About us

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About us

About the Bank

PASHA Bank is one of Azerbaijan's leading corporate banks. Established in 2007, we offer all major financial services, including investment banking, trade financing and asset management to a range of clients, from large corporates to small and medium enterprises. The Bank particularly works closely with companies operating in the non-oil sectors of the economy, including agriculture, transportation, construction and retail, which are vital for helping Azerbaijan to diversify its economy.

PASHA Bank is the one of the top 3 banks by assets in Azerbaijan. As of 31 December, 2023, the Bank's consolidated assets exceeded AZN* 8,893 million, while its total capital amounted to AZN 833 million. More detailed information on the Bank's financial figures can be found in the ‘Financial reports’ section.

PASHA Bank is headquartered in Baku and has a total of 5 business centres, 3 branches and 1 FX office across Azerbaijan. In 2013, we opened our first office in Georgia and office in Turkey in 2014. Our long-term regional vision envisages creating interconnected banking operations that will facilitate rapidly growing trade and deal flow between Baku, Tbilisi and Istanbul, the three most vibrant markets of the region.

By operating on a solid financial base, moving forward with determination and adding value to the future of both its customers and employees, PASHA Bank Turkey aims to be recognized as an international bank. The bank is rapidly expanding its activities by providing corporate and commercial banking, investment banking, interregional operations, trade finance, consulting services, local currency exchange operations, leasing and other banking services.

PASHA Bank Georgia provides services to large, medium and small enterprises in the field of corporate and investment banking. By identifying the interests of its customers as a key element of its corporate strategy, the Bank has chosen a course of action aimed at sustainable growth. The Bank offers credit, deposit, trade finance, treasury operations (securities, currency exchange, forward, swap, option), internet banking and other products.

We strive to be the best performing and most reliable bank in our country and we have gained international recognition for our achievements. EMEA Finance Magazine granted PASHA Bank with the title of the ‘The Best Investment Bank of Azerbaijan' in 2011, 2012 and 2013. At EMEA Finance Magazine's Europe Banking Awards 2013, PASHA Bank won the award for ‘Best Corporate Social Responsibility (CSR) Program'. In addition, Private Banking divison of PASHA Bank was named as the ‘Best Private Bank in Azerbaijan 2013' by World Finance magazine. EMEA Finance Europe Banking Awards identified PASHA Bank as the “The Best Bank of Azerbaijan” in 2014-2015. PASHA Bank received the Trade Award 2014 from Commerzbank AG for being Azerbaijan's most active bank in the area of trade finance in 2014.

The Global Finance identified PASHA Bank as the Best Bank in Azerbaijan in 2016. World Finance selected PASHA Bank as the winner in nominations of the Best Banking Group and the Best Commercial Bank in 2016. In 2017, PASHA Bank was the winner of the "Best Bank in Azerbaijan" award of Euromoney financial magazine. Within the confines of the Europe Banking Awards, EMEA Finance awarded PASHA Bank with the nominations of "The Best Bank in Azerbaijan", "The Best Investment Bank in Azerbaijan" and "Corporate Social Responsibility in CEE & CIS". Global Finance Magazine called PASHA Bank as the Best Bank in Azerbaijan in 2017. In 2018, PASHA Bank was granted with the title of the “Best Private Bank” and “Best Bank of Azerbaijan” by Global Finance, and received “Sap Value Award”. In the same year, Bank was chosen as the “Best Commercial Bank of Azerbaijan” by World Finance and “Bank of the Year” by The Banker.

According to final results of 2018, PASHA Bank was selected as the winner on the category of “Non-cash payments at POS terminals” and “Contactless payment cards” among the top 3 leading financial institutions within the framework of competition conducted on annual basis by the Central Bank of Azerbaijan together with the Azerbaijan Banks Association, among all participants of the banking segment.

