TEXNIKABANK - MORTGAGE CREDIT MARKET LEADER
Caspian Energy (CE): Mr. Guluzadeh, could you share the history of Texnikabank? How would you evaluate the bank's current state and place in Azerbaijan's financial market?
Khagani Guluzadeh, First Deputy Chairman of Board, Texnikabank OJSC: Texnikabank OJSC with its successful and rapid progress mechanism has commenced its operations back in 1993. The advanced experience and up-to-date technology in a short time resulted in the bank's huge success in creation of favorable conditions for national financial market and banking system, as well as in attraction of investments and provision of high-quality services to clients. According to the recent ranking of top hundred banks in the CIS (with assets exceeding $100mln as of January 1, 2007), Texnikabank secured 55th place by "assets growth rate".
Texnikabank operates the most branched network among private-owned banks of Azerbaijan (30 branch offices and 3 subdivisions), which mostly simplifies the work for the population. The regional presence expansion is one of main activities of the bank. We were the first bank in Azerbaijan to go to regions. This was necessitated by both care of enterprise clients and presence in regions for creation of relevant institutions providing high-quality banking services. The work on branch network expansion will go on this year. Moreover, we have already started thinking about functioning outside Azerbaijan. And the first step in this direction will be the subsidiary in Moscow to be opened up by the end of 2007.
CE: What are bank's basic financial indicators this year?
Khagani Guluzadeh: The bank's assets are growing up steadily, they amounted to $161 million as of April 1, up 6% over the quarter. The credit portfolio grew by 24% and amounted to $108.6 million. We managed to increase population's deposits significantly. This indicator displayed a 13% growth to $42.4 million. Attracted interbank credits amounted to $19.8 million as of April 1, increasing more than a half over the quarter. By the results of this quarter, the bank's net profit amounted to $2.3 million and capital is $28 million. For comparison I will say the bank's net profit in the early 2007 amounted to $5 million and capital was $23.5 million.
CE: What is the bank's international policy? Which international financial institutions are among Texnikabank's regular partners?
Khagani Guluzadeh: Having correspondent relations with foremost world banks, as well as the banks of Kazakhstan, Russia and Georgia, Texnikabank OJSC is also actively cooperating with international financial institutions like the Black Sea Trade and Development Bank, the European Bank of Reconstruction and Development, World Bank, implementing various projects with the latter.
We took an active part at international conferences and workshops. For example, on June 28-29, 2007 Baku will be hosting IV CIS & Baltic States Bond Congress where Texnikabank is a general sponsor. This is the fourth congress in a row, previous ones were held in Riga, Moscow and Kiev. Around 300 companies will be presented at the conference, including banks, investment foundations, and financial associations from Russia, Kazakhstan, Ukraine, Georgia, Baltic countries and UK. Etibar Aliyev, Chairman of Supervisory Board with Texnikabank, will be presenting the bank's development strategy at the conference.
CE: How successful is the bank in the equities market?
Khagani Guluzadeh: We have been working in equities market for quite a long time. In terms of figures, I will note that total amount of market operations during 1Q was 85.345 million manat. Operations on short-term state bonds amounted to 4.477 million manat and enterprise bonds to 2 million manat. Texnikabank performed 19% of all operations in the national equities market. By the results of 1Q Texnikabank's operations in equities market grew almost 6 times. Amount of bank's IPOed bonds is $3 million and 2 million manat. By the end of the year we are going to IPO bonds in amount of $3 million. Profitability on bank's currency bonds is 15% annual interest, manat bonds 14%, and circulation 5 years (novelty in Azerbaijani market). We have already deployed 2 million manat and $1 million for this period of time. I would mention foreign institutions displaying big interest in our bonds which evidences a stable economic situation in the country. This year we also issued shares in amount of 15 million manat, 4.136 million of which have been purchased by shareholders. By the end of the year we shall complete this process, which in turn will raise the charter capital to 26.912 million manat.
Our subsidiary, Texnika Capital Management LLC, acts as an underwriter to the placement of the bank's bonds. It owns 11.1% in the Baku Stock Exchange and is the most active participant of this market. The image the company holds among broker companies allows it to work with famous European and American companies.
CE: What achievements does your subsidiary, Texnikalizing LTD, enjoy in the market?
Khagani Guluzadeh: Texinkalizing LTD offers various leasing products on profitable conditions. This company, with the portfolio of $3 million, started its activity in 2005. Its primary activity is the financial leasing. 70% of the company's operations account for the construction and transport sectors. By the end of the year the company intends to double its portfolio. In addition, by the end of the year we plan to extend the period of leasing contracts to 36 months instead of current 24. The company cooperates with international financial institutions, attracts funds from abroad, and gets technical assistance within the Leasing Support Programme implemented by IFC. Texnikalizing's clients are the local largest construction companies and the representative offices of foreign financial institutions.
CE: What are the programmes Texnikabank participates that are directed at improving social conditions for population?
Khagani Guluzadeh: We keep on promoting programmes aimed to improve social conditions of the population. In this respect the bank is out of competition in the mortgage lending market. To date the amount of mortgage credits extended by the bank makes approximately 8.5 million manats, whereas the number of provided credits is 262. We do our best to make mortgage lending acceptable for people and our interest rates (general - 6%, social - 4%) prove that. Texnikabank has no limitations on extending mortgage lending. We are ready to render assistance and offer our services to each citizen of our country who has decided to take all advantages of the expedient and precise policy followed by President Ilham Aliyev.
In its future strategy the bank assigns a high importance to extension of the mortgage lending.
In conclusion I would like to say that in future Texnikabank will keep on following its main principle, which is to become closer to its customers, to enhance prosperity of those who trusts their capitals to us. Texnikabank, with its reliability and accuracy, will adhere to its principles and follow the strategy aimed at saving the gained trust of people, rendering high-quality services and, mostly important, making its own contribution to the development of the banking sector of the Republic of Azerbaijan.