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First syndicated loan to a private Azeri bank
EBRD leads ground-breaking $5 million deal with Azerbaijan’s UniBank
The European Bank for Reconstruction and Development is leading the first
international syndicate to lend $5 million to a private bank in Azerbaijan, as
part of efforts to encourage the Caspian seaside nation to foster competition
in the banking sector and to further diversify the non-oil sector of its
economy.
The EBRD is directly lending UniBank, one of Azerbaijan’s largest private
sector banks, $1.5 million over three years. Anglo Romanian Bank and Bank
Austria Creditanstalt will provide $3.5 million, for one year, with a one-year
extension option. UniBank will use the proceeds of the loan to expand lending
to private corporate customers, including smaller businesses.
UniBank, formed from a merger in 2002, has been 20 per cent owned by the EBRD
since 2003 and has one of the most developed corporate governance practices in
the country. While Azerbaijan’s banking sector is still dominated by
state-owned banks, which control more than 60 per cent of banking assets,
competition in the sector is increasing.
UniBank has created a niche for itself through an operational focus on lending
to small and medium sized regional companies. With existing branches in Baku,
the port capital, and the economically important inland city of Gyanja, which
straddles trade routes across the Caucasus region – and with plans to open two
further regional branches this year -- it is well placed to expand these
operations.
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