In 2019, PASHA Bank became the winner of the nominations “Best Corporate Social Responsibility” and “Most Active Education Supporter”. In 2020, Bank received the awards for “Cashless Payments Promotion”, “Digital Banking”, “E-Banking”, “Best Corporate Social Responsibility” and “Most Active Education Supporter”. At the same time, PASHA Bank was named as the "Leading Bank in Internet Banking Services", "Leading Bank in Contactless Payments" and "Leading Bank in Contactless POS-Terminal Infrastructure".

In 2020, EMEA Finance granted PASHA Bank with the title of "The Best Bank of Azerbaijan” and “The Best Investment Bank of Azerbaijan”. The Bank became the winner in the nominations "Best Banking Product" and "Best Corporate Social Responsibility program" among financial institutions operating in Central and Eastern Europe and the CIS.

In 2021, the PASHA Bank's "Online Loan" product was chosen as the "Best Banking Product" for SMEs in the region. In the same year, Bank was named as a "Best F2F Acquirer" in Azerbaijan.

PASHA Bank has received strong rating from international rating agency. In 2023, Standard & Poor's reaffirmed the Bank’s a long-term rating of 'BB-' and a short-term rating of 'B'.

Today, PASHA Bank is an international team of more than 1.200 people. We are constantly working to transform the Bank into one of the biggest and leading financial institutions of the region and to enhance the range of international standard products and services that we already offer.

We are part of PASHA Group, a large investment holding based in Azerbaijan, which has assets across a wide variety of sectors, including retail banking, insurance, construction and tourism. As one of Azerbaijan's youngest but largest banks, we constantly keep abreast of financial and technological innovations. We work hard to keep ahead of market trends and adopt international experience and state-of-the-art technology to ensure that we provide the best possible service to our customers.

*1 USD - 1.7 AZN (01.03.2023)

Dividend Policy of PASHA Bank

1. Dividend is a part of the Bank's net profit considered to be proportionally divided between the shareholders per the number of shares held by them.

2. The Bank shall ensure the payment of dividend in the following cases:
- when the financial position of the Bank is evaluated as stable and / or positive, and there is a prospect of development;
- there are no prohibitions on payment of dividend in accordance with the legislation of the Republic of Azerbaijan;
- when the appropriate decision by the General Meeting of Shareholders is accepted

3. The part of the profit (upon deduction of the relevant taxes) or its certain percentage payable as dividend shall be calculated in the established manner and shall be approved by the General Meeting of Shareholders of the Bank.

4. Prior to adopting a decision on the payment of the dividend by the General Meeting of Shareholders, a written consent is obtained to pay dividends by applying to the AR Financial Markets Supervision Chamber.

5. Unless otherwise specified by the General Meeting of Shareholders, payment of dividends shall be effected within the period not exceeding 10 working days upon the date of adoption of the decision.

PASHA Bank: Corporate movie

The information is being updated

Bank details

Full name – “PASHA Bank” Open Joint Stock Company
Contracted name - “PASHA Bank” OJSC
Mailing address - AZ 1005, Yusif Mammadaliyev Street, 13, Baku city, Azerbaijan

Requisites of the Bank:
Code: 505141
TIN: 1700767721
Correspondent account #:
AZ82NABZ01350100000000071944 (AZN)
AZ04NABZ01350200000000071840 (USD)
AZ30NABZ01350200000000071954 (EUR)
AZ16NABZ01350200000000019826 (GBP)

Mission and objectives

Mission and objectives


PASHA Bank’s vision is to be a leading Azerbaijani bank committed to the highest standards of ethics, indisputable business reputation and financial strength, with dedication to top quality of services, supporting growth of clients and pioneering digital channels development.

PASHA Bank's mission is to serve our stakeholders.

-As a devoted financial partner we contribute to the growth and development of customers’ businesses by providing high quality innovative products, services and expertise tailored to their aspirations;
-As a responsible employer we build professional team by nurturing enabled, engaged and empowered people;
-As a committed corporate citizen we remain dedicated to the sustainable economic development of the country and prosperity of society;
-As a financial institution we create shareholder value, building a sound organization, which pursues arising opportunities, thoughtfully invests in strategic priorities and delivers sustainable financial results;
-As an organization we are committed to transparent and prudent conduct of business.

