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Nabiullina named best European central banker as purge continues

CBR Chief Elvira NabiullinaThree years into her purge of the country’s banking sector which to date has seen 276 financial institutions driven out of business and a further 28 put through the regulator’s financial rehabilitation programme, the Central Bank of Russia’s Elvira Nabiullina has been named Europe’s best central banker for 2016 by the UK magazine The Banker. (more…)

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Vneshprombank licence revoked as $2.4bn hole found in balance sheet

VneshprombankRussian Central Bank’s purge of the country’s banking system claimed its biggest scalp this week when it announced that it was revoking Vneshprombank’s licence after ruling that its liabilities exceeded its assets by as much as $2.4bn and accusing its management of plundering assets “over a long period of time” and of falsifying accounts. “The prospect (more…)

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Russian rating agency to be launched as Moscow reacts to downgrades

Rating AgenciesMoscow is launching a Russian rating agency in a bid to counterbalance the negative effect of the persistent downgrades that the country and its leading companies has experienced at the hands of the big three Western agencies Standard & Poor’s, Moody’s and Fitch over the past 18 months. The government has claimed that recent moves to cut Russia’s debt rating down to junk status were politically motivated, and its central CBR bank has called for the new Analytical Credit Rating Agency (ACRA) to be “resistant to geopolitical risks”.

 
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Beijing launches China International Payment System

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee

REUTERS/Jason Lee

Reuters/Jason Lee

 The China International Payment System (CIPS), China’s answer to the SWIFT secure financial messaging service, officially came into operation yesterday. CIPS “will allow increasing efficiency of cross-border settlement in yuans and encourage the yuan’s use globally,” the deputy governor of the People’s Bank of China Fan Yifei told guests at an opening ceremony in Shanghai.
The new payment system (more…)

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Admiralteisky becomes 140th victim of Russian bank purge

CBR chief Elvira Nabiullina

CBR chief Elvira Nabiullina

Russian bank purge: The Central Bank of Russia (CBR) last week revoked the licence of the Admiralteisky Bank after riot police officers were called in to stop angry depositors from trying to break its doors down. The bank has been forced out of business partly because it did not have enough reserves, partly because it had processed large suspicious payments, partly because it was not observing anti-money laundering rules and finally because it “practically stopped serving its clients” this month, according to a statement released by the CBR.
It becomes the 140th bank to have its licence revoked since 2013 when the newly appointed CBR chief Elvira Nabiullina began her drive to clean up the banking sector, although she has been less successful in bringing those responsible to justice. The most high-profile victims of the purge have been:

  • Trust Bank, one of the country’s top 40 banks, collapsed at the end of December 2014 after depositor panic obliged the authorities to bail it out to the tune of $1.86bn – the second biggest banking bailout in Russian history. The financial institution had used US actor Bruce Willis in a high-profile advertising campaign that played on the bank’s name — but could not cope with the crash in the rouble’s valyes, growing bad assets and an outflow of deposits. The Central Bank said at the time that Trust managers had siphoned off assets and falsified the bank’s accounts. In April, criminal cases on fraud charges were opened against Ilya Yurov, the main shareholder of Trust Bank, and a series of his top managers. Yurov is believed to have moved to London.
  • Even the presence of Putin’s cousin Igor Putin on its board could not save Master Bank, whose licence was revoked in November 2013 with the CBR alleging that it had violated money laundering legislation and processed large suspicious transactions. Its bailout cost the CBR almost $1bn. The bank’s CEO (and reportedly its major shareholder) Boris Bulochnik was never charged and is reputed to be living in Israel.
  • Last month’s collapse of Probusinessbank, which counted several large Western funds among its investors, last month signalled the end of Russian financier Sergei Leontyev’s 20-year-old banking empire and his Life financial group. The Central Bank said there was a $989m hole in the lender’s balance sheet, citing a loss of capital, fictitious bonds and investments in poor quality assets. Immediately after the announcement that Probusinessbank was being taken into administration by the Central Bank, Leontyev told employees that he was leaving the country, explaining that “Russia is not ready for such a financial group.”
  • In July, the CBR withdrew the license of Russia’s 45th largest bank  Rossiisky Kredit, one of four financial institutions controlled by Anatoly Motylyov to be closed down within a matter of days. Motylyov has subsequently disappeared. 
  • The collapse of Mosoblbank in May 2014 and the withdrawal of its licence triggered a $1.7bn bailout. Two other banks owned by Andzhei Malchevsky and his son Alexander – Inresbank and Finance Business Bank – were closed down at the same time. Investigators allege that they and their senior management siphoned off over $1bn from its depositors. Former Mosoblbank chief executive Viktor Yanin was sentenced to a six-year prison term earlier this year, while deputy chief executive Yulia Zendina and Andzhei Malchevsky were arrested in June. Deputy chief executive Dmitry Vasilyev and Alexander Malchevsky were arrested in absentia by a Moscow court in August and put on an international wanted list. They are believed to have fled to Latvia. 
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GCC asks ECB for advice on setting up single currency

