INTERVIEW: Tsesnabank sees crisis as opportunity

By bne IntelliNews March 20, 2009

Clare Nuttall in Astana -

Kazakhstan's only Astana-based commercial bank, Tsesnabank, adopted a conservative strategy during the country's recent credit boom. Dauren Zhaksybek, chairman of the bank's management board, says it now hopes to benefit from the impact that the crisis is having on its larger rivals by increasing its market share.

Tsesnabank expanded modestly in the first part of this decade, and after 2005 started to grow its branch network, which now covers the whole of Kazakhstan. The impact of the global liquidity squeeze has been less significant for Tsesnabank than for its larger peers, since it relied mainly on customer deposits as its source of funding. It carried out just one Eurobond issue, a $125m placement in February 2007, and a few syndicated loans, and has a low exposure to Kazakhstan's troubled real estate sector.

"We always knew that real estate would be a problem sector. One of our sister companies is in the infrastructure construction business, so we understood the sector too well to find it very attractive," says Zhaksybek. "Instead, we tried to diversify our loan portfolio quite substantially, to become a truly diversified bank."

Before joining Tsesnabank in October 2006, Zhaksybek had spent two years in Vienna as a manager in Raiffeisen Zentralbank AG's trade finance department. When he left Austria in 2005, real estate prices in Almaty had already outstripped those in Vienna. "Everyone expected a crisis because the increase in prices was crazy - we all knew it couldn't go on. But people expected a correction in the market, not the external crisis we see today."

Along with other mid-size Kazakh banks such as Kaspi Bank and Eurasian Bank, Tsesnabank sees the crisis as an opportunity to take market share, after the nationalisations of BTA and Alliance Bank and the state capital injections into Halyk Bank and Kazkommertsbank. "Overall we see no change in our position. It's the same as it used to be before the crisis, except the market got tougher. Where there are problems, there are opportunities to attract new clients and gain market share," Zhaksybek says. "We feel quite happy about our position. The crisis has provided an opportunity to rethink our strategy and how we view our business. We are lucky - or farsighted - in that we didn't go for big growth."

Farm lending

Tsesnabank is using this period of crisis to overhaul its internal operations in order to become more competitive. In its 2008-2009 plan, the bank decided to work on improving its business processes and IT systems, develop a new risk strategy, and increase the knowledge and education of its risk management staff. It recently hired PricewaterhouseCoopers to advise it on this process. "We completed our last branch opening in mid-2007 - by coincidence just before the crisis started - and we now have a branch network covering the entire country, offering all commercial banking services," says Zhaksybek. "Our plan is not to grow, but to raise quality. We would like to take this time when the market is quite slow to work on these issues and make sure we are in a better position when market conditions change."

The bank's generally conservative approach also ensured that it didn't lose money from the recent devaluation of the tenge, although Zhaksybek acknowledges there will be some negative fallout. "The devaluation will affect our clients, and cause some deterioration of loan quality. But keep in mind that our bank borrowed and financed mostly in local currency - more than 75% of our loans are in tenge," he says.

While Tsesnabank has taken a cross-sector approach, since its launch in 1992 the bank has built up expertise in lending to the agricultural sector. Zhaksybek considers there is a lot of potential in this area. "Grain production in Kazakhstan is relatively low, but is getting higher, whereas the quality is better than in Russia, Ukraine and other competing markets. The market is also quite concentrated, especially compared to Russia which is still very farmer-oriented, which gives Kazakh agricultural companies more flexibility to invest in modern technologies and chemicals," he says.

Its location in Astana puts Tsesnabank right in the heart of Kazakhstan's grain belt as well as giving it easy access to the northern industrial cities. "We are also close to the government, which at times like this is a benefit," says Zhaksybek. "Based on location, we are a truly Kazakh bank. Astana is a young city with large potential, and Kazakhstan has a young banking sector. The city and the banking sector have grown up together."

Send comments to The Editor

INTERVIEW: Tsesnabank sees crisis as opportunity

Related Articles

Retail trade slows in Kazakhstan amid economic uncertainty

Naubet Bisenov in Almaty - A free-floating exchange regime for Kazakhstan’s currency, the tenge, is taking its toll on retail trade as the cost of imports rise. While prices have not changed ... more

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

New Kazakh central bank governor re-adopts free floating regime

bne IntelliNews -   The National Bank of Kazakhstan, the central bank, has re-adopted a free-floating exchange regime under the new governor, Daniyar Akishev, who has ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.