Strategic Goals

• Grow in core 
• Improve customer experience
• Strengthen processes and capabilities
• Best place to work



The bank's shareholders are PASHA Holding Ltd. (≈ 56,8195%), BLESS Ltd. (≈ 28,1796%), Mr. Arif Pashayev (≈ 9,9944%) and Mr. Mir Jamal Pashayev (≈ 5,0066%).

Shareholders rights

1. Shareholders holding ordinary shares of the Bank have the right to buy additional shares issued by the Bank. The shareholder's priority right shall be exercised in proportion to the equity interests before the issuance of the shareholder. Share-added stocks should be offered on the same terms as those offered to other buyers.
2. The shareholders, who have 5 percent of the Bank's shares, may require convening the extraordinary general meeting.
3. to participate in management of the bank in accordance with the legislation and this Charter, to be elected to and elect its governing bodies;
4. to participate in the general meeting of shareholders of the bank with the right to vote and request a copy of its protocols;
5. receive dividends from net profit of the bank;
6. in case of liquidation of Bank, to obtain a portion of the Bank's property remaining after the repayment of creditors' claims, accrued but unpaid dividends, as well as preference shares;
7. to use other rights provided by Charter and legislation.


Structure of PASHA Bank

Link to Structure of PASHA Bank



Correspondent relations


Policy and Reporting

Corporate Standarts

Risk management Policy

Reward Policy

Reward system is based on the following principles as one of the key components of the Bank's corporate governance mechanism:
• the stimulus created by the reward system ensures the Bank's competitiveness;
• the reward system provides improvement of risk management and human resource management;
• the reward system is aimed at ensuring long-term and sustainable development of the Bank.


Compliance Policy

AML Summary

Conflicts of Interests

Foreign Account Tax Compliance Act (FATCA)

PASHA Bank OJSC adheres to the principle of rejecting any form of bribery and corruption ("no tolerance" principle) and considers it its duty to promote the raising of the level of fight against bribery and corruption within the society. There is an "Anti-Bribery and Corruption Policy of PASHA Bank OJSC" for the purpose of maintaining the bank's high business reputation, identifying and preventing potential cases of bribery and corruption. The policy applies to all staff members, departments and branches of the Bank, people who have business relations with the Bank and provide services on behalf of the Bank and external service providers, suppliers, their employees and business partners.

PAŞA Bank ASC-nin Rüşvətxorluq və Korrupsiyaya qarşı mübarizə siyasəti

“PAŞA Bank” ASC rüşvətxorluq və korrupsiyanın istənilən formasından imtina prinsipinə ("dözümsüzlük" prinsipi) əməl edir və cəmiyyət daxilində rüşvətxorluq və korrupsiya ilə mübarizə səviyyəsinin yüksəldilməsini təbliğ etməyi öz vəzifəsi hesab edir. Bankın yüksək biznes nüfuzunun qorunub saxlanılması, potensial rüşvətxorluq və korrupsiya hallarının aşkarlanması və qarşısının alınması ilə əlaqəli prinsip və qaydaların müəyyənləşdirilməsi məqsədi ilə “PAŞA Bank ASC-nin Rüşvətxorluq və Korrupsiyaya qarşı mübarizə siyasəti” mövcuddur. Siyasət Bankın bütün işçi heyətinə, şöbə və filiallarına, Bankla işgüzar münasibətlərdə olan və Bankın adından xidmət göstərən şəxslərə və kənar xidmət təminatçılarına, təchizatçılara, onların işçilərinə və biznes tərəfdaşlarına aid edilir.

Financial reports

Financial statements

The Bank’s official auditor:
Ernst & Young Holdings (CIS) B.V.
Address: Port Baku Towers, Business Centre
South Tower, 9th floor,
153 Neftchilar avenue
Baku AZ1010, Azerbaijan
Phone: +994 12 4907020

Fax: +944 12 4907017



All reports


Our values and philosophy of customer cooperation

Our values and philosophy of customer cooperation

Our brand ideology reflects the opinion, culture, tradition and values of our company and forms our relations with customers. Ideology of PASHA Bank is based on 5 values: Integrity, Quality, Profitability, Entrepreneurship and Collaboration.

