Development
AccessBank Conference Call Roundup
On January 21st the Caspian Business Journal hosted an interactive conference call with AccessBank’s Managing Director, Andrew Pospielovsky and Brien Desilets of Claret Consulting. Mr. Desilets’ AccessBank Conference Call Presentation can be viewed by clicking the title, and his feature article with original analysis of AccessBank can be located here.
During the call Mr. Pospielovsky highlighted several of AccessBank’s accomplishments in 2009 and some of the areas that they will be focusing on in 2010.
Founded over seven years ago, AccessBank has grown into the premier banking institution for Azerbaijani clients. The bank saw 55% asset growth and over 40% growth in their portfolio (“while still maintaining quality” Mr. Pospielovsky adds) in 2009. While the economic downturn affected all sectors of the Azerbaijani economy, AccessBank saw a 200% increase in deposits as local Azerbaijani clients became all that more conservative.
Mr. Pospielovsky is optimistic for the future but does not see any return to the rapid growth of the past few years, it will take time. For now AccessBank is focused on continuing to improve risk management practices, branch network support in the regions and growing its already large client base.
In terms of areas and sectors that AccessBank is seeing growth in microfinance lending and success, Mr. Pospielovsky sees agriculture, services and small trade enterprises succeeding. Part of this has to do with a general increase incomes, particularly in Baku, in recent years. Light manufacturing, however, continues to suffer as the manat remains very strong in relation to its depreciating neighbors making imports cheaper.
Looking at the nuances of taking deposits in Azerbaijan, Mr. Pospielovsky highlighted some of the challenges of operating in this local environment. In Mr. Pospielovksy’s eyes foreign lending is still more stable then local deposits, as Azerbaijani law strongly protects the client from losing access to their deposits. As an example, if a deposit holder wanted to withdraw all of their funds in advance of the agreed upon term, AccessBank would have to return 25% of their account immediately, with a full re-payment within four days. With this extreme protection and ability to break deposit terms it can be easy for smaller banks to suffer from a bank run on deposits. However, Mr. Pospielovsky remains optimistic about the future of the Azerbaijani banking sector and in recent years the percentage of the banks operations being funded through deposits has increased, from just 11% over a year ago to over 23% today.
The Caspian Business Journal will host a follow-up conference call sometime later in 2010 to see how things are shaping up in the new year. Thank you to all of our participants and their questions, we will be announcing the next Consultant Conference Call in the coming weeks.
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