Iskandar Rajabov, chairman of the International Bank of Tajikistan (IBT)—one of the country’s largest private banks—speaks with Acuris Capital Intelligence about pursuing growth strategies in turbulent times.

Interview by Christopher Kenneth

Q. How have events like COVID-19 and Russia’s invasion of Ukraine affected IBT’s operations? 

These types of shock are almost always accompanied by a decrease in corporate activity, trust and business contacts, and negatively impact financial efficiency. When such problems arise, we try to find ways to solve them and maintain business growth.

IBT did not experience significant problems during the pandemic, as it was able to provide most banking services to clients remotely, through its IBT24 mobile app. This enabled it to offer uninterrupted banking services, ensure predictable financial performance and increase customer loyalty.

Today, a major problem is maintaining business relationships with Russian banks, which, historically, have been used by Tajik banks as reliable correspondent banks, not only for handling interstate financial transactions for clients, but also for interbank settlements with other countries. These recent negative events have forced IBT to review its payment routes that previously passed through Russian banks in favour of alternatives.

Q. What are the bank’s medium- and long-term growth strategies? 

IBT is currently implementing its business development strategy approved by its Supervisory Board for 2019-23. Based on the results of the past three years, the bank has more or less met all its targeted financial indicators. Taking the current situation into account, it plans to further increase its retail banking operations.

To this end, in 2019 the bank became one of the founders of the Association of Electronic Commerce Participants of Tajikistan and, in 2021, together with two other domestic banks, created a data processing centre in the country. Thus, the bank takes a balanced approach to the implementation of projects in the banking sector that require significant investments and coordination of business processes and models.

Q. Does IBT’s strategy include plans to acquire other banks in or outside of Tajikistan? 

IBT’s medium-term business growth strategy does not envisage acquisition of banks outside the country. Domestically, we are considering the possibility of acquiring some credit and financial players. We are primarily interested in undervalued credit institutions with good client bases, but that lack some competencies and the financial resources for further expansion of their operations.

Q. Are there plans to further expand IBT’s network and, if so, will this be done organically? 

Our focus is not on active expansion of branches or our operational network, but on the development of remote services to clients through a network of terminals. For example, IBT developed Oson as an operator of its payment system, which is registered with the National Bank of Tajikistan and provides access to all banking services, including for labour migrants working outside Tajikistan.

Q. Would IBT consider using financial instruments such as an equity capital raise, debt raise or bond issue to finance its growth objectives? 

Over the years, IBT has developed a system of control of internal limits and standards aimed at ensuring the smooth functioning and execution of investment projects.

Naturally, the bank uses different funding methods to maintain the required level of liquidity needed to run its operations successfully. Therefore, the bank does not have any problems with funding. Its current business growth strategy does not envisage the use of such financial instruments to augment its in-house operations funding capital.

However, it is possible that such instruments could be needed in the future when the market value of IBT’s shares increase and the bank’s owners decide to speed up their plans to increase its volume of products and services, as well as its share of the local banking services market.

A bit of background: IBT is a private commercial bank, receiving its banking operations license in 2016. Banking operations began in 2014 with the incorporation of Standard-Moliya, a microcredit provider, which was later transformed into IBT as a fully-fledged universal bank in 2016. Today, IBT is among Tajikistan’s top-10 largest and most successful financial organisations. Iskandar Rajabov, chairman of IBT, has been working in different banks and management roles in the Tajik banking sector since his graduation from Tajik National University in 2003, majoring in world economy, and later adding a law degree from his alma mater in 2011.

This interview has been edited for length and clarity.