Azeri President orders IBA bank to be cleaned up and privatised

Azeri President Ilham Aliev this week issued a decree paving  the way for the state-owned International Bank of Azerbaijan (IBA)  to be privatised after undergoing a clean-up to get rid of distressed assets resulting from poor management.
With 35% of Azerbaijan’s banking assets, the IBA is the country’s only state-owned bank and also its biggest.The finance ministry  currently controls 51.7%, and the privatisation is in line with advice from the International Monetary Fund.
“The shortcomings in the management, investment and loan policy of the International Bank of Azerbaijan in recent years, as well as financing of less efficient, risky investment projects, worsened the bank’s financial state, caused an increase in the share of distressed assets and reduced its liquidity,” the decree states.
In order to overcome the current situation, restore the bank’s financial position and ensure its sustainability, there was a need “to transfer the bank’s distressed assets to a specialized structure.”
The president ordered the finance ministry and the central bank to determine the share of the bank’s distressed assets within 15 days, remove these from its balance sheet in exchange for liquid funds in stages, and transfer them to the state-owned non-banking credit organisation Agracredit.

Source: reuters