BAKU

State-owned International Bank of Azerbaijan (IBA), the country’s largest lender, said it will pay 127 million manats ($74.7 million) in dividends to shareholders from last year’s profits.

In 2019, IBA transferred 150 million manats in dividends to to the state budget, part of a debt repayment on bonds of Agrarkredit CJSC, which had previously been issued under a state guarantee.

Established in 1992, IBA is the largest bank in Azerbaijan by assets. It reported a net profit of 32.4 million manats in the first quarter of 2021, 36.5 percent less than in the same period last year.

In 2015, the country’s President Ilham Aliyev ordered IBA’s privatisation following a clean-up operation to get rid of distressed assets resulting from poor management. The bank’s former head, Jakhangir Hajiyev, was arrested on suspicion of fraud and misappropriation of public funds.

Aliyev has been very vocal about the need to end large-scale corruption in Azerbaijan, a promise he has acted upon through a systematic wide-scale crackdown on graft, with continuing arrests of high-level or former officials suspected of financial wrongdoing.

The finance ministry said that about $3 billion could have been misappropriated by Hajiyev, who denied the charges. He was convicted of fraud and embezzlement in 2016 and sentenced to 15 years in jail.

In 2017, IBA proposed a plan to restructure $3.3 billion of its debt and later received approval from creditors holding 93.9 percent of the affected debt.

The restructuring process was completed in 2019 with the support of the government, which holds more than 99 percent, paving the way for its planned privatisation.

The European Bank for Reconstruction and Development (EBRD) said in 2019 it might be interested in buying a stake in IBA, but privatisation plans have been postponed several times and it’s not yet clear when the bank will be ready for sale.

In May this year, Fitch Ratings has upgraded the IBA’s long-term Issuer Default Rating (IDR) to ‘B’ from ‘B-‘ and Viability Rating (VR) to ‘b’ from ‘b-‘. The outlook is positive.