Kazakhstan: Marchenko retakes the helm at central bank


Guy Norton
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In a high-profile move, Grigory Marchenko has been appointed as chairman of the National Bank of Kazakhstan (NBK) for the second time, replacing his successor, Anvar Saidenov.

Marchenko previously served as NBK chairman from October 1999 until 2004 and was widely viewed as having played a leading role in the transformation of the fortunes of the central Asian country’s banking sector. Under his watch, Kazakhstan went from a near-bankrupt state in the wake of the August 1998 Russian financial crisis to being one of the most stable and profitable in the entire central and eastern European region – an achievement that won him widespread acclaim and comparisons to Alan Greenspan.

The former US Federal Reserve chairman’s star has waned dramatically in the light of the US sub-prime mortgage fiasco but Marchenko’s reputation as a canny operator has been strengthened by his stewardship of Kazakhstan’s third-biggest financial institution, Halyk Bank, where he served as chairman from January 2005. Although many of Halyk’s rivals embarked on a Eurobond issuance binge to finance rapid expansion, a strategy that has come back to haunt them in the wake of the global credit crunch, Marchenko adopted a much more prudent stance and concentrated on bolstering Halyk Bank’s deposit base. As a result, Halyk is viewed as the country’s strongest commercial bank in the post-credit crunch environment, albeit that the government is about to take a stake in it and its big local rivals as part of a broader economic rescue plan.

Liberal economist

Commenting on Marchenko’s reappointment as NBK head, Milena Ivanova-Venturini, banking analyst at investment bank Renaissance Capital in Almaty, says: "Marchenko is well known in Kazakhstan as a liberal economist, and has been an author of the pension and insurance reforms, mortgage credit and other economic transformations undertaken in Kazakhstan over the past decade."

She believes that while his appointment as NBK chairman is likely to bring overall benefits to Kazakhstan in terms of economic and banking sector stability, it could presage a devaluation of the Kazakh tenge. "Given Marchenko’s previous experience as NBK chairman after the 1999 devaluation of the tenge it might be that the government is looking to tap his knowledge and skill-set again in a similar environment," she says.

She adds: "If that is the case, we think his appointment may be a bearish signal on the tenge."

Recent official statements have pointed towards a smooth depreciation of the tenge, of up to 10%. In April 1999 the tenge devalued by about 35% over just a few days.

Ivanova-Venturini also believes that in his new role Marchenko could have a big influence on the fates of certain players in the Kazakh banking market. In particular, she claims that BTA and Alliance Bank might be faced with potentially negative revisions to the terms and conditions of their government-sponsored recapitalization programmes. "Both BTA and Alliance have yet to sign final agreements with the state on their respective recapitalization programmes and, until this happens, we see a heightened risk that the previously announced terms of these programmes might change," she says.