Economist Natig Jafarli says AccessBank and Bank Respublika are negotiating a merger or acquisition and have already reached a preliminary agreement. If completed, the deal would create the country’s fourth-largest bank.
Economist Natig Jafarli told the outlet Modern.az that talks between AccessBank and Bank Respublika are expected to result in the merger of the two institutions into a single bank starting early next year. He said that given the combined assets of the two lenders, the AccessBank-Bank Respublika merger would mark a serious move to create a major new player in the market.
The news follows a statement from the Central Bank of Azerbaijan backing the trend of market consolidation in the financial sector through mergers and acquisitions. Central Bank Governor Taleh Kazimov said two or three dominant players currently lead the financial system, and that such mergers are expected to strengthen competition in the market.
Why smaller banks are moving to merge
Jafarli described this kind of consolidation among banks as a positive process, stressing that it stems from objective necessity rather than simple preference. He said smaller banks are choosing to pool their resources and client portfolios to maintain their market position, a practice that is common worldwide.
The economist added that around 70% of the local market is currently controlled by just two or three major banks, a situation that hinders the formation of a healthy competitive environment. In his view, an increase in the number of large banks could help address this imbalance.
