Tag Archives: banking

Tajikistan’s TSB resumes transactions

JUNE 10 2016 (The Conway Bulletin) – Tojiksodirotbonk, Tajikistan’s second largest lender, said it resumed money transfer transactions, and that it continued to operate under the administration of the Central Bank. TSB, as it is commonly known, is awaiting confirmation from the EBRD for a funding lifeline of around $165m. The investment would give the EBRD a 25% stake in the bank.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Azerbaijan makes bank deal with Iran

JUNE 14 2016 (The Conway Bulletin) – Azerbaijan and Iran will launch their first joint bank next year, the countries’ central bankers told media. Elman Rustamov, Azerbaijan’s Central Bank chief, visited his Iranian counterpart Valiollah Seif in Tehran. Both laid the groundwork for the establishment of a new bank, a sign of the growing cooperation in the financial sector.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakh Tsesnabank completes bank deal

JUNE 16 2016 (The Conway Bulletin) – Tsesnabank, one of the largest banks in Kazakhstan, completed its takeover of Russian Plus Bank by buying a 14.7% stake from UAE based Linex Global. Tsesnabank, which had bought a controlling stake in Plus Bank in January, now owns 99% of the bank. Adilbek Dzhaksybekov, mayor of Astana, owns Tsesnabank.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Germany invests on Uzbek bank

JUNE 8 2016 (The Conway Bulletin) — ALWA, a German plastics manufacturer, bought a 15% stake in Orient Finance Bank, an Uzbekistan-based lender, for 9.3b sum ($3.2m), news agency Trend reported. The bank was able to sell the stake by increasing its capitalisation. This is in line with the government policy of selling off stakes in state-owned or state-participated assets.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Expobank buys Kazakh RBS

JUNE 8 2016 (The Conway Bulletin) — Russian lender Expobank, owned by Igor Kim, agreed to buy the Kazakhstan-based subsidiary of Britain’s Royal Bank of Scotland. Earlier this year, Mr Kim bought RBS’s Russian subsidiary. Orifzhan Shadiyev, owner of Capital Bank Kazakhstan, had, in March 2015, expressed an interest in buying RBS Kazakhstan although the deal later fell through.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Business comment: Banking mergers

JUNE 10 2016 (The Conway Bulletin) — A wave of mergers, acquisitions and privatisations has hit Central Asia and the South Caucasus.

At The Bulletin, we’ve extensively covered the Kazkommertsbank buyout over the past two years. But elsewhere, from Azerbaijan to Uzbekistan, the banking sector is in a restructuring phase.

A renovation of the financial sector had become crucial after an extended economic downturn hit the money markets, from currency exchange rates to loan sustainability. What’s more, low oil prices, besides depressing budget capacity and economic growth, have hindered investment and project financing.

From small local lenders to country-wide behemoths, banks across Central Asia and the South Caucasus have equally suffered, albeit for different reasons.

And since the beginning of 2016, small quakes have shaken the sector.

In Azerbaijan, immediately after the sharp depreciation of the manat, middle and small-sized banks were unable to maintain the newly set capital ratio requirements, triggering failures and mergers.

This week a rather obscure deal involving an Uzbek bank and a German plastics manufacturer marked the beginning of the new privatisation era in Uzbekistan.

And of course, across the border in Tajikistan, we are now three weeks into the care-taking administration of the country’s second-largest bank.

This is both a stress test and an opportunity. 25-year-old countries cannot afford to have a banking crisis every decade. Dependent as they are on commodity prices and regional trade, they need to seize this occasion to build more reliable and stable foundations for their finance sector.

ENDS

(News report from Issue No. 284, published on June 10 2016)

KazKom buys back bonds

JUNE 2 2016 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s largest lender, said it had bought back part of its outstanding bonds, spending around $35m in total. In May, CEO Kenes Rakishev had said the bank was ready to repurchase as much as $500m in outstanding bonds. After the latest transaction, KazKom has to pay back around $522m from two bond issues due later this year and €392m ($437m) due in February 2017.

ENDS

(News report from Issue No. 283, published on June 3 2016)

Kazakh bank’s profits fell by 33%

MAY 23 2016 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s second- largest bank, said profits fell by 33% in Q1 2016, compared to 2015 due to a slowdown in lending. The bank said high interest rates at the beginning of the year had scared away consumers. Importantly, Halyk also said the proportion of bad loans in its portfolio increased to 11.7% from 9.1% in Q4 2015.

ENDS

(News report from Issue No. 282, published on May 27 2016)

Moody’s warns that Azerbaijani banks could go bankrupt

MAY 23 2016 (The Conway Bulletin) — Ratings agency Moody’s said that a number of Azerbaijani banks could soon default, on the same day that the government said the country’s largest lender had piled up an unsustainable amount of bad assets, painting a bleak picture for the country’s financial sector.

Problem loans and liquidity issues have dented the financial health of Azerbaijani banks since the Central Bank decided to float the manat currency against the US dollar, triggering a sharp depreciation in December last year.

“Several banks with B3 rating have high risk of default,” Petr Paklin, analyst at Moody’s Financial Institutions Group was quoted as saying.

Moody’s downgraded Bank of Baku, Unibank and Xalq Bank to B3 in January and it is now saying that these could default. All three are among Azerbaijan’s 10-largest lenders.

The country’s biggest bank, the International Bank of Azerbaijan, amassed overdue loans and other toxic assets over the past few months at such a rate that it triggered a comment, and possible help, from the government.

“The cleaning process of toxic assets from IBA’s balance sheet is underway,” Samir Sharifov, Azerbaijan’s finance minister told local media on May 20.

IBA has not yet published the latest figures on the share of non- performing loans in its portfolio, but analysts believe it is well above the 12% previously reported. Notably, IBA holds around half of all loans in the country.

Azerbaijan’s government, as IBA’s largest shareholder with a 54.9% stake, could decide to write-off overdue loans, effectively bailing it out. Clearly, Azerbaijan’s financial sector has suffered from the sustained low oil prices and the sharp depreciation of the manat. The downturn has hit customers, who have been unable to pay back their loans.

ENDS

(News report from Issue No. 282, published on May 27 2016)

Kazakh President’s brother buys bank

MAY 20 2016 (The Conway Bulletin) — Bolat Nazarbayev, brother of Kazakhstan’s President Nursultan Nazarbayev, bought a 50% stake in the Ukrainian lender Eurobank. The remaining 50% of the bank is indirectly owned by Ukrainian financier Vadim Pushkarev. In 2014, Bolat Nazarbayev bought a 7.83% stake in Kazakhstan’s Bank RBK.

ENDS

(News report from Issue No. 282, published on May 27 2016)