Tag Archives: banking

Non-performing loans in Azerbaijan rise

APRIL 29 2016 (The Conway Bulletin) – International ratings agency Moody’s said that the proportion of loans deemed non-performing in Azerbaijan had reached 20%, a sign of the country’s poor economic health.

Moody’s said that data clearly shows the growth of non-performing loans in Azerbaijan. At the end of 2014, the proportion of non-performing loans in Azerbaijan had been 4.5%. This rose to 9.1% by the end of the third quarter of 2015 and has doubled, again, in the past six months.

Non-performing loans are credits that banks have been unable to collect for over 90 days. Analysts deem this timeframe a problem because when a loan is not repaid within three months it is likely that it will not be repaid at all.

Moody’s downgraded Azerbaijan’s economy, giving it a negative outlook and predicting problems collecting outstanding loans.

“The manat devaluation triggered a flight out of local currency deposits, led to a rise in banks’ problem loans, and eroded capital buffers,” it said in a statement.

Azerbaijan’s economy is heavily dependent on oil and gas which has collapsed in value since August 2014. The Central Bank devalued the manat currency twice last year. It ended the year at half the value it had started 2015 at.

Moody’s said this has had a negative impact on both economic activity and the banking sector.

“Azerbaijan’s economic growth outlook remains weak,” Moody’s said. “Moody’s recently revised its 2016 growth forecast for Azerbaijan, expecting real GDP to shrink by 3.3%, compared to a previous forecast contraction of 0.7%, reflecting its expectation of a contraction in both the oil/gas and non-oil/gas GDP sectors.”

ENDS

(News report from Issue No. 279, published on May 6 2016)

Tajik Sodirot Bonk forces leave

APRIL 22 2016 (The Conway Bulletin) – Tojik Sodirot Bonk, one of the biggest banks in Tajikistan, is forcing staff to take unpaid leave, media reported, an indication of the serious impact of an economic downturn. There were reports earlier this year of runs on banks. Tajikistan has been hit hard by a recession in Russia which has dried up remittance flows.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Banking activity drops in Georgia

APRIL 25 2016 (The Conway Bulletin) – Data from Georgia’s Central Bank showed savings held in Georgian banks dropped by 2.4% between February and March. At the end of March, Georgia’s commercial banks held 24.7b lari, a drop of 800m lari. This is the lowest savings level since November last year. The Central Bank is concerned that inflation has slowed. Like the rest of the region, Georgia has been vulnerable to a fall in its lari currency.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s Kazinvest shareholders sell shares

APRIL 26 2016 (The Conway Bulletin) – Kazakhstan’s minister of economy Yerbolat Dossayev and businessmen Yuri Pak and Berik Kaniyev sold their shares in Kazinvestbank, a mid-ranking bank in Kazakhstan, for an undisclosed amount. Gaukhar Kapparova, who received 11.3% of the bank’s shares after her husband died last year, is the only shareholder left from the previous structure.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Georgia cuts interest rate for the first time in 3 years

TBILISI, APRIL 27 2016 (The Conway Bulletin) — Georgia’s Central Bank cut its key interest rate for the first time in three years, performing a policy U-turn designed to boost its flagging economy.

It cut its key refinancing rate by 50 basis points to 7.5%, having steadily raised it from 4% throughout 2015. It said this was the first step towards a rate of around 5 or 6%.

“The Monetary Policy Committee considers it necessary to start phasing out the tight monetary policy, which means the gradual reduction of the refinancing rate down to the neutral level in the medium-term,” the Central Bank said in a statement.

“The rate of further monetary policy softening will depend on the revised inflation forecasts.”

In March, annualised inflation fell to 4.1% from 5.6% in February.

The Central Bank also dropped the lari-denominated minimum capital requirements for its commercial banks from 10% to 7% and increased the US dollar-denominated requirements.

It did this to try to push more lari into circulation and to take the US dollar off the market.

Alongside the less-than-rosy economic news, the Central Bank said that there had been signs of improved economic activity, especially in construction, but that high interest rates and other issues were a brake on potential growth.

“Another factor keeping the economic growth low is the negative impact of the economic situation in Georgia’s trade partners, reflected in the decrease of remittances and weakening of external demand,” it said.

Russia and Greece have traditionally been Georgia’s main source of remittances. Russia is currently in a recession linked to low global oil prices and Western imposed sanctions. Greece’s economy remains in recovery-mode after the impact of the 2008/9 Global Financial Crisis.

Like inflation, GDP growth has also been sluggish. The Statistics Committee said GDP grew by 2.3% in Q1, one percentage point slower than the expectations. The Central Bank expects 3% GDP growth in 2016.

