Lithuania – SEB Bankas reports profit of € 36.6 mln for 2012 and opens subscription for bonds linked to Asian and Australian stock prices; DNB Bankas reports 2012 profit of € 25.6 mln; NASDAQ OMX Baltic removes defunct Ūkio Bankas from exchange indices

On 27 February the largest commercial bank in Lithuania, SEB Bankas (AB SEB bankas), published condensed interim financial statements (IFRS, unaudited) for 4Q 2012.  (As reported earlier in this column, the bank had published summary data, without statements, on 31 Jaunary.)  The results are given below.  (Values in thousands of LTL; 1 EUR = 3.4528 LTL (pegged since 2002).)

	2012	2011	2010
Net profit for year	126,287	379,762	(12,058)
Total assets at year-end	22,583,627	25,477,573	21,028,262

Sources:

Press release: AB SEB banko 2012 metų 12 mėnesių tarpinė finansinė informacija (2013-02-27 16:00:01 CET)

IFRS financial statements for 2012 (unaudited): AB SEB bankas 2012 m. gruodžio 31 d. dvylikos mėnesių laikotarpio sutrumpinta tarpinė finansinė informacija (2013-02-27 10:49:19)

IFRS financial statements for 2011 (unaudited): AB SEB bankas 2011 m. gruodžio 31 d. dvylikos mėnesių laikotarpio sutrumpinta tarpinė finansinė informacija (2012-02-29 13:53:59)

A day earlier, on 26 February, SEB opened subscription for a series of bonds – linked to stock prices in Asia and Australia – that will go on sale beginning 15 April.  The three-year bonds have nominal values of 100 LTL (€ 28.96), 105 LTL, and 100 EUR, and will be linked to the index S&P Pan Asia Low Volatility Index Price Return EUR (Bloomberg ticker: SPPALVET).  The bonds have a maturity of 1,114 days (3 years and 18 days), coming due on 4 May 2016.

The index S&P Pan Asia Low Volatility Index Price Return EUR is rebalanced quarterly to track the performance of the 50 least-volatile stocks in the S&P Pan Asia Ex-New Zealand LargeMidCap Index.  As of 26 February the low-volatility index was generating the following annualized price returns: 1 year: 14.02%, 3 year: 10.69%, 5 year: 4.56%.

Sources:

Press release: SEB bankas pradeda platinti su Azijos ir Australijos šalių įmonių akcijų kainų indeksu susietas obligacijas (2013-02-26)

Bond issue information page, with links to detailed info and prospectus: Su Azijos ir Australijos įmonių akcijų kainų indeksu susietos obligacijos

S&P Dow Jones factsheet on index: S&P Pan Asia Low Volatility Index

S&P Dow Jones current-day factsheet on index: S&P Pan Asia Low Volatility Index (2013-02-26)

Also on 26 February, DNB Bankas (AB DNB bankas), the country’s third-largest commercial bank, published interim condensed statements (IFRS, unaudited) for 4Q 2012.  (The bank had previously published preliminary data, without statements, on 7 February.)  The results are summarized here:

	2012	2011	2010
Net profit for year	88,428	80,951	(122,633)
Total assets at year-end	11,580,673	11,242,806	11,299,584

Sources:

IFRS financial statements for 2012 (unaudited): AB DNB banko: Tarpinė sutrumpinta finansinė informacija – IV ketvirtis 2012 m. (pagal TFAS reikalavimus, neaudituota) (2013-02-25 10:07:27)

IFRS financial statements for 2011 (unaudited): AB DNB banko: Tarpinė sutrumpinta finansinė informacija – IV ketvirtis 2011 m. (pagal TFAS reikalavimus, neaudituota) (2012-02-23 14:44:10)

Finally, on 26 February the stock exchange NASDAQ OMX Baltic announced that it would be removing the shares of the recently defunct bank Ūkio Bankas (AB Ūkio bankas) from its indices “OMX Baltic Benchmark” and “OMX Baltic 10”.  The exchange explained that the shares would be included through 26 February but removed at zero value on 27 February, with no replacement to be inserted until the next review of the index.

