TBY talks to Oruj Heydarov, President of the AB Standard Group of Companies, on operating a diverse holding company in Azerbaijan.
TBY What factors have contributed to Azerbaijan’s level of economic diversification?
ORUJ HEYDAROV The favorable climate created for the private sector by governmental economic policy has certainly contributed to this development. I would like to mention also the role of the efficient integration of the group’s financial and intellectual resources in allowing our companies to reach leading positions in their fields.
In addition, investment initiatives implemented in Azerbaijan in the early 1990s enabled the attraction of billions of dollars of foreign investment into the country. These assets, the major part of which had been invested in the oil and gas sphere, resulted in the development of other sectors in the economy, thus creating favorable conditions for the development of our diverse business group.
What makes Azerbaijan attractive to foreign investors?
Foreign investments go to countries where predictability and stability are present, and where investors are on firm ground. Azerbaijan’s government has managed to create precisely such conditions for investors. Today, Azerbaijan has the right climate of protection for foreign investments, as well as a generally dynamic business environment.
What current projects are you implementing in terms of partnerships or production?
Our group’s Standard Capital brokerage company, jointly with the famous Danish company Saxo Bank, has started to provide services that enable clients to trade on 40 world exchange markets at once, which is a first for Azerbaijan. These transactions are carried out on the Maxis Trader high-technology platform created by our foreign partner. Bank Standard has been in continuous cooperation with international financial institutions within the framework of joint projects implemented in Azerbaijan. In particular, the bank finances the trading transactions of local private sector companies under the auspices of the Black Sea Trade and Development Bank within the framework of the program for the support of companies involved in regional trade. We provide domestic companies with such effective financing instruments as bills of credit with delay of payment. The bank’s cooperation with the Islamic Corporation for Development, as well as with other Islamic financial institutions, is also being developed successfully. The further extension of this cooperation is included in the priority plans of Bank Standard. We have also adopted new types of business, one of which is leasing services, and the bank’s shareholders have taken the decision to detach the leasing services sphere into a separate entity.
How did the global economic crisis affect the AB Standard group of companies?
Thanks to the government’s solid economic policy, the global financial crisis did not affect the Azerbaijani economy as significantly as it did other economies. A partial impact of the crisis was noticed in the country’s banking sector, the after effects of which had an impact on the efficiency of many banks. A long stream of negative information and pessimism in the media disturbed the confidence of clients and local banks, constituting the main threat over that period. The bank’s administration faced the task of building relations with clients properly, explaining to them why the global financial crisis had a minimal impact on the Azerbaijani banking sector, and why our depositors should not need worry about their savings’ destiny. I think that we have resolved this task very well. Over that period we witnessed a 25% increase in our deposit portfolio. Moreover, the bank managed to increase its aggregate capital and kept its total asset volumes at the same level. These factors considered, we have kept our position as a leading player in the private banking sector.
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