JAN. 4 2014 (The Conway Bulletin) — The Manila-based Asian Development Bank (ADB) plans to increase the number of loans it gives to small and medium sized businesses in Azerbaijan by extending the number of banks it works with. Last year ADB gave AccessBank a five year $50m loan specifically to lend to companies in rural areas.
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(News report from Issue No. 166, published on Jan. 8 2014)
DEC. 23 2013 (The Conway Bulletin) — So, it looks as if, finally, the Kazakh government has found a way of offloading its stake in the troubled BTA Bank.
An official press release confirmed the sale of a controlling stake in BTA Bank to Kazkommertsbank, also known as KazKom, and businessman Kenes Rakishev.
BTA Bank has the highest proportion of bad debt among Kazakhstan’s banks. Most analysts consider its shares to be virtually toxic and in November Halyk Bank, owned by the daughter and son-in-law of Kazakh President Nursultan Nazarbayev, declined to buy the government’s stake.
KazKom and Mr Rakishev, however, went through with the deal — probably for political, rather than commercial, reasons.
Nurlan Subkhanberdin, who lives in London, is the biggest shareholder in KazKom. Mr Subkhanberdin has fallen out of favour with the authorities over the past few years and has been looking for ways to rebuild relations.
Mr Rakishev — the son-in-law of the mayor of Astana, Imangali Tasmagambetov — is an increasingly high profile member of the Kazakh business elite who, again, may have been looking to shore up his position.
In any case, KazKom and Mr Rakishev have formed a consortium of investors that signed a preliminary nonbinding agreement to purchase equal shares in BTA Bank from Samruk-Kazyna, the Kazakh sovereign wealth fund. Samruk-Kazyna will still maintain a minority share in BTA Bank.
It’s unclear how much Mr Rakishev and KazKom agreed to pay for BTA Bank but it is safe to say it will be a fraction of the $7b that the government spent buying a 97.3% stake in BTA Bank in 2008/9 to save it from collapse.
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(News report from Issue No. 166, published on Jan. 8 2014)
DEC. 13 2013 (The Conway Bulletin) — Kazakh financier Bulat Utemuratov has agreed to buy the Kazakh government’s 80% stake in Termibank and a 16% stake in Alliance Bank, media reported. The government will still own a 51% stake in Alliance Bank and a 98% stake in BTA Bank which it has yet to find a buyer for.
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(News report from Issue No. 165, published on Dec. 18 2013)
DEC. 13 2013 (The Conway Bulletin) — Bulat Utemuratov, a close associate of Kazakh President Nursultan Nazarbayev, has agreed to buy the government’s share in Temirbank and most of its stake in Alliance Bank for up to $1b, local media reported.
This is important for Mr Nazarbayev who wants to change Kazakh banking. It is made more important since Halyk Bank, owned by his son-in-law Timur Kulibayev, declined to buy the government’s stake in BTA Bank in November.
Mr Utemuratov is a willing ally of Mr Nazarbayev and was an obvious purchaser of the Kazakh government’s 80% stake in Temirbank and a 16% stake in Alliance. This leaves Samruk-Kazyna with a 51% stake in Alliance Bank.
One question is why didn’t Mr Utemuratov buy the government’s entire stake in Alliance Bank? Another is, what is he going to do with the banks when he does finish the deal?
In any case, it is a step forward for Kazakh officials who plan large changes in Kazakhstan’s banking system. The government bought the stakes in the banks in January 2009 to stop them from collapsing during the global financial crisis and has been looking to cash them in for some time.
As well as selling its stakes, it wants the banks to reduce their proportions of bad debt and also to unite their private pension funds under one scheme run by the Central Bank.
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(News report from Issue No. 165, published on Dec. 18 2013)
DEC. 5 2013 (The Conway Bulletin) — In an interview with Bloomberg News in London, Kazakhstan’s Central Bank chief Kairat Kelimbetov said one of his main objectives was to cut the proportion of nonperforming loans in Kazakh banks to 10% by January 2016. Non-performing loans currently make up about 30% of its banks’ portfolio.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 3 2013 (The Conway Bulletin) — Azerbaijan’s Central Bank plans to buy $500m-$600m of Asian securities as part of its investment portfolio, local media quoted the Bank’s deputy chairman Avtandil Babayev as saying. Azerbaijan has developed a reputation as a big spender on foreign markets over the past few years with property, equity and debt purchases.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 29 2013 (The Conway Bulletin) — The authorities in Uzbekistan continued to ramp up pressure on Gulanara Karimova, eldest daughter of Uzbek President Islam Karimov. On Nov. 27, the Central Bank withdrew an operating licence for Credit Standard Bank, which is linked to her. Later, police also closed down art and jewellery stores belong to Ms Karimova.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 25 2013 (The Conway Bulletin) — The Uzbek authorities have tightened rules on private banking and money wiring. As of Nov. 25, Uzbek banks are now required to establish the identity of citizens exchanging $4,000, a tenth of the previously allowed amount.
Also, the new rules reduce to a total of $17,000 in three consecutive months the maximum amount people can wire without being considered as suspicious.
The authorities have said new regulations are part of efforts to combat terrorism financing and money laundering.
The timing, though, appears pertinent. Gulnara Karimova, the embattled eldest daughter of Uzbek President Islam Karimov, recently touched upon the money laundering issues on her Twitter page.
She said the Tashkent-based Asia Alliance Bank, established in August 2009, holds all of Uzbekistan’s assets and that this bank was set up specifically to launder money.
It’s important to note, though, that no formal charges have ever been levied at Asia Alliance Bank.
Ms Karimova, though, must tread carefully on money laundering. The French authorities currently have an ongoing case against her.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 27 2013 (The Conway Bulletin) — With a $2.2b fortune and the ear of the president, Bulat Utemuratov is one of the most powerful people in Kazakhstan.
Bloomberg News interviewed Mr Utemuratov at the new Rixos Borovoye hotel in northern Kazakhstan.
Mr Utemuratov is probably best known for selling his bank, ATF Bank, to Austria’s UniCredit Bank in 2007 for $2b.
And this deal, according to an excerpt from his interview with Bloomberg News, acted as a turning point in Mr Utemuratov’s business thinking.
“I decided after selling ATF Bank to UniCredit that we must stop using offshore companies and become more transparent,” he said in the Bloomberg interview.
“Everything must be clean.”
Mr Utemuratov had owned ATF Bank through a series of offshore accounts. The global financial crisis in 2008 and 2009 exposed dubious accounting practices. Since then, Mr Utemuratov said he had bought or set up another couple of banks, both of which he owns transparently.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 25 2013 (The Conway Bulletin) — Nurlan Kussainov, the CEO of the state-owned Kazakhstan Development Bank, resigned, local media reported. Media reports didn’t specify why Mr Kussainov quit the post he had held since April 2011. Kazakhstan’s sovereign wealth fund Samruk-Kazyna controls the Kazakhstan Development Bank.
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(News report from Issue No. 162, published on Nov. 27 2013)