ALMATY (TCA) — Kazkommertsbank (KKB), the largest bank by total assets in Kazakhstan, on March 2 announced that it has entered into a non-binding Memorandum of Understanding with respect to a potential acquisition by JSC Halyk Savings Bank of Kazakhstan of a controlling interest in KKB.
The parties to the MoU also include the Government of Kazakhstan, the National Bank of Kazakhstan, KKB, Halyk Bank, JSC BTA Bank, and Mr. Kenges Rakishev, a major shareholder in KKB.
The Memorandum was signed with the purpose of “ensuring financial stability and recovery of the banking sector” in Kazakhstan, the country’s National Bank said on March 2.
The National Bank also said that the Government of Kazakhstan and the National Bank plan to provide financial support of the potential transaction by the purchase of bad loans of KKB by the state-owned Problem Loans Fund.
The government of Kazakhstan last month said it would inject 2 trillion tenge (around $6 billion) into the Problem Loans Fund in order to buy bad loans from local banks.
“The MoU sets forth the framework and conditions under which the Transaction may be completed as well as outlines the steps that need to be undertaken by each of the parties in order to achieve this. The terms and conditions of the potential Transaction envisage, inter alia, the coverage of possible risks connected with the loan owed to KKB by JSC BTA Bank,” KKB said in a March 2 press release on the potential deal.
Kazkommertsbank and Halyk Bank are Kazakhstan’s two largest banks.