PASHA Bank has disclosed its financial results for the first 6 months of 2014 at the press-conference at the Four Seasons hotel in Baku. The speakers at the conference were Taleh Kazimov, the Member of Executive Board and Chief Investment Officer, Bahruz Naghiyev, the Head of Treasury Department, and Sona Abbasova, The Head of Corporate Communications Department.
Financial positions
According to the speeches delivered by speakers, PASHA Bank is fully on track to deliver on its 2012-2014 strategy, which aims to position the Bank as one top of the top corporate companies and to provide more services to SMEs and corporate clients with international exposure. The Bank has maintained its position as one of the largest commercial banks in terms of total equity, which reached AZN 342,320 thousands (USD 436,466 thousands) in the first half of 2014.
The Bank’s strategic decision to diversify its assets portfolio has enabled it to maintain a strong service offering for its clients.
As at 30 June 2014, PASHA Bank’s total assets amounted to AZN 998,004 thousands (USD 1,272,477 thousands), an increase of 42% compared to 2013 (AZN 704,055 thousands / USD 897,686 thousands), mainly due to increased activity on customers’ accounts.
Along with it, the Bank generated strong internal capital growth, producing an estimated tier one capital adequacy ratio under the Central Bank of the Republic of Azerbaijan’s capital requirements of 45% (compared to 36% for FY 2013), which means better utilisation of the Bank’s share capital. During 2014, the Bank paid dividends of AZN 14,992 thousands (USD 19,115 thousands) to its shareholders from the 2013 net profit.
Credit portfolio
Over the past period the Bank has generated strong loan growth, increasing its gross portfolio by 10% to AZN 384,522 thousands (USD 490,274 thousands) compared to AZN 350,956 thousands (USD 447,363 thousands) in FY 2013. The effective provision rate on the portfolio was 3.3% (year end 2013 - 6.2%).
Chief Investment Officer Taleh Kazimov spoke about plans to simplify lending terms within the framework of the own microfinancing program launched in June 2013.
8 out of 10 mln AZN allocated for these purposes have already been used. It is also planned to double the trade financing portfolio by the end of the year: the number and the sum of trade operations shall be increased up to 200 and 80 mln AZN within a year. According to him, the Bank performed 100 trade financing operations worth 35 mln AZN in the first half of the year.
In general, the bank is planning to increase assets and the credit portfolio up to 1.2 bln AZN and 420 mln AZN by the end of 2014 respectively.
Customer base
Remaining loyal to its customers and maintaining stability despite the drop of exchange rate or prices occurring on the market has helped the Bank to be in a favorable condition at the cost of relations strengthened over the few years. As a result, the Bank has expanded its customer base with total customer accounts AZN 449,188 thousands (USD 572,725 thousands). Of these customer accounts, 63% were placed in demand accounts, and 37% into term accounts, compared to 61% and 39% respectively in financial year ended 2013.
The Bank continues expanding branch network in the regions of the country. The first branches (business centers in Ganja and Zagatala) of the Bank started operating in regions in 2014. The Bank plans to open business centers in Guba, Sumgayit and Lankaran in 2015.
Profitability
The Bank’s net profit declined in the first half of 2014. “It is mainly the conservative and weighted policy, implemented by the bank, caused the decrease of revenues, but not the decrease of profitability”, Bahruz Naghiyev, the Head of Treasury Department said.
Pretax profit amounted to AZN 3,938 thousands (USD 5,021 thousands). Total operating income for the first half of 2014 was AZN 27,414 thousands (USD 34,953 thousands), a 6% increase compared to the corresponding period of 2013 (AZN 25,950 thousands / USD 33,078 thousands).
The Bank’s interest income increased by 9% and reached AZN 30,099 thousands (USD 38,377 thousands), whereas non-interest income amounted to AZN 4,191 thousands (USD 5,344 thousands).
Social aspect
Bank is actively engaged in social projects as well. Sona Abbasova, The Head of Corporate Communications Department, said PASHA Bank’s corporate social responsibility is contributing to the economic development of the country by investing into the human capital and financial education. Together with its partners, the Bank is currently arranging training courses for journalists, writing about business in Mass Media, implementing a Program “I am a PASHA Bank scholarship holder”, projects supporting development of youth entrepreneurship, etc. The policy aimed at investing into the financial education of the youth is to be continued in coming years.
