The central banks of Kazakhstan and Uzbekistan have come together to agree on cooperation that could culminate in large Kazakh lenders entering the underexplored Uzbek market.
The breakthrough was announced in a July 10 statement from the National Bank of Kazakhstan, which revealed that the two nations’ regulators are set to coordinate the mutual regulation and supervision of their respective banking sectors.
The opening up of the Uzbek banking sector marks another step in President Shavkat Mirziyoyev’s regional economic integration agenda. His late predecessor, Islam Karimov, was deeply suspicious of his neighbors and accordingly kept them at arm’s length from Uzbekistan’s economy.
Under the agreed new approach, Kazakh banks will be able to open subsidiaries in Uzbekistan or buy assets in existing lenders. Parent companies will be required to prove that they are financially viable and that they possess authorized capital of at least 100 million euros ($117 million). The daughter company will need to hold at least 11 million euros in capital.
Kazakhstan National Bank chairman Daniyar Akishev said on July 10 that Uzbekistan’s appeal for Kazakh banks is in its “large market capacity and large population.” While Kazakhstan has a relatively small population of 18 million, there are around 33 million people living in Uzbekistan.
The main candidate for entering Uzbekistan among the Kazakh majors is Halyk Bank, which already has a presence in Russia, Georgia, Tajikistan and Kyrgyzstan.
In May, Halyk Bank chief executive Umut Shayakhmetova told reporters that her company was initiating the bureaucratic procedure of opening a subsidiary in Uzbekistan.
"Mirziyoyev's economic reforms are bearing fruit. We see a great interest from Kazakhstan businessmen in investing in Uzbekistan,” she said.
Almaz Kumenov is an Almaty-based journalist.