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UPDATE 1-Azerbaijan's largest bank says to boost charter capital by $315 mln
February 12, 2016 / 2:54 PM / 2 years ago

UPDATE 1-Azerbaijan's largest bank says to boost charter capital by $315 mln

(Adds detail, context)

BAKU, Feb 12 (Reuters) - The shareholders of Azerbaijan’s largest bank, International Bank of Azerbaijan (IBA), will increase its charter capital by 500 million manats ($315 million) by issuing additional shares, the bank said on Friday.

IBA is the only state-owned bank in the oil-producing former Soviet republic and holds around a third of the banking assets in the country.

The Azeri economy has come under pressure from the collapse in global oil prices. It has devalued its manat currency, exposing banks to risks as people and firms find it harder to repay foreign-currency loans.

IBA officials declined to comment on the reasoning behind the planned capital increase to 1.14 billion manats. A banking source told Reuters it was aimed at “protecting the bank from possible risks amid the manat’s devaluation”.

The central bank has been revoking banking licences to increase the resilience of the sector.

President Ilham Aliyev ordered IBA’s privatisation in July 2015 after a cleanup to get rid of distressed assets.

The bank’s privatisation is in line with advice from the International Monetary Fund.

In December police arrested IBA’s former head Jakhangir Gajiyev on suspicion of fraud and misappropriation of public funds. A court in Baku ordered Gajiyev to be detained for three months, pending trial.

$1=1.58 manats Reporting by Nailia Bagirova; Writing by Alexander Winning and Margarita Antidze; Editing by Ralph Boulton

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