GCC consultative meeting 2015At a meeting of its bankers in Riyadh this week, the six member states of the Arab Gulf Cooperation Council vowed to press ahead with plans for monetary union and the launch of a single currency, and resolved (more…)

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Russian capital outflow past peak, Finance Ministry claims

Central Bank of RussiaRussian capital outflow totalled $ 52.5bn for the first six months of 2015, according to figures released by the country’s central bank (CBR) this week, with the Ministry of Finance suggesting that the crisis may now be past it peak. Capital outflows in the second quarter of 2015 (more…)

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Russian bank purge continues as two more licences revoked

CBR chief Elvira Nabiullina

CBR chief Elvira Nabiullina

Russian bank purge: Central Bank of Russia chief Elvira Nabiullina took the tally of bank licences she has revoked since taking up her post in July 2013 to 100 today, when she added the Moscow-based MAST and TEST banks to her list of victims.
Both banks’ licences have been rescinded on the grounds they had contravened laws designed to stamp out the laundering of proceeds from crime and to prevent the financing of terrorist activities.

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Central Bank lowers Russian interest rates in bid to stimulate economy

CBR chief Elvira Nabiullina

CBR chief Elvira Nabiullina

The Central Bank in Moscow today cut Russian interest rates for the fourth month in a row as it tries to stimulate the country’s ailing economy. The rate now stands at 11.5%, down from a peak of 17% last December. The Bank made the decision “taking account of lower inflation risks and persistent risks of considerable economy cooling.” Although inflation (more…)

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Russia’s Central Bank lowers key interest rate to 12.5%

Central Bank of RussiaWith the rouble rallying against the dollar and the euro , the Central Bank of Russia (CBR) yesterday announced that it was bringing down its key interest rate from 14% to 12.5%. “Amid rouble appreciation and significant contraction in consumer demand in February-April 2015, monthly consumer price growth is declining and annual inflation is tending to stabilize,” it said in a statement. The CBR estimates (more…)

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Russian economy to return to high growth in 2017, predicts CBR

Ksenia Yudaeva, Deputy Chair, Central Bank of Russia

Ksenia Yudaeva, Deputy Chair, Central Bank of Russia

The Russian economy will return to a period of high growth in 2017 after stabilising next year, the first deputy chairman of the Bank of Russia Ksenia Yudaeva predicted today. The damage caused by the rouble’s nosedive would only last a few months, she forecast, after which things would level off. KP

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Kazakh banking sector assets increase by 17.9% over year

National Bank of Kazakhstan

National Bank of Kazakhstan

Kazakh banking sector: The total assets of Kazakhstan’s banking sector in Kazakhstan grew by 17.9% last year, according to statistics released by its National Bank this week. The volume of residents’ deposits increase by 15.9% and foreign currency deposits by 72.2%, while national currency deposits were down by 17.7%. The total volume of bank lending to the economy increased by 7.2%, nearly 15% of which was in loans to the small business sector. There are currently 38 licensed banks operating in Kazakhstan.  News.Kaz Read More»

