OREANDA-NEWS. April 09, 2013. The International Bank of Azerbaijan (IBA) considers the recommendations of IMF Mission on restructuring and diminishing of IBA - the largest bank in the country –unfounded.

According to the IBA Deputy Chairman of Board Rashad Hajiyev they are contrary to capitalization and strengthening of financial-banking systems. "For several years, the IBA meets on a regular basis with the IMF Mission. At each meeting, the Bank provides information about new features and dynamic processes that occur both in the IBA and the banking system of the country", - said R.Hajiyev.

He noted that the global financial crisis, in addition to the adverse effects contributed to the formation of a new, more dynamic and flexible financial management system, both on the part of regulators and various state agencies. Under present conditions, the standard and outdated approach to solving problems and tasks is not so effective.

"Unfortunately, in certain matters declarative,rather superficial statements and recommendations of the IMF, does not evolve from year to year and often unsupported by facts, to some extent lost its actuality", - he said.

As an example, he noted that the IMF recommends to strengthen, diversify and capitalize the banking system. Although this recommendation has not changed over the past few years, the Bank welcomes the vision of the Mission in the matter of capitalization of the banking system. At the same time, the position of the Mission in strengthening and capitalization of the banking system is rather contradictory. For several years, the IMF insists that the business model of IBA is not viable and should be reformed (reduce, restructure and split) to avoid systemic risk.

"At each meeting, we ask the representatives of the IMF, why do they insist on restructuring, reducing and splitting the Bank, but, unfortunately, we can not get answers to our questions. We can only guess and suppose. For example, if the idea is separation of unsound assets from healthy assets, suggesting the creation of a new bank in the merger of healthy assets and liabilities of several banks, it does not apply to the IBA, as the bank does not have the unsound assets. Some would prove availability of significant unsound assets, but it was not possible for the simple reason that the Bank has no such assets"- said R.Hajiyev.

According to him, investors, customers and partners of the IBA should be aware that the bank's portfolio has no significant unsound assets, which also confirms the stability of improving financial profitability, capitalization, asset quality.

"Instead of consolidating, the Mission proposes to restructure and reduce the largest bank in the country, which will inevitably lead to a weakening of the banking system of the country", - he assume.

As you know, most industrialized countries have established financial institutions, whose role is to develop the various economic sectors and promoting exports of goods and services. Today this role is successfully meeting by Development Banks, which are financed by the state. Taking advantage of government support, they are able to attract cheap financial resources from international financial institutions. The leading countries of the former Soviet Union, such as Russia ("Roseximbank"), Ukraine ("Ukreximbank") and Kazakhstan ("Kazakhstan Development Bank") has a similar structure.

R.Hajiyev noted that the IBA, having a huge experience in working with multinational and regional development banks such as the Asian Development Bank, Islamic Development Bank and the Black Sea Trade and Development Bank, as well as export credit agencies in many developed countries, in fact, acts as a Development Bank of the country. Thus, the Bank is helping to overcome the difficulties associated with not yet fully established mechanisms for financial intermediation and assumes the risks of lending the key sectors of the national economy. Moreover, this cooperation allows the bank to raise the country significant amounts of "cheap"and the long-term resources and direct them to the non-oil sector of the economy.

Over the past 12 years the assets of the Bank increased by 25 times, the loan portfolio - 30 times, customer deposits - 58 times and the share capital - 148 times.