Halyk Bank AO: ‘Bad Bank’ To Grease Merger Of Top Two Kazakh Lenders KKB And Halyk
Kazakhstan’s second largest lender Halyk Bank has provisionally agreed to take over larger rival Kazkommertsbank (KKB), the banks said on March 3.
The central bank in Kazakhstan said the authorities had agreed to support the deal by helping KKB get rid of bad loans via the state-owned ‘bad bank’, the Problem Loans Fund.
Critics were not slow to express concern about the Halyk/KKB merger, saying it was important to note that with this deal more than one-third of the Kazakh banking sector would be controlled by one bank whose owners are presidential family members. Together KKB and Halyk Bank, account for 37% of Kazakhstan’s banking system assets.
Kazakhstan’s banking system remain in need of clean-up efforts, having struggled to recover from the 2008-9 financial crisis. Banks in Kazakhstan have been beset by bad loans since the slump in world crude prices, oil being the country’s number one export.
The size of the KKB stake to be acquired by Halyk Bank has not yet been announced. A full merger would create a bank with assets of $27bn, outdoing the country’s third largest bank Tsesnabank fourfold, and the local unit of Russia’sSberbank, which currently ranks as the no.4 Kazakh lender, sixfold. While the two banks are currently owned by two political groups, both banks are linked to President Nursultan Nazarbayev.
Nazarbayev’s daughter Dinara Kulibayeva, together with her husband Timur Kulibayev, have a controlling stake in Halyk Bank, while KKB is controlled by Kazakh businessman Kenges Rakishev, a son-in-law of Defence Minister Imangali Tasmagambetov. In April, Rakishev increased his stake in the lender from 28.67% to 43.15%. He now directly and indirectly (through Qazaq Financial Group) controls 71.23% of KKB’s common shares.
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