Tag Archives: banking

Kazakh businessman to chair KazKom

APRIL 1 2016 (The Conway Bulletin) – Kenes Rakishev, a businessman favoured by the Kazakh political elite to front companies they are linked with, was nominated to become chairman of Kazkommerts- bank. Mr Rakishev, 36, has steadily increased his stake in Kaz- kommertsbank over the past couple of years. He led the merger between Kazkommertsbank and BTA Bank which was riddled with debt. Analysts said that the merger of Kaz- kommertsbank with BTA Bank was driven as much by politics as it was by business motives.

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(News report from Issue No. 275, published on April 8 2016)

Kyrgyz-Russian Dev. Fund to change rules

MARCH 30 2016 (The Conway Bulletin) – Kyrgyz PM Temir Sariyev said that the misfiring Kyrgyz-Russian Development Fund would reduce the minimum loan it is prepared to hand out to $1m from $3m. The Fund had been criticised as too heavily geared towards large businesses, because of the high loan requirement and the co-financing clauses. Earlier this month Kyrgyz President Almazbek Atambayev sacked Nursulu Akhmetova as chair of the Fund.

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(News report from Issue No. 274, published on April 1 2016)

Editorial: Banking in Tajikistan

MARCH 18 2016 (The Conway Bulletin) – There are two kinds of banking crises. One is when the financial sector struggles to stay healthy, as toxic assets mar the books of commercial banks, as seen most notably in Kazakhstan in 2011-2013.

The other one is a crisis of trust, when citizens start doubting the ability of their banks to provide cash and protect their savings.

This second type of crisis is now happening in Tajikistan. Our correspondent listened to angry voices from the long queues forming outside Tojiksodirotbank, Tajikistan’s third-largest lender.

A regional economic downturn has hit Tajikistan hard, especially because of the sharp drop in the value of worker remittances from Russia.

The government has put the blame on external and private factors. Notably, the Central Bank blamed exchange offices for the imbalance in the exchange rates.

Now responsibility seems to be shifting to commercial lenders, which are a channel for remittances and an increasingly popular method for paying wages among businesses.

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Editorial from Issue No. 272, published on March 18 2016)

Tajik banking system wobbles as rumours grow of a collapse

MARCH 17 2016, DUSHANBE (The Conway Bulletin) — People in Tajikistan appear to be losing faith in their banking system, triggering a run on one of the country’s biggest banks.

This week crowds of around 100 people have been gathering at the head office of Tojiksodirotbank in Dushanbe, the only place the bank’s customers can withdraw money.

Nuriniso, a 30-year-old street-cleaner, was queuing to withdraw her salary. “Yesterday, I was at the bank until 9pm to get my money. They gave me 700 somoni (around $90) and told me to come another day for some more,” she told a Conway Bulletin correspondent.

An older woman standing next to Nuriniso explained.

“Don’t you understand that the bank is bankrupt?” she said of rumours fuelling what could, effectively be a run on the bank. “The bank will close from the first of April and money can only be withdrawn from other ATMs at 25% (commission).”

This is important for the entire Central Asia and South Caucasus region which has been hit by a worsening economic crisis. If withdrawals from Tojiksodirotbank did accelerate and it did become a run on the bank, it would be the first instance of an unplanned banking failure linked to the current economic downturn.

Tojiksodirotbank, which holds the majority of accounts for the country’s lower and middle classes such as doctors, teachers and government officials, has not commented on the queues forming outside their branches. Instead it said via its website that a technical problem was slowing down transactions.

And Tojiddin Pirzoda, the bank’s chairman has denied rumours of its impending bankruptcy. “Tojiksodirotbank holds a leading and a strong position in the banking system,” Tajik state news agency Khovar quoted him as saying in February.

But Nuriniso, the street cleaner who earns 640 somoni a month (around $80), said she had now lost confidence in Tajik banks.

“I will never keep my money in banks. My workplace has created this headache (by paying my salary into Tojiksodirotbank) ,” she said.

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(News report from Issue No. 272, published on March 18 2016)

Azerbaijan’s IBA rebrands

MARCH 14 2016 (The Conway Bulletin) – The International Bank of Azerbaijan, the country’s largest lender, changed its logotype, colour and slogan in an effort to boost its domestic and international image. The IBA posted poor financial results last year. Its former CEO Jahangir Hajiyev was arrested in December.

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(News report from Issue No. 272, published on March 18 2016)

Kazakh Halyk Bank not to pay dividends

MARCH 14 2016 (The Conway Bulletin) – Kazakh lender Halyk Bank said it might not pay dividends for 2015 as the company expects a sharp decline in earnings this year. “The board is considering paying no dividend this year,” Dauren Karabayev, deputy CEO at the bank, was quoted by the FT as saying. Mr Karabayev was also not confident regarding the coming year for Kazakhstan’s economy. “2016 will not be a strong year,” he said. Halyk Bank is controlled by Kazakh President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev, one of the country’s most high-profile businessmen.

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(News report from Issue No. 272, published on March 18 2016)

Kazakh and Azeri VTB change directors

MARCH 14 2016 (The Conway Bulletin) – The Azeri and Kazakh subsidiaries of Russian bank VTB changed their directors. In Azerbaijan, Vugar Ismayilov left his post of deputy chairman after seven years. In Kazakhstan, Mikhail Oseyevski substituted Mikhail Yakunin as chairman after Mr Yakunin left the bank to join the Russian National Commercial Bank, formerly owned by the government of Crimea, now property of the Russian government.

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(News report from Issue No. 272, published on March 18 2016)

Editorial: NPLs in Kazakhstan

MARCH 11 2016 (The Conway Bulletin) – Women banging pots, blowing whistles and wearing grey capes in the streets of Almaty last January alarmed observers.

They were protesting about mortgages and how difficult it was to repay these loans after a devaluation of the tenge. In other words, this was yet another alarm bell about non-performing loans in Kazakhstan.

The country was battered with toxic loans in the aftermath of the Global Financial Crisis of 2007/8 and some banks, directly or indirectly, asked for help from the government.

And the government has only just started to offload these banks — think BTA and Kazkommertsbank’s merger last year.

Now, though, new data suggests that there may be another round of dodgy debt to deal with. This time the government needs to act early to stop borrowers from tipping the fragile banking system into the red again. It has the funds and it now also has the experience. This time round, there are few excuses for the Kazakh government and the Central Bank.

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(Editorial from Issue No. 271, published on March 11 2016)

S&P downgrades Kazakhstan’s Baiterek

FEB. 26 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded the credit ratings for Baiterek Holding from BBB-/A-3 to BB+/B. S&P said “the likelihood of extraordinary government support to the consolidated Baiterek group [is] almost certain”. It said its negative outlook mirrors that of the agency’s latest assessment of Kazakh sovereign credit. Baiterek’s subsidiaries include the Development Bank of Kazakhstan and the Investment Fund of Kazakhstan.

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(News report from Issue No. 270, published on March 4 2016)

Moody’s downgrades Uzbek Khamkorbank

FEB. 26 2016 (The Conway Bulletin) – Rating agency Moody’s cut Khamkorbank’s long-term local currency deposit rating to B2 from B1. In February, the Uzbek Central Bank suspended the bank’s licence to trade foreign currencies for six months. The World Bank’s IFC and the Netherlands’ state-owned FMO own stakes in Khamkorbank.

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(News report from Issue No. 270, published on March 4 2016)