OREANDA-NEWS. April 20, 2009. They say in Azerbaijan that adherence to prudent position on the occasion of privatization of state-run banks has been confirmed by development of situation at the world market.

At last Friday’s Baku conference Jahangir Hajiyev, the chairman of board of country’s largest International Bank of Azerbaijan (IBA), said that life had confirmed rightness of our position in the issue of IBA privatization.

“Eight years ago we had a dispute with then president of the European Bank for Reconstruction & Development (EBRD) about full privatization of the IBA. We were accused of opposition to this process, but situation with key banks of the world confirmed soundness of our careful position and we had an opportunity to talk of that with EBRD ex-president Jean Lemier at the session of World Economic Forum in Davos,” Hajiyev said.

In 2001 Azerbaijan gave up from a deal for sale of a blocking package in the IBA to the EBRD at face value. The fact that the EBRD set such institutions as International Monetary Fund and World Bank against the country’s government did not help change the situation. As a result, so far the Ministry of Finance of Azerbaijan has kept a 50.2% equity stake in IBA charter capital.

“Life confirmed rightness of the idea of establishment of state foreign trade bank initiated by us in 1991. The IBA fulfils efficiently its function. Its full privatization can probably take place in the prospect, but today there are not conditions for that,” stated Ziad Samedzadeh, the chairperson of the Parliamentary Economic Policy Committee (he was one of the group experts who recommended IBA creation).

Today out of the three state banks only Kapital Bank has been privatized fully. The IBA keeps semi-state status and non-bank credit institution Agrar-Kredit belongs to the government fully as last year the EBRD declined from participation in its privatization.