Central Asian Dialogue in the Media
Kyrgyzstan to adopt law on deposit insurance in September
Cooperation agreement with banking association of Kazakhstan signed at BIBC
During Jul 25-28, Kyrgyzstan hosted the 4th Bishkek International Banking Conference (BIBC), which became a very important event in the financial sector. Several presentations were dedicated to the investment potential of Kyrgyzstan. According to Mikhail Nadel, the chairman of BoD in AsiaUniversalBank (which acts as the general sponsor and the initiator of all BIBC conferences), foreign investors are likely to be interested in such sectors of the Kyrgyz economy as extraction, financial services, tourism, foreign trade and the power sector. The latter sector, according to Nadel, has considerable export potential, as Kyrgyz energy can be supplied to Russia, Kazakhstan, Uzbekistan, Tajikistan, China and Pakistan.
The development of the power sector was also discussed by Almaz Biybosunov, a high-ranked official from Kyrgyz ministry of industry. Significant attention was devoted to construction of Kambarata hydropower plants, which is expected to help the country attract large amount of FDI and to very good use of its energy potential. Notably, after the construction of Kambarata plants Kyrgyzstan is expected to increase energy exports to bordering regions of Kazakhstan, which lack energy.
An interesting presentation was made by AUB chairman's adviser Dmitry Shutilev regarding the specifics of banking products' marketing in developing countries. The speaker described social and ethnic factors which, in his opinion, foreign banks should be aware of and take into account when they enter the Central Asian markets.
Worth noting, along with traditional banking, Kyrgyzstan tries to introduce Islamic banking principles. The pilot project is currently implemented in EcoBank. According to Zhirgalbek Kasimov, high-ranked official of the presidential administration, the introduction of Islamic banking principles in the country is expected to be successful. However, there are several discrepancies between the country's existing legislation and Islamic banking principles; in particular, it is related to taxation of leasing operations.
In addition, it became known that this year the Kyrgyz government plans to take measures aimed at increasing the volume of local banks' lending. In particular, economy and finance minister Alikbek Zhiparov said that this September the parliament would adopt the law on deposit's insurance.
Importantly, at the closure ceremony of the conference the associations of banks of Kyrgyzstan and Kazakhstan signed a cooperation agreement aimed to improve the integration between the banking systems. It includes mutual support in opening branches, improving relations between individual banks and lobbying the interpenetration of the countries' banking systems.
ISI - Emerging Markets
IV Bishkek International Banking Conference is held in the Kyrgyz Republic 25 to 28 July, 2007. This year, the conference, whose title was "Central Asian financial market in the global economies", brought the record number of the most famous international financial specialists coupled with the broadest range of the most economically vital topics discussed. BIBC IV was also the first one to provide a great number of the best speakers from the Kyrgyz Republic Basically focused on investment opportunities the country brings, the conference also addressed the whole Central Asian region (and the Republic of Kazakhstan in particular) concerning the process of regional economic integration. This was reflected in the best financial think tanks from Kazakhstan taking part in the conference and sharing their views about further development of the Central Asian Region. AML and compliance, as well as risk management specifics, were the highlights of the conference. The point most observers found most interesting was interrelations of traditional world-wide-used methods of risk management and compliance procedures, provided by the best specialists from Europe and the US, with the local specifics, provided by representatives of the Kyrgyz governmental regulatory bodies. For more information about the conference please visit www.bibc.kg, www.aub.kg or www.asiauniversalbank.com
Kyrgyz banker expects to ride out political tensions
Emerging Markets - 14th September 2007
By Philip Alexander
The head of the country's banking association has told Emerging Markets that the financial sector has managed to increase turnover, despite clashes between the government and opposition Kyrgyzstan's banks are proving resilient to political uncertainty, according to the president of the Kyrgyz Banking Union Anvar Abdrayev, who is hoping for fresh legislation to strengthen the sector.
Opposition parties have accused President Kurmanbek Bakiev of increasingly authoritarian behaviour, following clashes between protestors and police and the administration's announcement of an alleged coup plot earlier in 2007.
"The banks, unlike other sectors of the economy, managed to not only restore their turnover volumes, but also to increase them," Mr. Abdrayev told Emerging Markets.
He said there had been some deposit withdrawals and a slowdown in credit growth, but assets had still risen by 37.5% and total capital by 47% since the current government took power just over two years ago, after former president Askar Akaev was ousted amid popular protests over alleged election-rigging.
However, the sector remains small overall, with deposits at just 14.5% of GDP in 2006, and credit at 10% of GDP. Abdrayev noted that apart from AsiaUniversalBank, which is the largest in the sector, "most Kyrgyz banks have insufficient capitalization and lack long-term funds to invest in project finance."
He believes the sector's expansion will be aided if legislation is implemented in areas such as the rules governing loans, the tax code, real estate valuations and deposit protection.
"We are actively cooperating with the development and realization of laws on the regulation of commercial banking operations with the National Bank of the Kyrgyz Republic and other state bodies," said Abdrayev.
Marat Baitokov, vice-president of the Kazakhstan Banks' Association, which signed a cooperation treaty with the Kyrgyz Banking Union last month, agreed that the legal environment for Kyrgyz banks was becoming liberal and transparent. But he noted that "political instability also makes certain risks."
Baitokov hopes that the treaty can stimulate Kazakh investment in the financial sector of its neighbour, by improving the quality of information available.
"Adequate and accurate information on these banks' operations, their advantages and risks, is needed, so they could form their niche in the market and thus develop it. Now we have the mechanisms for this information delivery," said Baitokov.
According to Abdrayev, the main opportunities in the Kyrgyz banking sector at present are in trade and commercial operations credit and the mortgage market, which account for 37.6% and 14.9% of total assets, respectively.
3rd international banking conference to be held in Bishkek
Kazakhstan Today - 20 June 2006
BISHKEK. A 3rd international banking conference "Co-operation between banks in conditions of globalised economic markets" is due to take place in Bishkek from 26 to 29 July, Kazakhstan Today correspondent reports.
According to the organisers, the geography of the participants will be very broad this year. Representatives of financial institutions and investment companies from Cyprus, Great Britain, Switzerland, and China will arrive in Bishkek to participate I nthe conference. The conference is sponsored by an international financial magazine "Euromoney" and Kyrgyz AsiaUniversalBank, it is organized by the Union of Banks of Kyrgyzstan and the Moscow International Currency Association.
The Bishkek international banking conference is taking place each year since 2004. In the previous years more than 250 delegates from Armenia, Belarus, Kazakhstan, Kyrgyz Republic, Latvia, Moldova, Russia, Ukraine, and the USA participated in the conference.
