Tajik central bank head says Tojiksodirotbonk (TSB) and Agroinvestbonk can lose their operating licenses if they fail to attract additional investments in the near future.
A regular sitting of the Majlisi Namoyandagon (Tajikistan’s lower house of parliament), presided over by its head, Shukurjon Zuhurov, was held on May 25.
Speaking at the session, the head of the National Bank of Tajikistan (NBT), Jamshed Nourmahmadzoda, noted, “If these banks fail to fulfill their obligations to attract additional investments and pay back financial aid provided to them by the government, specific measures will be taken against them, up to and including license revocation.”
After receiving financial aid from the government in early 2017, Tojiksodirotbonk and Agroinvestbonk promised to improve their financial situation within the next three years, Tajik central bank head said.
“The management of Tojiksodirotbonk has promised to attract additional investments within the next six months and Agroinvestbonk management has promised to attract additional investments until the end of May,” Nourmahmadzoda said.
According to him, Tojiksodirotbonk is fulfilling its obligations in accordance with schedule. “They [Tojiksodirotbonk] have managed to buy back 5 percent of their shares from the government. Meanwhile, Agroinvestbonk is behind the schedule of repaying its debt to the government. The bank should settle its debt in the amount of more than 50 million somoni to the government before it pays out retail customers,” the NBT head added.
Recall, four local commercial banks, including Tojiksodirotbonk and Agroinvestbonk, have been experiencing serious liquidity issues since 2015. Parliament in December 2016 approved a government decree to issue bonds to recapitalize the mentioned banks. TSB and Agroinvestbonk were topped up by 2.25 billion somoni (US$284 million) and 1.7 billion somoni (US$215 million) respectively.
The financial aid has been provided to the banks for the period of five years with a 2-percent annual interest rate. They should pay back 5 percent of these fund this year, 20 percent next year, and 25 percent each of the remaining three years.
Assets on TSB’s books reportedly include the bank headquarters in Dushanbe, 43 branches across the country, Closed Joint Stock Company (CJSC) Dushanbe Mall (Tajikistan’s largest shopping mall, which is home to the country's first ever hypermarket to be part of the French Auchan chain), Tajikistan Hotel in Dushanbe, eight nine-story apartment buildings in Danghara district (Khatlon province), spinning mills in Danghara and Farkhor districts (Khatlon province), cotton ginneries in Khatlon province, and auto-repair enterprise.
The government now owns 85.9 percent of the shares in Tojiksodirotbonk. Before that, 58.89 percent of TSB’s shares had been owned by Closed Joint-Stock Company (CJSC) Yevraziya (Eurasia), 11.65 percent by Melodiyon LTD, 10.99 percent by Ehson LTD, 7.38 percent by Media Plyus (Plus) LTD and 1.11 percent by Vostok LTD.
On May 14, Tojiksodirotbonk announced on its official website that the deal for Saudi Investment Group to acquire a 51 percent stake in the lender has been agreed in principle. It is unclear when the acquisition will formally occur and on what terms.
TSB was established in December 1990 as the Tajik branch of the Vnesh Econom Bank of the former Soviet Union, and it initially specialized in trade and import-export banking. Later this branch was reorganized into a Joint-Stock Commercial Bank “Tajikvnesheconombank”. In June 1999 the bank was renamed and registered as Tojiksodirotbonk or TSB.
Headquartered in Dushanbe, TSB has 11 branches in the main cities of Tajikistan and covering all regions of the country.
Agroinvestbonk holds more than 730 items located in various regions of the country, including the bank headquarters in Dushanbe, main branches in Khorog, Khujand, Kulob and Qurghon Teppa, 60 other branches across the country and five service centers. Besides, the bank possesses resort zones in Varzob district, small enterprises, farming units, shopping centers, shops, cafes, drugstores, refueling stations, service stations, warehouses, consumer service centers, and many apartments and residential buildings.
Founded in 1992, Agroinvestbonk, with headquarters in Dushanbe, is now 87.3 percent government-owned as a result of the bailout program. It has main branches in Khorog, Khujand, Kulob and Qurghon Teppa and more than 60 other branches across the republic. In 2012, the government made a decision on recapitalization of Agroinvestbonk and injected 700 million somoni in the bank. 200 million somoni went to replenishing the bank authorized capital stock and 500 million somoni were assigned for the swap.
