Halyk Bank Drops Talks on Purchase of State’s BTA Stake

Nov 18. Bloomberg

By Nariman Gizitdinov

Halyk Bank Drops Talks on Purchase of State’s BTA StakeHalyk Savings Bank (HSBK), Kazakhstan’s second-largest bank, halted talks on buying the government’s shares in twice-defaulted BTA Bank after sovereign wealth fund Samruk-Kazyna rejected its bid.

Talks were discontinued by mutual consent after the completion of due diligence on BTA, Halyk said on its website today. The Almaty-based lender said it “will continue to implement its long-term development strategy.”

As part of a move to unify Kazakhstan’s almost $23 billion of retirement savings under a single state-run pension fund, the Kazakh government has said it planned to swap its stake in BTA for Halyk’s pension fund. It then wanted to offer its remaining shares in the defaulted bank to Halyk, which is controlled by President Nursultan Nazarbayev’s daughter and son-in-law. Halyk’s pension fund had 1.1 trillion tenge ($7.3 billion) of assets under management last year, contributing about 14 percent of the bank’s net income.

Halyk wanted to separate the planned sale of its pension fund from the acquisition of BTA shares, Interfax reported in June, citing Halyk Chairman Alexander Pavlov. Halyk consultants valued the pension fund at $576 million to $715 million, and the bank was prepared to sell at “fair market value,” Interfax said.

Halyk didn’t comment on the sale of its pension fund in today’s statement.

Samruk-Kazyna took over BTA, the biggest lender at the time, Alliance Bank and Temirbank after in 2008 credit markets froze and a property bubble burst. The lenders restructured about $20 billion in debt after defaulting in 2009. BTA overhauled its debt in December for the second time since 2010.