UPDATE 1-Kazkommertsbank finalises deal to buy stake in BTA Bank
* KKB acquisition to create Central Asia's largest bank
* KKB, private investor to tackle BTA's burden of bad loans
* KKB plans to complete merger with BTA by year-end (Adds Zhussupova quotes, details, background)
By Dmitry Solovyov and Mariya Gordeyeva
ALMATY, Feb 6 (Reuters) - Kazkommertsbank (KKB) is to buy rival BTA Bank jointly with Kazakh businessman Kenes Rakishev for about $1 billion, in a deal that will shift BTA's bad debts left over from the financial crisis into the private sector.
BTA is currently majority-owned by Kazakh sovereign wealth fund Samruk-Kazyna, which bailed out the bank in 2009 during the crisis.
Under their agreement, finalised on Thursday, KKB and Rakishev will each buy a 46.5 percent stake in BTA. KKB said it would pay $465 million for its share.
A spokesman for Rakishev said the businessman would pay the same price for his stake. He made no further immediate comment.
KKB Chief Executive Nina Zhussupova said the combination of BTA and KKB would create the largest universal bank in the region. KKB is already the largest lender in oil-rich Kazakhstan, which has a population of 17 million, and BTA is the country's third-largest bank.
The country's second-largest bank is Halyk Bank , controlled by a daughter of Kazakh President Nursultan Nazarbayev and her husband.
KKB will have to take on BTA's non-performing loans, which accounted for around 87 percent of its loan portfolio as of Jan. 1, 2014. KKB's non-performing loans stood at 29.4 percent at the start of this year.
"The merger combined with proven KKB collection capabilities should also enhance the recovery of troubled BTA assets," KKB CEO Zhussupova said in a statement.
The sale of BTA is in line with an order for Samruk-Kazyna to exit the capital of three local banks it bailed out during the crisis, which was issued by the Kazakh president at the beginning of 2013.
The Kazakh state decided to turn to local investors after failing to attract foreign capital for BTA, central bank governor Kairat Kelimbetov said in December.
Rakishev is the son-in-law of Imangali Tasmagambetov, an influential politician close to the president who is currently mayor of Astana. Rakishev is also chairman of Sat & Company, an industrial holding developing Kazakhstan's mineral resources.
KKB expects to finalise the BTA deal in the second quarter, KKB Managing Director Sergey Mokroussov said. A merger of the two banks was likely by the end of the year, he said.
BTA, which completed a debt restructuring last December, has started recovering assets owned by its former head Mukhtar Ablyazov, who is accused of embezzling up to $6 billion of the bank's money.
A French court ruled last month that Ablyazov must be extradited from France to Russia or Ukraine.
Ablyazov, a critic of President Nazarbayev, had been in hiding since being sentenced to prison for contempt of court by an English judge 19 months ago. He was arrested near the Riviera resort of Cannes last July and has been in custody since.
Russia, Ukraine and Kazakhstan brought fraud cases against Ablyazov after BTA was seized by Kazakh authorities and declared insolvent. Ukraine and Russia have both demanded his extradition.
Ablyazov denies the allegations against him, which he has said are designed to silence him as an opponent to Nazarbayev, who has ruled Kazakhstan for more than 20 years. (Reporting by Dmitry Solovyov; editing by Tom Pfeiffer and Jane Merriman)