Source:

Press release by NASDAQ OMX Vilnius: Ūkio banko akcijos bus išbrauktos iš Baltijos šalių biržų lyginamojo indekso OMX Baltic Benchmark ir Prekybinio indekso OMX Baltic 10 sudėties (2013-02-26 08:30:03 CET)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Russia – Speculation intensifies about successor for outgoing central bank governor Ignatiev

In recent days speculation has been heating up in Russian financial circles concerning who will be chosen to succeed departing Bank of Russia governor Sergey Ignatiev, who is due to step down in June 2013 after more than 11 years in the post.

On 21 February Reuters Russia published a report, based on inside sources, saying that the list of candidates being considered by Russian President Vladimir Putin has been narrowed down to a “short list” (шорт-лист) of six candidates:

– Alexei Ulyukaev (Алексей В. Улюкаев, born 1956), presently a First Deputy Chairman of the Bank of Russia

– Mikhail Zadornov (Михаил М. Задорнов, 1963), president of the commercial bank VTB 24

– Andrey Kostin (Андрей Л. Костин, 1956), president of state-owned VTB Bank

– Sergey Shvetsov (Сергей А. Швецов, 1970), presently a Deputy Chairman of the Bank of Russia

– Andrei Bougrov (Андрей Е. Бугров, 1952), Chairman of the Board at Norilsk Nickel

– Sergey Glazyev (Сергей Ю. Глазьев, 1961), an economist and former political opponent of Putin

Sources told Reuters Russia that Glazyev is new to the list, added in because neither Putin nor Prime Minister Dmitry Medvedev is fully satisfied with the other five candidates.  Glazyev, presently a presidential advisor, is known as a “radical economist” and strong proponent of state intervention, and has been critical of Ignatiev’s tight-money policy, claiming that it puts Russian banks and businesses at a competitive disadvantage.  Glazyev has argued that monetary policy should not be used to fight inflation, and that the quantitative theory of money is incorrect because in the history of Russia there have been periods when the money supply grew, but inflation fell.  Another strong opponent of Ignatiev’s high policy-interest-rates is German Gref, chairman and CEO of Sberbank, who holds that the central bank’s high refinancing rates are stunting the growth of the Russian economy.

On 21 February the newssite Argumenty also published a report citing an anonymous Kremlin insider as saying that Glazyev would be the successor to Ignatiev.

In the midst of the ongoing storm of speculation and rumor, the online portals Bankir.ru and Ipocredit.ru have teamed up to launch an online poll entitled “Who will lead the Bank of Russia?” (Кто возглавит Банк России?)  The poll gives respondents a choice of 11 names plus “other”, and also asks respondents to rate the performance of the present governor of the Bank of Russia, Ignatiev, on a scale from one to five.  To vote in the poll, go to Кто возглавит Банк России?

Sources:

Шорт-лист сменщиков главы ЦБР расширился - источники (2013-02-21 19:01)

Кремлевский аноним выдал имя будущего главы Банка России (2013-02-21 20:40)

СМИ: Центробанк России может возглавить Глазьев (2013-02-21 20:13)

Кто возглавит Банк России?

While the press and the financial world are preparing for him to step down in June after eleven years at the helm, in recent days Ignatiev granted a lengthy and candid interview to Olga Plotonova of the magazine Vedomosti (Ведомости), an interview which the magazine published on 20 February.

In the interview Ignatiev gave detailed examples of what constitutes an “inflow” or “outflow” of capital from Russia as calculated in the statistics released by the Bank of Russia.  In response to a question from Ms. Plotonova, he explained that the Bank calculates that in 2012 “questionable transactions” (сомнительные операции) in Russia totaled USD 49 bln, of which USD 35 bln contributed to Russia’s net capital outflow for the year.  He stated that such transactions typically make use of a “one-day company” (Фирма-однодневка) established for the purpose of evading Russian taxes, and that the sorting out of the transactions of such a company is possible only in the case of a criminal investigation.  He stated that the Bank’s analysis revealed that more than half of all the suspicious transactions were conducted by firms that had payment relationships with one another, so he believes these operations are being carried out by a single, well-organized group of persons, and that a serious investigation on the part of law enforcement authorities ought to be able to identify these persons as well as the ultimate beneficiaries of the transactions.

