Bulat Utemuratov finalizes Temirbank and Alliance Bank purchase and talks about their future

Samruk-Kazyna National Wealth Fund has finalized sale of stakes in two Kazakhstan banks, Temirbank and Alliance Bank, to Bulat Utemuratov, a Kazakh businessman, Tengrinews reports citing the Fund’s press-office.

Mr. Utemuratov acquired 79.88% of Temirbank’s common stock worth $196.1 million and 16% of Alliance Bank’s common and preferred stock worth $8.2 million. This leaves Samruk-Kazyna, Kazakhstan's state-run wealth fund, with a controlling 51% stake in Alliance Bank, while Bulat Utemuratov becomes the controlling shareholder of Temirbank.

In 2013, President Nazarbayev instructed Samruk-Kazyna to sell its shares in Alliance Bank and Temirbank, which it acquired during the global financial crisis of 2008 and 2009 when the banks were on the verge of collapse and defaulted on their payments to foreign creditors.

The Kazakh billionaire announced his intention to purchase the banks in late 2013 and obtained the permission from the National Bank, the central bank in Kazakhstan, on March 20, 2014.

“This sale is part of the anti-crisis measures to stabilize the financial sector of Kazakhstan. Besides, it will release the Fund from non-core functions of managing banks. The fund's withdrawal from these two commercial banks will have a positive effect on the Kazakhstani banking sector and the economy in general,” Deputy Chief Executive Officer of Samruk-Kazyna Yelena Bakhmutova said.

Mr. Utemuratov said that "finalization of the deal to purchase the controlling stake in Temirbank and minority stake in Alliance Bank is the first step on the path of restoration of these two banks".

Speaking about the future of the banks he said: “Managers of Temirbank will focus on improving the quality of services and implementing the business strategy. In the nearest future, the bank's clients will feel significant improvements. As for Alliance Bank, it will be a joint effort together with Samruk Kazyna and the foreign creditors of the bank to negotiate restructuring of its debt. For my part, I am willing to contribute to restoration of Alliance Bank by injecting Temirbank's capital into in and by subsequently merging the two banks,” Mr. Utemuratov said.

After the merger Samruk-Kazyna National Wealth Fund intends to support the new bank with large amounts of longer-term funding, he said. “However, restoration of Alliance Bank's capital will largely depend on the creditors' willingness to take part in the process. We will put all our efforts in making the negotiations with creditors sucessful. It is the key condition that has to be met, before the merger between Alliance Bank and Temirbank takes place,” the businessman said.

"I am sure that after completion of the restructuring of Alliance Bank and its merger with Temirbank the new bank will become one of the leaders of Kazakhstan's banking system," Mr. Utemuratov concluded.

Temirbank is currently ranked 13th by assets in Kazakhstan. According to the Commission on Regulation and Control of Financial Market and Financial Organizations, in 2013 the bank’s assets made $1.9 billion, while its obligations equaled to $1.4 billion and its own capital made $476 million.

Alliance Bank is ranked 8th in the Kazakhstan banking system. According to the Commission, in 2013 the bank’s assets made $4 billion, the obligations equaled to $3.8 billion and the own capital made $227 million.

Purchasing Alliance Bank and Temirbank may become Mr. Utemuratov’s next step in his advancement into the financial industry after he sold ATF Bank to Italian group UniCredit SpA (UCG) for $2 billion in 2007. The deal was a 5-fold return of his investments.

Mr. Utemuratov controls Forte Bank and Kassa Nova Bank - lenders No. 27 and No. 29 in Kazakhstan. Their combined assets total at $533 million.
 

Writing by Assel Satubaldina, editing by Tatyana Kuzmina