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UPDATE 1-Two more Azeri banks lose licences as central bank consolidates sector
January 26, 2016 / 12:48 PM / 2 years ago

UPDATE 1-Two more Azeri banks lose licences as central bank consolidates sector

(Adds central bank statement, details)

BAKU, Jan 26 (Reuters) - Azerbaijan’s central bank said on Tuesday it had revoked banking licences from two lenders, Yunayted Kredit Bank and NBC Bank ASC, in a further step aimed to consolidate the Caucasus nation’s banking sector.

The licences were revoked and external management appointed to the two small banks after they failed to meet a minimum capital requitement of 50 million Azeri manats ($31 million) and were unable to respect obligations to creditors, the central bank said.

All private persons who had insured their deposits at these two banks will be paid compensations in full, it said.

The liquidation of weak banks in the Caucasus nation is not linked directly to the sharp devaluation of its manat currency, central bank sources told Reuters.

The manat has lost about a third of its value against the dollar in the past month and the central bank has spent more than half its foreign currency reserves, which now stand at about $5 billion, trying to protect it from low oil prices. Oil and gas account for 75 percent of the state’s revenues.

The number of banks working in Azerbaijan has now fallen to 39 from 43 at the start of the year. A financial market source said the number of banks in Azerbaijan may fall to 30 already next month or may reach this number by the end of March.

$1 = 1.6052 manats Reporting by Nailia Bagirova; editing by Ralph Boulton; Writing by Dmitry Solovyov; Editing by Maria Kiselyova and Ralph Boulton

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