Pointing out that at present banks in Russia do not have the authority to close or suspend an account even if they discover that the true holder of the account is different from the person who opened it, Ignatiev expressed his support for a proposal prepared by the Federal Service for Financial Monitoring (Росфинмониторинг) and forwarded to the Duma by the government that would give banks the authority to close or suspend accounts as well as to refuse to open new accounts if they have reason to suspect the use of the accounts in questionable transactions.

Sergey M. Ignatiev (b. 1948), outgoing Chairman of the

Central Bank of the Russian Federation (“Bank of Russia”)

When asked about the main problem threatening the health of Russian banks today, Ignatiev replied that the problem is no longer non-performing loans but instead criminal bankruptcy.  He said that of the roughly 1,000 banks operating in Russia today the Bank of Russia ends up revoking the licenses of about 30 per year, and he estimates that in three quarters of these cases the bank was deliberately bled dry of assets by its management, while his colleagues would estimate that proportion as even higher.  He pointed out that after problems came to light with Mezhprombank and Bank of Moscow, the Bank of Russia increased the risk weights for loans to technology companies that do not carry out any real activity but merely serve to channel funds.  Yet he believes that the real solution to the problem lies in the certainty of punishment, even if the punishment is not severe, but he admits that to date prosecution in the case of banking fraud has been difficult because the law is complex and investigations require expert knowledge and considerable time.

He indicated that he supports the proposal to raise the limit for deposit insurance in Russia from 700,000 RUB to 1,000,000 RUB (€ 25,000), which he considers a reasonable level given prices in Russia today.

He stated that he believes that the Bank of Russia responded correctly to the crisis of 2008-2009, and that he has no regrets about what was done to overcome the crisis, including the extending of unsecured loans to banks, and adds that the amount of such loans repaid to the Bank of Russia was actually higher than he had expected.

Asked what he will do after his term comes to an end in June 2013, he replied that he is thinking about it but that at the moment still does not know.

Sources:

Interview on Vedomosti site: Интервью — Сергей Игнатьев, председатель Банка России (2013-02-20)

Interview on Bank of Russia site: Интервью Председателя Банка России С.М. Игнатьева газете "Ведомости", опубликованное 20 февраля 2013 года (2013-02-21)

Bank of Russia’s calculations of net capital inflow/outflow of Russia, 1994-2011: Чистый ввоз/вывоз капитала частным сектором в 1994-2011 годах

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Serbia – Banks in Montenegro uninterested in joining Serbian central bank’s direct payment system; Mobile operator Telenor looking to enter retail banking market in Serbia; Abu Dhabi’s First Gulf Bank denies plans to acquire Dunav Banka; National Bank declines to join class-action suit against banks regarding CHF-denominated loans

On 20 February the Serbian news service Beta reported that commercial banks in neighboring Montenegro have no interest in taking part in the direct payment system run by the National Bank of Serbia (Народна банка Србије - NBS).

In 2007 the Central Bank of Montenegro (Централна банка Црне Горе – CBCG) put into place all of the legal measures necessary for banks in Montenegro to be able to join the NBS’s direct payment system, but sources at the CBCG tell Beta that only two of the country’s eleven banks chose to take part, and that both banks subsequently abandoned the system because they found cheaper and more efficient payment alternatives.

The CBCG also reports that – in the other direction – over the last five years banks in Serbia and in Bosnia and Herzegovina likewise have not indicated any interest in being included in Montenegro’s direct payment system, due above all to the relatively low volume of transactions.

