Privatization of state participation to improve rating of International Bank of Azerbaijan, Moody`s

International rating agency Moody`s considers that privatization of International Bank of Azerbaijan (IBA) will positively influence the bank`s credit rating.

The agency reports that it will lead to increase of autonomous power, transparency, improvement of corporate governance and strengthening of the bank capitalization. The privatization will also enable improvement of banking sector`s competitive dynamics and strengthening of the banks` aggregated financial indicators, Moody`s forecasts.

IBA consultants will prepare recommendations on privatization conditions, lend legal and technical assistance , estimate the government`s share and help International Bank to attract strategic investors.

Azerbaijani branch of PriceWaterhouseCoopers Audit Azerbaycan, Salans UK Limited, Rothschild & CIE consortium have been chosen as consultants for provision of services on privatization process and reduction of state share (divestiture) in IBA`s equity capital.

"It will probably be a lasting project and we do not expect IBA privatization to finish this year",- the report says. Being Azerbaijan`s largest bank IBA has dominating position in banking sector, according to data for the end of 2010, 42% of total volume of banking system assets, 43% of credits, 36% of deposits, including 24% of population deposits fall on the share of this bank.
"The bank privatization will also support its dominating status, as IBA will make profit from capital increase which will enable to increase large companies` financing as well as large number of clients through wide distribution network,"- the report says.

According to Moody`s expectations the bank`s capital will considerably increase due to the issue of shares.


/AzerTAc/