Kazakhstan’s Halyk Bank to acquire 96.81% of ordinary shares in Kazkommertsbank

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ASTANA (TCA) — Kazakhstan’s Halyk Bank on June 15 announced the signing of the sale and purchase agreements with Mr. Kenges Rakishev to acquire 86.09% of ordinary shares of JSC Kazkommertsbank for a consideration of 1 Kazakhstan tenge, and separately with JSC Sovereign Wealth Fund Samruk-Kazyna to acquire 10.72% of ordinary shares of Kazkommertsbank also for a consideration of 1 Kazakhstan tenge.

The signing of the Agreements with Mr. Rakishev and Samruk-Kazyna follows the signing on 2 June 2017 of the Framework Agreement between the Government of Kazakhstan (represented by the Ministry of Finance), the National Bank of Kazakhstan, Samruk-Kazyna, JSC Fund of Problem Loans, JSC BTA Bank, Kazkommertsbank, Mr. Rakishev and Halyk Bank.

Halyk Bank said that the closing of the transaction is subject to the following conditions:
– Acquisition by JSC Fund of Problem Loans of certain assets and loans from BTA Bank;
– Repayment of the loan by BTA Bank to Kazkommertsbank for an amount of up to 2.4 trillion tenge;
– Mr. Rakishev having acquired ordinary shares (including those in the form of global depository receipts issued with regards to these ordinary shares) currently held by Qazaq Financial Group, Mr. Subkhanberdin and Central Asian Investment Company; and
– Receipt of customary regulatory approvals from the relevant regulatory bodies in Kazakhstan and certain other jurisdictions.

The closing of the transaction is expected to take place in the third quarter 2017, but prior to 31 December 2017.

As part of the transaction and in addition to cash consideration paid for the acquired ordinary shares, after satisfaction of the above conditions, Halyk Bank expects to recapitalise Kazkommertsbank for KZT 185 billion in accordance with capital requirements set by the National Bank of Kazakhstan, to bring Kazkommertsbank’s capital adequacy ratio in line with those maintained by domestic peers. It is expected that Halyk Bank will finance the recapitalisation of Kazkommertsbank from its own internal sources.

Following completion of the transaction enlarged Halyk Group would be able to become an undisputed leader of the Kazakhstan financial sector with materially improved position across all client segments, strengthened branch, ATM and POS-terminal network, expanded products and services proposition to its clients in banking, insurance, brokerage and asset management.

“This deal is landmark for the Kazakhstan financial sector,” said Umut Shayakhmetova, CEO of Halyk Bank. “It will allow to enhance the health and stability of the banking system, as well as to create a major financial group, not only able to compete domestically, but also expand its foreign operations and address the challenges associated with Kazakhstan’s membership in the WTO. It remains Halyk Bank’s priority to ensure safety of our clients’ savings, provide a wide range of products and services, and to work on the increase of market capitalisation of the group for the benefit of our investors and shareholders. We will focus our efforts on both Halyk Bank’s and Kazkommertsbank’s clients, and implement the best practices used by each of the banks.”

JSC Halyk Bank and its subsidiaries (Halyk Group) is Kazakhstan’s leading financial services group, operating across a variety of segments, including retail, SME & corporate banking, insurance, leasing, brokerage and asset management. Halyk Group also operates in Georgia, Kyrgyzstan and Russia. With total assets of KZT 5.201 trillion, Halyk Bank is Kazakhstan’s leading lender. The Bank has the largest customer base and broadest branch network in Kazakhstan, with 506 branches and outlets across the country. Halyk Bank has been listed on the Kazakhstan Stock Exchange since 1998 and on the London Stock Exchange since 2006.

Sergey Kwan

TCA