Last week, the license of “Muğan Bank” was revoked. According to the data of the Central Bank of Azerbaijan (CBA), the license of OJSC “Muğan Bank” was revoked from October 19, 2023, by the decision of the CBA Board on October 18, 2023, in accordance with Articles 16.1.6, 16.1.7, 16.1.9, 16.1.18, 57, and 61.1 of the Law of the Republic of Azerbaijan “On Banks” (the aggregate capital size is less than the minimum size established by law for banks, the adequacy ratio of the aggregate capital is less than 3 percent, the bank does not carry out its current activities properly). A temporary administrator has been appointed, and a court application for the liquidation of the bank due to its bankruptcy has been prepared.
This week, the current activities of the CBA in Azerbaijan, the development of a new Country Partnership Framework (2024-2028), and the financing of new investment projects were discussed, along with the prospects of cooperation between the Central Bank and the CBA and the implemented technical assistance projects.
Furthermore, it was announced that the Central Bank of Azerbaijan has selected Bank of Baku and TuranBank as the banks-agents for the purchase and sale of investment money signs.
According to the data of the Central Bank of Azerbaijan, investment coins with a face value of 10, 20, 50, and 100 manats were put into circulation from May 10, 2023, dedicated to the 100th anniversary of the birth of the great leader Heydar Aliyev. They are made of 999.9 gold. The gold content in the coins is 3.11 g, 7.78 g, 15.55 g, and 31.1 g, respectively.
“Bank of Baku and TuranBank have submitted relevant applications, and the Board of Directors of the Central Bank has chosen them as banks-agents to stimulate the purchase and sale of investment money signs. With the selection of the banks-agents, the Central Bank ceases the direct purchase and sale of these investment money signs to the population and banks,” the CBA statement said.
It was also reported that during a meeting with the President of the Swiss National Bank, Thomas Jordan, opinions were exchanged on the prospects of cooperation between the central banks of Azerbaijan and Switzerland.
Moreover, the International Rating Agency Fitch Ratings revised the outlook on the rating of the operational environment of Azerbaijani banks from “b+” to “Positive” from “Stable”.
“This reflects our expectations that financial stability in the Azerbaijani economy with high cyclicity will continue to improve due to the strengthening of the financial profile of local banks and tightening regulatory supervision. The latter also leads to a reduction in risks associated with asset quality,” the agency notes.
This week, Fitch Ratings revised the forecast for OJSC “Expressbank” rating to “Positive” from “Stable,” confirming the bank’s viability rating and long-term issuer default ratings (IDRs) at the “B” level.
Furthermore, Fitch notes that the credit quality prospects of the banking sector of Azerbaijan are favorable due to the improvement of the asset structure, tightening of regulation, and operating conditions, supported by the growth of oil prices.
In addition, Fitch forecasts strong credit growth in the sector (25 percent in 2023 and 20 percent in 2024), which will be driven by retail lending.
Last week, it was reported that OJSC “PASHA Bank” expects to end 2023 with a net profit of about 200 million manats.
Furthermore, it is planned that a branch of PASHA Bank will be opened in Shusha next year. The construction of the building, where the branch will be located, will be completed by the end of April next year. The branch staff will be formed from local residents, and work in this direction is already underway. It was also noted that PASHA Bank plans to open a branch in Lankaran in 2025.
This week, the International Monetary Fund published a forecast for the surplus of Azerbaijan’s current account balance, according to which the surplus in 2023 will amount to $12.6 billion, and in 2024 – $12.7 billion.
