KPMG to assess loan portfolio and financial investments of Alliance Bank

Almaty. May 18. Interfax-Kazakhstan

Kazakhstan-based Alliance Bank has contracted KPMG (London) for assessment of the bank’s loan portfolio and financial investments as well as its off-balance-sheet items.

Besides, KPMG will assess how potential adjustments may affect the bank’s financial status, Alliance Bank says in a Friday press release.

According to the bank, the creditors’ coordination committee for external debt restructuring include the following international banks: ADB (Asian Development Bank), CALYON, Commerzbank Aktiengesellschaft, DEG (Deutsche Investitions- und Entwicklungs GmbH), JP Morgan, Sumitomo Mitsui Banking Corporation Europe Limited and Wachovia Bank N.A.

“The plan for debt restructuring and recapitalization of Alliance Bank will have to be approved by the creditors and submitted to the Kazakh Financial Supervision Agency for approval by July 15, 2009,” the press release reads.

On May 29, 2009 JSC Alliance Bank will hold a conference call with its creditors to inform the latter about the status of the negotiations with the coordination committee and about preliminary results of KPMG’s audit.

Following the bank’s earlier announcement about suspension of its debt servicing operations for three months, as at May 11 the bank failed to fulfill its obligations with respect to the principal external debt exceeding $10 million in value.

As reported, Alliance Bank approached its creditors with a debt restructuring proposal. The external debts of Alliance Bank come to about $4 billion. This year the bank is to repay $560 million.

The major shareholder of the bank, Seimar Alliance Financial Corporation (SAFC), sold its owned 76% voting stake in bank to Samruk-Kazyna National Welfare Fund for a symbolic price of 100 tenge (current FOREX rate is 149.82/$1). However, the deal has not been closed yet.

In first half of 2008 Alliance Bank was ranked 22nd by assets among the CIS banks and 4th among the Kazakh banks according to the Interfax-1000: CIS Banks ranking prepared by the Interfax Center of Economic Analysis.