Kazakh KKB Ordered To Submit $2.9 Bln Provisioning Plan By April 10

Betted On Kazakhstan’s Largest – And Cheapest – Bank

(Reuters) – Kazakhstan’s biggest lender, Kazkommertsbank (KKB), needs to come up with a plan how to create 908 billion tenge ($2.9 billion) in loan loss provisions by April 10, the bank said on Thursday citing a central bank order.

The Central Asian nation’s central bank said last month a state-run “bad bank” would buy 2.4 trillion tenge ($7.5 billion) of bad loans from Kazkommertsbank, paving the way for a takeover by its closest rival, Halyk Bank.

This month, the central bank instructed KKB to implement a number of corrective measures, including limitations on payments of dividends and bonuses, as well as asset disposals, KKB said in a statement on Thursday.

By April 17 KKB must also submit to the central bank an action plan aimed at strengthening its internal controls and risk management systems as well as outlining how it will implement the corrective measures.

KKB did not say what penalties it could face for missing the deadlines set by the regulator. (Reporting by Olzhas Auyezov; Editing by Jon Boyle)