DEC. 5 2013 (The Conway Bulletin) — In an interview with Bloomberg News in London, Kazakhstan’s Central Bank chief Kairat Kelimbetov said one of his main objectives was to cut the proportion of nonperforming loans in Kazakh banks to 10% by January 2016. Non-performing loans currently make up about 30% of its banks’ portfolio.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 3 2013 (The Conway Bulletin) — Azerbaijan’s Central Bank plans to buy $500m-$600m of Asian securities as part of its investment portfolio, local media quoted the Bank’s deputy chairman Avtandil Babayev as saying. Azerbaijan has developed a reputation as a big spender on foreign markets over the past few years with property, equity and debt purchases.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 29 2013 (The Conway Bulletin) — The authorities in Uzbekistan continued to ramp up pressure on Gulanara Karimova, eldest daughter of Uzbek President Islam Karimov. On Nov. 27, the Central Bank withdrew an operating licence for Credit Standard Bank, which is linked to her. Later, police also closed down art and jewellery stores belong to Ms Karimova.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 25 2013 (The Conway Bulletin) — The Uzbek authorities have tightened rules on private banking and money wiring. As of Nov. 25, Uzbek banks are now required to establish the identity of citizens exchanging $4,000, a tenth of the previously allowed amount.
Also, the new rules reduce to a total of $17,000 in three consecutive months the maximum amount people can wire without being considered as suspicious.
The authorities have said new regulations are part of efforts to combat terrorism financing and money laundering.
The timing, though, appears pertinent. Gulnara Karimova, the embattled eldest daughter of Uzbek President Islam Karimov, recently touched upon the money laundering issues on her Twitter page.
She said the Tashkent-based Asia Alliance Bank, established in August 2009, holds all of Uzbekistan’s assets and that this bank was set up specifically to launder money.
It’s important to note, though, that no formal charges have ever been levied at Asia Alliance Bank.
Ms Karimova, though, must tread carefully on money laundering. The French authorities currently have an ongoing case against her.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 27 2013 (The Conway Bulletin) — With a $2.2b fortune and the ear of the president, Bulat Utemuratov is one of the most powerful people in Kazakhstan.
Bloomberg News interviewed Mr Utemuratov at the new Rixos Borovoye hotel in northern Kazakhstan.
Mr Utemuratov is probably best known for selling his bank, ATF Bank, to Austria’s UniCredit Bank in 2007 for $2b.
And this deal, according to an excerpt from his interview with Bloomberg News, acted as a turning point in Mr Utemuratov’s business thinking.
“I decided after selling ATF Bank to UniCredit that we must stop using offshore companies and become more transparent,” he said in the Bloomberg interview.
“Everything must be clean.”
Mr Utemuratov had owned ATF Bank through a series of offshore accounts. The global financial crisis in 2008 and 2009 exposed dubious accounting practices. Since then, Mr Utemuratov said he had bought or set up another couple of banks, both of which he owns transparently.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 25 2013 (The Conway Bulletin) — Nurlan Kussainov, the CEO of the state-owned Kazakhstan Development Bank, resigned, local media reported. Media reports didn’t specify why Mr Kussainov quit the post he had held since April 2011. Kazakhstan’s sovereign wealth fund Samruk-Kazyna controls the Kazakhstan Development Bank.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 18 2013 (The Conway Bulletin) — Halyk Bank, owned by Timur Kulibayev and his wife Dinara Nazarbayeva, turned down the option of exchanging its pension fund for the government’s shares in BTA Bank. By declining the swap, Mr Kulibayev potentially pit himself against Kazakh President Nursultan Nazarbayev, his father-in-law.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 18 2013 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s second largest bank, reported that profits for the first nine months of the year grew by 4.1% compared to a year earlier, partly buoyed by an increase in consumer lending. The 8.3% increase in loans is more evidence, if it was needed, that consumer confidence in Kazakhstan has bounced back.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Azerbaijan has made decent economic progress but more needs to be done to continue to encourage business to develop, the IMF said in a statement after it concluded an assessment of the country’s economy.
The IMF said in general it supported the Azerbaijani Central Bank’s plan to force banks to strengthen their capitalisation levels. It was concerned, though, about the health of the state-owned International Bank of Azerbaijan (IBA).
“The mission calls for combining this capitalisation with the restructuring of this bank (the IBA) in line with internationally accepted practices,” the IMF said in a statement.
The IBA is so large and important to Azerbaijan’s banking sector, the IMF explained, that it needs to be reformed. Earlier this year, the IBA said it would increase its capitalisation levels to 500 million Manat (about $640 million).
In December 2012, the Fitch ratings agency downgraded the IBA’s credit rating because it said its capitalisation levels were too low.
Overall, the IMF said the Azerbaijani authorities were on the right track with reducing non-oil deficit levels.
“Azerbaijan’s near-term economic prospects are generally favourable, with overall gross domestic product growth projected at 5% in 2013 and 2014, following the successful stabilization of oil output,” the IMF concluded.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 20 2013 (The Conway Bulletin) — In an important, but little noticed, report Azerbaijan’s Central Bank said that plans to ensure that its banking sector holds enough capital to protect it from a sudden economic downfall are on track.
It said that of the 43 banks operating in Azerbaijan, those holding 95% of all deposits will hit the target of ensuring they hold a minimum capital of 50 million manat, roughly $64 million, by the end of the year.
Elman Rustamov, the chairman of the Azerbaijani Central Bank, said the smaller banks would be given until the end of 2014 to hit the required levels of capital.
“However, this does not mean that banks can relax. They need to work and grow,” Mr Rustamov said according to local media.
“Other countries also took such precedents to protect themselves.”
The Azerbaijani Central Bank ordered commercial banks to improve the amount of capital they hold as a reaction to the relative boom in consumer borrow that has taken off.
This year consumer credit has risen fast in Azerbaijan, worrying some analysts.
International financial institutions, including the IMF, have supported the new rules over bank capitalisation in Azerbaijan.
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(News report from Issue No. 161, published on Nov. 20 2013)
