BAKU, Azerbaijan, October 29. The Central Bank
of Azerbaijan (CBA) supports consolidation in the banking sector,
governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov
said, Trend's
correspondent reports from the event.


He made the remarks at a press conference on Thursday following
a meeting on the parameters of the interest rate corridor.


According to him, two consolidation processes have taken place
in the banking sector this year.


“As the Central Bank, we generally support consolidation. We
also expect consolidation to increase competition,” Kazimov
said.


The CBA governor noted that the Central Bank would support any
consolidation initiatives or plans in the banking sector next
year.


“Of course, we support consolidation provided that it ensures
the stability of the financial sector. However, we currently have
no other plans in this regard. If any such case arises next year,
we will inform you,” he added.


According to Kazimov, consolidation can also help improve the
efficiency of financial institutions.







“Merging two troubled banks to create a bigger problem is not
consolidation. We do not support this kind of consolidation. If two
or more banks merge to create a stronger financial institution, we
will certainly support that,” the CBA governor emphasized.


He said consolidation in the banking sector can take place
through both mergers and acquisitions.


“Generally, we support consolidation and are ready to encourage
banks to merge so they can become more competitive. The sector and
the country are small, and the size of our economy must also be
taken into account. There is no need for such a large number of
small players in this market,” Kazimov noted.


The CBA governor added that smaller banks face growing
difficulties in competing, particularly given the investment
required in information technology and digitalization.


“Considering the investment required in information technology
and digitalization, it is becoming increasingly difficult for
smaller banks to compete. An effective merger or acquisition could
therefore be an appropriate solution,” he said.