FEB. 6 2014 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s largest bank, and Kenes Rakishev, the son-in-law of the mayor of Astana, finalised a $1b deal to buy most of BTA Bank from the Kazakh government. The merger will happen by the end of the year, said Kaskommertsbank. The Kazakh government bought debt ridden BTA Bank in 2009.
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(News report from Issue No. 171, published on Feb. 12 2014)
FEB. 3 2014 (The Conway Bulletin) — The proportion of savings held in Kazakh tenge dropped to 62.6% in 2013 from 70.2% a year earlier, media quoted Kazakhstan’s Central Bank chief Kairat Kelimbetov as saying. Mr Kelimbetov said that he wanted to boost this figure and reduce the amount of savings held in US dollars.
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(News report from Issue No. 170, published on Feb. 5 2014)
JAN. 23 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank issued a stern warning to its domestic banks to tighten up checks they carry out on consumers before issuing loans. The Azerbaijani economy is booming but increasingly unsecured loans could derail this growth.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 24 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank ordered domestic banks to stop giving out loans to consumers so easily.
In a strongly worded statement, Azerbaijan’s Central Bank said lenders had not been doing enough due diligence on the financial security of consumers they were lending cash to.
“The Central Bank has assigned banks to intensify activities on issue of loans and enhance control over the field in line with responsible lending principles with an eye to further amplify banking sector’s financial sustainability,” the Azerbaijani Central Bank said.
The Central Bank appears to be reacting to a number of warnings from analysts who said that poorly secured loans and rising consumer debt are major risks to Azerbaijan’s economy.
Azerbaijan’s fuel-powered economy has picked up pace again since stumbling during the global economic crisis of 2008/9. In 2014, the economy is expected to grow by around 5%.
But overconfidence and slack controls threatens this economic growth. The Central Bank’s own figures showed that lending to consumers increased by nearly a third last year.
The Central Bank also appears to accuse commercial banks of aggressively selling loans to consumers and also warned them not to give out misleading information over the financial responsibilities of taking out loans.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 23 2014 (The Conway Bulletin) — Alliance Bank asked its creditors to accept a so-called haircut to keep the bank solvent. In financial terms a haircut is when creditors agree to reduce repayments. Kazakhstan’s sovereign wealth fund Samruk-Kazyna and billionaire Bulat Utemuratov are Alliance Bank’s biggest stakeholders.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 9 2014 (The Conway Bulletin) — Uzbekistan’s financial authorities have shut Samarkand Bank for undisclosed violations, media reported, the second bank it has closed in the last two months.
After the authorities withdrew its trading license, Samarkand Bank, just like Credit Standard Bank before it, transferred its assets to the state-owned People’s Bank of Uzbekistan.
There is, typically, a political reason, for this sort of targeted action in Uzbekistan and in the case of Samarkand Bank, the clue is, possibly, in the name.
Shortly after the Uzbek authorities cut the license of Credit Standard Bank in November 2013, allegations appeared on Uzbek websites linking it to Gulnara Karimova, the embattled eldest daughter of Uzbek President Islam Karimov. She is currently locked in a power battle with rival clans and analysts said the closure of Credit Standard Bank may have been an attempt to undermine her.
The Karimovs are part of the Samarkand clan, named after Uzbekistan’s second city. Samarkand Bank’s name and origins suggest a link between the bank and the clan. Disbanding it will play into the hands of the so-called Tashkent clan, headed by various members of Uzbekistan’s intelligence service.
Once again, politics may well be the root cause of another banking closure in Uzbekistan.
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(News report from Issue No. 167, published on Jan. 15 2014)
JAN. 4 2014 (The Conway Bulletin) — The Manila-based Asian Development Bank (ADB) plans to increase the number of loans it gives to small and medium sized businesses in Azerbaijan by extending the number of banks it works with. Last year ADB gave AccessBank a five year $50m loan specifically to lend to companies in rural areas.
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(News report from Issue No. 166, published on Jan. 8 2014)
DEC. 23 2013 (The Conway Bulletin) — So, it looks as if, finally, the Kazakh government has found a way of offloading its stake in the troubled BTA Bank.
An official press release confirmed the sale of a controlling stake in BTA Bank to Kazkommertsbank, also known as KazKom, and businessman Kenes Rakishev.
BTA Bank has the highest proportion of bad debt among Kazakhstan’s banks. Most analysts consider its shares to be virtually toxic and in November Halyk Bank, owned by the daughter and son-in-law of Kazakh President Nursultan Nazarbayev, declined to buy the government’s stake.
KazKom and Mr Rakishev, however, went through with the deal — probably for political, rather than commercial, reasons.
Nurlan Subkhanberdin, who lives in London, is the biggest shareholder in KazKom. Mr Subkhanberdin has fallen out of favour with the authorities over the past few years and has been looking for ways to rebuild relations.
Mr Rakishev — the son-in-law of the mayor of Astana, Imangali Tasmagambetov — is an increasingly high profile member of the Kazakh business elite who, again, may have been looking to shore up his position.
In any case, KazKom and Mr Rakishev have formed a consortium of investors that signed a preliminary nonbinding agreement to purchase equal shares in BTA Bank from Samruk-Kazyna, the Kazakh sovereign wealth fund. Samruk-Kazyna will still maintain a minority share in BTA Bank.
It’s unclear how much Mr Rakishev and KazKom agreed to pay for BTA Bank but it is safe to say it will be a fraction of the $7b that the government spent buying a 97.3% stake in BTA Bank in 2008/9 to save it from collapse.
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(News report from Issue No. 166, published on Jan. 8 2014)
DEC. 13 2013 (The Conway Bulletin) — Kazakh financier Bulat Utemuratov has agreed to buy the Kazakh government’s 80% stake in Termibank and a 16% stake in Alliance Bank, media reported. The government will still own a 51% stake in Alliance Bank and a 98% stake in BTA Bank which it has yet to find a buyer for.
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(News report from Issue No. 165, published on Dec. 18 2013)
DEC. 13 2013 (The Conway Bulletin) — Bulat Utemuratov, a close associate of Kazakh President Nursultan Nazarbayev, has agreed to buy the government’s share in Temirbank and most of its stake in Alliance Bank for up to $1b, local media reported.
This is important for Mr Nazarbayev who wants to change Kazakh banking. It is made more important since Halyk Bank, owned by his son-in-law Timur Kulibayev, declined to buy the government’s stake in BTA Bank in November.
Mr Utemuratov is a willing ally of Mr Nazarbayev and was an obvious purchaser of the Kazakh government’s 80% stake in Temirbank and a 16% stake in Alliance. This leaves Samruk-Kazyna with a 51% stake in Alliance Bank.
One question is why didn’t Mr Utemuratov buy the government’s entire stake in Alliance Bank? Another is, what is he going to do with the banks when he does finish the deal?
In any case, it is a step forward for Kazakh officials who plan large changes in Kazakhstan’s banking system. The government bought the stakes in the banks in January 2009 to stop them from collapsing during the global financial crisis and has been looking to cash them in for some time.
As well as selling its stakes, it wants the banks to reduce their proportions of bad debt and also to unite their private pension funds under one scheme run by the Central Bank.
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(News report from Issue No. 165, published on Dec. 18 2013)