In the month of January 2013 the NBS’s real-time gross settlement system (RTGS система) handled 10.23 million payments for a total of RSD 3,538.4 billion (€ 31.71 bln).  During the same month the NBS’s clearing system (клиринг система), which handles smaller payments (up to RSD 250,000 – € 2,240), handled 4.30 million payments, for a total of RSD 34.6 billion (€ 0.31 bln).  Finally, the NBS’s system of international and interbank clearing of foreign exchange payments (систем међународног и међубанкарског клиринга плаћања у девизама) in January saw a total of 2,556 foreign exchange payments for a total value of € 23.26 mln, with 23 participants.  (One euro equaled 111.6013 RSD on 31 January 2013)

Sources:

Beta article: Banke nisu zainteresovane za platni promet sa Srbijom (2013-02-20 13:30)

NBS payment system statistics for January 2013: МЕСЕЧНА ИНФОРМАЦИЈА о раду RTGS система, клиринг система и система међубанкарског и међународног клиринга плаћања у девизама за јануар

A day earlier, on 19 February Beta reported that Telenor d.o.o., Serbia’s largest mobile operator, is planning to enter into the banking business in Serbia.  According to statements made to Beta by Ove Fredheim, the CEO of Telenor d.o.o., the company is considering three options: purchasing an existing bank, obtaining a banking license and opening a new bank, or providing financial services through a partnership.  Martin Navratil, Telenor’s director of financial services in Serbia, told Beta that Telenor is the largest provider of financial services in Pakistan, while in Malaysia it offers financial services in partnership with banks, and in Serbia it does not plan to serve corporate clients but instead offer retail clients mobile banking, savings, and loans.

Telenor d.o.o. is 100% owned by Telenor A/S of Denmark, which in turn is owned by Telenor Danmark Holding A/S, part of Norway’s Telenor Group.

Sources:

Article: Potvrđeno: Telenor osniva banku (2013-02-19 16:11)

Business registry info on Telenor d.o.o.: Претрага привредних друштава: TELENOR D.O.O. BEOGRAD

On 18 February the Serbian newssite eKapija published a statement by Abu Dhabi’s First Gulf Bank denying an earlier press report that the bank plans to expand operations into Serbia.  In the short statement, the bank firmly denied any intention to undertake operations in Serbia.  The bank’s denial follows on a 1 February report by the Serbian newspaper Blic asserting that the bank was in fact in the midst of negotiations to acquire the small Serbian commercial bank Dunav Banka.

First Gulf Bank PJSC (شركة مساهمة عامة بنك الخليج الأول), headquartered in Abu Dhabi (UAE), is the second largest lender in the UAE.  The bank is owned 67% by Abu Dhabi’s ruling Al Nahyan family.

Sources:

First Gulf Bank has no plans to operate in Serbia (2013-02-18 15:49)

Дунав банка понуђена на продају Арапима? (2013-02-03)

In earlier news, on 12 February the National Bank of Serbia announced that it would not be participating in the class-action suit against three banks filed by the consumer association “Efektiva”.  The association, composed of bank customers, on 5 February filed suit in the First Basic Court in Belgrade against the commercial banks Hype Alpe-Adria-Bank, Piraeus Bank, and Eurobank.  Efektiva is seeking redress for loan customers of the three banks who were adversely affected when the banks in 2011 drastically hiked loan payments on existing Swiss-franc-denominated loans and mortgages after rapid appreciation in the Swiss franc (CHF).  The association states that this is the first class-action suit ever filed in Serbia.

The association is basing its case in part on Art. 3 of the EC’s Council Directive 93/13/EEC of 5 April 1993, asserting that the article implies that consumers are not liable for contracts they sign if possible major adverse consequences are not explained to them in advance.

The central bank stated that it would not be possible for it to participate as either an intervener or a plaintiff in the suit, as Serbian law precludes the regulator itself from either initiating or supporting either side in lawsuits involving consumer rights.

