Best bank: Bank ABB
Prospects for the Azerbaijani banking sector continue to improve as bank balance sheets strengthen and tighter regulatory oversight is established. Nowhere is this more evident than at Bank ABB – International Bank of Azerbaijan – which has made good progress since the decisive resolution of its legacy risks in 2022.
The bank is 96% state owned and accounted for 26% of sector assets and 20% of sector loans in mid 2023. In May this year, chairman of the board of directors Abbas Ibrahimov announced plans for a public listing: the bank is one of several state enterprises targeted by the government to attract private investment. Its shares currently offer a dividend yield of 15.1%
Asset quality and profitability are more resilient than domestic peers, the number of which has halved during the regulatory clean-up of the banking sector over the past decade. The bank’s net assets grew by 8.5% over the review period, reaching Am12.75 billion ($7.5 billion), while profit before tax hit Am421.4 million, a 31% increase year on year. The lender’s return on tangible common equity was approximately 26%.
Credit penetration in Azerbaijan is among the lowest in the region, with a loan-to-GDP ratio of about 15%, according to Fitch. The bank has introduced digital loans to small and medium-sized enterprise banking customers via a tool on the bank’s internet platform, enabling SMEs to secure loans in a more efficient manner. In mid 2023, the non-performing loan ratio stood at a relatively modest 4.3% – to be watched carefully as loan growth accelerates.
The bank has boosted its mobile app with several new functionalities. These include an investment platform powered by real-time insights, an online insurance feature for in-app acquisition of insurance products, and a mobile deposit solution.
As a result of these changes, engagement on its app has grown, delivering increases in registered mobile users and active mobile users of 15% and 47% respectively.
Best bank for SMEs: Pasha Bank
Pasha Bank has expanded its services for business clients. It has revamped its payments offering and focused on business operations efficiency.
A digital business card has been introduced for individual business owners, who can use it remotely at point-of-sale terminals, ATMs and with Apple and Google Pay. The card is used in conjunction with the bank’s mobile service PASHA Biznes, which the bank also launched in 2023.
The PASHA Biznes mobile app was designed to make payment transactions faster and more secure.
The bank has also launched a new functionality to its existing pay-by-link service. Multilink can facilitate reoccurring and bulk payments, such as transferring funds from residents of housing and communal cooperatives to cashless accounts.
