OREANDA-NEWS. March 05, 2010. IFC Financial Market Crisis Response Project carries out diagnostics of Azerbaijani first bank. The Project informed that diagnostics of Azerbaijani first bank has already been finished and special recommendations are being prepared for it.

A bank is not named on the ground of confidentiality.

The Project’s goal is to:

assist financial institutions in assessing and quantifying critical risks and internal weaknesses which threaten their sustainability in the context of the crisis;

support selected institutions in initiating immediate action items to be implemented to speed-up recovery process;

create impact on the broader financial sector through dissemination and awareness-raising of best practices and strengthening of the overall financial infrastructure;

analyze the legal and regulatory environment related to distressed asset transfer and sales.

The Project focuses on three areas of assistance to financial institutions:

Loan Portfolio Monitoring/ NPL Management. The Project  implements best practices in bad asset ma-nagement to support reco-vering and stimulate new lending.

Risk Management which includes capital adequacy, liquidity; asset liability management; operational, market and credit risk.  In order to emerge from the crisis as stronger insti-tutions, ma-ny of the poor risk practices which contri-buted to the weakened state of financial institu-tions must be addressed.

Distressed Asset Reso-lution.  In order to allow financial institutions to clean their balance sheets and focus on new lending, the Project will support partners in preparing and valuing their portfolios for sale or transfer.

To ensure a consistent approach the Project:

conducts a deeper Diagnostic of the institution’s needs in the areas of focus to determine the most effective activities that will need to be carried out and the priority modules to focus activities;

develops a comprehensive advisory plan, based on the outputs of the Diagnostic. The institution’s management will then formally approve implementation of the initial modules with a specific Advisory Service Agreement (ASA);

assists the institution’s management in the implementation of the modules.