EXPERT INTERVIEW: Quality of Kazakhstan bank system's assets to improve with foreign investors arrival

/IRBIS, Natalya Vaguina, Dinara Mukasheva, July 30, 2008/ - The last year for Kazakhstan bank sector was rich with merger. In this question the sharp growth of local banks` attractiveness for foreign investors presents the separate interest, about which frequent cases of purchasing big shares in capital testify. In this relation, analysts, participated in weekly expert interview of IAFM IRBIS, estimated prospects of Kazakhstan bank sphere developing in the whole and bank shares in particular. Analysts stick to one position - foreign participants entering Kazakhstan market opens wide range of interesting prospects for further development of domestic banks. Besides, appearing of new investors means also considerable assets flow-in bank's capital, what for certain banks` categories may help in improvement of shareholders assets` condition. Vitaliy Kan, analyst of external analysis and forecasting administration of BTA Bank JSC considers that arrival of foreign strategic investors in capital of Kazakhstan banks will allow to increase debt ability of the last ones and will open new entering on capital and refinancing markets. "Besides, on the background of decreased capitalization of Kazakhstan banks since world liquidity crisis start, we expect increased interest to bank sector of the country on the side of foreign financial groups" - Mr. Kan added. The head of branch analytic of Subsidiary organization of Joint Stock Company BTA Bank BTA Securities JSC Nurlan Rahimbaev considers: "We think that prospects of bank sector of the country will mostly depend on situation on global market and news of internal market. In this relation, such news as foreign investors purchasing huge assets in our country can weaken tension on the market". At that, he thinks that deals with foreign investors will strongly affect shares of certain banks, in minor degree - the whole market. Bakhtiyar Bakas uly, analyst of Verny Capital JSC positively estimates prospects of Kazakhstan bank sector development, considering that in a year or two situation will be stable: "Notwithstanding quotes decreasing of Kazakhstan banks, this sector and Kazakhstan economy in the whole remains attractive for investments". Evgeniy Popov, the director of assets management department of ALMEX Asset Management JSC thinks that activation of foreign participants on Kazakhstan market is the price compromise between seller and purchaser, because earlier, before crisis prices on bank assets were very high. Now the situation has changed and foreign investors negotiate with Kazakhstan bankers from the position of other price guideposts. "This tendency in long- tern prospect should give fundamental power to Kazakhstan bank system, brining new technologies and competition. We take these deals rather positive and think that bank's shares quotes will go up when situation in financial sector becomes stable and growth of Kazakhstan bank's business renewal. Financial analyst of Asia Broker Services JSC, Shakhnazar Tleuliev also thinks that "quality" investors appearing on market will positively influence on problem of assets quality: "This process will make bank system more stable and that's why we think that bank sector has good prospects and bank's shares will again start to grow". Reference Foreign share in the capital of Kazakhstan banks ---------------------------------------------------------------------------- Capitalization on Shareholder-nonresident Share Bank KASE, m. USD of Kazakhstan in capital, % ----------------- ----------------- -------------------------- ------------- ATFBank JSC Bank Austria 2,558.02 Creditanstalt AG (Austria) 99.86 Kazkommertsbank 4,095.24 Alnair Capital Holding 8.03 JSC* Bank CenterCredit Kookmin Bank JSC** 1,529.23 (South Korea) 30.00 SB Sberbank of SC Saving bank of RF OJSC Russia JSC*** - (Russia) 100.00 ---------------------------------------------------------------------------- * according to bank information, dated June 20, 2008. Alnair Capital Holding - is Kazakhstan company, which belongs to private investment fund, established by Its Highness sheik Tahun bin Zaid al-Nahayan, who is the member of royal family of Emirat Abu-Dabi;. Alnair Capital Holding made an agreement, providing it the right for purchase of another 17.12% common shares of Kazkommertsbank JSC.. ** according to bank information, dated March 17, 2008 Kookmin Bank is also provided the right for increasing it share till 50.1% or higher. ***till March 15, 2007 - АО "TEXAKABANK". According to bank's information transferring of it shares in property of SC Saving bank of RF OJSC started July 2006. Information is presented within the frames of weekly expert interview on acute questions of Kazakhstan and international stock market development, made by IAFM IRBIS. Analysts of Asia Broker Service JSC, ALMEX Asset Management JSC, Subsidiary organization of joint stock company BTA Bank BTA Securities JSC, BTA Bank JSC, Verny Capital JSC participated in interview. IAFM IRBIS expresses its gratitude for participation in this project. For detailed information please contact us Tel.: (727) 237 53 41 [2008-07-30]