Bishkek, Kyrgyzstan (PressExposure) June 29, 2009 -- OJSC "Asia Universal Bank" became one of the two banks in the Kyrgyz Republic to hold a full license to trade in precious metals.
Under the terms of the license, AUB can provide its corporate and private clients with a full range of services regarding precious metals trading and other related operations. These include the purchasing and selling of ingots, financial operations on precious metal accounts, accepting precious metal as collateral against loans, the purchasing and distribution of commemorative coins, and futures trading on precious metals. As a result, AUB has considerably expanded its range of services for both domestic and international clients.
"This expanded range of banking services means the bank can enter new markets and service new clients," - says Mikhail Nadel, the Chairman of the Board of Directors, AsiaUniversalBank, "We are a universal bank committed to provide the widest range of services to our clients, and this license is a sound confirmation of this commitment. We therefore enter the market of precious metals and contribute to its trade and market development, primarily in the Kyrgyz Republic".
Prices of precious metals are relatively less vulnerable to market volatility making investment in these assets more reliable in the long term. In the Kyrgyz Republic, gold exports are one third of the general export figures in 2009. However, precious metals are not yet fully recognized as a reliable investment instrument. Consequently, the market for precious metals and commemorative coins is still relatively underdeveloped. Banks with large domestic branch networks, such as AUB, increasingly engage in precious metals operations, and this market is expected to grow. Trade in precious metals will contribute to the further strengthening of financial intermediation, investment flows, and economic growth in the Kyrgyz Republic.
"Currently, the Kyrgyz Republic has certain legal limitations on precious metals operations. In particular, Kyrgyz banks are not allowed to operate with ingots which do not meet the requirements of international standards as issued by the London Association of Precious Metals, and are not supplied with a manufacturer's certificate. In addition, while banks can engage expertise to assay precious metals, they are not authorized to issue certificates for metals intended for delivery to third parties. However, banks are permitted to accept precious metals as collateral against loans or as an instrument for saving," - says Bakyt Zakirov, Deputy Chief Executive Officer of Law.
"Our clients can use precious metals accounts to minimize their risks, which is very important. The accounts make sense as inflation proof investments, as client risks are primarily associated with the world prices for precious metals, not on the economic situation in the country or its national currency exchange rate which is determined by both macro and micro economic factors. Thus our clients have an opportunity to diversify their investment portfolios and reduce general risks" - adds Nurdin Abdrazakov, Chief Executive Officer, AsiaUniversalBank.