. To achieve this result, our bank plans to continue investing in implementation of new products and improving the infrastructure for the comfortable use of our services by customers," he said.

Tsiklauri added that each of the bank's departments has a list of tasks that teams need to solve for 2023 to be more positive, just like last year.

Speaking about the development strategy, the chairman of the bank noted that AccessBank's current and enduring goal is to support micro, small and medium-sized enterprises (MSMEs).

"AccessBank has always been strong in supporting customers of this segment, and it remains a top priority for us. We have launched active work on the promotion of services and products for the retail segment, and in the future, we plan to further strengthen it," he said.

According to the chairman of the bank, the strategy will be aimed at improving banking services in terms of technologies to accelerate decisions on granting loans (for example, scoring mechanisms, automated decision-making, etc.).

"Implementation of AccessBank's development strategy is proceeding according to our roadmap aimed at maintaining strong positions in the segment of MSMEs, and strengthening in the retail segment," he added.

Furthermore, Tsiklauri said that AccessBank's microcredit portfolio has increased by more than 25 percent year-on-year, and the bank monthly continues to issue loans in this segment several times more than anyone else in Azerbaijan’s market.

"The segments and the main directions of our activity are: firstly, AccessBank will continue to invest capital in micro-loans, and I think, in the coming years, our growth in this segment will be 15-20 percent. Secondly, in 2023 we will be more active in the segment of small and medium-sized enterprises (SMEs) than in the previous years. And thirdly, we will continue to enhance our products for the retail segment, which we began to actively develop in 2021," said Tsiklauri.

In terms of the bank's partnership with Azerbaijan’s Entrepreneurship Development Fund, Tsiklauri noted that the maximum target threshold for 2023 exceeded the limit of the previous year. As a result of the bank's partnership with the fund, 258 entrepreneurs were granted preferential loans in the amount of 7 million manat ($4.1 million) in 2022 to finance various investment projects.

"This tool is a good way to encourage business activity. Over the past year, we fully used this resource, and by the end of 2022, we received additional funds, increasing the limit. This year we have been allocated 10 million manat ($5.8 million) from the fund," the chairman said.

In addition, to support start-up entrepreneurs, in 2022, the bank allocated a total of more than 45 million manat ($26 million) in the form of business development loans to 4,000 entrepreneurs aged 18 to 30 years.

"The economic activity of micro, small and medium-sized enterprises is the highest one, and in this regard, all our attention is focused on this segment. In this area, we have programs to support not only youth, but also women's entrepreneurship," added Tsiklauri.

Speaking about AccessBank's cooperation with international financial institutions, Tsiklauri noted that for further growth it is necessary to raise additional funds, and therefore the bank is currently negotiating with a number of overseas financial institutions. ®