The International Bank of Azerbaijan (IBA) will be selling its subsidiaries, the Bank’s Chairman announced today.
This move is in accordance with a debt restructuring plan put in place following the bank’s
filing for bankruptcy in New York in May
. The IBA hopes US bankruptcy laws will aid it in the restructuring of its $3.3 billion debt.
Khalid Ahadov, chairman of the IBA’s management board, highlighted in particular the International Leasing Company, labeling the subsidiary “unsatisfactory”.
The subsidiary is “only engaged in premiums”, has few assets, and has stopped taking on new obligations, Ahadov said.
The crisis has affected Azerbaijani banks across the board. Ten banks are facing a capital deficiency, according to latest audit reports
quoted by the Azerbaijan Press Agency
(APA).
“According to local standards, capital adequacy is normal at most banks,” Zakir Nuriyev, head of the Azerbaijan Banks Association, is quoted by the APA as saying in response to the audit reports. The number of banks with capital deficiency in the country would be far less according to these calculations.
“However,” Nuriyev said, “the international standards say the situation is different.”
There are currently 32 banks operating in Azerbaijan, two of which are state-owned. 16 banks operate with the participation of foreign capital.
Recently, Moody’s Investors Service
downgraded
the ratings of four Azerbaijani banks, and warned about deterioration in their performance.
