TEXNIKABANK RELIABLE AND OPEN  FOR ALL

 

Caspian Energy (CE): Mr Aliyev, what could you say of Texnikabank's operations and its history as whole?

Etibar Aliyev, Chairman of Supervisory Board, Texnikabank:  The bank's operation commenced in the period of universal origination of commercial banks in the country. Texnikabank was licensed by the National Bank of Azerbaijan in 1993. Its assets as of the early 2007 amounted to 132.8 million manat, up 109% from January 1, 2006. Credits and loans issued to the customers amounted to 78.7 million manat as of January 1, compared to 42.3 million manat in the early 2006. Subscribers' accounts as of the early 2007 amounted to 81.3 million manat, up 119% from the previous year. The joint-stock capital of Texnikabank grew to date by 75 percent from the previous year and amounted to 20.5 million manat as of January 1, 2007.

 

CE: How did the bank extend its branch network through last years? Are you planning to extend your branch network in regions to support SMB crediting projects?

Etibar Aliyev: Texnikabank is running a branched network across the regions of the country. Nowadays we are having 30 branch offices, 3 subdivisions and 3 currency exchange booths. Each year we are expanding our regional presence. In the nearest outlook we are setting up branch offices or representative offices overseas. First steps are already taken in this respect; I think we will have setup Texnikabank's subsidiary in Moscow by the end of this year.

SMB development in regions we consider a very important task. To this end the bank is closely collaborating with National Entrepreneurship Support Fund. Through the National Fund we have issued over 10 million manat of credits, which, in my opinion, is a good support to development of entrepreneurship in regions under the state program of their development.

Texnikabank is crediting virtually all branches of economy but the priority today is small and medium business both in regions and the center. We have funds enough for this. Apart from that, we are an agent-bank of recently setup International Fund of Agriculture Development. This year under this Fund we will issue €3 million to support SMBs in agriculture. This project is purposed for northern regions only.

 

CE: You have quite a broad branch office network. How does it prove its financial sustainability?

Etibar Aliyev: I would not say we have so many branch offices. However, as against the other banks to have recently run to regions this objective had been our priority issue yet five years back. Many bankers blamed me that time and they are now competing by number of regional branch offices. And I just do open new branch offices, not expecting any revenue from them. And they are not making any profit. We just had to open them up. In case an enterprise customer launches his business in region, each respected bank just should follow him and create all required infrastructure in the region. And vice versa, my customer opening his branch office in the region where we are represented should work only with me. As against other banks, our network is branched but I do not consider this an end. We keep on working in this respect. Yet this year we schedule opening several branch offices. Banking infrastructure in regions today is a necessary condition for development of local businesses, reflecting in the development of regions as such.

 

CE: How could you characterize the process of reforms in the country, in particular banking reforms?

Etibar Aliyev: Over 10 years of economic reforms in the country are already resulting in a specific outcome. Azerbaijan's economy is growing rapidly today. This process may not miss banking sector. Moreover, I would say banking sector is leading this development. Say, economy is a train, then the banks are the engine and therefore banking system development is nigh. The banking sector has changed utterly compared to the previous year.

 

CE: And where is Texnikabank's place in this ‘engine'?

Etibar Aliyev: Our strategic plan is already ‘bearing fruits', we even running ahead of our own objectives. I think Texnikabank is closer to the head of this engine. The facts are compelling. By amount of assets Texnikabank shares third or fourth place in Azerbaijan. We currently work with more than 150,000 customers. The Bank's assets amounted to 133 million manat and credit portfolio to nearly 80 million manat as of January 1, 2007. Balance indicators and bank's image among the population resulted in dynamic growth of deposits. Today they amount to 32 million manat, with other accounts amounting to 43 million manat.  The bank is developing in accordance with approved strategic plan up to the year 2008.

The bank uses virtually all payment system like Western Union, Xpress money, Contact, Migom, Bistraya Pochta and so. The bank joined international system SWIFT and national AZIPS. All conditions have been crested for fast and timely transfer of money of legal entities and physical persons alike.

 

CE: Could you provide the dynamic of deposit account growth and interest rate alteration?

