Caspian Energy (CE): Could you please tell about the history of activity of Ziraat Bank in Azerbaijan?
Avni Demirci, Chief Executive Officer and General Director of Ziraat Bank Azerbaijan OJSC: In Azerbaijan, Ziraat Bank started operating as a bank partner in 1995 and since then it has broadly contributing to the development of the banking sector of the country. Strategic geographical location, constantly expanding relations with Turkey, broad opportunities for investment-making into Azerbaijan, as well as new prospects of the economic growth promoted the opening of Ziraat Bank in Azerbaijan.
The Bank started operating on 30 December 2014 in accordance with the license #255 given by the Central Bank of the Azerbaijan Republic. After performing our first banking operating on 12 June 2015, we started receiving clients as early as July 2015. It took us two years to secure our IT infrastructure, create internet-banking, card systems, and develop a firm structure of human resources.
We purchased a headquarters building. The management of Ziraat Bank, Minister of Economy of Turkey Nihat Zaybekchi, officials of the banking sector of Azerbaijan, government representatives and public figures attended the opening ceremony of Ziraat Bank.
CE: What role does the Azerbaijani market play in the turnover of Ziraat Bank?
Avni Demirci: The Republic of Turkey finds Azerbaijan as a window towards the Caucasus both political and cultural terms and also sees Azerbaijan as a bridge between Turkey and other Turkic republics. As is known, Turkey and Azerbaijan are “one nation, two states”. Among the Turkic states, Azerbaijan is the closest one to Turkey in regard to culture, history, language and traditions. Turkey and Azerbaijan supported each other during hard period of the War for Independence, and proved their brotherhood. Salvation of the Azerbaijani capital, the city of Baku, in 1918 by the Caucasian Islamic army commanded by Nuru pasha is of big historical importance to Azerbaijan.
The following stage of development of relations between the two countries started after the restoration of the Azerbaijan Republic’s independence in 1991. Over 100 major agreements were signed between Azerbaijan and Turkey over the last 26 years, which contributed positively both into the development of mutual relations and regional cooperation.
As emphasized in the words of Mustafa Kemal Ataturk “Azerbaijan’s happiness and destiny is the happiness and destiny of Turkey”. Based on historical roots and proven itself in the most difficult periods, the Azerbaijan-Turkey brotherhood will keep strengthening, developing and securing regional tranquility.
CE: Could you please tell in details about the activity Ziraat Bank and about development of this sector in Azerbaijan?
Avni Demirci: Our bank presented a card system to its clients in 2017 and began offering top-quality internet-banking services under the motto “Don’t come to the Bank. Let the bank come to you”. High level of advanced risk management systems, risk management culture, as well as a high quality of assets distinguish Ziraat Bank’s clients in Azerbaijan from their competitors in this sector. Moreover, as a result of use of the local currency in external trade payments between Turkey and Azerbaijan, in 2017, tendering worth 27 mln TRL was conducted between the two countries. In this way, Ziraat Bank keeps serving as a bridge in external trade operations for all those countries which it cooperates with.
Being very perfectly aware of needs and expectations of its customers, our bank made its products and services fast and efficient owing to its subdivisions making it possible to do banking operations in a right manner.
Focused on ethical values, offering efficient and profitable services in accordance with international standards, attaching top priority to satisfaction of its customers, providing quality and more innovative services to its clients and human resources, since the first day of its operation Ziraat Bank OJSC has been aspiring to be more than a bank for its clients.
Established to finance trade-economic cooperation developing between Azerbaijan and Turkey, especially in the field of agriculture and trade, except for the oil sector, within a short period of time our bank managed to increase its assets, credit portfolio and deposit portfolio up to 210 mln AZN, 84 mln AZN and up to 110mln AZN. The net profit totaled 15mln AZN over the period of three years. The investment potential reached 65 mln AZN. Over this period we have opened two branches, developed skilled human resources and an IT-crew, completed the construction of our headquarters, and increased the number of our customers up to more than 15,000 people through permanent expansion of the area of our operations. We will also service our clients in 5 branches and expand our service network with 3 new branches which we plan to open in large cities of Azerbaijan in 2018.
As to the banking sector in Azerbaijan, there are a total of 31 banking and 123 non-banking financial institutions operating here, of which only three are 100% foreign investment banks. Licenses of 13 banks were cancelled over the last two years because of the economic crisis. At that period when the banking market reduced in size, all foreign investments took the waiting position. The whole quantity of employees of the entire banking sector makes 16,737 people. As of June 2018, a total volume of the banking sector’s credits, deposits, funds and total assets made 10,069 mln manats, 17,251mln manats, 3.9 bln manats and 30 bln manats respectively. A minimum size of the capital required to create a bank in Azerbaijan makes 50 mln AZN.
CE: Exactly which banking services do you offer for service of the Turkish investments made or planned to be made into Azerbaijan?
Avni Demirci: Our bank continues staying one of the leading banks funding large projects in the field of agriculture, small and medium businesses, big corporations, infrastructure and energy, which are becoming more significant in Azerbaijan. Ziraat Bank Azerbaijan together with its rich diversity of products and services, synergetic structuring, market knowledge and experience, skilled human resources and strong structure of shareholders, continues staying an important bank on the market, ensuring non-stop support and motivation required for all sectors.
In addition to the Azerbaijani banks, our bank’s customer portfolio also includes Turkish companies which have invested and are operating here. For our clients investing into Azerbaijan, using “Made in Turkey” product brand and importing goods from Turkey, in addition to our own resources, we also apply the resources of the EXIM bank.
Besides, the Baku-Tbilisi-Kars railway project launched in 2017, and the TANAP (Trans-Anatolian gas pipeline) project which is scheduled to be completed in 2018, will be very promising in terms of commercial relations in this region. Together with our major bank and other banks operating in this region, Ziraat Bank Azerbaijan plans to be more active in funding commercial relations developing in the region.
Established in partnership with T.R. Ziraat Bank A.C. which was founded in 1863, operates in 19 countries of the world, including Turkey, and possesses a 154-year history, Ziraat Bank Azerbaijan OJSC is a part of a big family Ziraat Finance Group. Ziraat Bank Azerbaijan OJSC which is offering services to corporate firms, large and medium-size businesses, as well as individual clients in Azerbaijan, and is doing it together with T.R. Ziraat Bank A.C. possessing 154-year work experience, skilled personnel, IT infrastructure and international service network, continues developing special projects in order to develop partnership with customers. These projects will meet the demands of customers. Besides, the Bank keeps providing special products and services aimed at appreciating each customer, and will continue developing in this direction.
Thank you for the interview
