Tag Archives: banking

Rakishev buys another stake in Kazkommertsbank

JULY 3 2015 (The Conway Bulletin) – Kenes Rakishev bought an additional 2.61% stake in Kazkommertsbank from its founder and former chairman Nurzhan Subkhanberdin, further strengthening the Kazakh elite’s grip on one of the country’s largest banks.

The share purchase gives the 35-year-old Mr Rakishev, who is regarded as a trustee for more powerful members of the Kazakh elite and is best known for helping to buy a house in England from Prince Andrew in 2008, a 25.84% stake in the bank.

Samruk-Kazyna, Kazakhstan’s national welfare fund, owns 10.7% of the bank and an investment company called Alnair, which is also close to the Kazakh elite, owns a 28% stake in it.

The London-based Mr Subkhanberdin still controls around 32% of the bank but he has been gradually pushed out of Kazkommertsbank this year. His stake in the bank has dwindled and in March he was ousted as chairman.

Mr Subkhanberdin’s mistake had been to flirt with supporting Kazakhstan’s opposition.

In 2009 he wrote an open letter to Kazakh President Nursultan Nazarbayev questioning the imprisonment of the former head of the Kazakh uranium company Kazatomprom, Moukhtar Dzhakishev on various corruption charges.

Earlier this year, the Kazakh government, through Mr Rakishev, forced Kazkommertsbank to buy the debt-ridden BTA Bank.

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(News report from Issue No. 239, published on July 9 2015)

Kyrgyz Central Bank initiates capitalisation criteria

JULY 1 2015 (The Conway Bulletin) – Commercial banks in Kyrgyzstan’s need to meet a minimum capitalisation level, the Central Bank said, part of an ongoing process to professionalise the banking sector and protect it against another Global Financial Crisis. By 2017, commercial banks in Kyrgyzstan will need a working capital of nearly $10m.

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(News report from Issue No. 238, published on July 2 2015)

NPLs drop in Kazakhstan

JULY 1 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank said the percentage of non-performing loans held by banks had fallen from a peak of 33% to 13% because of a combination of tax breaks and state financing. It’s unclear exactly how these measures helped to reduce non-performing loans.

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(News report from Issue No. 238, published on July 2 2015)

Kazakh BTA ends banking

JUNE 23 2015 (The Conway Bulletin) – The Kazakh Central Bank cancelled BTA’s banking licence, officially ending its banking activities. BTA, which had once been one of Kazakhstan’s biggest banks, merged with Kazkommertzbank earlier this year. It assumed a massive proportion of bad debt in the 2008/9 Global Financial Crisis.

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(News report from Issue No. 237, published on June 25 2015)

Iran floats idea of bank with Azerbaijan

JUNE 14 2015 (The Conway Bulletin) – Azerbaijan and Iran intend to set up a joint bank in Tehran, Iran’s ambassador to Azerbaijan, Mohsen Pak Ayeen, told the Trend news agency.

Mr Ayeen was speaking to reporters at the sidelines of a conference in Tehran. He didn’t give any more details on how the bank would be developed.

If the bank did take off, it would underline just how far relations between Azerbaijan and Iran have improved over the past few years. Under former president Mahmoud Ahmedinejad, Azerbaijan and Iran were locked in a cycle of sabre rattling, arresting spies and threatening war.

Since then, though, with Hassan Rouhani in power in Tehran since 2013 and the international community gradually accepting the re-emergence of Iran, the two neighbours have made a show of swapping prisoners, hosting bilateral defence and diplomatic meetings and talking up trade relations.

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(News report from Issue No. 236, published on June 18 2015)

IMF enters Georgian banking row

JUNE 5 2015 (The Conway Bulletin) – The IMF jumped into an increasingly vicious row over supervisory oversight of commercial banks in Georgia by criticising the government’s plans to strip the Central Bank of the responsibility.

In a rare intervention into domestic politics, the IMF released a statement
which said it was worried about the implications that a change of supervisory powers would bring.