Etibar Aliyev: Comparing to the previous year, the population's deposit accounts grew more than in twice. While in 2005 they amounted to 15 million manat, today they exceed 32 million manat. Through the same period of time on-demand accounts in the bank grew from 19 to 43 million manat. Interests on deposits total 12% in our bank. We are not frightened with some banks raising interest rates and statistically this process has no effect on our bank's figures. Each bank has its own strategy and approach. Our advantage is that we provide the better services and for this reason our customers do not change our image and services for other bank's higher interests.

 

CE: How does the bank collaborate with international financial institutions? Which banks do you maintain correspondent relations with?

Etibar Aliyev: I could say we are collaborating with all international financial institutions. The Bank maintains correspondent relations with American express bank ltd., Dresdner bank AG, Parex bank, Petrocommerce, Uralsib bank, Impexbank. The bank's credit link is opened with Raiffeisen Zentralbank Oesterreich AG of Austria, Commerzbank AG of Germany, Banque de commerce et de placements S.A. of Switzerland, Kazkommertsbank and Bank Turanalem of Kazakhstan. We actively collaborate with the European Bank of Reconstruction and Development and the World Bank we are working with on many projects. Ever greater success was achieved collaborating with US-Russian JV Kazimir Partners, which is a strategic partner of ours. We have already approved a future work plan with them.

 

CE: Is the bank planning to issue its own equities? How active is your bank in securities market?

Etibar Aliyev: The securities market in Azerbaijan is a progressing one. To work in this market and communicate with international funds concerned in equities of Azerbaijani entities the bank established a subsidiary, Texnika Capital Management. This company is operating in full and already gained a certain image among brokerage companies so far. it is also known in Europe and the USA and some companies from there are working with it. Many foreign banks, even Citi Group, already open accounts with us. These institutions are concerned in participation in Azerbaijan's securities market through Texnika Capital Management. Our plans for this year include sale of our own equities in foreign markets. We have already sold equities in amount of $mln so far. The interest in our shares is growing up.

 

CE: How any plastic cards has the bank issued so far? Are there any problems in this field?

Etibar Aliyev: Despite our only third year in plastic cards market we already secured leadership here. We issued the population nearly 40,000 plastic cards and, I suppose, their number will reach 400,000 by the end of the year. Alongside enterprise users of plastic cards, we have a huge number of physical customers. As to the market itself, there is a regulatory basis for its development and President has signed the appropriate decree so far. Unfortunately, not all necessary preconditions were created for universal use of plastic cards. You could barely see a POS-terminal in a shop or a service sector. But the reason is obvious and clear - they hope to evade taxes.

 

CE: How active is the bank in mortgage crediting market?

Etibar Aliyev: The mortgage market is already offering this new product to the population. Our bank is attaching special importance to this project. Texnikabank is hors concours in this sector as well. So, we already credited over 150 projects. Issued mortgage credits amounted to 2,330 million manat. Texnikabank is a concerned entity that contributes to projects aiming at improvement of people's welfare. And this program, within the sphere of personal interests of President Ilham Aliyev, will be even more affordable. Mortgage crediting expansion is a inseparable component of Texnikabank's strategy.  

 

CE: Which audit company is performing the bank's annual inspection? What is the bank's credit rating?

Etibar Aliyev: Last year's audit in Texnikabank performed by PriceWaterhouse Coopers is about to complete. The bank obtained ISO 9001:2000 from Moody International Certification Ltd. The rating from one more international organization we will receive in the second half-year. 

 

CE: What do you think of foreign banks presence in Azerbaijan? Is our banking sector able to compete with them?

Etibar Aliyev: I tell you frankly - we are more than ready to compete with them, moreover I do not consider them rivals. We will displace them from the market through our skill, work and experience. I do not believe they will be able to compete with us here. Examples of recent past show that these banks barely invest a cent in Azerbaijani economy; they think just to pump away as much money as possible. I agree they have much money but huge finances are not all, one should be able to manage them as well.

 

CE: Mr Aliyev, are you satisfied with bank's success? How would you like to see Texnikabank in 2007?

Etibar Aliyev: I achieved Texnikabank's securing a good place in Azerbaijani banking sector. Reliability, competent management, high-level service, timely payments are the very things to have created the bank's positive image. And my mission will only be complete when every person in Azerbaijan will know Texnikabank. As for financial indicators, our objective is to grow Texnikabank's capital by the end of the year to 60 million manat from today's 20 and assets to 500 million manat from today's 130.