BTA Bank Will Shut Branches, Cut Staff in Debt Restructure

Aug. 21. Bloomberg

By Laura Cochrane

BTA Bank Will Shut Branches, Cut Staff in Debt RestructureBTA Bank, Kazakhstan’s largest lender to default this year, said it will shut branches and cut staff as it restructures more than $12 billion in debt.

The bank aims to cut costs and may consider “disposing” of “non-core assets” such as retail unit Temirbank, according to an investor presentation, dated Aug. 18, on BTA’s Web site.

BTA Bank, one of three Kazakh banks to default this year, said July 24 it is offering creditors $1 billion to buy back debt and is stopping debt interest payments as part of a restructuring plan. It halted principal payments on its obligations in April after creditors demanded immediate repayment following the government’s February takeover.

“BTA has recently lost several clients due to poor communication,” the presentation said. “It is crucial for BTA Bank to restore confidence with its clients to attract new deposits.”

Net liabilities at BTA were more than 890 billion tenge ($5.9 billion) as of June 30, from net assets of almost 417 billion tenge at the end of last year, the presentation said. Impairment of investment in BTA’s Russia unit totals 34 billion tenge, according to the presentation.

Most of the Almaty-based lender’s existing loan security is “several times overpriced against real values” and its investment decisions in the past have been “above market valuations, even at boom times,” according to the presentation.

BTA will present the final restructuring plan to creditors by Sept. 18, the presentation said.