Following up on the press release issued on 3 July 2017, JSC “Kazkommertsbank” (the “Bank”) hereby announces that in accordance with the terms of the Framework agreement signed on 2 June 2017 between the Bank, the Government of the Republic of Kazakhstan (represented by the Ministry of Finance of the Republic of Kazakhstan), the National Bank of Republic of Kazakhstan (“NBRK”), JSC Sovereign Wealth Fund “Samruk-Kazyna” (“Samruk-Kazyna”), JSC “Problem Loans Fund”, JSC “Halyk Bank” (“Halyk Bank”), JSC BTA Bank (“BTA Bank”), and Mr Kenges Rakishev (the “Framework Agreement”), BTA Bank has repaid its loan to the Bank in the amount of KZT2.4tn. According to the terms of the Framework Agreement, the proceeds were immediately used for:
− Repayment of its obligations to NBRK in the amount of KZT 625bn which were drawn in several tranches starting December 2016 as a stabilization measure to support the Bank’s current liquidity
− Investment of KZT1tn into treasury bonds of the Ministry of Finance of the Republic of Kazakhstan
Simultaneously, the Bank has repaid its obligations under the securities REPO transactions in the amount of KZT202bn. Additionally, since 1 July 2017 the Bank has repaid the amount due to Samruk-Kazyna for the shares of BTA Bank under the share purchase agreement dated 31 December 2014 in the amount of KZT 41bn. In order to balance the open currency position the Bank has entered a KZT1tn 1 year swap with NBRK.
The remaining liquidity in the approximate amount of KZT570bn will enable the Bank to duly meet its obligations, support operating activity and restore its lending to the economy, including SME and retail clients.
According to the terms of the Framework Agreement and taking into account the results of the due diligence undertaken by Halyk Bank and NBRK, on 4 July 2017 the Bank has adjusted its net asset value by approximately KZT550bn. Such adjustment has been against Bank’s existing own funds which already reflected the write-off of the remainder of the loan to BTA Bank in the amount of KZT 64.8bn and capital benefit from the revaluation of KZT250bn deposit of JSC “Problem Loans Fund” as a result of reduction of the nominal interest rate from 5.5% to 0.1% and extension of the deposit term to 2037. As a result of the above actions, the net asset value of the Bank reduced to approximately zero.
According to the Framework Agreement, the next step will be the completion of the acquisition of 96.81% of common shares of the Bank’s common shares by Halyk Bank and the subsequent recapitalization of the Bank.
As a result of the state measures undertaken to improve the stability of the banking sector, the systemic risks have substantially reduced which is expected to enhance stability and creditworthiness of the country’s financial system.
Asel Mukazhanova, Financial Institutions and Investor Relations
Tel: +7 727 2585125, firstname.lastname@example.org
Larissa Kokovinets, Corporate Communication Service
Tel: +7 727 2585456, email@example.com