Visual concept of our values is reflected in the color array of our logo. Red color considered as energy and fire symbol in nature reflects the leader position, strength and vigilance of our Bank. Being symbol of life, regeneration, perennial youth stands for trust in tomorrow, positive worldview, achievement of goals and aiming at perfection.

The logo, which is the symbol of ancient cultural traditions, moral values and modern thinking, represents the main premise of our ideology – idea of creation of new reality.

Risk management

Liquidity Risks

As a leading bank, we ensure best-in-class liquidity risk management in the bank by:
• Applying risk-based decision making together with effective and proactive risk management strategies.
• Assuring quality of assets and sustainable profitability.
• Creating, maintaining and nurturing the risk aware culture.
• Taking measured risks to achieve our targets.

Liquidity is the bank's ability to fulfil its liabilities, effectively manage the changes that may occur in the sources of funding or in the liquidity of assets, as well as financing asset growth as planned without additional expenses. Liquidity risk is the risk that the Bank may be unable to meet its financial obligations. It is the risk of failure to perform planned and contingency obligations in a timely and effective manner, and a decline of the bank's ability to access additional liquid funds.

In order to manage liquidity risk, PASHA Bank has developed the Liquidity Management Policy, which intends to regulate the following procedures of the Bank:
o Management of intra-day liquidity;
o Management of current liquidity;
o Management of structural liquidity.

The Bank has an adequate Risk Appetite Statement, which controls all material risks through traffic lights system (red, yellow and green zones).

The following risk tools are used for liquidity risk management:
• Liquidity adjusted value at risk (VaR) techniques
• Liquidity at risk (LaR) techniques
• Stressed VaR techniques
• Dynamic liquidity gap analysis
• Liquidity Coverage Ratio (LCR) based on BASEL guidelines
• Net Stable Funding Ratio (NSFR) based on BASEL guidelines
• Time to wall measures
• Risk budgeting
• Duration limits
• Stress testing
• Scenario analysis
• Lending capacity limits
• Funding capacity limits
• Concentration limits

The Bank introduces following actions for the management and supervision of liquidity risks:
• The Bank ensures that it can meet its payment obligations at all times. Where necessary, the Bank also takes measures to manage the intra-day liquidity risk. It ensures sufficient diversification of refinancing sources and liquidity buffers. Effective monitoring and limit settings are crucial to mitigate concentration risk.
• The Bank ensures that a looming liquidity shortage is recognized early on. For this purpose, procedures are set up, the adequacy of which are reviewed regularly.
• The Bank prepares liquidity reports comparing the projected cash inflows with the expected cash outflows. The liquidity reports present the liquidity situation in the short, medium and long term. The fluctuations in cash flows in normal market phases are adequately reflected in the liquidity reports.
• It is important to keep an eye on the extent to which the Bank is able to meet the liquidity needs arising, even in a tense market environment. In doing so, particular attention is paid to the degree of liquidity of the assets. Permanent access to the refinancing sources relevant for the Bank is regularly reviewed. In case of short-term worsening of the liquidity situation, the Bank holds sufficient, sustainable liquidity buffers (e.g. high quality liquid assets).
• The Bank establishes robust liquidity risk management framework that ensures to maintain sufficient liquidity, including a cushion of high quality liquid assets, to withstand a range of stress events.
• The Bank incorporates liquidity costs, benefits and risks in the internal pricing, performance measurement and new product approval process for all significant business activities (both on- and off-balance sheet), thereby aligning the risk-taking incentives of individual business lines with the liquidity risk exposures their activities create for the Bank as a whole.

The Bank has a sound process for identification, assessment, mitigation, monitoring & controlling, communication and reporting of liquidity risk. This process covers a robust framework for comprehensively projecting cash flows arising from assets, liabilities and off-balance sheet items over an appropriate set of time horizons.

