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Azerbaijan 2016 | FINANCE | INTERVIEW

TBY talks to Etibar Babashli, Chairman of the Board of AtaBank, on supporting entrepreneurs, working for security, and targets for 2016.

Etibar Babashli
BIOGRAPHY
Etibar Babashli was born in 1976 and graduated from Ankara University’s Faculty of Political Science. He went on to receive a master’s degree in business management and administration from Azerbaijan State Economic University. He has been the Chairman of the Board at AtaBank since 2014.

AtaBank gave preferential loans to entrepreneurs to the amount of AZN26 million in 2015. As a member of the National Entrepreneurship Support Fund, how does the Bank use concessional lending to help develop Azerbaijani businesses?

The development of SMEs is one of the main targets of the socio-economic development of the country. AtaBank, being one of the leading commercial banks in this area, has taken part in supporting local entrepreneurs already for many years. AtaBank was among the first commercial and financial organizations to take part in periodic financial fairs dedicated to the support of SMEs. AtaBank carefully selected interesting projects and financed them via the National Entrepreneurship Support Fund. The Bank has created the proper corporate structure and appropriate committees to evaluate the businesses that apply for lending. All SMEs, including private businessmen, submit necessary documentation including the proper business plan and forecasted profit and loss information. During the lending process, AtaBank's specialists, who are highly qualified in appropriate areas of the industry, can also offer advice to the businessmen to help them lead their firms on the correct path and stabilize their income over the long term. We plan to expand our activity in this direction over the upcoming years, thus creating a more developed platform for SMEs in Azerbaijan.

As the first bank to issue the Visa Electron Vertical cards in the CIS region, what advantages do these cards offer to your customers and what are the different types of vertical cards are available at AtaBank?

AtaBank prepared this idea a long time ago. This product was also the newest for Visa payment systems in CIS countries, so we had to pass some necessary technical issues before launching the project. Confirming our image as an innovator, AtaBank has commenced the issuing of vertical cards for the first time among CIS countries. Visa granted AtaBank with the appropriate certificate for the issuance of these cards, making the product special and remarkable. The Visa Electron Vertical is a card with an absolutely vertical design on the front side. The name and surname of the cardholder as well as the card number (PAN) and expiration date are also applied vertically. AtaBank offers two types of vertical cards, which have their own style and décor. There is a flame placed on one of the Visa Electron Vertical cards designs, which represents Azerbaijan as the “Land of Fire.” This card was designed for the cardholders leading active lifestyles, similar to the nature of a flame. The other card is designed in stern tones and is intended for Visa cardholders leading a more relaxed lifestyle. Visa Electron Vertical cards are issued for several directions: deposit, salary, and debit. Customers can request cards in any branch or section of AtaBank in several currencies, including AZN and USD. From a technical point of view, Visa Electron Vertical cards are similar to the ordinary horizontal cards.

How does your 3D Secure service help AtaBank stay competitive as online payments and e-commerce become increasingly popular throughout Azerbaijan?

AtaBank pays critical attention to security measures and prevention efforts related to fraudulent transactions in its overall activity. Taking into account that e-commerce has become popular among cardholders in Azerbaijan in foreign and domestic markets, and also through analyzing the best practices of the Visa and MasterCard international payment systems, AtaBank made the decision to implement the 3D Secure service for all its cardholders. AtaBank recently migrated from a static to a dynamic authentication method. By using the dynamic authentication method, the cardholder receives a one-time password every time the cardholder tries to make an online transaction if the e-merchant also uses the 3D Secure system. In accordance with the rules of international payment systems, if an e-merchant does not use the 3D Secure system on the acquiring side, it will be responsible for all chargebacks received from the issuers. Thus, the 3D Secure system is the most modern tool to secure all online transactions from fraudulent use and it reduces consumer risk. Cardholders receive periodic information updates about the development of the 3D Secure service. For example, all cardholders of AtaBank who are connected to the SMS-notification service are automatically connected to 3D Secure updates.

