Download Income Growth (USD millions)

IBA: Stable Growth in Challenging
Environment
Emil Mustafayev
First Deputy Chairman
20.01.2009, Vienna
1
Azerbaijan – safe harbor for investment

Working economy and stable financial system

Sufficient national reserves

Immunity of a small economy

Fitch (BB+) and Moody’s (Ba1) confirmed ratings at
previous levels; recently received a new one from S&P
(BB+)

Low level of foreign indebtness and their timely servicing

Healthy slow down of rapid economic growth and
reduction in inflation

Development of entrepreneurial culture
2
Measures Taken By Azerbaijan State

Reduce key refinancing rate

Increase liquidity by reducing mandatory reserve
requirements

National Bank provides loans to commercial banks

Intention of government to allocate funds from State Oil
Fund to commercial banks

Continue investments into infrastructural projects

Support real economy, financial sector SME, agriculture,
construction
3
IBA – Core of the Azeri Banking System

Stable performance and growing customer base

Largest creditor of the national economy

Recently confirmed ratings from Fitch at BB+ and
Moody’s at Baa2

Dominate position in the banking system

Well diversified asset base

Strong shareholder support

Trust of customers and investors

Wide branch network and international presence
4
IBA’s Asset Structure and Quality
Assets – Currency Structure
Loan Portfolio Diversification
Agriculture
6,0%
Transport &
communic.
10,0%
Oil & energy
27,0%
Foreign
Currency
75%
Trade and
Services
26,0%
Manufacturing
10,0%
Construction
Iindividuals
10,0%
11,0%
Non-Performing
Loans (NPL)
10
9
AZN
25%
Assets Growth in August-December 2008
4 600
8
7
6
7
4 400
7
4 473
4 300
4 150
2003 2004 2005 2006 2007 2008 2009
(forecast)
Aug
Sep
Oct
Nov
Dec
5
5
IBA’s Assets Dynamics
Strong Loan Portfolio and Assets Growth (in USD millions)
Total assets
Loan portfolio
5 000
4 600
3 250
3 208
2 120
1 258
882
440
510
219
2002
203
2003
2 408
2 800
1 192
739
415
2004
2005
2006
2007
2008
2009
(Forecast)
6
6
IBA’s Liabilities – Funding Mix
Equity
8%
Subordinated
Debt
3%
Other
3%
Due to fin.
instit.
9%
Corporates
41%
Other
borrowed
funds
28%
Retail
14%



Repayment of foreign totaling almost
600 mln. USD
Freed up 225 mln. USD as a result of
reduction of mandatory reserve by
NBA
Consistently growing deposit base
even during August – December
7
IBA’s Liabilities Dynamics
Customer Accounts (USD millions)
Retail
Corporates
1 728
1 860
2 050
1 231
589
313
76
309
110
2002
2003
167
2004
810
179
2005
266
2006
461
2007
634
2008
780
2009
(Forecast)
8
IBA’s Shareholders Equity Dynamics
Total Equity and Share Capital (USD millions)
Total Equity
469
Share Capital
382
287
236
162
54
91
27 7
36
20
27
2002
2003 2004
2005
10
250
118
68
2006 2007
2008
2009
(forecast)
*
9
IBA’s Capital Adequacy and Ownership Structure
Shareholders structure
Last emissions
Individuals
31,1%
Ministry of
Finance
50,2%
IBA's
Employees
5,7%
Tier 1
Legal
Entities
13,0%

IBA’s main shareholder is Azerbaijan
Republic Ministry of Finance (50.2%)

In order to increase its capitalization,
IBA has undertaken 4 large emissions
in the last 6 years
Total CAR
8,0%
12,8%
6,9%
5,2%
5,1%
2006
2007
9,4%
2008
2009
(Forecast)
2006
14,0%
10,4%
2007
2008
2009
(Forecast)
10
IBA’s Financial Performance
ROA (Return on Assets)
2,5%
Income Growth (USD millions)
2,5%
2,8%
Interest income
330
286
2,0%
1,8%
219
85 64
2005
Non-interest income
2006
2007
2008
2009
(Forecast)
ROE (Return on Equity)
34,0%
30,0%
2005
146
124 105
2006
2007
150
120
2008
2009
(Forecast)
Operating Income Growth (USD millions)
32,0%
295
33,0%
257
24,4%
215
137
77
2005
2006
2007
2008
2009
(Forecast)
*
2005
2006
2007
2008
2009
(Forecast)
11
International diversification


Subsidiaries abroad:

IBA – Moscow

IBA- Georgia

IBA – Qatar (planned)
Representative offices abroad:

Frankfurt

London

Luxembourg

Dubai

New-York
12