DEC. 11 2014, (The Conway Bulletin) — Kazakhstan’s Kazkommertsbank posted a drop in profit for the nine months to the end of September 2014 of 10% mainly due to its purchase of BTA Bank which has a large amount of debt, media reported. Analysts said that Kazkommertsbank bought BTA Bank for political rather than business reasons.
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(News report from Issue No. 213, published on Jan. 7 2015)
DEC. 30 2014, (The Conway Bulletin) — Pasha Bank, one of Azerbaijan’s biggest banks, has bought an 80% stake in Turkish bank TAIB for an undisclosed amount, media reported. The move by Pasha Bank shows the ambition of the Azerbaijani baking sector.
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(News report from Issue No. 213, published on Jan. 7 2015)
DEC. 5 2014 (The Conway Bulletin) – Bank of Georgia, which is listed on the London stock exchange and is the largest bank in the country, said it wanted to buy the Georgian subsidiary of Ukraine’s PrivatBank. PrivatBank is Ukraine’s largest bank. Bank of Georgia said that it had agreed a preliminary deal to buy the bank for $51m.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 9 2014 (The Conway Bulletin) – The IMF cut Kazakhstan’s growth rate for 2014 to 4.3% from 4.6% because of a slump in oil prices and the downturn in Russia’s sanction-hit economy. It also said Kazakhstan needed to cut more of its non-performing loans (NPLs) from its banking sector. Kazakhstan has one of the highest proportions of NPLs in the world.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 2 2014 (The Conway Bulletin) – Halyk Bank, Kazakhstan’s second biggest lender, said profits for the first nine months of the year had risen by around two-thirds, mainly because of an increase in the number of loans it has given out. The results are good news for Kazakhstan’s economy which has been under pressure from falling oil prices.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 19 2014 (The Conway Bulletin) – Kazakhstan’s Alliance Bank has completed a $1.2b debt restructuring deal and will now merge with Temirbank and ForteBank to become one of the biggest lenders in the country, Reuters reported. The government bought a stake in Alliance Bank in 2009. Temirbank and ForteBank are owned by billionaire Bulat Utemuratov.
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(News report from Issue No. 210, published on Nov. 26 2014)
OCT. 14 2014 (The Conway Bulletin) – Ratings agency Standard & Poors placed Kazkommertzbank, one of the biggest banks in Kazakhstan, on a negative ratings watch because of its purchase of BTA Bank. BTA Bank was bought from the government in what analysts have said was a political, rather than business, move. BTA Bank owned a large amount of bad debt.
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(News report from Issue No. 204, published on Oct. 15 2014)
SEPT. 24 2014 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) sold its 5% stake in Bank of Georgia.
The sale ends the EBRD’s mission to support Bank of Georgia after the 2008 Global Financial Crisis. It took control of the stake in 2012 after a financial aid package put together in December 2008 was converted into shares.
“The EBRD’s role in supporting Bank of Georgia in the aftermath of the 2008 crisis is now complete,” Reuters quoted Nick Tesseyman, the EBRD MD, as saying.
“The EBRD will continue to provide debt financing to Bank of Georgia going forward as part of our continued support to the Georgian financial sector.”
The Bank of Georgia is publicly listed on the London Stock Exchange.
In many ways the sale of the EBRD’s 5% stake in Bank of Georgia is a success for Georgia as a country. The EBRD would not have sold its stake if it didn’t think that the bank was stable enough and if there wasn’t enough investor interest in Georgia and its finance industry.
Bank of Georgia CEO Irakli Gilauri acknowledged this.
“This transaction illustrates the depth of support for the bank from international investors and signals increasing investor interest in Georgia’s capital market,” he said.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 30 2014 (The Conway Bulletin) – Shares in Kazkommertzbank have nose-dived since it bought a stake in BTA Bank from the Kazakh government.
By the end of September, shares in KazKom, as the bank is commonly known, traded at $1.65 on the Kazakh Stock Exchange, down by 37.5% since July when it completed buying nearly half of BTA.
Analysts said the drop highlighted the toxic nature of BTA’s bad debt portfolio and a drop in profit. KazKom said profit for the first half of 2014 was down by 6%.
A source from the banking industry said: “Most bad loans are with BTA which is unable to recover them from its debtors. This entails a huge cost.”
Mountains of bad debt still holds back Kazakhstan’s financial sector, a legacy of the Global Financial Crisis of 2008/9 when the government had to buy up a handful of banks. One of these was BTA Bank.
At the end of last year, the Kazakh government said it wanted to sell its shares in government-owned banks.
Kenes Rakishev, a young Kazakh businessman with strong links to the elite and KazKom, controlled by the London- based businessman Nurzhan Subkhanberdin agreed in February to buy the bank. At the time, sources with knowledge of the Kazakh finance centre said buying BTA Bank made no business sense for KazKom. Instead, they said, it was a political move by Mr Subkhanberdin to win favour.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 18 2014 (The Conway Bulletin) – Kazakhstan’s Central Bank officially decreed that Halyk Bank, one of the country’s biggest banks, could buy HSBC’s Kazakh subsidiary. Halyk Bank agreed to buy HSBC’s Kazakh operation earlier this year for around $175m. HSBC is streamlining its business, cutting the less profitable operations.
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(News report from Issue No. 201, published on Sept. 24 2014)
