Halyk Bank to buy preference shares from state

May 21. Reuters. ALMATY

By Robin Paxton and Mariya Gordeyeva

* Samruk-Kazyna still has 13 pct of Halyk shares
* Halyk’s first-quarter net profit up 58 percent (Recasts with planned share buyback)

Halyk Bank to buy preference shares from stateHalyk Bank , Kazakhstan’s largest lender by assets, aims over the next few months to buy back all its preference shares bought by the state during the financial crisis.

“Our plan is by end of the second quarter to be able to exercise the (buyback) option either in full or at least for the largest part of it. If anything remains, we’ll exercise it in the beginning of the third quarter,” deputy chief executive Dauren Karabayev told a teleconference with investors on Monday.

In 2009, as part of an anti-crisis programme, Kazakhstan’s sovereign wealth fund Samruk-Kazyna acquired 20.9 percent of ordinary shares in Halyk for 27 billion tenge ($182 million) and 50.3 percent of its preference shares for 33 billion tenge ($223 million).

Halyk is part-owned by Almex, a holding controlled by President Nursultan Nazarbayev’s daughter and son-in-law. Almex holds the buyback option.

In April 2011 Halyk and Almex bought out 19.8 percent of the ordinary shares from the state for around 33 billion tenge.

According to Halyk data, Samruk-Kazyna still holds half of its preference shares, or around 13 percent of all its shares.

As of Sept. 30, 2011, Nazarbayev’s daughter Dinara and her husband Timur Kulibayev held 44.51 percent of all shares in the bank. The remaining shares in the bank are held by small shareholders with less than 5 percent.

Halyk said earlier on Monday that net profit rose 58 percent in the first quarter and bad debt charges fell by more than a third.

The bank said net profit was 16.8 billion tenge ($114 million) in the three months to March 2012.

Kazakhstan’s banks have struggled to recover from the financial crisis even though the country’s economy, helped by high oil prices, grew 7.5 percent last year.

The banks are still weighed down by toxic loans, the legacy of exposure to bloated real estate markets and excessive reliance on external funding. Sector wide, non-performing loans have remained above 30 percent for three years.

Halyk said in a statement that net interest income rose 46.6 percent year-on-year in the first quarter. Its impairment charge decreased by 36.3 percent, the bank said.

The bank did not give any new forecast for its full-year profit. It has previously said it expects net income of around 50 billion tenge in 2012.

Total assets grew by 11.9 percent compared with a year ago, and its net interest margin was 4.9 percent, compared with 4.3 percent in the same period a year ago.

Halyk said net loans to customers fell by 3.2 percent in the first quarter, due to a decline in corporate loans and mortgages that was partially offset by increasing consumer loans.

The bank said 30-day non-performing loans rose to 20.5 percent of gross loans by March 31 from 19.8 percent on Dec. 31, 2011. The percentage of 90-day non-performing loans also increased.