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EBRD acquires 20% stake in Azerbaijan’s Unibank
Investment aims to consolidate banking sector and foster competition
To support consolidation and foster competition in Azerbaijan’s financial sector, the European Bank for Reconstruction and Development is purchasing a 20 per cent stake in Azerbaijan’s Unibank. It is the EBRD’s first equity investment in a local bank in Azerbaijan.
Kurt Geiger, EBRD Business Group Director for Financial Institutions, speaking in the Azeri capital of Baku, said the EBRD aims for its investment to strengthen Unibank’s capital base so it can continue to grow and demonstrate the benefits of lending to small and medium-sized enterprises (SMEs) – the current focus of Unibank’s strategy.
Eldar Garibov, Chairman of the Supervisory Board at Unibank, said the investment will not only help his bank develop its SME business, but also reach its longer-term goal of developing as a full-service bank for the people of Azerbaijan.
Unibank, the largest private bank in Azerbaijan, with total assets of $15 million, was established in October 2002 as a result of the country’s first private-sector banking merger, of Mbank and Promteckbank.
Unibank already benefits from both SME Credit and Trade facilities provided by the EBRD, which have been actively used since their introduction in 2002.
Earlier this year Unibank received a further $1.5 million loan from the International Co-operation and Development Fund of Taipei China through its Financial Intermediary Investment Special Fund, which is managed by the EBRD and aims to promote the development of Unibank’s SME business. Unibank also benefits from an EBRD-managed training and assistance scheme funded by the EU’s Tacis programme.
In addition to providing an important source of new capital, the EBRD’s investment will be accompanied by a programme of institutional strengthening and overall management guidance to Unibank. This will enable the bank to continue to improve corporate governance and operational standards. The EBRD will be represented on Unibank’s Supervisory Board, and will encourage the development of new products and innovative solutions to serve clients’ needs.
The EBRD has a portfolio in Azerbaijan worth €325 million in sectors as diverse as banking, property, power, water, transport, SMEs and natural resources.
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