Halyk Bank CEO Says KKB Needs To Shed Bad Assets Before Deal

How Halyk Bank Passed into the State Ownership?

ALMATY, Jan 30 (Reuters) – Kazakhstan’s Halyk Bank , which is in talks to take over rival Kazkommertsbank (KKB), wants the latter to get rid of bad assets before a deal is finalised, Halyk Bank Chief Executive Umut Shayakhmetova told Forbes on Monday.

Earlier this month, two of the biggest lenders in the oil-rich Central Asian country said they were in talks over a merger and acquisition transaction, but provided no further details.

In an interview published by the local edition of Forbes, Shayakhmetova made it clear Halyk was the potential buyer in the deal, but said it was not interested in buying KKB in its current form.

“We expect there to be a complicated structure, most likely a slimmed-down bank (KKB) will be acquired,” she said. “We are interested in a structure that would provide for the split-off of bad assets. It is possible that the deal will involve state support.”

Half of KKB’s assets totalling $15.7 billion are tied up in a single loan to BTA, a former bank that is now a distressed asset management company. BTA has so far missed no repayments on that debt, but the outlook is uncertain. (Reporting by Olzhas Auyezov; Editing by Sherry Jacob-Phillips)