Islamic Finance

Uzbekistan opens door to Kazakh banks

| 10 July, 2018

JULY 10, 2018 | 8:18AM EDT | ALMATY

Uzbekistan has relaxed regulatory requirements for Kazakh banks looking to set up subsidiaries in the neighbouring Central Asian nation, opening the way for Halyk Bank, Kazakhstan’s biggest lender, to start cross-border operations.

Uzbekistan normally allows only banks rated “A” or higher to establish subsidiaries on its territory. But under an agreement between the Uzbek and Kazakh central banks signed on Tuesday in Almaty, the required rating was lowered to “B” for Kazakh banks.

So far, the only Kazakh bank that has announced plans to expand into Uzbekistan is London-listed Halyk , which also has subsidiaries in Russia and Kyrgyzstan and is rated “B” or higher by the major agencies.

The move by the Tashkent government is part of President Shavkat Mirziyoyev’s campaign to attract foreign investment and reform the economy of the mostly Muslim nation of 32 million.

At the moment, only five out of Uzbekistan’s 28 banks have foreign shareholders, all of them small compared with government-owned lenders which dominate the sector.

(Reporting by Mariya Gordeyeva Writing by Olzhas Auyezov; Editing by Susan Fenton)

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