Kazakhstan’s Halyk Bank swallows Qazkom

Caspian

Published on Thursday, 27 July 2017 Back to articles
Kazakhstan's Halyk Bank swallows Qazkom

Kazakhstan’s second-largest bank by assets, People’s Savings Bank (aka Halyk Bank), has completed the acquisition of its larger rival, Kazkommertsbank. Last year’s rebranding changed the latter’s name to Qazkom as part of a strategy to improve its visibility in both domestic and overseas markets.

In accordance with the 15 June definitive acquisition agreement, Halyk Bank purchased 86.09% of voting stock from Kenges Rakishev and 10.72% from the Samruk-Kazyna sovereign wealth fund. The government has been a shareholder in Kazkommertsbank since 2009 when it partially bailed out the bank during the financial crisis.

The merger has been one of the most hotly debated topics since late 2016. Halyk’s management was initially opposed to the idea, arguing that it was not interested in its rival’s assets and was unsure of their quality. The position changed when the issue gained strategic relevance in the face of growing concerns about the stability of the entire banking sector, which is dominated by a handful of large players.

Halyk Bank is the crown jewel in the business empire of Timur Kulibaev and his wife Dinara Nazarbaeva, the middle daughter of Kazakhstan’s President Nursultan Nazarbayev. When Halyk Bank CEO Umut Shayakhmetova voiced her criticism of the merger, she probably spoke with the backing of the Kulibaevs. The dilemma could not be resolved as they wished, for one simple reason: Qazkom is also part of the Nazarbaev clan’s assets, albeit in a roundabout way. Self-made multimillionaire Rakishev reportedly held shares on behalf of the Nazarbaevs.

The biggest challenge for the two banks is how to merge their operations. Halyk asserts that it does not envisage a full merger and wants to keep things much as they are. It plans to inject around US$570 million of additional equity into Qazqom to bring its capital adequacy ratios into compliance with the central bank’s minimum requirements. It would be very hard to run two banks separately.   … [article continues] …

This is an excerpt from an article in our monthly Caspian Focus publication.

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