Tag Archives: banking

Kazakhstan says wants to build its own regional Ease of Doing Business index

ALMATY, MARCH 21 2017 (The Conway Bulletin) — Looking to ape the World Bank’s global ‘Ease of Doing Business’ survey, Kazakh officials said they wanted to set up a regional version covering all of Kazakhstan.

The survey will measure how difficult, or easy, Kazakh and foreign companies find it to do business in Kazakhstan’s regions, providing data for investors and the government.

Serzhan Madiyev, head of the state-linked Economic Research Institute said that the index had been ordered by President Nursultan Nazarbayev.

“We provide recommendations to the government on what needs to be done to raise the position in this rating every year,” he told the state- owned Astana Times newspaper. “It

is very important for attracting foreign investments.”

Kazakhstan has been looking to attract more investors, and its ‘Ease of Doing Business’ ranking by the World Bank has improved. In 2017, it was ranked in 35th position. The World Bank survey, though, doesn’t measure corruption, one of the main grudges that foreign investors have.

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(News report from Issue No. 322, published on March 27 2017)

Armenia joins China-led AIIB

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MARCH 23 2017 (The Conway Bulletin) — Armenia was one of 13 new members to be approved by the China-led Asian Infrastructure Investment Bank (AIIB). This was the first new intake of members at the AIIB since its inception in January 2016 and brings its total to 70. In the Central Asia/South Caucasus region, only Turkmenistan has declined to join the AIIB. The US, a non-member, sees the AIIB as an attempt by China to try to extend its influence.

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(News report from Issue No. 322, published on March 27 2017)f

No to privatising IBA, says Azerbaijani official

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MARCH 17 2017 (The Conway Bulletin) — Azerbaijani officials said that it was too early to start privatising the International Bank of Azerbaijan, the country’s largest bank, going back on a pledge made at the end of last year. In an interview with Reuters, Rustam Tahirov, strategic services department head at Financial Market Supervision Agency, said that the government wasn’t able to reduce its 76.73% stake in IBA. It increased its stake from 55% at the start of the year, effectively propping up IBA during an economic downturn that has threatened to scupper the Azerbaijani banking sector.

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(News report from Issue No. 322, published on March 27 2017)

Kazakh Central Bank says to buy KKB bad debt

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ALMATY, MARCH 15 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank confirmed that it would buy up 2.4 trillion tenge ($7.5b) of bad debt owned by Kazkommertsbank, effectively subsidising its purchase by Halyk Bank.

Halyk Bank, owned by the daughter and son-in-law of Kazakh president Nursultan Nazarbayev, agreed to buy Kazkommertsbank earlier this year for an undisclosed amount in a deal that will give it a 38% market share and Kazakhstan’s elite control of the banking sector.

The 2.4 trillion tenge bad debt held by Kazkommertsbank is a legacy of its purchase of BTA Bank from the government. The government had

bought it in 2008/9 when it was about to collapse during the Global Financial Crisis.

Separately, deputy Central Bank chairman Oleg Smolyakov said it would take two to three months for Halyk Bank to carry out its due diligence of Kazkommertsbank before the takeover could be completed.

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(News report from Issue No. 321, published on March 20 2017)

Kazakhstan’s Eurasian Bank plans to expand

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MARCH 14 2017 (The Conway Bulletin) — Kazakhstan’s Eurasian Bank plans to expand into Uzbekistan, Kyrgyzstan, Georgia and Azerbaijan in a bid to become a truly regional operator, its CEO Pavel Loginov said in an interview with Forbes Kazakhstan. Almaty, the former capital of Kazakhstan, is considered the financial capital of Central Asia but the only two banks in the region listed on the London Stock Exchange are both Georgian — Bank of Georgia and TBC.

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(News report from Issue No. 321, published on March 20 2017)

Islamic finance boosts in Kazakhstan

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MARCH 14 2017 (The Conway Bulletin) — The Association of Financiers of Kazakhstan, an industry lobby group, and Islamic Development Bank have signed a deal to look at ways of developing Islamic finance in Kazakhstan, media reported. There are currently two banks in Kazakhstan practising Islamic banking — Zaman Bank and Bank Al-Hilal.

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(News report from Issue No. 321, published on March 20 2017)

Markets: TBC Bank

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MARCH 20 2017 (The Conway Bulletin) — Rather like the Georgian rugby team that it sponsors, TBC Bank is on the up. The bank, which has a 37% share of the consumer loans market in Georgia, is listed on the London Stock Exchange. It pushed up to near an all-time high on March 17 of 1,497p/$1. This is 29% higher than it was at its IPO in mid-August.

And analysts say there is more to come from TBC. It’s main rival is Bank of Georgia, which has a market share of around 32%. It’s share price has tripled since it listed five years ago.

Analysts have also said that the Georgian consumer market has plenty of room to grow. They point out that the market is still underdeveloped and that banks’ loan books are growing by 20% every year.

There are, of course, risks for investors. These come mainly in the exposure to Georgia, which has a high level of political and economic risk. Its currency has been dented and its politics can be fraught.

Just like the Georgian rugby team, which is knocking on the door of the venerable Six Nations tournament, TBC Bank is heading in the right direction for increased kudos and recognition.

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(News report from Issue No. 321, published on March 20 2017)

Tough times for Kazakh banks, says S&P

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MARCH 14 2017 (The Conway Bulletin) — The ratings agency Standard & Poor’s said that banks in Kazakhstan will face another tough year because the Kazakh economy is still labouring under slow growth rates, depressed commodity prices and exchange rate volatility. The Kazakh Central Bank has set up a fund to help banks that are struggling through this regional economic downturn.

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(News report from Issue No. 321, published on March 20 2017)

Two banks merge in Kazakhstan

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MARCH 15 2017 (The Conway Bulletin) — Tengri Bank and Capital Bank Kazakhstan are to merge, they said in a statement, the first of what observers hope will be a series of mergers in the fragmented banking sector. Observers have said that there are too many small and undercapitalised banks and that the sector needs to consolidate. The merged bank will be the 17th largest in Kazakhstan and have a capital ratio of 19% which is more than double the minimum level, Tengri Bank and Capital Bank said.

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(News report from Issue No. 321, published on March 20 2017)

Fitch says more banks in Azerbaijan are likely to fail before the end of the year

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MARCH 16 2017 (The Conway Bulletin) — Fitch the ratings agency said that more banks in Azerbaijan would fail this year as the economy continued to labour under the pressure of depressed oil prices and bad debts.

The Azerbaijani banking sector has been faltering, forcing a major investment by the government into its biggest bank — International Bank of Azerbaijan. It now owns 76.7% of the bank, up from 55%. Last year, several smaller banks had their licences removed or were forcibly merged.

“Fitch expects the banking sector to remain loss-making in 2017 and we have Negative Outlooks on most of the Azerbaijani banks we rate,” it said in a statement.

“Banks will not be able to absorb new NPLs (non-performing loans) through growth, given the sluggish economy and capital constraints.”

Importantly it also said that non- performing loans, those considered more than 90 days overdue, had increased to average 21% of the banks’ loan portfolio, up from 12% at the end of 2015.

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(News report from Issue No. 321, published on March 20 2017)