The assets of the International Bank of Azerbaijan (IBA), the largest lender in the country, contracted by 28.9% y/y to AZN8.7bn ($5.1bn) in 2017, the state-controlled bank reported on January 10.
The lender underwent a restructuring of its debt last year, whereby $3.3bn worth of its foreign obligations were swapped for government-backed ones. It was the second government rescue for IBA - the first occasion was in 2015. The bank's problems were the result of a faulty lending model, coupled with currency depreciation and a depressed business environment, in which generating new business has been difficult.
Once its balance sheet is clean, Baku intends to reprivatise IBA, having increased its share in the lender to over 80% since 2015.
At end-December, IBA's obligations stood at AZN7.75bn, its loan portfolio at AZN1.8bn and its deposit portfolio at AZN1.5bn, the lender reported.
The lender said that it was making efforts toward increasing profitability, optimising costs and strengthening its capital position, which stood at AZN525mn at end-December.
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