Russian inflation expected to peak at 15-17% as CBR cuts interest rate

Alexei Ulyukayev, Russian Minister of Economic Development,

Alexei Ulyukayev, Russian Minister of Economic Development,

Russian inflation is likely to peak at between 15% and 17% around March and April before dropping down to 12% by the year end, Russia’s Economic Development Minister Alexei Ulyukayev said yesterday (January 31). Ulyukaev also predicted that Russia’s GDP would contract by 3% this year if the price of oil averaged $50 a barrel. He also defended the Central Bank of Russia’s decision to cut the key interest rate by 2 points down to 15%, despite the fact that it had driven the dollar-rouble exchange rate down to 69.66 at 15:40 GMT on Sunday February 1. He called the decision “justified” and “expedient” and signalled the CBR’s understanding that the risks posed to financial stability had decreased. “This [the rate cut] is an undoubtedly responsible and positive step,” he said. ITAR-TASS, rbth
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Russian gold spree accounts for 33% of global central banks’ purchases

goldRussian gold spree: The Central Bank of Russia bought 152 tons of gold last year – just under one third of the 461 tons that the entire global community of central banks bought between them in 2014. Russia’s enthusiasm for gold was triggered both by a determination to decrease her dependency on the dollar and the euro in light of the political tensions that have characterised her relations with the US and the EU since it annexed Crimea, and by the collapse in the value of the rouble. Active procurement has also given a boost to the domestic gold mining industry. FT.com, KP.ru
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Visa opts in to Russian national payment system

VisaVisa opts in to Russian national payment system: The Central Bank of Russia this week confirmed that Visa had signalled its intention to use the country’s national payment system (NBTS) for the processing of transactions that take place within Russia. Legislation passed last year stipulates that international payment systems (more…) Read More»

Dagestan bank has licence revoked by Central Bank as purge goes on

 DyMax

DyMax

The Dagestan bank Prestizhkreditbanka has had its licence revoked by the Central Bank of Russia as it continues its purge of Russia’s financial sector. “The Bank carried out high-risk lending policy to place funds in low-quality assets, which led to a complete loss of the bank’s equity,” the CBR reported today. “Due to the loss of liquidity the credit institution fails to provide timely fulfilment of obligations to creditors. (more…) Read More»

Central Bank of Azerbaijan to invest $500m in Chinese markets

The Central Bank of Azerbaijan is planning to invest $ 500,000,000 in China’s financial market after securing approval from the Chinese authorities. The bank’s deputy chairman Aftandil Babayev told a press conference that his team would now begin examining the quality of the securities on offer. News.az  Read More»

Kazakh BRIC membership suggested by bank Governor

Kazakh BRIC membership:The governor of the National Bank of Kazakhstan, Kairat Kelimbetov has put forward the idea that Kazakhstan should join the BRIC bloc and put the K in BRICK. Because it shares borders with both Russia and China, and because its economic performance is so heavily influenced by that of its Russian neighbour, he reasoned in a recent interview with The Banker magazine, it might be time to recognise it as part of the BRIC grouping. The Banker

New Payment System

Kelimbetov also announced this week that a 3.0 version of a national payment system for Kazakhstan was in development that will be compatible with leading global payment systems. Times of Central Asia 
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Sukuk issue expected from Kazakhstan next year

Sukuk: Kazakhstan expects to able to be in a position to issue Islamic bonds (sukuk) next year, according to the chairman of its national bank Kairat Kelimbetov.“The legislation that regulates the sphere of issuance of Islamic obligations is already in place,” he said yesterday, “and there will be good opportunities to attract sovereign and quasi-sovereign obligations next year.” AKIPress   Read More»

OpenWay tipped to clinch Russian NBTS contract

OpenWay, the Belgian-based software developer, is being tipped to be appointed by Russia’s Central Bank to design a new National system of payment cards (NBTS) as an alternative to the international payment systems (IPS). OpenWay has already developed the Way4 card processing technology and would run the contract through its Russian Openvey Service subsidiary. Interfax   Read More»