Kazakhstan pushes banks to sell stakes to govt

By Raushan Nurshayeva

ASTANA, Nov 3 (Reuters) - Kazakhstan will press banks to raise more capital or accept a partial nationalisation offer as it tries to fend off the impact of the global credit crisis, the state regulator said on Monday.

The government's proposal to partially nationalise the four biggest banks in Central Asia's top economy is a worry to equity investors, whose stakes will be diluted in the transaction.

The four largest Kazakh banks have tentatively agreed to raise their capital by selling stakes to the government, which last week offered the banks a $5 billion aid package. But the transactions have yet to be approved by bank shareholders.

Putting more pressure on bank owners to accept the government's offer, the regulator said it would introduce a new capital adequacy ratio, measuring the size of a bank's Tier 1 (core) capital against its risk-weighted assets.

"The ratio will probably be 11 percent," FSA Chairwoman Yelena Bakhmutova told reporters in the capital Astana.

The new ratio is likely to require banks to seek capital injections should they recognise further asset quality deterioration, which analysts and the regulator say is inevitable in light of deepening financial instability.

Kazakhstan's largest bank BTA BTAS.KZ had Tier 1 capital of 450.7 billion tenge ($3.77 billion) as of June 30 with risk-weighted assets of 3.95 trillion tenge, putting the new ratio for it at about 11.4 percent -- just above the required minimum.

Data on the banks could not be immediately obtained.

Separately, Bakhmutova said the regulator and the government were closer to defining the mandate for the $1 billion distressed asset fund due to be launched later this year.

She said the fund would buy loans secured by commercial or residential property or land plots categorised just above nonperforming loans, at a discount from their book value.

"We think the discount might be 10 percent," Bakhmutova said. BTA, according to its reports, has 2 percent of its loan book, or about $225 million, in such loans as of June 30.

The banking system as a whole had $3 billion in such loans as of Oct. 1, according to the FSA data. (Writing by Olzhas Auyezov; Editing by Andy Bruce)