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Planned restructuring of BTA Bank's debt will not affect its clients

08 january 2012, 18:42
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Chairman of the board of BTA Bank Anvar Saidenov. Photo by Yaroslav Radlovskiy©
Chairman of the board of BTA Bank Anvar Saidenov. Photo by Yaroslav Radlovskiy©
Planned restructuring of the obligations of Kazakhstan’s BTA Bank will not affect its clients, Interfax-Kazakhstan reports citing the chairman of the board of BTA Bank Anvar Saidenov.

“The planned restructuring of the bank’s obligations will not infringe on the interests of the clients, niether individuals, nor legal entities. This opinion is supported by Samruk-Kazyna fund and Kazakhstan National Bank,” the bank’s press-service cites Saidenov as saying.

Saidenov notes that “this process does not affect the current operational activities of BTA” and the bank continues to perform standard banking operations: servicing its clients, processing payments and transfers, issuing loans, accepting deposits in a normal mode.

“The bank still continues servicing deposits according to the signed contracts. The bank’s clients may place additional money on their deposits, do partial withdrawals, open and close deposit accounts in any branch of the bank,” the bank’s chairman says.

Commenting the information that the bank might fail to collect enough funds to make the next payment to service its debt, Saidenov stresses, that “the bank does not reject its obligations, but offers the creditors to discuss new terms of the debt and its servicing”. “Thus, the information on the possible failure to pay the coupon has to be considered in the context of the initiated restructuring,” he notes.

On December 22 BTA Bank announced its plans for the next restructuring of its debt. This issue will be reviewed at the general meeting of the bank’s shareholders on January 26, 2012 in Almaty. Back then major shareholder of the bank, Samruk-Kazyna state fund, stated its support of the BTA Bank’s suggestion to restructure part of its debt.

It is expected that the planned restructuring will be made in relation to obligations to creditors undertaken by the bank after restructuring of 2010. According to the bank’s message, restructuring is an important measure that, if taken at the right time, will provide for further normal functioning of the bank and it help enhance its financial status and re-gain position at the market in the future.

The bank stresses that servicing the operations on deposits, loans, processing money transfers of individuals and legal entities, as well as operations on payment cards will be run in a normal mode.

Meanwhile, Saidenov wrote in a letter to shareholders and GDR holders on December 23 that BTA Bank could possibly fail to make the next payment to service the debt, as any such payment would lower the capital sufficiency rate and liquidity indexes of the bank. According to unaudited consolidated financial IFRS report for January-September 2011, negative consolidated capital is around $2.2 billion; net profit from interests is in the red as well.

“The state of the bank’s capital have deteriorated since then even further. Under certain assumptions based on the requirement for the tier one capital adequacy ratio of 10 percent, the bank's negative capital and capital deficiency as per the IFRS might reach $4.2 billion and $5.1 billion respectively by December 31, 2012,” Saidenov says.

By January 1, 2012 the bank had to make the next coupon payment on Eurobonds in tenge, US Dollars and Euro. The total amount of payment is around $160 million.

After defaulting in 2009, BTA Bank finished restructuring of its debt in September 2010. The restructuring reduced the debt from $16.65 billion to $4.2 billion.

After the restructuring BTA Bank is controlled by Samruk-Kazyna state fund (81.48 percent). Restructuring allowed the bank’s creditors to receive the total of over 18 percent of its stock.

At the end of 2010 BTA Bank was ranked 16th by assets among CIS banks and 3rd among 39 commercial banks in Interfax-1,000 ranking made by Interfax-CEA.

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