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Halyk Bank has agreed to buy HSBC's Kazakh subsidiary in a $176m deal announced on February 26. The deal comes amid ongoing consolidation among Kazakhstan's largest banks.

Kazakhstan's second largest bank said in a February 26 statement that it expects the deal to buy 100% of the British-based bank's local unit to close by the end of 2014. The acquisition is subject to regulatory approval,

"We will welcome another group subsidiary in the People's Bank. The deal represents another step forward in the performance of the group's strategy," said Umut Shayakhmetova, who chairs Halyk's board. "This acquisition will strengthen the leading position of Halyk Bank ... to attract new customers in the retail segment, [and] large national and foreign companies operating in Kazakhstan, will give impetus to the further development of private banking and internet banking."

Halyk is Kazakhstan's second largest lender after Kazkommertsbank, and also operates in Russia, Georgia and Kyrgyzstan. HSBC entered the Kazakh market in 1998, and is the 17th largest bank in the country, with assets of more than KZT187bn. The bank took over Royal Bank of Scotland's consumer business in the market in 2010.

HSBC is selling its Kazakh business as part of a retreat from non-core markets as it seeks cost savings. The bank has sold or shut down a total of 63 businesses since 2011, according to Bloomberg. At the same time, the deal comes amidst a wave of consolidation among the top tier of Kazakh banking. Astana is finally finding opportunity to sell off banks it was forced to take under state control since the crisis hit in 2009.

In December, state holding Samruk-Kazyna agreed to sell stakes in two major banks to Verniy Capital owner Bulat Utemuratov. The fund will offload a majority stake in Temirbank while keeping a controlling stake in Alliance Bank, in a deal that is expected to receive regulatory approval this year.

Later the same month, Samruk-Kazyna said it had found a buyer for BTA Bank, previously Kazakhstan's largest bank. On December 23, the fund announced a non-binding agreement to sell BTA to Kazkommertsbank and Kazakh investor Kenes Rakishev, with the fund retaining a minority stake.

Previous attempts to sell off the troubled bank - first to Russia's Sberbank then to Halyk - fell through. Following due diligence, in November Halyk announced that talks with Samruk-Kazyna had been scrapped "by mutual consent".