“The IMF is concerned that recent proposals to amend the central bank law would put NBG (National Bank of Georgia) independence at risk,” the statement said.

The government’s plan, which some suspect has been motivated by a desire to punish the Central Bank still headed by senior officials appointed by the previous administration of Mikheil Saakashvili, has been controversial from the start. A group of businesses warned that the policy change would not only pose a threat to the banking system, but also to the business and investment climate. This sentiment was supported by President Giorgi Margvelashvili, who said he would veto the bill if it was adopted by parliament.

The government has said that it wants to transfer responsibility for the oversight of commercial banks to an independent body to improve and strengthen this oversight. It has fallen out with Central Bank chief Giorgi Kadagidze over his handling of the economic storm which has battered the region.

IMF made its statement the day after former PM and Georgia’s most powerful man, Bidzina Ivanishvili, backed the proposed changes.

Mr Ivanishvili set up the governing Georgian Dream coalition and is considered the country’s chief power broker. He has clashed with both Mr Margvelashvili and Mr Kadagidze.

It its statement, the IMF also reiterated its public support for Mr Kadagidze, pitting itself firmly against Mr Ivanishvili and Mr Margvelashvili.

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(News report from Issue No. 235, published on June 11 2015)

FDI in Georgia halves in first 3 months of 2015

JUNE 9 2015 (The Conway Bulletin) – Foreign direct investment (FDI), so important to Georgia’s economy, halved in the first three months of this year compared to the last quarter of 2014, GeoStat, the Georgian statistics agency, said.

GeoStat measured total FDI in Georgia at $175m, down from $349m in Q4 2014. Georgia’s attractiveness as a foreign investment destination was rebounding after the global economic crisis of 2008/9 and a war against Russia in 2008, so the data will disappoint.

Apart from the second quarter of 2014, this was the weakest FDI data for Georgia since 2009. The biggest drop was in construction and manufacturing, reflecting the recession which has hit the region, triggered by a struggling Russian economy.

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(News report from Issue No. 235, published on June 11 2015)

Georgia’s President opposes new banking law

MAY 30 2015 (The Conway Bulletin) – Georgia’s President Giorgi Margvelashvili said that he opposed stripping the Central Bank of its supervisory duties over the country’s commercial banks. As reported in last week’s Bulletin, reformers suggested that these powers should be given to an independent body.

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(News report from Issue No. 234, published on June 4 2015)

Georgia’s parliament to consider new banking law

MAY 22 2015 (The Conway Bulletin) – Georgia’s parliament will consider adopting a law that will shift supervisory powers over commercial banks away from the Central Bank to an independent supervisory body, media reported.

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(News report from Issue No. 233, published on May 28 2015)

Tajik bank switches to Islamic banking code

MAY 20 2015 (The Conway Bulletin) – Tajik bank Bonki Rushdi Tojikiston (BRT) will switch to Islamic banking rules after striking a deal with the Saudi Arabia- based Islamic Development Bank, media reported.

BRT will be the first Islamic Bank in Tajikistan. Its conversion shows the increasing appeal of Islamic banking, after banks in Kazakhstan, Kyrgyzstan and Azerbaijan agreed to switch.

BRT aims to complete the conversion by mid-2015.

“This will open the door to numerous other operators iden- tifying the opportunities inherent in the sharia compli- ant financial system,” Khaled Al-Aboodi, head of the Islamic Corporation for the Development of the Private Sector was quoted as saying. Islamic Corporation for the Development of the Private Sector is the unit within the Islamic Development Bank which helps banks convert to Islamic banking rules.

Reuters reported that Islamic banking has grown more popular across the world but has been slower in taking off in Muslim dominated countries that are officially secular. The popularity of finance raised through a sukuk, an instrument that adheres to Islamic banking rules, has also grown in popularity in the region. Earlier this year, the part state-owned International Bank of Azerbaijan said it wanted to issue a sukuk worth $200m to $300m.

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(News report from Issue No. 232, published on May 20 2015)