International Bank of Azerbaijan, a state-owned institution, has pipped the National Bank of Uzbekistan to win the best bank award because it is more independent from government and enjoys a better reputation among consumers. Indeed, it has played an important part in the stabilization of Azerbaijan's economy.
The IMF recently acknowledged this, and welcomed the government's renewed steps to privatize the bank. As it said: "A fully privatized competitive banking system is a critical component of the banking effort. This will not only encourage domestic and private investment, but will also enable low-interest financing of small and medium business enterprises as competition in the banking system develops."
But looking back on last year's award, which was also won by International Bank, we read that the privatization is still "pending". When, one wonders, will the privatization ever occur? The lack of it is not just slowing the progress of the economy. It is perhaps even harming the bank itself. According to the latest figures from 2002, profits were down almost across the board on 2001. Positive signs could be found, however, in lower staff costs and lower provisions.