Tag Archives: banking

EBRD gives Georgia’s TBC Bank an unsecured loan of $100m

JUNE 23 (The Bulletin) — The EBRD gave an unsecured loan of $100m to Georgia’s TBC Bank to help it lend out cash to small and medium-sized businesses fighting off the impact of the coronavirus. The EBRD has been a core supporter of SMEs in Georgia throughout the lockdown. Georgia has been praised for stamping out the virus but its economy is set to shrink by 5% this year.

ENDS

— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Armenia says the coronavirus will wipe out any potential GDP growth

Leave a Reply

APRIL 2 (The Bulletin) — Armenia’s economy minister, Tigran Khachatryan, said that the coronavirus will wipe out any previously projected economic growth this year.

Economists had been predicting another strong year of growth for Armenia with a GDP rise of around 7.5% but it has been hit hard by the spread of the coronavirus – with 822 infections, the highest in the region – and COVID-19, the disease caused by the coronavirus.

The Armenian Central Bank has also said that economic growth will slow to 0.7% in 2020, but Mr Khachatryan, the economy minister, said that it was too early to even predict this level of growth.

“We believe that in 2020 there will be a significant reduction in economic indicators as opposed to optimistic forecasts made at the beginning of the year,” he was said.

Fitch, the ratings agency, warned that the economic fallout from the coronavirus will damage Armenia’s banking sector and increase the ratio of nonperforming loans. It also said the government’s current account deficit would increase from 1% of GDP to 5%.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Georiga pledges $606m to prop up economy

Leave a Reply

APRIL 1 (The Bulletin) — Georgia’s government pledged $606m to help business try to weather the impact of the coronavirus pandemic and the Central Bank said that it was relaxing its lending and capitalisation rules for smaller banks to free up another $400m.

On the $606m aid for businesses, Georgian PM Giorgi Gakharia said: “This is the help that will be directed to the maintenance of jobs, to the maintenance of companies, to the ongoing production of companies and to the maintenance of current businesses.”

The Central Bank has also been selling its US dollar reserves to prop up its currency. The lari has stabilised, although it is still at an all-time low.

Georgia’s economy ministry has said that the pandemic will knock the country’s GDP growth rate, but it has not said by how much.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan puts four banks into government protection scheme

Leave a Reply

ALMATY/Feb. 28 2020 (The Bulletin) — Four Kazakh banks have entered a government scheme that protects them from bankruptcy after a Central Bank asset review test, the Kazakh Central Bank said in a statement.

The move comes at the end of the government’s review of assets held by 14 second-tier banks. This will concern analysts who have said that Kazakhstan’s banking sector is still too weak and that the banks’ asset-to-loan proportion is still too low.

The banks — Bank CenterCredit, ATF Bank, Eurasian Bank and Nurbank — are now protected from bankruptcy but will have to pay a premium for the insurance.

Although the banks have been taken into a government protection scheme, the Oleg Smolyakov, deputy chairman of the Kazakh Central Bank, said they were all adequately capitalised as they passed a minimum threshold of a capital adequacy ratio of 7.5%.

“We are confident that, based on the implementation of recommendations and measures, a further increase in the financial stability of the banking sector as a whole will be achieved,” he was quoted by the media as saying.

In December, sources had described the four banks as needing a bailout to survive after the asset review showed up holes in their balance sheets. Media reported that the asset protection scheme for the four banks would last five years and be worth $308m.

In the 2008/9 Global Economic Crisis, the government had to buy up three private banks. They were hit again after the 2014 collapse of oil prices.

— ENDS

— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kaspi.kz posts jump in profits and talks up IPO options

Leave a Reply

ALMATY/Feb. 27 2020 (The Bulletin) — — Four months after postponing an IPO on the London Stock Exchange, Kapsi.kz, a Kazakhstan-based banking and technology group, said that income rose to 197b tenge ($525m) in 2019, a 79% rise from 2018.

Kaspi.kz which owns Kapsi Bank, one of the largest high street retail banks in Kazakhstan, postponed its IPO because it said that market conditions were poor, although analysts said that it may have been irked by receiving a poorer market reception than expected.

Kapsi.kz has close links to the Kazakh elite and, until the start of 2019, Kairat Satybaldy, the nephew of Kazakhstan’s former president, Nursultan Nazarbayev, had officially owned the biggest stake in the company.

The company’s other main shareholders are Baring Vostok funds, Goldman Sachs, chairman Vyacheslav Kim and CEO Mikheil Lomtadze.

