TODAY.AZ / Business

ADIF continues payment of funds to depositors of banks with revoked licenses

05 February 2016 [17:40] - TODAY.AZ

/By AzerNews/

By Aynur Karimova

Azerbaijan Deposit Insurance Fund continues payment of funds to depositors of the banks, licenses of which were revoked by the Central Bank of Azerbaijan.

The Fund reported on February 5 that within six days, over 14 million manats ($8.68 million) was paid to the depositors of Bank of Azerbaijan, the license of which was terminated on January 18.

The payment of funds is carried out in the branches of the Muganbank and Rabitabank -- the designated agent banks.

Accepting of appeals of Bank of Azerbaijan’s insured depositors began on January 29, 2016, and payment of compensation has been implemented since that day.

The Fund further reported that although ADIF started acceptance of the applications for payment of compensation to the depositors of the Gandja Bank from February 4, the number of appeals was insignificant.

Payment of funds to the depositors of the Gandja Bank is being made in the branches of the Rabitabank, the Unibank and the Kapital Bank.

The volume of insured deposits of Bank of Azerbaijan amounts to 24.2 million manats ($15 million), while the Gandja Bank - 1.5 million manats ($930,000).

The ADIF went on to add that the depositors of the Texnikabank can apply to the fund for payment of compensation since February 11.

On February 2, the CBA revoked the license of the bank, and two days later, an insured event occurred at the Texnikabank. The CBA revoked its license due to the fact that the total capital of the bank did not correspond to the CBA minimum requirement of 50 million manats ($31 million).

The total capital adequacy ratio amounted to three percent [the CBA minimum requirement is 10 percent].

In accordance with the law, insured payments can be obtained seven days after the bank is declared bankrupt.

Within seven days, the ADIF will announce the agent banks in charge of payment of funds to the depositors of the Texnikabank.

The ADIF returns up to 30,000 manats ($18,607) for each insured deposits.

Since early 2016, the CBA has terminated the licenses of TexnikaBank, the Caucasus Development Bank, the Atrabank, the Gandja Bank, the Bank of Azerbaijan, the United Credit Bank and the NBCBank.

In February, the CBA made a decision to restore the license of the NBCBank. Later, a source in the NBCBank told local media that the bank has already signed a protocol of intents on consolidation with other two banks.

A source in the CBA said that the NBCBank intends to merge its assets with the Parabank and the Kredobank.

The Caucasus Development Bank also plans to discuss its merger with other banks on March 20. The bank intends to merge with the Gunay Bank and the Atrabank, Trend reported earlier.

However, Etibar Aliyev, Chairman of the Texnikabank's Supervisory Board, told Trend on February 4 that Texnikabank has no plans to merge with other banks.

The consolidation of banks is likely to lead to financial recovery of the banks as this process is in the interests of both owners and clients of banks.

The consolidation will also allow stable banks, which have deliberately decided to merge, to increase their share in the market and to gain more revenues. This strategy would be more correct if targets growth of profit and market share.

The International Finance Corporation and the European Bank for Reconstruction and Development support the consolidation of banks in Azerbaijan, regarding it as a way leading to financial recovery of the banks.

Azerbaijan has experienced good examples of consolidation of banks earlier.

For instance, UniBank was formed by the merger of two commercial banks in 2002 - MBank and Promtexbank, where the EBRD acquired a 15-percent share, and 8.3333 percent is owned by the German Investment Corporation DEG.

Bank of Baku merged with IlkBank in 2005.

In late January, two Azerbaijani banks - AGBank and DemirBank - also decided to consolidate and signed a protocol of intent about merging.

URL: http://www.today.az/news/business/147601.html

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