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14 I Companies & Markets bne June 2020
manats [$4.3bn] and protects the interests of 8.3 million people.”
As early as February, the central bank said it had identified “serious financial problems” at Atabank, citing a large number of high-risk loans. AtaBank merged with the Azeri Caspian Development Bank in April 2017. Its capital is 600mn manats ($353mn).
Azerbaijan has a relatively small banking sector, with 30 lenders in all. But the bailout three years ago of its largest bank, the state-run International Bank of Azerbaijan (IBA), cost the state budget billions of dollars. Last October, IBA said it was embarking on a three-year development strategy that would prepare the lender for its delayed privatisation. It also said it planned to set up its own investment company.
Top government officials have recently made upbeat statements, saying that the country would not be forced to devalue the manat, which it did twice in 2015 causing substantial hardship for ordinary Azerbaijanis with manat savings.
In another move to shore up the banking sector, President Ilham Aliyev has signed an order extending the term for which bank deposits are guaranteed by the government.
Black April for Russian car market as sales plunge by 72%
bne IntelliNews
Sales of passenger cars and light commercial vehicles (LCVs) in Russia are the latest victims of the coronavirus (COVID-19) crisis with sales crashing by 72% year-on- year in April, according to the report by the AEB Automobile Manufacturers Committee. In January-April overall the sales were down 19% y/y to 0.4mn vehicles.
The fall in sales are a result of the stop-shock caused by the lockdown that was imposed on Russia at the end of March. The halt will be frustrating for carmakers as the industry had a tough year but was expecting to see the market start to recover in 2020.
As reported by bne IntelliNews, car sales in Russia got
a bump in March on front-loaded demand, but sales are widely
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“I think this is not the end, the process of closing or merging banks will probably continue during the year,” economist Gubad Ibadoglu wrote on his Facebook page, as reported
by Eurasianet.
‘Systemic problems’
Ibadoglu added that the current banking crisis was rooted in more systemic problems in the sector, which is controlled by politically well-connected figures in the hydrocarbon-rich country.
“Unfortunately, in 28 years [of independence], a healthy and competitive banking market has not been formed in Azerbaijan, and banking management that meets modern corporate standards has not been established. The costs of all this will be borne primarily by bank customers, who again will be the most affected population. Account funds will not be returned to the owners in full,” Ibadoglu wrote in another post.
“It is not easy to make a forecast in the current uncertainty. Or if the devaluation of the manat takes place in a few months, then who will pay for the devaluation of manat deposits in banks that closed yesterday? How will these types of risks
be managed? The Central Bank must also answer these questions.”
expected to stall in April-May amid the coronavirus pandemic. The sales of new cars and light commercial vehicles (LCVs) in Russia in 2019 had already declined by 2.3% to 1.76mn.
"After exceptionally high March sales, in April 2020 dealer operations [were] forced to be stopped or extremely limited with the COVID-19-related lockdown situation," the chairman of AEB, Thomas Staertzel, commented, noting that the industry experienced the strongest monthly sales decrease
in AEB statistics history.
"Black April" 2020 strongly challenged dealer liquidity and
in mid-term even their sustainability, AEB warned, while not expecting "much better sales results in May." Russia's largest car maker AvtoVaz said its sales dropped three-fold month on