ENDS

(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s Halyk Bank goes digital

APRIL 15 2016 (The Conway Bulletin) – Halyk Bank, Kazakhstan’s second- largest bank, said it has launched a new banking subsidiary, Altyn-i, which will operate a digital-only model. Altyn-i will operate under Altyn Bank, the successor of HSBC Kazakhstan, that Halyk Bank bought in March 2014 for $176m.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Uzbekistan plans bank sale

APRIL 15 2016 (The Conway Bulletin) – The Uzbek government said it is ready to sell off its stakes in two commercial banks, part of a privatisation programme adopted in February. The government said it estimates its 47.6% stake in Aloka Bank to be worth $42.7m and its 63.1% stake in Turon Bank to be worth $29.7m. The government needs to raise cash and also wants to portray Uzbekistan as an investment-friendly economy.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Kazakh businessman closes in on total control of Kazkommertsbank

ALMATY, APRIL 20 2016, (The Conway Bulletin) — The finish line is now in sight for Kenes Rakishev, a Kazakh businessman linked closely to the country’s elite, who has seemingly made taking over Kazkommertsbank one of his priorities.

In this process, control of Kazakhstan’s largest bank has been ripped from Nurzhan Subkhanberdin, a former opponent of Kazakh President Nursultan Nazarbayev.

A KazKom statement said that Mr Rakishev, 36, will buy out Subkhanberdin’s remaining shares in the bank by the summer. Mr Rakishev is also poised to become the next chairman in May.

“[Mr Rakishev] is expected to chair the board of directors and Marc Holtzman, chairman, shall take the CEO position in May 2016 after the extraordinary general meeting of shareholders,” KazKom said earlier this month.

As of this week, Mr Rakishev owns a 71.23% stake in Kazkommertsbank. When he buys out the rest of Mr Subkhanberdin’s shares, his stake will rise to 86%. Samruk-Kazyna, the Kazakh sovereign wealth fund owns a 10.7% stake in KazKom and the rest is owned by unnamed minority shareholders.

This takeover started in February 2014 when, essentially, the Kazakh government started to offload the debt-ridden BTA Bank onto KazKom and also to use it as a Trojan Horse to dislodge the London-based Mr Subkhanberdin.

Analysts have said the government, with Mr Rakishev as the nominated project leader, forced KazKom to buy BTA Bank from Samruk-Kazyna.

This weakened Mr Subkhanberdin’s control of the bank and started a process that has propelled Mr Rakishev to both being the owner and chairman of KazKom.

The eventual merger of KazKom and BTA Bank last year and the promotion of Mr Rakishev are the biggest changes to Kazakhstan’s banking sector since the Global Financial Crisis of 2008/9, but both the government and Mr Rakishev have been assiduous in avoiding commenting in public about it.

Even so, Mr Rakishev has developed an increasingly high public profile in Kazakhstan.

The son-in-law of the current Kazakh minister of defence, Mr Rakishev shot to prominence in 2008 as the go-between for Timur Kulibayev, President Nazarbayev’s son-in-law, and the British Royal Family when he bought an estate in England from Prince Andrew.

Since then, he has had a hand in some of Kazakhstan’s biggest business deals.

He also, officially, owns a 75% share in industrial holding Sat&Co. and a 20% stake in Central Asia Metals, a copper producer listed in London.

To this list he can now add KazKom.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Stock market: BGEO Group

APRIL 22 2016 (The Conway Bulletin) – Shares in BGEO Group, the London-listed holding company that owns Bank of Georgia, gained 6% this week, rallying on the company’s positive annual results.

It posted a 38.4% growth in revenue and its retail banking customer base grew by 37.8% in 2015.

Neil Janin, BGEO’s chairman, also gave a strong outlook.

“The current economic and political situation in Georgia is solid and its outlook promising,” Mr Janin said in a statement, praising the recent tax code amendments.

Georgia holds parliamentary elections in October which may impact BGEO. The company was cagey about this and said that it hoped the country would “continue in the right direction”. In Georgian politics, though, anything can happen, as we’ve learned through the years.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Kazakhstan’s wealthiest men owns Nurbank

APRIL 15 2016 (The Conway Bulletin) – Rashit Sarsenov, one of Kaza- khstan’s wealthiest men, said that he was the real owner of JP Finance Group, an Almaty-registered company that officially owns 82.8% of Nurbank. Measured by assets, Nurbank is the 15th biggest bank in Kazakhstan. Mr Sarsenov’s sister was previously listed as JP Finance Group’s owner. In November 2015, Mr Sarsenov’s son, Eldar, became the chairman of the bank.

ENDS

(News report from Issue No. 277, published on April 22 2016)