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President Nazarbayev urges to stabilize BTA and Alliance Banks following debt restructuring

11 april 2012, 08:23
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President Nursultan Nazarbayev. Vladimir Dmitryev ©
President Nursultan Nazarbayev. Vladimir Dmitryev ©
April 10 at a sitting in Astana focused on the National Bank’s 2011 progress report President Nazarbayev instructed to stimulate domestic banks, President’s Press Service reports.

“[The National Bank] in partnership with the Government should stimulate domestic banks. Apart from that, they should focus on stabilizing BTA and Alliance Banks that have undergone debt restructuring”, the Press Service quoted President as saying.

Back in 2009-2010 three Kazakhstan-based banks – BTA, Alliance and Temir – resorted to debt restructuring schemes. BTA is currently negotiating a second debt restructuring with its creditors.

Head of State pointed to the poor quality of the loan portfolios and low lending activity. He emphasized that threats to the global economy are still there, Eurozone problems are still lingering. And all of these factors will have their effect on the national financial system of Kazakhstan.

“We’d better not expect expansion of external sources of borrowing; instead, we should concentrate on finding internal sources”, President said.

President gave some specific instructions related to the tenge exchange rate, anticipated inflation corridor [of 6-8%] and streamlining of the nation’s accumulation pension funds.

Besides, he broached some aspects of the National Fund’s assets management, further development of the insurance market, and concerted monetary policies with the Customs Union member states.

BTA Bank defaulted in 2009. In September 2010 BTA Bank completed the first restructuring of its debt. As a result, the bank’s debt was slashed from $16.65 to $4.2 billion. After the restructuring it is controlled by Samruk-Kazyna state fund (81.48 percent). The bank’s creditors received over 18 percent of shares after the restructuring.
BTA Chairman Anvar Saidenov proposed a second restructuring in a Dec. 23 letter to shareholders to evade bankruptcy. The bank defaulted on its $150 million coupon payment in January 2012.

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