Type | Joint stock company (KASE: BTAS) |
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Industry | Finance and Insurance |
Founded | 1925 |
Headquarters | Almaty, Kazakhstan |
Key people | Marat Zairov, CEO |
Products | Banking |
Website | бта.қаз |
JSC BTA Bank (former Bank TuranAlem or Turalem) is the third largest lender in Kazakhstan by assets.[1] BTA Bank has 9 partner banks in Russia, Ukraine, Belarus, Turkey, Georgia, Armenia and representative offices in China, Ukraine, the UK, Russia and the United Arab Emirates.
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Bank Turanalem
- Approximately 1.2 million customers and 132,000 corporate clients;
- 22 branches and 230 cash settlement units in Kazakhstan;
History
Bank TuranAlem was founded in 1925 and is the ancestor of the modern JSC BTA Bank. Bank TuranAlem was established when the department of Promyshlennyi (Industrial) Bank (Prombank) (Russian: Промышленный банк (Промбанк)) was opened in the Kazakh Republic following a ruling from the Presidium of Central Council.
Modernisation and growth
The closed joint-stock company Bank TuranAlem was created on January 15, 1997 following a ruling from the Kazakhstan government over the reorganization of Kazakh joint-stock bank Turanbank and joint-stock bank Alem Bank Kazakhstan.
JSC Bank TuranAlem (BTA) is among the largest banks in Kazakhstan and is a leader in the creation of banking networks within the Commonwealth of Independent States (CIS).
BTA Bank operates in the CIS and far-abroad countries. The activities of its strategic bank partners cover Ukraine, Russia, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. BTA Bank also runs its representative offices in Russia, Ukraine, China and the United Arab Emirates.
In Kazakhstan, BTA Bank’s network consists of 22 branches and 230 cash settlement units.
Global economic crisis
Mukhtar Ablyazov was Chairman of the Board of directors of BTA Bank from 2005 to 2009, and was responsible for leading BTA Bank’s strategy during this time.
BTA Bank pursued an ambitious expansionist strategy during the crisis, which was achieved through exceptionally high loan growth, unaccompanied by an equivalent growth in deposits, that resulted in a massive funding gap and latent credit risks. The rapid growth warranted a warning from Kazakhstan’s financial regulatory agency for BTA Bank to increase its reserves.[2]
The bank’s lending policies under Ablyazov destabilized BTA Bank’s balance sheet and necessitated an effective takeover in 2009 by Kazakhstan’s National Welfare Fund, Samruk-Kazyna.[3] Shortly after, Ablyazov and other former members of management fled Kazakhstan.
In 2009 BTA Bank commenced civil proceedings against Ablyazov and the High Court in London has found sufficient cause to freeze Ablyazov’s assets.
A report from Kazakhstan’s financial regulatory agency indicated Ablyazov established regional committees to approve loans while at the same time chairing these committees, a process which breached corporate management principles.[4]
As a result of its aggressive lending and intransparent practices, BTA Bank had the highest percentage of bad loans of any other Kazakh bank in July 2009, accounting for 53.94% of all non-performing loans in Kazakhstan.[5]
Restructuring
BTA Bank reached a compromise with its bondholders to issue cash and new securities equal to approximately half of the $12.2 billion owed as part of its restructuring package.
The package was equal to $7.8 billion, or 63% of the outstanding principal and interest. Creditors also received recovery notes, allowing them to profit from the sale of assets, and 15% of BTA’s equity.
BTA set out to pay about $1 billion in cash to the creditors and issue $2.3 billion of senior debt and $797 million of subordinated debt under the restructuring agreement.[6]
In June 2012, BTA declared talks began on its proposed debt overhaul with the creditors’ steering committee after the state-owned lender failed to make an interest payment on its July 2018 dollar bonds in January. Subsequently, BTA filed for creditor protection under Chapter 15 of the U.S. bankruptcy code for the second time in about two and a half years.[7]
Asset recovery
BTA Bank has lodged court proceedings against Ablyazov in the UK as part of its effort to recover assets. Reports now suggest British taxpayers could benefit from legal action being taken against Ablyazov over the alleged embezzlement of more than £1 billion.[8] Royal Bank of Scotland, which is now 83%-owned by the UK Government after a succession of bailouts, is among the creditors which had to write off a total of $6.8 billion (£4.4 billion) lent to the Kazakh bank.[9]
If the legal action is successful, RBS and BTA's other creditors will recoup part of their losses, according to the British expert leading the Kazakh bank's asset recovery process.[10]
Possible sale
BTA has been reported to be considering an asset sale to strategic investors after facing pressure from the Chairman of the National Bank of Kazakhstan, Grigory Marchenko.
Marchenko has pushed for Kazakhstan’s state welfare fund, Samruk-Kazyna, to expedite the sale of majority stakes in banks that it acquired during the course of debt restructuring programs.[11]
Anvar Saidenov, who was appointed chief executive of BTA after the Kazakh National Welfare Fund agency Samruk-Kazyna took over, spoke of a possible sale back in 2009 as soon as liquidity increased to more acceptable levels.[12]
See also
References
- ^ BTA Bank of Kazakhstan to Restructure Client Debts as It Increases Lending Nariman Gizitdinov, Bloomberg, 21 June 2010
- ^ [1] - Memo, Agency of the Republic of Kazakhstan on regulation and supervision of financial market and financial organisations, March 28, 2008
- ^ The National Wealth Fund "Samruk-Kazyna" has transferred to BTA Bank 1,7 milliard US dollars and continues to form managing bodies of the financial institution - BTA press release, 4 February 2009
- ^ Agency of the Republic of Kazakhstan on regulation and supervision of financial market and financial organisations - Memo, 2 February 2009
- ^ http://www.afn.kz/en/ Agency of the Republic of Kazakhstan on regulation and supervision of financial market and financial organisations
- ^ BTA Reaches Compromise on $12 Billion Restructuring - Nariman Gizitdinov, Bloomberg, 8 December 2009
- ^ "BTA Bank’s Loss Aggravated by $423 Million". The Gazette of Central Asia (Satrapia). 30 July 2012. http://www.satrapia.com/news/article/bta-banks-loss-aggravated-by-423-million/. Retrieved 4 August 2012.
- ^ Taxpayers set for cash boost in banker case - Sam Marsden, Press Association, 21 July 2010
- ^ [2] - RBS sues Kazakh over '£1bn fraud', 22 July 2010
- ^ Taxpayers set for cash boost in banker case - Sam Marsden, Press Association, 21 July 2010
- ^ [3] - Kazakh c.bank urges state to sell bank assets] - Maria Gordeyeva, Reuters, 2 June 2010
- ^ Interview: Anvar Saidenov, chairman of the management board of BTA Bank - Ben Aris, Business New Europe, 8 April 2009
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