Azerbaijan's IBA doubles authorised capital to €640mn after share issuance

By bne IntelliNews January 17, 2017

The International Bank of Azerbaijan, the country's largest lender, has doubled its authorised capital to AZN1.24bn (€640mn) through the issuance of shares on the domestic stock exchange, topnews.az reported on January 16.

IBA's fate has been chequered in recent years. In March 2015, the giant bank, which accounts for over a third of banking assets in the country and has subsidiaries in a dozen others, fell in thrall to the biggest corruption scandal in the country marked by questionable lending practices and an ill-thought-out lending strategy. Its long-serving chairman at the time, Jahangir Hajiyev, was placed under arrest - under which he remains - and scores of top management were dismissed or detained.

The country's financial markets regulator took over the lender, seeking to purchase its skyrocketing bad assets through a state-owned non-credit agency. Initially, Baku denied rumours that IBA's non-performing loans had reached AZN10bn (€5.42bn), or almost its entire loan portfolio at end-2015, which stood at AZN10.5bn. Instead, it claimed that the government would only spend some AZN3bn on bailing out the troubled lender.

However, in November 2016, ratings agency Fitch Ratings downgraded the bank's viability rating from 'b-' to 'f' after receiving confirmation that authorities had indeed spent AZN10bn on rehabilitating the lender. In Fitch's view, the downgrade amounted to a recognition of the fact that the bank had failed.

''This capital increase is our next step towards a successful recovery of the IBA,'' Khalid Ahadov, IBA's new chairman of the board, reportedly said. 

Related Articles

IMF says Azerbaijan’s banking sector stronger but systemic vulnerabilities persist

The International Monetary Fund (IMF) has concluded that Azerbaijan’s financial system has made considerable progress in strengthening resilience since the 2015 oil price shock and 2020 COVID-19 ... more

Azerbaijan’s banking sector assets reach AZN27.88bn with a 2.55% NPL ratio in March 2025

The Azerbaijani banking sector has demonstrated remarkable resilience and steady growth in recent years, despite global economic challenges, according to the latest central bank ... more

Azerbaijani banks report mixed financial performance in Q1 2025

Azerbaijan’s leading commercial banks released their financial results for the first quarter of 2025, showing a mixed performance in profitability, digitalisation, credit growth and capital ... more

Dismiss