Video about the lawsuit aired on 9 February by RTS 2’s program

Potrošački savetnik (Consumer Advisor)

Sources:

NBS press release: Народна банка Србије не може бити учесник у парничном поступку који је покренуло удружење потрошача „Ефектива“ (2013-02-12)

Potrošač ne mora znati šta potpisuje! (2013-02-15 16:55)

Video: Prva kolektivna tužba protiv banaka u Srbiji (RTS 2, 2013-02-09)

Website of consumer association “Efektiva”: Udruženje Bankarskih Klijenata Efektiva

EC directive: Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts

Background: Hungary: Controversial Swiss franc loan law goes into effect (2011-09-29)

Background: Bosnian Borrowers Bemoan the Once Safe Swiss Franc (2011-09-09)

Background: Croatia’s Swiss franc loan trap (2011-08-11)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Transnistria – Parliamentary committee discusses possibility of dual-currency system in Transnistria, allowing the Russian ruble to have equal status with the Transnistrian ruble

On 11 February the press office of the Supreme Council of the Pridnestrovian Moldavian Republic (Верховный Совет Приднестровской Молдавской Республики) – the country’s parliament – reported that the Committee on Economic Policy, Budget and Finance had been discussing the possibility of the Russian ruble being allowed to circulate in Transnistria on an equal basis with the Transnistrian ruble.

The proposal, put forward by parliament member Andrey V. Sipchenko, would amend the Law on the Central Bank of the PMR and the Law on Currency Regulation and Currency Control to permit the Russian ruble (RUB) to be used in the country on equal terms with the domestic currency, the Transnistrian ruble (PRB).

Parliamentary press office report on the meeting
of the Committee on Economic Policy, Budget and Finance

The proposal was vigorously opposed by the central bank, the Trans-Dniester Republican Bank (Приднестровский Республиканский Банк), one of whose deputy chairmen, Vadim I. Stepanov, told the Committee that such a move would have risks given the fact that the Russian ruble is issued by the Bank of Russia, which follows a monetary policy of its own and might not necessarily be interested in considering the interests of Transnistria.

In the end the Committee decided to recommend to the Supreme Council the adoption of the measure, but with a transition period of a number of years.

The largest banknote currently in circulation in Transnistria, the 500 PRB note,
which bears an image of Russian empress Catherine the Great
and presently has an exchange value of € 33.47

Sources:

Реально ли хождение российского рубля в Приднестровье? (2013-02-11)

Депутаты ВС ПМР предлагают ввести в Приднестровье бивалютную систему (2013-02-11 22:45)

Video: Хождение российского рубля в Приднестровье? -11.02.2013 (2013-02-11)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Lithuania – Šiaulių bankas reports profit of € 4 mln for 2012 while it shifts assets from loans to securities, IMF concludes that Lithuania’s banking system is “profitable, liquid, and well-capitalized” but that “continued vigilance is needed”

On 11 February 2013 the commercial bank Šiaulių bankas (Šiaulių bankas AB) published unaudited financial statements for 4Q 2012.  (One euro equaled 3.4528 Lithuanian litas (LTL) on 31 Dec. 2012.)

The bank registered a net profit for the year of 14.9 mln LTL (€ 4.31 mln), an increase of 16.1% over the result of 12.8 mln LTL for 2011 and a considerable improvement over the net loss of 24.2 mln LTL registered in 2010.  Total assets at the end of 2012 were 2,931.5 mln LTL (€ 849.0 mln), up 7.5% over the previous year.

Total deposits increased 14.3% during the year, ending the year at 2,165.9 mln LTL (€ 627.3 mln).  But the additional deposits did not end up in loans, since in 2012 the bank’s loan portfolio declined 0.6% to 2,057.7 mln LTL.  Instead the funds ended up in securities, with holdings of trading securities more than tripling in 2012 to end the year at 51.2 mln LTL, and investment securities surging by 42% from 335.3 mln LTL to 478.4 mln LTL.  Among investment securities, held-to-maturity securities decreased 10.0% during the year, from 303.3 mln LTL to 273.0 mln LTL, while the level of available-for-sale securities exploded from 32.1 mln LTL to 205.4 mln LTL, presumably indicating a reclassification by the bank of some securities from “held to maturity” to “available for sale” status.

