Government of Kazakhstan to buy back shares of banks at $5 bn

/REUTERS, Astana, Raushan Nurshaeva, the text - Maria Gordeeva, Editor - Ann Smirnova, October 28, 08/ - The Government of Kazakhstan suggests shareholders of the four biggest banks - Alliance Bank, BTA Bank, Halyk Bank and Kazkommertsbank - redeem their shares for $5 bn., said the statement of the Government. "In accordance with recommendations of the AFN, the government appealed to shareholders of the four backbone banks with an offer for the inflow of additional funds in equity capital of the banks as a measure to strengthen their capital adequacy," - says the document. "The Government also plans to discuss similar initiatives with large foreign parties: ATFBank and Bank CenterCredit", - is said in a statement. In spring 2008, South Korean Kookmin Bank announced on intention to acquire a majority holding of Kazakhstan Bank CenterCredit. It is anticipated that additional capitalization would be implemented through issuance of common and preferred shares amounting to a total of $5 bn. Failing immediate capitalization of banks by the current shareholders, the Government is ready to become a shareholder of the banks. "The State has no plans to acquire a majority holding in the capital of any bank. As a result of the plan, 25 % of the voting shares of the four banks are supposed to enter the state ownership" - the document says. Within the $5 bn. capitalization, banks are also expected to provide additional forms of long-term capital in the form of preferred shares and subordinated debt. The National Fund SamrukKazyna is supposed to provide the public interest in these banks. SamrukKazyna, in turn, will be further capitalized by the state at $5 bn. The statement also said that the government does not plan to stay long- party data banks, and expects to emerge from their capital in the med-term prospect, depending on the situation on global financial markets. "At that time state-owned shares will be implemented in accordance with market principles," - says the paper. Moreover, according to the statement of the Government, to maintain the current liquidity of banks, the National Bank of Kazakhstan may decrease the minimal reserve requirements as well as to expand the list of instruments, taken as collateral for repo transactions. [2008-10-28]