NB Chairman Comments On Merger Of Banks In Kazakhstan

Kazakhstan: State Bailing Out Yet Another Ailing Bank

Chairman of the National Bank Daniyar Akishev has commented on two banks’ intent to merge, Kazinform correspondent reports.

The chief banker noted that the process of consolidation in the banking sector has been reiterated several times. ‘The optimization of costs and expenses in the banking sector is an inevitable process. The shareholders of the bank should evaluate the extent that the financial institutions can ensure the profitability of their businesses in view of future obligations for capitalization of the institutions, i.e. for timely payment for the obligations the banks have. Amid economic slowdown in the country it is obvious that for many financial institutions the process of consolidation can result in establishment of quite a sound and balanced financial institution’, Akishev said.

‘The things that are now happening in the market when the banks signed the Memorandum of Intent to merge, I know that there are also talks about other banks. And this process will go on and is exclusively based on economic assessment of business. Therefore, being the regulator, we are interested in having a stable financial system in the country. And if we see that unification, cooperation or consolidation of players in the market helps improve sustainability of the funding system we welcome it. The process that yesterday two banks announced their intent was discussed with us, i.e. the shareholders met the leading team of the National Bank and showed the model they will follow. I believe they understand where they will move to. These processes will continue’, the Head of the National Bank noted.

Earlier it was informed that Tengri Bank signed a Memorandum of Intent to merge with the Capital Bank Kazakhstan. Halyk Bank stated on its intent to purchase the controlling block of Kazkommertsbank’s shares. Moreover, it is known that Tsesnabank already discussing its merger with BankCenterCredit.