The largest shareholders of Šiaulių bankas are as follows:

European Bank for Reconstruction and Development (EBRD): 19.57%

Mr. Gintaras Kateiva (member of the bank’s Supervisory Council): 6.24%

Clients of the Swedish bank Skandinaviska Enskilda Banken AB (publ): 5.53%

AB „ Eglės“ sanatorija: 5.37%

Mr. Algirdas Butkus (chairman of the bank’s Board): 4.39%

Sources:

2012 m. Šiaulių banko pelnas augo (2013-02-11)

2012 metų IV ketvirčių AB Šiaulių banko ir banko grupės finansinės ataskaitos (2013-02-11 09:36:54)

2011 metų IV ketvirčių tarpinė AB Šiaulių banko ir banko grupės finansinė atskaitomybė (2012-02-20 15:27:57)

Stambiausi akcininkai

In other news, on 11 February a mission from the International Monetary Fund concluded a visit to Lithuania and issued a concluding statement in Vilnius.  Below is reproduced verbatim the section of the statement that deals with the banking system.  (Emphasis as per original.)

Strengthening the financial sector to support growth

Overall, the banking system is profitable, liquid, and well-capitalized, but continued vigilance is needed. The system-wide capital adequacy ratio is nearly 15 percent and liquid assets are about 25 percent of total assets. However, non-performing loans (NPLs)—while declining—remain high and profitability is falling. The intervention of Snoras bank removed a major threat to financial stability, and the recent steps to rapidly address problems in two troubled credit unions underscore the importance of effective financial sector supervision. In this context, the Bank of Lithuania’s (BoL) stepped-up onsite inspections, strict stress testing, and careful monitoring of banks’ loan loss provisions are essential for the continued health of the banking system. The BoL should continue to safeguard financial stability, including by requiring banks to raise capital as needed. Ongoing efforts to strengthen the supervision of credit institutions are welcome.

The financial sector has an essential role to play in supporting a robust and sustainable recovery. While Lithuania has so far been able to continue its economic recovery despite negative private sector credit growth for nearly four years, it is important that credit is not unduly constrained going forward. The weak economic environment and uncertainty about growth prospects both in Lithuania and abroad have no doubt hampered demand for credit by firms and households. At the same time, lending standards have been tight, partly reflecting continued risk aversion of the part of banks, lingering NPLs, and scarcer parent bank funding. NPLs appear to take a longer time to work out in Lithuania than in some regional peers, and a review of obstacles to timely NPL resolution should be considered. In this regard, the new household insolvency regime and recent proposals to modify the corporate insolvency regime are welcome.

Source:

Republic of Lithuania—Concluding Statement for the 2013 Article IV Consultation (2013-02-11)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Bulgaria – Parliamentary commission adopts draft bill ratifying bilateral agreement between Bulgaria and Switzerland that would permit exchange of bank account information for tax purposes

On 7 February 2013 the Budget and Finance Committee (Комисия по бюджет и финанси) of the National Assembly adopted, on first reading, a draft bill that would ratify an agreement signed in Sofia on 19 September 2012 between Bulgaria and Switzerland.  The agreement updated the pre-existing Convention for the Avoidance of Double Taxation [CADT] between the Republic of Bulgaria and the Swiss Confederation, signed in 1991, to permit for the first time the two sides to exchange information in order that both double taxation and tax evasion can be avoided.  The Convention will apply to accounts of both individuals and legal entities.

The draft bill, presented by the Council of Ministers on 31 January, was approved by the committee by a vote of 20 in favor, 0 opposed, and 0 abstentions.  The agreement signed on 19 September 2012 will enter into force once this draft bill has been adopted by the National Assembly.

On 7 February the draft bill was also reviewed by the Foreign Policy and Defense Committee, which issued an opinion in favor of the adoption of the bill by the National Assembly.

Signing of updated agreement in Sofia on 19 September 2012

Sources:

Parliament: Status page of draft bill: Законопроект за ратифициране на Спогодбата между Република България и Конфедерация Швейцария за избягване на двойното данъчно облагане на доходите и имуществото

Report of the Budget and Finance Committee: Доклад на Комисия по бюджет и финанси (2013-02-07)

Report of the Foreign Policy and Defense Policy Committee: Доклад на Комисия по външна политика и отбрана (2013-02-07)

News article: Ровят в сметките на българи в Швейцария (2013-02-07 16:42, updated 22:23)

