* 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 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
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
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
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