CBA' s decision will be signal for brand bank

The main reason for increasing by the Central Bank of Azerbaijan (CBA) of the minimum capital requirements to Azerbaijani banks is due to the fact that after the global financial crisis, there was a shortage of liquidity, and many bank shareholders have refused to support these structures, the country's banking circles believe. To date, eight banks operate at a loss.

By the decision of the Central Bank of Azerbaijan (CBA) on July 25 this year, the minimum total capital of existing banks, as well as the capital of newly established banks was increased from 10 to 50 million manat. Terms of bringing capital to the new standard level for existing banks are set prior to January 1, 2014.

Currently, nearly 92 percent of the banking market in the country is formed by banks within the top twenty.

"This decision is intended to ensure that shareholders have supported their banks, which indirectly affects the pace of consolidation in the banking market of the country," banking experts say.

According to one of them, first of all, it will lead to activation of emission of shares by banks, and they will not delay its placement, which will be certain fed for stock exchange, brokers, and so on.

"At the moment a new regulatory requirement of CBA can be followed by 15 banks [there are 43 banks in the country]. Banks, whose shareholders are individuals, will have another reason for a positive decision towards a merger. The banks that are members of the holding will not have a problem, since this issue will be resolved by holding, banks with foreign capital won't face problems either," experts noted.

According to market participants, there shouldn't be problems with banks that have level of capitalization exceeding 30 million manat, and the banks with capital below this level face entirely different situation.

Even before the global crisis there were rumours on increasing the capitalization and not by chance that many Azerbaijani banks have already formed the required level of capital.


/Trend/