Ministry of Finance: Signing of agreement in Sept. 2012: A NEW CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION BETWEEN REPUBLIC OF BULGARIA AND THE SWISS CONFEDERATION HAS BEEN SIGNED (2012-09-19)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

[contact]

Kazakhstan – Total assets of Kazakhstan’s 38 commercial banks grew 8.2% in 2012, Financial authority approves major shareholder changes and director appointments for several banks, Nurbank’s new majority owner offers to buy out other shareholders

On 8 February 2013 the central bank’s financial supervision committee, AFN (АФН РК), published consolidated statistics for the commercial banking sector for December 2012.  (As of 31 Dec. 2012 one euro equaled 198.35 KZT.)

Assets: At the end of 2012 total assets of the country’s 38 commercial banks amounted to 13.870 tln KZT (€ 69.927 bln), an increase of 8.18% over the end of 2011.

Liabilities: Total liabilities were 11.873 tln KZT (€ 59.86 bln), up 3.09% over the year-earlier date.

Equity: After loss provisions, total equity at the end of 2012 was 1.998 tln KZT (€ 10.07 bln), up 53.01% from a year earlier.  Total equity of the commercial banks was 1.305 tln KZT at the end of 2011, 1.323 tln KZT at the end of 2010, -0.982 tln KZT at the end of 2009 (due to the insolvency of BTA Bank), and 1.458 tln KZT at the end of 2008.  The jump in equity in 2012 follows on a second successful debt restructuring by BTA Bank in December 2012.

Sources:

ҚР-ның екінші деңгейдегі банктері бойынша жиынтық баланс

Активы банков Казахстана за 2012г выросли на 8,2% - до 13,9 трлн тенге (2013-02-08 12:02)

On 8 February the AFN also published a series of decisions that it had taken on 25 January, including the following decisions concerning banks:

Eximbank: Central Asian Fuel-Energy Company («Орта Азиялық отын-энергетикалық компаниясы» АҚ) was granted permission to change its status regarding Eximbank Kazakhstan («Эксимбанк Қазақстан» АҚ) from that of a holding company to that of a major shareholder.  As of 1 October 2012 the energy firm’s stake in Eximbank Kazakhstan stood at 54.50%, but by 1 January 2013 it had been reduced to 20.24%.  Eximbank Kazakhstan is the country’s 23rd largest bank by assets with total assets of 77.2 bln KZT (€ 389 mln).  Central Asian Fuel-Energy Company is a regional power utility with 930 MW of generating capacity and more than 30,000 km of local transmission lines.

Kazkommertsbank: Alnair Capital Holding ("Alnair Capital Holding" АҚ) was granted permission to acquire a significant participation in Kazkommertsbank («Казкоммерцбанк» АҚ).  Kazkommertsbank is the largest commercial bank in Kazakhstan, with total assets of 2,553.2 bln KZT (€ 12,872.2 mln) as of 31 December 2012, giving the bank an 18.4% market share in assets among the country’s 38 commercial banks.  At the same date the bank also enjoyed a 20.5% market share in loans, a 17.4% share in deposits, and a 23.3% share in capital.

SENIM-BANK: The AFN granted Ayan Vakhitovich Kuchukov (Кучуков Аян Вахитович, born 1973), presently serving as chairman of the board of SENIM-BANK («СЕНІМ-БАНК» АҚ), permission to acquire the status of a significant shareholder in the bank.  As of 8 December 2012 Mr. Kuchukov owned 6.43% of the bank’s shares; at that time the largest shareholder was Ms. Zaure Akhylbekovna Algaziyeva (Алгазиева Зауре Ахылбековна, born 1980), manager of the bank’s Almaty branch and a member of the board of directors, but as of 1 January 2013 the latter had reduced her holdings to 24.71% of the bank’s shares.  SENIM-BANK is a community bank headquartered in Rahat on the southwest outskirts of Almaty.  In assets the bank ranks in 34^th place among Kazakhstan’s 38 commercial banks, with total assets of 13.3 bln KZT (€ 66.8 mln) as of 31 December 2012.

