Tag Archives: banking

Uzbek President meets Korea bank

SEPT. 23 2015 (The Conway Bulletin) – Uzbek president Islam Karimov met with Lee Duk-hoon, President of the Korean state-owned Eximbank in Tashkent to discuss Korean investments in the country. After the negotiations, Mr Lee brokered the signing of an inter-banking agreement with Asaka Bank, opening a credit line of $160m for Uzbekistan. Korean Eximbank is a key partner for Uzbekistan’s infrastructure and banking projects.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Kazakh Central Bank wants loans in tenge

SEPT. 23 2015, ALMATY (The Conway Bulletin) — The Kazakh Central Bank presented a bill to parliament that will force people to take loans in tenge, a tactic it says is necessary to wean the economy off its addiction to US dollars.

Shaken by a 40% drop in the value of the tenge over the past 18 months, the Central Bank wants to ensure that commercial banks do not accrue a large amount of bad loans in US dollars as they did during the 2008/9 Global Financial crisis.

“This is an effort to protect customer’s rights and to decrease the rate of non-performing loans for second-tier banks,” Kuat Kozhakhmetov, deputy chairman of the Central Bank, said when he presented the bill to the parliament.

If the bill becomes law, people who have not earned their salary in a foreign currency for the 6 months before asking for a loan will will only be able to apply for a tenge loan.

According to a recent IMF study, almost 60% of the total loans issued by financial institutions in Kazakhstan are denominated in a foreign currency. The Central Bank also said that 14% of mortgages are currently denominated in foreign currencies.

People in Kazakhstan have used foreign currency loans to buy goods indexed to the US dollar or the Russian rouble, such as houses or cars. Salaries are often paid in tenge but are indexed to the US dollar.

A fall it the value of oil and a slump in the Russian economy has pressured the tenge and other regional currencies. Loans taken out in US dollars have become much more expensive to service.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Visa signs Tajik deal

SEPT. 21 2015 (The Conway Bulletin) — US-based Visa International and Tajikistan’s Central Bank signed an agreement to resolve a long-standing problem with payments and mutual settlements in the country. Media quoted Jamshed Nurmakhmadzoda, the Tajik Central Bank chairman, as saying: “Prior to this, Visa card holders could incur financial losses during the transactions.” The move is poised to increase the population’s confidence in cashless payment methods.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Stock market: Centerra Gold, KAZ Minerals

SEPT. 11-18 2015 (The Conway Bulletin) — Canadian mining company Centerra Gold saw its stock price on the Toronto Stock Exchange jump over 16% to 7.34 Canadian dollars, after having slumped in the past three weeks, due to the signing of a new exploration licence in British Columbia. Centerra’s main asset, the Kumtor gold mine, is located in Kyrgyzstan. London listed KAZ Minerals, was down 6% to 152 pence due to low copper prices. Kazakhstan-focused Roxi Petroleum gained 4.4% this week, to 8.75 pence.

Kcell, one of Kazakhstan’s largest telecoms, lost 2% on Sept. 17 after its mother company TeliaSonera said it would leave Eurasian markets.

London-listed Bank of Georgia surged 3.9% this week to 1,907 pence. The GDR stock of Georgia’s TBC Bank lost 6.5% this week in London, down to $9.25 per share, though it had fallen to $9.11 on Sept. 14.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyz bank to issue debt

SEPT. 16 2015 (The Conway Bulletin) — The Kyrgyz Investment and Credit Bank (KICB), a popular lender in Kyrgyzstan, said it wants to issue debt worth 200m som ($2.9m), its largest ever issue. “The total amount of outstanding debt securities issued by the bank has reached 450m som, about 1% of the total volume of the bank’s liabilities,” Aliyev Bektur Kubanychbekovich, KICB deputy chairman, told local media.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

S&P affirms BBB- for Kazakhstan

SEPT. 11 2015 (The Conway Bulletin) — Rating agency Standard & Poor’s affirmed Kazakhstan’s long-term sovereign debt rating at BBB with a negative outlook, but said weak governance hindered economic performance. It also highlighted limited monetary flexibility and an over-dependence on hydrocarbons as weaknesses.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Business comment: Halyk Bank & The Money Markets

SEPT. 18 2015 (The Conway Bulletin) — On Sept. 17, for the first time the Central Bank of Kazakhstan published data on the activities of Kazakh banks in the currency market. This decision greatly pleased liberal economists and advocates of transparency in Kazakhstan’s banking sector. But it didn’t please everybody. In one table, the Central Bank listed the amount of US dollars that banks

purchased and sold the day before. If a bank buys a large quantity of US dollars, it suggests that it may be engaging in speculation activities, or at least this is what the public could read into the data. By unveiling turnaround data only, the Central Bank irked Halyk Bank, who ranked first for volume traded.

The next day, in a rare complaint, Halyk Bank said the figures were “incomplete and misleading”.

Despite having traded $58m (around 12% of the whole banking sector), Halyk said it had been a net seller by $34m.

This is a much more patriotic figure.

And the bank, owned by powerful businessman Timur Kulibayev and his wife Dinara Nazarbayeva, now wants the Central Bank to publish the detailed numbers since Aug. 17, the day before the first adjustment to the tenge/dollar exchange rate, which led to the decision to let the tenge off its dollar peg, effectively spurring a new devaluation.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Moody downgrades Kazakh banks

SEPT. 7 2015 (The Conway Bulletin) — Moody’s ratings agency downgraded three Kazakh banks due to their deteriorating asset quality and their exposure to foreign currency lending. Kazkommertsbank’s baseline credit assessment (BCA) was rated caa2, ATF Bank fell to caa3, and Eurasian Bank was downgraded to caa1. Moody’s also changed the outlook of the three Kazakh lenders, together with Halyk Bank, to negative, highlighting the precarious state of Kazakhstan’s banking sector.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Georgian president signs banking law

SEPT. 10 2015 (The Conway Bulletin) – Georgian president Giorgi Margvelashvili signed into law a bill that switches supervision of commercial banks from the Central Bank to a state-linked body called the Financial Supervisory Body. Mr Margvelashvili tried to veto the switch but was blocked by parliament. Inter- governmental banks have criticised the switch and called it political.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Fitch warns Azerbaijani banks they are increasingly vulnerable

SEPT. 9 2015 (The Conway Bulletin) — The Fitch ratings agency warned investors of the precarious state of Azerbaijan’s banking sector.

Authorities in Azerbaijan have put a brave face on the country’s shaky economic conditions but the Fitch report cut through the bluster.

“We believe capital positions at some banks are likely to come under significant pressure over the medium term from increasing credit losses,” Fitch said. “Capital cushions are only moderate in most cases, and internal capital generation is limited.”

Azerbaijan depends on oil and gas for over 90% of its exports, meaning that it haPs been particularly exposed to the collapse in oil and gas prices. GDP growth is slated at the relatively low 1.5%.

In February, the Central Bank devalued the manat currency by a third denting its credibility. Despite the devaluation, fresh data has shown that the Central Bank has still spent billions defending its new value.

Non-performing loans are likely to grow from their current level of 10%, a consequence that Fitch sees inevitable, especially given the growing amount of loans and deposits denominated in foreign currency.

“We expect zero loan growth for the banking sector in 2015,” Fitch said. “Asset quality, already somewhat strained, with impaired loans averaging 10% at end-1H15 at Fitch-rated banks, is likely to deteriorate further.”

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)