Operational risks

The management of operational risks is part of the Bank’s risk management system. The need for managing operational risks is determined by the proportions of possible operational losses which may pose a threat to the Bank’s financial stability.

In order to improve its business reputation, OJSC PASHA Bank considers it appropriate to communicate information (including the information provided as part of annual reports) on the management of operational risks to partners (shareholders), lenders, depositors and other customers, external auditors, rating agencies and other interested persons. In doing so, the bank wants to ensure that the level of detail being disclosed corresponds to the nature and scope of its activities.

The system on the management of operational risks at OJSC PASHA Bank has been organized to meet the following objectives:
- to ensure complete, timely and effective achievement of the Bank’s strategic goals in accordance with the nature and scope of its activities;
- to optimize technological processes;
- to observe legislative requirements, rules and traditions of the business turnover, conditions of agreements and transactions being executed, and to enhance the level of confidence in the Bank (business reputation) on the part of its customers and deposits.

The key missions of the system on the management of operational risks are as follows:
- to identify, evaluate and analyze emerging operational risks;
- to minimize operational risks, including by way of introduction of standardized procedures and maximum automation of banking processes;
- to improve the effectiveness of banking processes.

The fundamental principles for the organization of a system on the management of operational risks are:
- to determine a procedure for identifying and evaluating an acceptable level of operational risks and monitoring of the level of operational risks, including consolidated grounds;
- to develop a set of measures towards maintaining an acceptable level of operational risks, including control and (or) minimization of risks;
- to specify a procedure for information support on issues of operational risks (procedure for exchange of information between subdivisions and employees, procedure and frequency of submission of reporting and other information pertaining to the management of operational risks, etc.);
- to determine a procedure for the management of operational risks in remote banking, in developing and introducing new technologies and conditions for bank operations and other transactions, in other financial innovations and technologies, in accessing new markets;
- to allocate authority and responsibility among the Supervisory Board, executive bodies, subdivisions and employees as regards main principles for the management of operational risks;
- to establish a procedure for exercising control over the effectiveness of management of operational risks.

The Bank has laid down principles for the management of operational risks through appropriate in-house regulatory documents pertaining to every direction of its activity.

Considering the said principles, the Bank is using the following methods to minimize the level of operational risks:

- to standardize banking operations and other transactions (procedures, regulations, technologies for implementing operations and transactions and signing agreements);
- to organize a system of additional and subsequent control, a system of current verification of transactions and operations;
- to establish in-house regulations for the development and endorsement (approval) of in-house regulatory documents;
- to analyze the impact of the factor of operational risks (both as a whole and in line with their classification) on the Bank’s performance indicators;
- to ensure the required level of professional qualification and personnel development;
- automation of banking processes and technologies, especially in areas relating to standard operations and large workloads;
- to allocate responsibilities among subdivisions considering optimization of workload on individual employees;
- to furnish employees with the legal framework meeting domestic and external requirements to the maximum extent possible;
- to encourage employees depending on their impact on the level of operational risks.

The system on the management of operational risks is organized by the bank in three stages:
- preliminary;
- current;
- subsequent.

The level of operational risks is identified, evaluated and analyzed in accordance with an approved Methodology. Monitoring of operational risks is carried out on the basis of regular analysis of a system of indicators developed in accordance with the approved Methodology. Through this Methodology the Bank establishes the frequency of operational risk monitoring depending on its significance for a certain activity direction, in-house processes or the system of information technologies.

Minimization of operational risks envisages a wide range of measures aiming to reduce the likelihood of events and circumstances leading to operational losses and (or) reduce (limit) the volume of potential operational losses. Methods of minimizing operational risks depend on the nature of such risks.

The following measures are particularly important for exercising control over operational risks:
- to exercise control over compliance with limits established on banking operations and other transactions;
- to observe the established procedure for accessing the Bank’s information and material assets;
- to ensure proper personnel training;
- to regularly align basic documents and accounts on banking operations and other transactions.

