Category Archives: Central Asia & South Caucasus News

Fitch says more banks in Azerbaijan are likely to fail before the end of the year

MARCH 16 2017 (The Conway Bulletin) — Fitch the ratings agency said that more banks in Azerbaijan would fail this year as the economy continued to labour under the pressure of depressed oil prices and bad debts.

The Azerbaijani banking sector has been faltering, forcing a major investment by the government into its biggest bank — International Bank of Azerbaijan. It now owns 76.7% of the bank, up from 55%. Last year, several smaller banks had their licences removed or were forcibly merged.

“Fitch expects the banking sector to remain loss-making in 2017 and we have Negative Outlooks on most of the Azerbaijani banks we rate,” it said in a statement.

“Banks will not be able to absorb new NPLs (non-performing loans) through growth, given the sluggish economy and capital constraints.”

Importantly it also said that non- performing loans, those considered more than 90 days overdue, had increased to average 21% of the banks’ loan portfolio, up from 12% at the end of 2015.

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(News report from Issue No. 321, published on March 20 2017)

Two banks merge in Kazakhstan

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MARCH 15 2017 (The Conway Bulletin) — Tengri Bank and Capital Bank Kazakhstan are to merge, they said in a statement, the first of what observers hope will be a series of mergers in the fragmented banking sector. Observers have said that there are too many small and undercapitalised banks and that the sector needs to consolidate. The merged bank will be the 17th largest in Kazakhstan and have a capital ratio of 19% which is more than double the minimum level, Tengri Bank and Capital Bank said.

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(News report from Issue No. 321, published on March 20 2017)

Turkmenistan Airline changes corporate structure

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MARCH 11 2017 (The Conway Bulletin) — Turkmenistan’s official press service said that the corporate structure of Turkmenistan Airlines had been changed to a open joint-stock company. Under the new structure, the government will own a 70% stake in the company, the aviation department within the ministry of transport will own 27% and Turkmenistan Airline will own 3%. It’s unclear why the corporate structure has been changed.

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(News report from Issue No. 321, published on March 20 2017)

Kazakhstan breaks OPEC limit

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MARCH 13 2017 (The Conway Bulletin) — Kazakhstan produced more oil in February than it was supposed to under an OPEC-led deal in December aimed at cutting global production, official data showed. It produced 1.718m barrels of oil/day in February, a 2% rise from its output in January. This is 38,000 barrels of oil/day than it had agreed to. Oil prices have fallen on news that oil stockpiles were higher than thought.

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(News report from Issue No. 321, published on March 20 2017)

Swedish officials arrest Russian over corruption in Azerbaijan

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MARCH 14 2017 (The Conway Bulletin) — Police in Sweden arrested a Russian national working for the Canadian company Bombardier for allegedly paying bribes in Azerbaijan to win contracts, media reported. The bribery allegations date back to 2013 and focus on contracts to sell train signalling equipment to the Azerbaijani railway company. Azerbaijan has a poor record for corruption.

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(News report from Issue No. 321, published on March 20 2017)

Venice commission praises Kazakh constitution amendments

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MARCH 14 2017 (The Conway Bulletin) — The Venice Commission, the Council of Europe’s constitutional analysis unit, said that amendments made to the Kazakh constitution by President Nursultan Nazarbayev earlier this year were “a clear step forward”. Without consulting ordinary Kazakhs, Mr Nazarbayev transferred some powers, mainly looking after domestic briefs such as education and pension reforms, to parliament, keeping state affairs such as security and foreign policy under the president’s remit. “There can be no doubt that the reform goes in the right direction and constitutes a clear step forward. Other steps should follow in the future,” the Venice Commission said in a statement.

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(News report from Issue No. 321, published on March 20 2017)

Kyrgyz MPs reject hunting ban

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MARCH 20 2017 (The Conway Bulletin) — Kyrgyzstan’s parliament voted 56 to 52 against banning hunting of endangered deer and other animals (March 16). The vote angered environmentalists but pleased businesses who said a ban would be impossible to police and cost thousands of dollars. Eurasianet said 69 licences were given out last year to hunt deer while there were 520 reported incidences of illegal hunting.

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(News report from Issue No. 321, published on March 20 2017)

Kyrgyz officials charge ex-prosecutor with abuse of office

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MARCH 13 2017 (The Conway Bulletin) — Prosecutors in Kyrgyzstan are investigating Aida Salyanova, a former Prosecutor-General and now an opposition MP, with abuse of office. Her supporters have said that the charges are fabricated and an extension of the crackdown on the opposition party Ata-Meken. Kyrgyzstan is holding a presidential election this year. Ahead of it, tensions are running high.

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(News report from Issue No. 321, published on March 20 2017)

Armenian leader flies to Paris for talks with Hollande over Nagorno-Karabakh

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YEREVAN, MARCH 8 2017 (The Conway Bulletin) — Armenian president Serzh Sargsyan flew to Paris to meet with French President Francois Hollande to sign deals on tourism and educational issues as well as discuss the ongoing simmering conflict around the disputed region of Nagorno-Karabakh.

Earlier this month Azerbaijan said five of its soldiers had been killed in the region and Armenia-back rebels said one of its soldiers had been killed. This was the worst outbreak of fighting since April last year when Azerbaijani tanks rolled into the region controlled by Armenia-back rebels. At least 100 people were killed in the fighting last year.

In an interview with AFP news agency ahead of his trip to Paris, Mr Sargsyan blamed Azerbaijan for the fighting.

“The danger of a new war is constant and will persist until Azerbaijan is persuaded that there is no military solution to the conflict,” he said.

Azerbaijan disputes this and has blamed Armenian rebels for the war in the early 1900s that and was only stopped by a UN ceasefire.

ENDS

(News report from Issue No. 320, published on March 13 2017)

Kazakh C.Bank loans Delta $31m

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MARCH 7 2017 (The Conway Bulletin) — As part of its well-publicised plan to help its struggling banking sector, the Kazakh Central Bank said that it had loaned Delta Bank, one of the smaller banks in Kazakhstan, 9.8b tenge ($31m), media reported. The loan, made on March 3, was linked to a missed coupon repayment that Delta Bank had needed to pay. This was connected to pension obligations.

ENDS

(News report from Issue No. 320, published on March 13 2017)