August 26, 2011 / 10:37 AM / 7 years ago

Kazakh bank Alliance cuts dividend on pref shares

* Shareholders agree to slash preferred share dividend

* Dividend was part of debt restructuring plan

* Posts 4.4 bln tenge H1 net loss vs year ago 310 mln pft

ALMATY, Aug 26 (Reuters) - Shareholders in Alliance Bank , Kazakhstan’s sixth-largest lender by assets, approved a plan to slash dividends on preferred shares in an attempt to restore its capital, the bank said on Friday.

Alliance, majority owned by the state since completion of a debt restructuring plan last year, also posted a net loss of 4.4 billion tenge ($30 million) in the first six months of 2011 versus a year-ago profit of 310 billion.

The bank published its first-half financial results on its website, www.alb.kz, without giving a reason for the loss or any further details.

Alliance was among a group of Kazakh banks to default during the global financial crisis, before completing debt restructuring programmes that installed the state as the largest shareholder.

Since Alliance’s restructuring was completed, sovereign wealth fund Samruk-Kazyna has owned 67 percent of the preferred and common shares in the bank. The remainder is split between more than 2,000 minority shareholders.

Alliance’s creditors agreed to write off debts of about $3.5 billion in return for their 33 percent stake. Part of this debt was converted into preferred shares with a guaranteed dividend of 2,680 tenge each.

But Alliance said in a statement its shareholders had agreed at a meeting on Thursday to lower the dividend payable on each preferred share to 100 tenge.

Alliance had negative capital of 105 billion tenge at the end of 2010, according to its own accounts audited to international standards.

The bank has said it is in talks on the sale of a minority stake to the European Bank for Reconstruction and Development, but it has not revealed the size of the stake or the identity of the possible seller or sellers.

Chief Executive Maksat Kabashev said in the statement Alliance would be able to attract investors and enter capital markets after restoring its capital to international standards. (Reporting by Olga Orininskaya; Writing by Robin Paxton; Editing by David Holmes)

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