Azerbaijan's capital markets regulator has taken over the management of troubled Bank Standard and frozen deposits at the bank for a month as it is works to bail out the lender, abc.az reported on May 3.
Azerbaijan's banks have been hit by lower oil prices, which sent the economy into recession this year, and a double devaluation of the Azerbaijani manat in 2015, which eroded banks' asset quality and sent non-performing loans skyrocketing.
The decision was prompted by critical liquidity levels at the bank, Rufat Aslanli, chairman of the newly established Financial Markets Supervisory Body (FMSB) said. The central bank has allocated AZN15mn (€8.7mn) to cover operational costs at the bank, such as salaries.
In April, medium-sized Bank Standard, which has not reported its financial results since 2013, was rumoured to be in negotiations to merge with the country's largest bank, International Bank of Azerbaijan (IBA). The latter also needed a government bailout in 2015 following the February devaluation.
Aslanli has said that the government would provide more funds to Bank Standard after a three-month programme aimed at reforming the bank's operations. According to the bank's 2013 financial statement, its assets stood at €994.48mn, liabilities at €946.51mn and its loss for the year at €7.39mn.
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