How Qazkom Nearly Brought Down Kazakh Banking System

Betted On Kazakhstan’s Largest – And Cheapest – Bank

“Kazkommertsbank” – one of the largest banks in Kazakhstan – almost brought down the entire banking system of the country, DW reported. The regulator was forced to allocate funds for its maintenance.

Kazkommertsbank (Almaty), whose securities are officially listed on Kazakhstan Stock Exchange (KASE), has notified KASE on receiving on December 14, 2016 a cash loan in the amount of KZT400.8 bn; loan/equity – 65.53 %, KASE official website reported.

Remind, that Kazkommertsbank has rejected reports that management has been in discussions about a government bailout and says Kazkommertsbank clients have no need to worry.

Kazkommertsbank said that last week, Bloomberg with reference to anonymous sources commented that the bank has been granted an emergency loan, which has been assumed as a first step of the special government-sponsored KZT 1.5 trillion rescue programme being discussed between the management of the bank and the National Bank of Kazakhstan. Kazakhstan’s biggest bank struggling as asset quality worsens, The Bloomberg reported.

A statement says: “The Bank hereby officially states that it is not in any negotiations with the National Bank and the Government on bailout. On December 14, 2016 the Bank applied for the loan from the National Bank in amount of KZT 400.8 billion under the standard procedures on provision of short-term liquidity to the second-tier banks. The loan has been extended at market terms and conditions for a fixed period with interest being accrued and paid.

“The Bank used the standard facility of the National Bank, which is available for all commercial banks to support short-term liquidity, ahead of upcoming holidays in December. For the last decade the Bank has used this facility at least 10-12 times.”

President Nursultan Nazarbayev said last month that the government sees two possibilities for improving Kazkommertsbank’s health: either shareholders will find funds to boost its assets — “make it viable and it will pay back its credits normally” — or the lender will turn to the state for a loan.

President of Kazakhstan Nursultan Nazarbayev has promised to prevent collapse of Qazkom Bank, formerly known as Kazkommertsbank (KKB). Head of state said about the government’s intention to support the largest bank of Kazakhstan in an interview with Bloomberg.

Qazkom is one of the largest banks in Kazakhstan and Central Asia. Bank’s shares are listed on Kazakhstan Stock Exchange (KASE). Global depositary receipts, the basic asset of which is the bank’s shares (GDRs) are listed on the London Stock Exchange (LSE).

How Qazkom Nearly Brought Down Kazakh Banking SystemKKB is controlled by local businessman Kenges Rakishev, a son-in-law of Nazarbayev’s long-time confidant, Deputy Prime Minister Imangali Tasmagambetov. Rakishev gained a foothold in Kazkom in 2014 when it bought BTA Bank, a twice-defaulted nationalized lender. Over the past year he built a 71 percent stake as founder Nurzhan Subkhanberdin reduced his position.