ALMATY/Feb. 7 (The Conway Bulletin) — — An obscure brokerage ultimately controlled by the Kazakh government bought a 99.5% stake in Tsesnabank, part of a deal that saved Kazakhstan’s second-biggest bank from bankruptcy.
The actual amount that Almaty-based First Heartland Securities paid for Tsesnabank has not been disclosed but it follows directly on from a 604b tenge ($1.6b) bailout agreed by the government this month. Tsesnabank had already been bailed out in September last year when the government’s bad debt fund bought $1.8b of debt linked to the agricultural sector.
First Heartland Securities is controlled by state-owned Nazarbayev University. This gives the government, and President Nursultan Nazarbayev and his family, total dominance over the Kazakh banking sector. His son-in-law, Timur Kulibayev, and daughter, Dinara Nazarbayeva, own Kazakhstan’s largest bank — Halyk Bank.
In a statement, First Heartland Securities said that under the terms of the deal it will inject 70b tenge ($185.8m) into Tsesnabank. Erke Nurkenov, First Heartland Securities’ chairman, said that Tsesnabank’s operations would not be impacted by the change in ownership.
“First Heartland Securities will continue to develop Tsesnabank and strengthen its position in the SME segment and work with individuals, primarily focusing on improving the quality and availability of service,” he said in a statement.
Pres. Nazarbayev’s ally Adilbek Zhaksybekov had owned Tsesnabank. He had been head of the Presidential Administration before resigning in September with a promise to sort out his ailing bank. He was replaced as Tsesnabank’s chairman by Shigeo Katsu, president of Nazarbayev University, and Bekzhan Pirmatov, formerly deputy CEO at First Heartland Bank, was appointed the Tsesnabank CEO.
Tsesnabank had been heavily exposed to the agriculture sector. Since a 2015 devaluation of the tenge, its debtors have struggled and the proportion of bad debt in its portfolio expanded rapidly.
Although analysts had warned of Tsesnabank’s collapse for months, it will still shake investor confidence.
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>This story was first published in issue 399 of The Conway Bulletin on Feb. 8 2019
Copyright The Conway Bulletin 2019