In order to limit operational risks, the Bank has envisaged a comprehensive system of measures to ensure uninterrupted financial and economic activity in implementing banking operations and other transactions, including contingency plans (plans on ensuring uninterrupted and (or) resumed financial and economic activity).
The Bank attaches special importance to ensuring the integrity and restorability of its information systems and resources. To achieve this, the Bank stores initial and reserve information separately to avoid their simultaneous loss and (or) damage, and envisages other measures to protect information as stipulated under the Information security policy.

The Bank exercises control over the effectives of operational risks management. Management bodies regularly assess the effectives of operational risks management, and Bank employees are required to provide them with any requested information.

The Bank regularly but at least once in six months evaluates the level of operational risks and submits information to that effect to the Supervisory Board and the Board of Directors. The effectives of operational risks management is evaluated as a whole considering other elements of the risk management system.
The Bank regularly revises appropriate in-house processes and procedures and information technologies used to identify the previously unknown sources of operational risks. The frequency of such revisions is established as and when necessary but at least once in two years.

Credit risks

In order to exercise control over risks in the process of the most effective placement of credit resources, OJSC PASHA Bank adheres to a specifically developed Lending Policy. The main objective of the Bank’s lending policy is rational and effective placement of monetary resources enabling maximum revenue with minimum risk, while maintaining the required liquidity level of the Bank.

The Bank’s lending policy lays down the goals and priorities of lending activity, means and methods of their realization, contains principles and procedures for organization and control over credit operations.

The key factor of the Bank’s credit policy is the focus on meeting customer demand for borrowed funds with a broad selection of forms and methods for the provision of credit products and reduced risks of non-redemption of the principal amount and interest on it.

The Bank attaches special importance to the following priorities of control over risks:
- Qualitative assets
- Profitable relations
- Reasonable growth of the advances portfolio

To meet the objective of the best placement of resources, the Bank is governed by the following criteria:
- Requirements of the National Bank of the Azerbaijan Republic
- Mission and Corporate Strategy of the Bank (including high ethics standards)
- Lending culture of the Bank
- Interests of security and reasonable caution, which means participation only in transactions legitimate and reasonable from the risk standpoint.

To meet these objectives, the Bank has mid- and long-term strategic requirements on the advances portfolio. These requirements correspond to strategic directions and the acceptable level of risks. When these strategic requirements are determined, a careful analysis is conducted to consider their expected rate of return and risks. Strategic requirements are regularly reviewed and, if necessary, amended and supplemented.

It is the responsibility of every employee of the Bank involved with lending to act in accordance with the Lending Policy. All loan requests are considered in the following sequence: quality, profitability and portfolio growth.

In order to minimize the Bank’s credit risks in line with the requirements of the National Bank of the Azerbaijan Republic, as well as internationally recognized principles and standards on the management of credit risks in banking and recommendations of the Basle Committee on Banking Supervision, the Bank manages credit risks in accordance with the following key principles:
- Authority in the area of lending activity.
- Diversification of the advances portfolio.
- Monitoring of the advances portfolio.
- Creation of reserves to cover possible losses.

The Bank has also developed an in-house rating system as a standard means for evaluating borrowers. Information on customer ratings is used by the Bank at different managerial levels to ensure better understanding of the quality of assets and segmentation of the Bank’s credit portfolio.

The Bank regularly evaluates its assets to determine possible losses. If objective indications are revealed that assets are depreciating, the Bank establishes appropriate reserves in accordance with international requirements, regulations of the Central Bank of the Azerbaijan Republic and in-house regulations pertaining to lending activity.

If negative trends are discovered in the structure of the credit portfolio, the Bank takes prompt action to rectify lending activity within the framework of key principles of the current lending policy and the risk management policy.

When determining a fair value of the loans being advanced, the Bank proceeds from the need to fully reimburse the costs associated with the engagement of resources, and include overhead and commission enabling the Bank to compensate its expenditure on studying, processing and maintaining a loan, and receive acceptable profit considering the risk potential of a credit operation.

