International Bank of Azerbaijan (IBA), the largest and the only state-owned bank of the oil-rich country, plans to issue $350-$500 million in eurobonds this year, its chief financial officer said in an interview.

Rashad Hajiyev, who is also deputy chairman of the board, also ruled out privatisation for the bank in the coming 4 years.

"We are ready to get to the international bond market and we'd like to issue debut eurobonds this year," he told Reuters. "(It) will be in a range of $350-$500 million and a minimum maturity will be five years."

He said the funds would be used to increase its capital by 500 million manats ($460 million) in the next four years to about 900 million manats.

Hajiyev added the bank had chosen a foreign company to be a lead manager of the future issue, but did not specify its name.

The bank, 50.2 percent owned by Azerbaijan's Ministry of Finance, holds 35 percent of banking assets in the country.

Hajiyev said IBA did not consider privatisation plans in the coming 4-5 years.

"Our bank will be privatised one day, but it won't happen in the next 4-5 years," he said.

"Our state is rich enough and does not need to sell its bank now just to get a profit."

IBA's net profit rose by 10-15 percent in 2013 to about $70 million.

The International Monetary Fund (IMF) has advised the IBA to combine capitalisation plans with restructuring in line with internationally accepted practices.

Hajiyev said that the bank was considering forming an Islamic banking business and did not rule out raising funds for this purpose through an Islamic syndicated loans.

IBA raised $130 million through an Islamic syndicated loan in 2013.

"We're going to continue to work in this direction," Hajiyev said.

He added the bank had been working with national authorities on a draft Islamic banking law.

Islamic finance has developed slowly in the former Soviet state, where an estimated 93 percent of the 9 million people are Muslim. But IBA's Islamic banking business is now growing strongly, which is encouraging authorities to take action.

IBA now offers sharia-compliant products through an Islamic window, but legislation would pave the way for a stand-alone Islamic banking unit.

(uk.reuters.com)

ANN.Az