Tag Archives: banking

Markets: TBC Bank

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.

ENDS

(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.

ENDS

(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.

ENDS

(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.

ENDS

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

Kazakh C.Bank loans Delta $31m

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MARCH 7 2017 (The Conway Bulletin) — As part of its well-publicised plan to help its struggling banking sector, the Kazakh Central Bank said that it had loaned Delta Bank, one of the smaller banks in Kazakhstan, 9.8b tenge ($31m), media reported. The loan, made on March 3, was linked to a missed coupon repayment that Delta Bank had needed to pay. This was connected to pension obligations.

ENDS

(News report from Issue No. 320, published on March 13 2017)

Kazakh bank posts improving results

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MARCH 10 2017 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s second largest bank by assets, said its net income in 2016 was 9.2% higher than in 2015 at 131.2b tenge ($412m). Importantly, its Q4 net income was 32% higher in 2016 than the same period in 2015 and the proportion of loans considered to be bad, those more than 90 days overdue, had dropped to 10.2% by Dec. 31, from 11.5 % on Sept. 30. The data suggested that the economic downturn that has hit Kazakhstan is lifting. Last week, Halyk Bank confirmed it would merge with Kazkommertsbank.

ENDS

(News report from Issue No. 320, published on March 13 2017)

Fitch says Kazakhstan’s KKB-Halyk merger will be complicated

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ALMATY, MARCH 10 2017 (The Conway Bulletin) — The Fitch ratings agency said that it doubted a proposed merger between Kazakhstan’s two largest banks, Halyk Bank and Kazkommertsbank, could be achieved as smoothly and as quickly as the authorities had suggested.

Instead Fitch said that the bad debt inherited by Kazkommertabank when it completed the purchase of BTA Bank in 2015 was likely to linger despite a promise by the Central Bank to buy it up. It said that a Central Bank fund had promised 2 trillion tenge to buy up bad debt but that this was still short of the 2.4 trillion bad debt pile that Kazkommertsbank currently holds.

“Fitch believes there is a material risk that KKB’s problem assets may not be fully removed from the bank’s balance sheet or adequately reserved prior to a transaction,” Fitch said.

“Halyk Bank’s capitalization could weaken significantly as a result of the acquisition of KKB.”

This is important as Fitch is the first major Western institution to speak out against plans revealed earlier this month to merge the two banks.

The merged bank will have a 38% market share of the Kazakh banking sector. It placed Halyk Bank on a negative watch.

ENDS

(News report from Issue No. 320, published on March 13 2017)

Kazakh elite are winners from bank merger

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MARCH 3 2017 (The Conway Bulletin) — By merging Kazkommertsbank with Halyk Bank, the Kazakh elite have completed their drive to control the country’s banking sector.

It’s been a long campaign but, for the Kazakh elite, one worth fighting and winning. If previously, the country’s banking sector had been troublesome, creating billionaires such as Mukhtar Ablyazov and Nurlan Subkhanberdin who didn’t necessarily want to go along with President Nursultan Nazarbayev’s vision for Kazakhstan, now they have full control.

The process to subjugate the banking sector started with the government’s purchase of BTA Bank in 2008/9 when it was on the brink of collapse. Next came the not-so-subtle takeover of Kazkommertsbank in 2014/15 and then its absorption of BTA Bank, and its mountain of bad debt.

And now we have the denouement.

Kazkommertsbank has apparently agreed to merge with, or perhaps more accurately – be taken over by, Halyk Bank. The first and second biggest banks in the country will create a mega-bank that will dominate the sector.

Halyk Bank is owned by Dinara Kulibayeva, President Nursultan Nazarbayev’s daughter, and her husband, Timur Kulibayev. Since 2015, the 37-year-old Kenes Rakishev, one of the Kazakh elite’s favourite businessmen has been the majority owner of Kazkommertsbank. Last year he also became its chairman.

And, as if to underline the elite/insider nature of the deal, the Kazakh Central Bank has given the deal its blessing, saying that it will provide the necessary funds to see it through, including buying up the bad debt that Kazkommertzbank inherited when it took over BTA Bank. In other words, expect the new bank to be in excellent health and to be fully compliant to the whims of the Kazakh elite.

This cements the elite’s control of Kazakh business and banking. Opposition forces will never have as much leverage, good or bad, as when Ablyazov controlled BTA Bank and Subkhanberdin controlled Kazkommertsbank.

The business acumen of the Kazkommertsbank-Halyk merger may not be obvious, but the political reasons are crystal clear.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Bank of Georgia revenue rises

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FEB. 24 2017 (The Conway Bulletin) — London-listed Bank of Georgia said in its full year 2016 results that its revenues had risen by 17.8% to over 1b lari. Analysts considered this a decent but not overly brilliant annual performance because of the drop in value of the lari, which fell 10.5% against the the US dollar in 2016.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Two Tajik banks lose licences

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DUSHANBE, FEB. 24 2017 (The Conway Bulletin) — Tajikistan’s Central Bank withdrew operational licences for Fononbank and Tajprombank, two months after it unveiled a $490m plan to save its banking sector from collapsing under the weight of bad debt.

It two terse statements, the Tajik Central Bank avoided giving details on just why it had withdrawn the banks’ licences but it did say that it was studying the banks’ various issues.

Tajik media later reported that customers of Fononbank and Tajprombank were unable to withdraw their savings.

A depreciation in the value of the Tajik somoni and a general economic downturn linked to a recession in Russia, which generates much- needed jobs and remittances, has pressured Tajikistan’s banking sector.

The government has already pumped millions of dollars into the country’s two biggest banks, Agroinvestbank and Tojiksodirot. It also promised in December to support Fononbank and Tajprombank. The government has also been talking to the IMF about receiving funds and the European Bank for Reconstruction and Development (EBRD).

Neither the IMF nor the EBRD has committed any funds yet, although the EBRD pledged last year to buy an undisclosed stake in Tojiksodirot for $100m.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)