National Bank may prohibit KKB-Halyk Bank merger - expert

 “There is too little information about the possibility of this merger. Even if the banks intent to merge, the National Bank may not allow this deal to prevent monopolization of the market,” Rysmambetov said in an interview with Kazinform.

In his opinion, the KKB's condition  in the market does not raise any fears.

In his words, KKB's rating has been improved recently to B-, that is a very high evaluation for Kazakhstani banks.

“Financial stability of Kazkommertsbank is beyond the question,” he added.

“In spring 2016, CEO of Kazkommertsbank Kenges Rakishev made a presentation  of the Bank’s new strategy during which he said he would like to cut wholesale banking and concentrate more on individuals. At that moment I did not believe in KKB's intention to sell its corporate business despite its rating downgrade. Moreover, the new upgraded rating made it more attractive for corporate banking.  Kazkommertsbank will be too big for the retail market. That is why I think that it will remain in corporate sector,” the expert says.

In his view, the merger of the two largest banks of the country always bears some risks. 

“The emergence of a giant player in the market is a monopolization. To my mind, it won’t be a traditional merger. The merger of banks is always inextricably linked to changes in political landscape. Or, on the contrary, the merger of banks will be a proof of political changes,” he noted.

Earlier Kazakhstani mass media claimed that the two largest banks in Kazakhstan Kazkommertsbank (KKB) and Halyk Bank are in discussion of a possible merger to establish a bank with assets of $27 billion. It is worth mentioning that the two banks account for 37% of Kazakhstan's banking system assets. Halyk Bank has a market capitalization of $1.7 billion, while Kazkommertbank's market capitalization is approximately $540 million. Kazkommertsbank is controlled by well-known Kazakhstani businessman Kenges Rakishev, while Halyk Bank is chaired by the Vlast Magazine's Banker of the Year Umut Shayakhmetova.