Kazakh Kazkommertsbank confirms talks on deal with Halyk Bank

By bne IntelliNews January 22, 2017

Kazakhstan’s largest bank Kazkommertsbank (KKB), recently rebranded as Qazkom, has entered preliminary negotiations for an unspecified “deal” with Halyk Bank, KKB said in a press release on January 20.

The deal possibly refers to merger talks which, according to some reports, the two banks have been engaged in since late 2016. Reuters referred to such talks last November citing sources close to the negotiations, but KKB dismissed its report as false speculation. A merger would create a bank with assets of $27bn, four times the size of the country's third largest bank Tsesnabank, and six times as big as the local unit of Russian Sberbank, which currently ranks as the No.4 Kazakh lender.

“Further information will be provided as and when appropriate,” KKB’s press release added.

The potential merger could only take place after May 2017, when Halyk Bank redeems a $638mn Eurobond issue, as the bond covenants would stand in the way of the deal, according to Reuters.

KKB and Halyk Bank, which are both linked to President Nursultan Nazarbayev, account for 37% of Kazakhstan's banking system assets. There is conjecture that the merger could involve the write-down of bad assets belonging to KKB, which could involve help from the government.

Halyk Bank, listed on the London and Almaty stock exchanges, has a market capitalisation of $1.7bn. Domestically-listed KKB has a market capitalisation of around $540mn.

KKB is controlled by Kazakh businessman Kenes 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 stock.

Nazarbayev’s daughter Dinara, together with her husband Timur Kulibayev, has a controlling stake in Halyk Bank.

Related Articles

Raiffeisen to file lawsuit against new Croatian banking law

Austria's Raiffeisen Bank is preparing to file a complaint at the Croatian constitutional court later in July against a recent law that aims to declare thousands of its loans to Croatians void, ... more

94% of creditors of Azerbaijan's IBA approve debt restructuring plan

An overwhelming majority of creditors (93.9%) to the International Bank of Azerbaijan (IBA) approved the bank's ... more

Lebanon becomes European Bank for Reconstruction and Development shareholder

Lebanon has become the fifth member country from the Southern and Eastern Mediterranean (SEMED) region to join the European Bank for Reconstruction and Development (EBRD), becoming a shareholder with ... more