It looks like, after Timur Kuanyshev’s family has left Tengri Bank, the financial institute has got a chance to survive. However, the incident once again draws our attention to two other small banks experiencing similar problems. Why don’t the regulators touch them?
On September 3, 2020, Centre of Business Information Capital announced that Timur Kuanyshev’s family had been taken off the list of Tengri Bank’s shareholders. The publication says that the event itself took place on August 24, 2020, but Kuanyshev left the Board of Directors of this financial institute as early as May 15.
The publication also informs that Tangri Bank’s majority shareholder, Punjab National Bank, has taken measures to stabilise the situation with liquidity and has employed an outside consultant from amoung “the big four” for assessing the situation. Based on the results of the consultant’s report, a plan to stabilise the bank’s operations will be developed.
In view of all this, it looks like Tengri Bank has a chance to survive. Especially since the National Bank of the Republic of Kazakhstan and the Agency for Regulation and Development of Financial Market of the Republic of Kazakhstan look in favour on it. The aforementioned publication quotes the Agency’s Deputy Chairman Oleg Smolyakov who, back in February 2020, said:
“There is no resolution or proof that Tengri Bank has gone bankrupt. Due to the temporary difficulties, the bank has established certain cash withdrawal limits. We know about this problem and believe that it is a task, first of all, for the shareholders to support their bank. Tengri Bank has got a rather prominent shareholder with a good rating. So, we are now communicating and, if necessary, all the compliance enforcement measures will be applied to the financial institute”.
Meanwhile, the incident once again attracts our attention to two other small banks experiencing similar problems. We are talking about AsiaCredit Bank and Capital Bank Kazakhstan.
We have touched upon this sensitive (for the Library) topic on numerous occasions. For instance, in our publication of May 18, 2020, titled “On the Financial Interests of Bolat Nazarbayev’s son”, we wrote:
“It is not hard to notice that, among the 13 Kazakh banks that did not go through the AQR (apart from the state-owned Zhilstroysberbank of Kazakhstan and the banks controlled by the large foreign banking groups), there are two small financial institutes that have been experiencing problems for quite some time. We are talking about Capital Bank of Kazakhstan and AsiaCredit Bank JSC. And the fact that they are «drowning» has been know at the market for a long time. The only thing that was not clear was who or what was keeping them afloat.
The passivity of the National Bank and the Agency for Regulation and Development of the Financial Market are all the more astounding since the state has got a gigantic experience in «saving» much larger financial institutes starting from BTA Bank and ending with Tsesnabank.
Moreover, when Tengri Bank JSC refused to merge with Capital Bank Kazakhstan and AsiaCredit Bank JSC, the National Bank of the Republic of Kazakhstan did nothing that could harm the last two”.
“Now then, based on the information provided by our insiders, Mr. Shadiyev has got a very influential silent partner. We are talking about Nurbol Nazarbayev, a son of the First President’s brother Bolat Nazarbayev.
We do not know exactly how the shares of the two banks are divided between the Leader of the Nation’s nephew and Orifdzhan Shadiyev, but the mere thing that the National Bank of the Republic of Kazakhstan didn’t dare to make these banks go through the AQR speaks volumes.
For instance, it explains why Capital Bank Kazakhstan JSC and AsiaCredit Bank JSC that have been experiencing financial problems for a long time and have a highly poor-quality loan portfolio, have never been punished or pressurised which, on the back of the Kazakh banking sector’s tumultuous history, looks like and absolute nonsense”.
The reports of the financial institutes show that, for the past several months, their financial situation has not improved. For instance, as of June 30, 2020, Capital Bank Kazakhstan’s current operations losses constituted 1.62 bln tenge against 1.824 bln tenge a year earlier. With that, the bank’s assets had shrunk down to 67.1 bln from 75.4 bln tenge.
As for AsiaCredit Bank, as of June 20, 2020, its losses constituted 1.841 bln against 2.29 bln tenge a year earlier. The assets had shrunk down to 59.1 bln tenge from 68.8 bln.
In view of this, we think it’s time to ask the following question:
Why the National Bank of the Republic of Kazakhstan and the newly created Agency for Regulation and Development of Financial Market are looking so favourably on these two small, systemically loss-making and regularly experiencing financial problems banks?
Recall that, as of July 1, 2020, the assets of Capital Bank Kazakhstan and AsiaCredit Bank constituted 0.2% of the total amount of the second-tier banks’ assets. In other words, if they disappear from the market, it is going to affect the country’s financial sector in no way.
Is it only due to the regulators’ concern that the licences revocation will disturb the market and alarm the bankers?
Or perhaps the answer lies in the fact that the decision to close these banks and get them out of the way will drag them into the wrangles with the clan of Bolat Nazarbayev?