Control over the Bank’s lending policy and specific operations relating to the placement of resources is exercised within the framework of the Bank’s general system of in-house control. Besides the Supervisory Board and the Board of Directors, control is also exercised by in-house subdivisions (Credit Committee, Committee on risk management, Department of financial management, Department of risk management, Department of internal audits and Department of credit control).

To reflect the level of credit risks and their directions, to meet the requirements on issue, management and control over loans, as well as the quality of the advances portfolio and off-balance liabilities, the Bank operates the Information System of Management (ISM). The ISM provides information on the content and structure of the credit portfolio and exercises control over established limits, thus reducing the concentration of risks. The ISM also informs authorized employees and managers of the Bank involved with lending activities when credit risk indicators approach the limit. The ISM provides the Management with timely and regular information on the non-conformity of current quality criteria with the plan.

Market risks

As a leading bank, we ensure best-in-class market risk management in the bank by:
• Applying risk-based decision making together with effective and proactive risk management strategies.
• Assuring quality of assets and sustainable profitability.
• Creating, maintaining and nurturing the risk aware culture.
• Taking measured risks to achieve our targets.

The management of market risks at the Bank is based on the principle of identification of different sources of market risks and responsibility for the risks, limitation of potential losses and centralization of market risks management.

The Bank organizes the system of market risks management with the following purposes:
• To avoid potential losses as a result of market fluctuations;
• Increase the economic value of assets and off-balance sheet instruments;
• To observe the requirements of the Central Bank of the Azerbaijan Republic and ensure best practice (Basel regulations, IFRS standards etc.) regarding to the assurance of the Bank’s financial stability;
• To ensure that the Bank and its customers’ legitimate interests are met when operating with market instruments.

The Bank has an adequate Risk Appetite Statement, which controls all material risks through traffic lights system (red, yellow and green zones).

The following risk tools are used for market risk management:
• Value at risk (VaR) techniques
• Stressed VaR techniques
• Risk budgeting
• Counterparty limit setting
• Country limit setting
• Open position limits
• Duration limits
• Stress testing
• Scenario analysis

The methods of market risk management depend on the nature of arising risks and are divided as follows:
• General, i.e. applicable to all risks considered as market risks (i.e. currency, interest rate, equity);
• Special, i.e. applicable only to specific risks or financial instrument (trading portfolio).

System on the management of currency risks

The Bank manages currency risk by assessing and analyzing the structure of assets and liabilities in foreign currencies, making hedging contracts and setting limits on individual transactions that involve currency risk.

The management of currency risks is related to structural methods of management. The following are subject to currency risk management:
• General open currency position of the Bank;
• Investment open currency position of the Bank;
• Trading currency position of the Bank.

The key instruments of control over currency risks are:
• Single exchange rate policy;
• System of control over open currency positions.

The Bank controls its currency position in accordance with the requirements of the Central Bank of the Republic of Azerbaijan through limiting the position. The Bank hedges the currency risk by exchanging resources through swap deposits.

System on the management of interest rate risks

The main sources of interest rate risk for the Bank are the mismatch between the maturity of assets and liabilities, which are sensitive to changes in interest rates. Interest rate risks may emerge both in assets and liabilities part. The following are key instruments of interest rate risks management:
• Unified policy on the establishment of interest rates;
• Control over GAP (difference between assets and liabilities).

The Bank pursues a unified interest rates policy considering internal and external factors. External factors include the value of market interest rates for a certain type of instruments. Internal factors include the comparison of the Bank assets and liabilities by interest rates, maturity and determination of GAP.

System on the management of price risks (equity and fixed income securities)

The system of limits is the key instrument of equity and fixed income price risks management. The Bank uses the following system of limits:
• Limit for the issuer of securities;
• Limit for the share of securities in trading and (or) investment portfolio;
• Limit for uniform financial instruments;
• Stop loss limits.

The system of limits is an integral part of the risk management system and is supported by relevant internal regulations defining a procedure for establishing limits, their types for specific instruments, as well as the authority and responsibility of involved departments.