Finance and Consulting
Following Azerbaijan’s declaration of independence in 1991, it established the National Bank of Azerbaijan, its central bank. An independent institution with classic central bank functions, it reports directly to Parliament and the President.
Close ties with the IMF and World Bank
Elman Rustamov, Chairman of the Board of the National Bank
Chairman of the Board Elman Rustamov has led the National Bank of Azerbaijan for the last decade. “In order to achieve our goals, we have reorganized to become a very modern bank with technical capability and personnel know-how up to world standards,” he says. “Since 1995 we have worked closely with the World Bank and the IMF, which are providing assistance with these two aspects of our modernization.”
Rustamov points out that of all the CIS nations, Azerbaijan was the first to legislate with a banking law. Among its other achievements, the bank has developed a strong payment system, and reduced inflation from 1,800 percent in 1995 to about two percent over the last eight years.
Rustamov emphasizes that it is critical for Azerbaijan to diversify its economy, and use the money generated from the oil sector wisely. “It is also very important for Azerbaijan to attract foreign direct investment,” he comments. “The National Bank has provided macroeconomic stability, so foreign investors can come here without concerns about the banking and financial system.”
Azerbaijan’s ongoing privatization program and transition to a free market economy has also created a thriving consultancy sector. Working with a knowledgeable consultant in an emerging market like Azerbaijan can often determine the difference between success and failure.
The International Bank of Azerbaijan
“IBA has played an active part in Azerbaijan’s economic transition.”
Jahangir Hajiyev, Chairman of the Board
The International Bank of Azerbaijan (IBA), founded in 1991, has grown rapidly to become the largest bank in Azerbaijan and the entire Caucasus region. IBA focuses on applying the most rigorous international standards and has successfully positioned itself as a dynamic universal bank well placed to partner international investors. IBA occupies a prominent place among the best financial and credit institutions of Eurasia and has won many important international awards in the banking sphere over the last three years. The successful activity of the bank’s management has resulted in the following awards: “Best Bank”, an award of the “Euromoney” Magazine – “Sacred Book” by the Financial World, “Bank of the Year” by “The Banker”, “Best Emerging Market Bank” by “Global Finance” a magazine published in the United States, “Golden Medallion” established by the Geneva High Business Institute and Management and Sweden Business Club. The bank’s overall rating has been established by Fitch IBCA at B+ positive.
Jahangir Hajiyev, Chairman of the Board, explains, “IBA’s high international banking ratings enable the development of long-term relations with major international financial institutions. In addition, IBA has played an active part in Azerbaijan’s economic transition, supporting market reforms and economic growth. We have also expanded our activities abroad. We have a subsidiary bank in Moscow (“IBA-Moscow”) that was founded in 2002, and we opened our Saint-Petersburg operating branch in May 2003. IBA is in a process of transition into a large corporation. The IBA is a co-founder of Baku Interbank Currency Exchange Market, Baku Stock Exchange, the processing Company “Azericard” (the only in Southern Caucasus), and the leasing Company “Azerileasing”. The IBA also owns the International Insurance Company. The authorized capital stock of this company (IIC) accounts for 43 percent of the total volume of authorized stock capital of all insurance companies in Azerbaijan, and it makes it the largest in the country. The official opening ceremony of the IBA London Representative Office took place in Bank of England in December 2002. Opening our representative office in Great Britain was an important step in integrating of IBA into European markets.”
IBA increased its net assets by 9 percent last year to reach around USD 537 million, while its first-tier capital grew by 18 percent and annual profits grew by an impressive 91 percent in the same period. The bank’s return on capital grew by 20.2 percent last year as well.
The bank offers a range of world-class services to individual and corporate customers, including over 140 banking products and financial schemes. IBA guarantees exceptional customer service, transparent operations and prompt decision-making. The majority of the bank’s customers are corporate clients, primarily in the energy, transport and construction sectors. The retail market is one of IBA’s priorities; the bank offers VISA, Swift and American Express services and is also active in pension services.
Committed to promoting Azerbaijan’s long-term prosperity, IBA has created many jobs for local workers and has proved instrumental in supporting the government’s goal of diversifying the economy. As for the future, Hajiyev says, “IBA will further reinforce its reputation within the country and the region.”
Ernst & Young
“We have earned a reputation as a trusted business advisor.”
Ernst & Young was one of the first international professional services firms in Azerbaijan, opening its Baku office in 1994. It has acquired a prestigious client list of local and international businesses throughout the Caspian Region. The team of 26 in Baku has diverse specialties including oil and gas, telecommunications, manufacturing, utilities and the public sector.
Ernst & Young in Baku is part of a network of 12 CIS offices, located in Moscow, St. Petersburg, Novosibirsk, Yuzhno-Sakhalinsk, Kiev, Minsk, Tbilisi, Baku, Almaty, Atyrau, Astana and Tashkent. Collectively the Ernst & Young CIS practice has 1,460 specialists in seven countries.
In Baku, Ernst & Young provides a full range of premier services: audit and business advisory, tax, corporate finance, and professional education seminars. The assurance and advisory business services (AABS) team is expert at Azeri, international and US accounting standards. This team provides clients with accounting, advisory services, audit, internal controls review, financial analysis and accounting due diligence.
In tax services, Ernst & Young has a formidable reputation in Azerbaijan. It can advise on everything from new investment planning and start-ups to taxation issues and labor law. The corporate finance services practice utilizes resources in the CIS and global offices, advising on raising finance, mergers and acquisitions, strategic finance, treasury management, due diligence, corporate restructuring, and financial modeling. Finally the Professional Education Center offers courses on accounting, finance and business management. It has trained more than 12,500 people in the CIS since 1993.
Central Asia Business Consultants
“Azerbaijan offers great rewards and potential.”
Adik Babayev, Managing Partner
Central Asia Business Consultants – known as CABC – is a consulting company formed in 1997 by Adik Babayev and Richard Ward. Currently the company is active in accounting services, tax consulting, audit, legal and customs services. CABC is primarily operating in Azerbaijan, but also has offices in Kazakhstan, the United States, the UK and Turkmenistan. It employs 30 highly qualified individuals in Azerbaijan and approximately 10 in its other offices.
CABC’s client base comes from a diverse range of sectors, from gold mining to printing and freight forwarding. Major clients include KLM, Tidewater Marine International, Group 4 Securitas, Schlumberger Logelco, AIG, Procter & Gamble, Technip Overseas and Coca-Cola.
Managing Partner Babayev explains that clients are attracted to CABC’s fast and cost-effective tax, legal, accounting and audit services. Combined with the firm’s extensive knowledge of statutory requirements and English language proficiency, this makes CABC the partner of choice for companies from all five continents. CABC also shares clients with some of the other main consulting companies in Azerbaijan, especially for local tax, legal, and accounting services.
Until 2003, CABC was acting as the representative office of Deloitte & Touche in Azerbaijan. Now that Deloitte & Touche has established its own office in Baku, CABC continues its close cooperation with the company primarily in audit in accordance with the Azerbaijani and International auditing standards, providing extensive knowledge of the local tax and accounting system.
Babayev is working to develop CABC still further. CABC is investing heavily in training its personnel to the latest international accounting standards, and would like to continue expanding the company’s client portfolio.
One of the new investments of the company was formation of a new division – CABC UK, Ltd which provides its clients with the personnel, payroll, tax administration and HR consultancy services.
For incoming investors, working with a local specialist like CABC can determine the difference between success and failure. “I would advise newcomers to the market in Azerbaijan to be prepared for challenges and difficulties,” says Babayev. “Yet Azerbaijan also offers great rewards and potential.”