Reuters quoted sources inside Kaspi.kz saying that the company was once again considering an IPO and quoted Mr Lomtadze as saying: “We continue to monitor market conditions closely in relation to our potential initial public offering.”

In its full-year report, Kaspi.kz said its revenue had increased by 37%.

— ENDS

— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Georgia cancels project to build deep sea port at Anaklia

Leave a Reply

TBILISI/Jan. 9 2020 (The Bulletin) — The Georgian government cancelled a $2.5b contract to build Georgia’s largest deep-water port at Anaklia on the Black Sea because it said that finances for the consortium which had taken on the project were too flimsy.

Critics of the government, though, accused it of turning the country’s biggest infrastructure projects into a political weapon. One of the key consortium partners is TBC Bank which was set up by Mamuka Khazaradze who is currently standing trial, accused of corruption.

“The Anaklia Port Project is owned by the state, it is not owned by any private investors,” Maia Tskitishvili, Georgia’s minister for regional development and infrastructure, said when she announced that the contract, held by the Anaklia Development Consortium (ADC), would be cancelled . “By the end of 2020, we had to have a port in operation but as you can see, we will not get this result.”

She said ADC, led by TBC Bank had failed to replenish capital of $120m or attract a loan of $400m from international banks. ADC disagreed, though, and said that it had secured loan pledges from international banks such as the European Bank for Reconstruction and Development (EBRD). It said that these pledges had been undermined because the government had failed to guarantee to potential investors that they would get their money back is the project collapsed.

ADC said it would take the government to arbitration over the Anaklia contract.
Georgia has framed this project, conceived in 2014 under the current Georgian Dream coalition, as a vital piece of infrastructure needed to boost its status on the east-west transit corridor that China has dubbed the Belt and Road project.

ENDS

— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

— Copyright owned by the Central Asia & South Caucasus Bulletin

Georgia’s TBC Bank launches consumer finance products in Uzbekistan

Leave a Reply

DEC. 20 2019 (The Bulletin) — Georgia’s TBC Bank has launched a consumer finance services trial in Uzbekistan, media reported, part of its drive to expand its international operations. Earlier this year, TBC Bank bought the Payme Uzbekistan-based digital payment service. It said that its consumer finance products are currently limited to electronic and furniture items at their ‘point-of-sale’.
ENDS

— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019

Georgia gives Anaklia partners more time to name financers

Leave a Reply

DEC. 17 2019 (The Bulletin) — Georgia’s government extended to Dec. 31 a deadline for the partners developing the Anaklia port on the Black Sea to submit new loan agreements after they missed a Dec. 16 deadline. The Anaklia was supposed to be the biggest infrastructure project built in Georgia, opening it up to more East-West cargo traffic, but instead each side has accused the other of undermining progress. The partners are TBC Holding, the US’ SSA Marine, Britain’s Wondernet Express and Bulgaria’s G-Star.
ENDS

— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019

Kazakhstan prepares to bail out banks, again

Leave a Reply

ALMATY/Dec. 9 (The Bulletin) –Kazakhstan is preparing another $1b bailout of its banking system, a sign that the economy is recovering at a slower pace-then-expected from a 2014 downturn and also that banks have not been reformed substantially to deal with this sluggish economic growth.

Reuters quoted two sources who were described as being familiar with the plans as saying that an asset quality review had shown up holes in the balance sheets of at least four banks.
The Central Bank, Kazakhstan’s financial regulator, has declined to comment but if these asset gaps are confirmed it will be another blow to Kazakhstan’s prestige as the financial centre of the region.

Western analysts have criticised the Kazakh banking system for handing out loans to consumers too easily, for being poorly run and for owners using banks as personal slush funds.
Last year, the Kazakh government forced the merger of the two biggest banks in the country into one super-bank, Halyk Bank, under the ownership of Timur Kulibayev, the son-in-law of former Kazakh president Nursultan Nazarbayev. On top of this, the government has also spent an estimated $13b already on bailing out banks.
ENDS

— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019

Court case begins against TBC Bank founders in Georgia

Leave a Reply

DEC. 2 (The Bulletin) — The court case against TBC Bank founder Mamuka Khazarde and his deputy Badri Japaridze for corruption and money laundering began in Tbilisi. Both men deny the charges which they have said are politically motivated. TBC Bank is one of Georgia’s biggest banks and is listed on the London Stock Exchange.
ENDS

— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019