The International Bank of Azerbaijan increases interest rates on deposits

Bank has already approved new rates. We shall mention that last IBA raise on rates happened in November 2005. Raise will be applicable to US dollar and Euro deposits. In these the deposit rates nominated in dollars are equaled to manat deposit rates, and rates on Euro deposits will increase by 0.4 points. New interest rates will vary dependent on the term and currency of deposit as well as interest payment option from minimum 6.4% to maximum of 19% annually. Today its one of the highest interest rates on private deposits in the country.

For the first time in the history of Azerbaijan’s banking system IBA proposes the possibility of deposits for the periods of up to 5 years! In previous years the Bank was gradually increasing the maximum term of allocation from 2 years to 4 years, and long-term deposit increase trends allow the optimistic forecasts.

In addition to rates increase, Bank introduce several additional terms for stimulation of customer interest, for instance: for manat and US dollar deposits for the period of 1.5 to 5 years, during the payment of interest at the end of each year the rate increases for additional 0.6-0.8 percent points of “base” rates, and in payment of interests at the end of term (for longer than 1 year deposits) from 0.6 t 3.8 interest points of “base” rates, dependent of the term of deposit! Thus, for example, if on four year deposit in national currency the maximum interest rate was equal to 14%, it now can reach the level of 17.2%!

In additional, depositors (dependent of the amount and term of deposit) will be proposed to have Visa Classic, Visa Gold, MasterCard Standard or MasterCard Gold credit cards, as well as credit lines at the amount of 60%-70% of the amount of deposit.

Term of deposit	In manats and US dollars			Euro and Pounds Sterling
	Monthly interest payment (“Base rate”)	Year end interest payment	Term end interest payment	Monthly payment of interest
3 months	8.4%	–	8.4% annual	6.4% annual
6 months	8.8% annual	–	8.8% annual	6.8% annual
9 months	9.4% annual	–	9.4% annual	7.4% annual
12 months	10.4% annual	–	11.0% annual	8.4% annual
18 months	10.8% annual	11.4% annual	12.2% annual	8.8% annual
24 ??????	11.6% annual	12.2% annual	13.4% annual	9.6% annual
36 months	12.8% annual	13.4% annual	15.4% annual	10.8% annual
48 months	14.0% annual	14.6% annual	17.2% annual	12.0% annual
60 months	15,2% annual	16,0% annual	19.0% annual	13.2% annual
Deposit Certificate	–	–	10.0% annual	–

Deposit contracts made until June 1, 2006 shall be serviced at current interest rates before their expiry. At the end of term of deposit contract, in the event of its extension or prolongation by default, new interest rates shall apply.