Parliamentary elections took place in Azerbaijan in November 2015. What is your outlook on the financial market of Azerbaijan as the country moves forward with a new parliament?

The financial market in Azerbaijan is part of the world capital market and the aggregate supply and demand for capital lenders and borrowers of different countries. Azerbaijan has achieved great results in the finance industry as a country. By attracting more and more international tourists, constructing new roads and buildings, and opening new world-renowned hotels and companies in Baku and in other big cities around the country, we will see the strong impact of economic growth on the overall development of Azerbaijan. Holding international events such as the Global Youth Forum, Mugam Festival, International Music Festival in Gabala, First European Games 2015 in Baku, Islam Solidarity Games 2017 in Baku, Football European Championship 2020, Formula One Grand Prix, and many others brings Azerbaijan to a higher level of development and modernization. All of these factors provide an attractive platform for international investments into the country's economy. Thus, the financial market has taken a huge step forward over recent years. Unfortunately, two rounds of devaluation for the national currency in 2015 slightly slowed down the development of the financial market. The end of 2015 and the beginning of 2016 was marked by cutbacks and economic stabilization attempts in the financial sector particularly. We assume that the year 2016 will proceed as the stabilization period and promote a new level of development in the financial sector, alongside assistance from the Government of the Republic of Azerbaijan.

With the Formula One Grand Prix coming to Baku this summer, how does hosting this large, international event contribute positively to the financial sector of Azerbaijan?

The Formula One Baku Grand Prix contract is the result of the proactive development of our country. Starting in June 2016, this immense project will begin in Baku and continue over the next 10 years. Formula One is the number one motorsport event, recognized all over the world. During this period, there will be great attention given to Azerbaijan from the world media and fans. We assume a significant tourist flow of Formula One fans will visit from some neighboring countries such as Turkey, Georgia, Iran, Russia, Ukraine, Kazakhstan, Belarus, Moldova, some Asian countries, and beyond. The increased flow of tourists will positively affect the national economy. The tourist-driven economic contributions will stimulate new construction, the development of internal infrastructure, increase the state budget, and will lead to the signing of more and more interregional and intraregional contracts. Financial institutes will be called to support these endeavors. In this regard, the financial sector will improve in quality as well as in figures.

As one of the largest banks in Azerbaijan, what are your targets and objectives for the year 2016?

As of December 31, 2015, AtaBank's total assets were AZN607.2 million, which is 4% higher than the previous year. Our credit portfolio at the end of 2015 was equal to AZN530.4 million and liabilities including current accounts are equal to AZN534.0 million, also including our deposit portfolio of AZN443.5 million. Our time deposit portfolio of retail customers is equal to AZN260.8 million and our aggregate capital is AZN53.7 million. AtaBank ended the 2015 financial year with a profit of AZN1.4 million. As always, AtaBank plans the future development of 2016 in accordance with the strategic plan and bank's policy. By making some slight strategic changes in business development perspectives, AtaBank plans to expand its activity in several directions: plastic cards and contactless acquiring activity, corporate lending, business credits, mortgages, and fund transfers. Being the largest acquirer in Azerbaijan, AtaBank plans to expand its POS-terminal network, implement new technologies like mobile application payments, expand cash-in and payment terminals network, bring to the market some new kind of deposits, and continue the stimulation process of non-cash payments. AtaBank plans to develop the second release of internet and mobile banking systems, continue the bonus and loyalty programs, develop CRM, and pay critical attention to customer care. AtaBank also plans to confirm its stable FITCH rating. Being the Principal Member of Visa and MasterCard, we also plan to receive the Principal Licensee from the China UnionPay international payment system for the issuing and acquiring of UnionPay cards until the end of 2016. AtaBank is planning to be among the most stable financial institutions in Azerbaijan, as it is at the moment.