Kazakhstan said to weigh its biggest bank rescue since 2009
ALMATY. KAZINFORM Kazakhstan has extended an emergency loan to the country's biggest bank, the first step in what could be a rescue that may reach 1.5 trillion tenge ($4.5 billion), according to people familiar with the plans, Bloomberg reported.
A bailout is among the alternatives under discussion between officials from Kazkommertsbank JSC and the central bank as Kazakhstan edges closer to its biggest bank rescue since the global financial crisis seven years ago led to $20 billion in debt restructurings by the country’s lenders. Representatives from Kazkommertsbank and the central bank declined to comment.
Kazkommertsbank has borrowed about 400 billion tenge from the central bank since Dec. 15 to support liquidity, said the people, who spoke on condition of anonymity. Officials were instructed to stave off the collapse of the nation’s biggest holder of deposits and are discussing various scenarios for how a bailout might occur, they said.
While Kazkommertsbank previously got 250 billion tenge from the central bank for taking twice-defaulted BTA Bank off the state’s hands in 2014, it’s failed to tackle the pile of bad debt as crude lost about half its value since June of that year, dragging down the tenge and eroding economic growth.
Halyk Bank, the nation’s second-biggest lender, may start talks about gaining control of Kazkommertsbank at a later stage of the rescue, if Kazakhstan agrees to provide about 1.5 trillion tenge to plug holes in the troubled lender’s balance sheet, according to two of the people. Another person said the size of the financing will depend on talks between Halyk and the central bank. A representative of Halyk Bank declined to comment.
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