Minutes of extraordinary general meeting of shareholders of SENIM-BANK

held on 11 December 2012

Letter from AFN to SENIM-BANK stating that changes to the bank’s share

prospectus submitted on 13 November 2012 have been registered

Sources:

AFN decisions: Мұрағат (2013-02-08)

Eximbank: Банк туралы / Акционерлер

Eximbank: АО "Эксимбанк Казахстан" предоставило KASE выписку из системы реестров своих акционеров по состоянию на 01 января 2013 года (2013-01-15)

Eximbank: АО "Эксимбанк Казахстан" предоставило KASE выписку из системы реестров своих акционеров по состоянию на 01 октября 2012 года (2012-10-22)

SENIM-BANK: Директорлар кеңесі

SENIM-BANK: Банктің құрылымдық бөлімдерінің және филиалдардың басшылары

SENIM-BANK: АО "СЕНИМ-БАНК" (Казахстан) предоставило KASE выписку из системы реестров своих акционеров по состоянию на 01 января 2013 года (2013-01-28)

SENIM-BANK: KASE опубликовала протокол внеочередного общего собрания акционеров АО "СЕНИМ-БАНК" (Казахстан) от 11 декабря 2012 года (2012-12-28 16:30)

On 5 February the AFN also announced decisions taken in the period 18-31 January regarding proposed appointments to the boards of directors of financial institutions.  The AFN granted approval to appointments for 10 persons to the boards of directors of 7 financial institutions, including 3 banks and 1 bank holding company:

Banks: 3 persons to the board of Bank RBK ("Банк «Bank RBK» АҚ), 1 person to the board of Astana Finance Bank («Астана-Финанс» банкі» АҚ), and 1 to the board of Alfa-Bank («Альфа-Банк» ЕБ АҚ).

Bank holding company: 1 person to the board of ALMEX Holding Group ("АЛМЭКС" Холдинг тобы" АҚ), which owns 69.3% of Halyk Bank ("Қазақстан Халық Жинақ Банкі" АҚ).

Sources:

Комитетом согласованы следующие руководящие работники финансовых организаций (2013-02-05)

Список акционеров по состоянию на 01.01.2013 года

In addition, on 4 February the commercial bank “Bank CenterCredit” ("Банк ЦентрКредит" АҚ) received from the AFN a written notification of possible sanctions for having provided incorrect information to AFN inspectors.  Besides this written notice, so far in 2013 the bank has received from AFN two other written notices (both on 30 January) as well as two fines: a fine of 346,200 KZT (€ 1,717) on 11 January for supplying credit history of a client to a credit bureau in an improper manner, and a fine of 86,550 KZT on 10 January for not indicating interest rates and fees clearly in written materials for customers.

Sources:

Информация для субъектов финансового рынка / Банковский сектор / Общие сведения / Банки второго уровня

Информация для субъектов финансового рынка / Банковский сектор / Общие сведения / Банки второго уровня

To update an article posted in this column on 4 January 2013, recent filings by the commercial bank Nurbank (“Нұрбанк” АҚ) reveal that between 1 October 2012 and 1 January 2013 the firm JP Finance Group LLP (“JP Finance Group” ЖШС) acquired 7,294,059 shares of Nurbank common stock previously held by Ms. Sophia Temirbulatovna Sarsenova (Сарсенова Софья Темирбулатовна) of Almaty, as a result of which JP Finance Group came to hold 67.8352% of all shares of the bank’s stock.

Subsequent to this acquisition of a controlling interest in Nurbank, on 29 January the bank announced that JP Finance Group was extending – to holders of any outstanding shares of Nurbank – an offer to buy such shares for 10,000 KZT (€ 49.17) each.

JP Finance Group is a partnership headquartered in Almaty and represented by Ms. Raushan Z. Erzhanova, who also serves as Chairman of the Board of Nurbank.

Sources:

Изменения и дополнения в проспект выпуска 1-й облигационной программы, зарегистрированные 23 января 2013 года (2013-02-05)

Акционеры по состоянию на 01.01.13

Акционеры по состоянию на 01.10.12

Share acquisition offer posted by Nurbank on its website: Внимание (2013-01-29)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

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