Bank Technique, an Azerbaijani bank, is a perfect example of how an image of a bank and its ambitions can change so drastically in a very short period. Thus, Global Banking & Finance Review acknowledged Bank Technique as the Fastest Growing Bank in Azerbaijan in 2013. International Finance Magazine awarded the bank in two categories – “Best Internet Bank Azerbaijan 2013” and “Most Innovative Bank Azerbaijan 2013”. In October 2013, the bank received an international IAIR Award in the category “Excellence in Banking Services”.
The Chairman of the Supervisory Board of Bank Technique, Rovshan Ismayilov, speaks of the measures, taken to become the most innovative bank in the country:
- First of all, I would like to say that in the middle of 2012 the bank underwent pivotal staff and structural changes. The bank has been functioning under a new management for over a year now. As a first step, from April through June 2012, we solved the tactic issues of stabilizing the financial-economic activities of the bank. These included ensuring of necessary liquidity level, systematic adjustment of cash flow, loan restructuring, individual regulation of business processes, etc.
As a part of the last stage, we started developing and executing of mostly strategic tasks, targeted at institutional development of the bank. During the next six months, namely until the end of 2012, we carried out large scale projects at the bank, such as elaboration of a new development strategy, rebranding of the bank, migration of the card business onto a more advanced processing, complete migration of our accounting basis onto a more developed computerized banking system, development and introduction of internet and mobile banking. At the same time, we have also established an efficient system of corporate management, motivation and compensation package and many other things.
As a result of the abovementioned processes, the financial indicators of the bank have improved significantly. Liquidity was reinstated and the amount of liquid assets was increased manifold and their share in total assets rose from 3 to 20 percent. The loan portfolio and overdue loans decreased respectively by 28 and 33 percent. In order to achieve an adequate evaluation of bank’s loan portfolio, in the course of 3 months we created additionally over 70 million manats of reserves, wrote off over 20 million manats of virtually accrued, however unpaid interest. We registered over 400 million manats of warranty liabilities that were not taken into account previously, eliminated the foreign exchange exposure of €19 million, which was inconsistent with the financial situation and paid over 70 million manats of debts to banks and investors.
At the same time, while evaluating and restructuring the deposit portfolio, we managed to cut down the resource prime cost by vast 35%, which upped the efficiency of our operations, maintaining the growth rate of retail deposits at 13%. By the way, this number reached 31% according to the results of the second half of the year. Moreover, the traditionally unprofitable card business of the bank became profitable already by the end of 2012 compared to 1.2 million manats of losses of 2011. As a result of all these measures the yearly income grew significantly. Shortly speaking, the bank develops fundamentally. In addition, we see this fundamentality in the quality that in turn generates quantity. According to statistics, the factual everyday interest income in 2011, which was 26.3 thousand manats, has already grown by 40% and reached 37 thousand manats. It means that with a loan portfolio of 314 million manats the bank really started earning more income by 40% compared to average portfolio of 400 million manats in 2011. Additionally we have to note that in 2011 the bank was unprofitable with a real loss of 0.7 million manats and the amount of the cumulative losses according to results of 2011 was over 40 million manats, which is also confirmed by the audit conclusion by KPMG ltd in 2011. Moreover, the level of the expected yearly income is estimated at 4 million manats at the moment and the factual capital assets of the bank increased more than twice, exceeding 50 million manats. Regarding the resource base, I would like to note one more time that throughout the year, we returned over 70 million manats of costly resources and it was done at the same time with increasing liquidity. What it means is that we said no to the practice of attracting unnecessarily expensive resources, despite the decrease in the quantity index. We also discarded the policy of aggressive credit facility “to the first comer” literally, which leads to deterioration of financial situation of the bank. This creates a full dependence on the quality of loans and interest income with inertial risk increase. Having chosen a more balanced scenario for attracting and distributing resources, we managed to save over 10 million manats of yearly interest income. In the end, the entire statistics speaks only of the positive dynamics of financial indicators.
In this regard, I would like to speak of strategic development. The main directions of strategic planning are innovative-technological development of the bank and establishment of full-range remote banking. The demand in such banking increases by every year and the existing classic banking does not correspond to these demands. On the other hand, this is connected to the rather favorable macroeconomic environment in the country. At the same time, the shift to innovative-technological banking fully corresponds to the course of monetary management policy on stimulating cashless settlements, which are especially urgent.
At the moment, we have managed to complete the first stage: we have launched a wide range of technological and remote services, exceeding the services offered by other local banks. By the end of the year, we are planning to finalize the introduction of the most advanced module for internet banking, which will allow us starting a more quality level of remote banking. With this scenario, almost all banking services will be shifted to remote-technological platform. This in turn will increase the speed of money circulation by multiple times. We have quite ambitious plans and only time will show how fast and efficiently we can carry them out.