State-run Alliance Bank (ASBN), the first Kazakh lender to default in 2009, had a $25 million gain on the repurchase of $90 million of its bonds from the market last year, according to Renaissance Capital.
The bank’s ability to redeem its debt will become “less comfortable” starting in 2014, Moscow-based Renaissance analyst Mikhail Nikitin wrote in an e-mailed report today.
Kazakh President Nursultan Nazarbayev told government and central bank officials on April 10 to stabilize Alliance and BTA Bank (BTAS), two of the defaulted lenders brought under state control in 2009. Kazakhstan’s sovereign wealth fund, Samruk-Kazyna, holds the government’s 67 percent stake in Alliance and 80 percent in Temirbank after they were taken over in 2009. The fund is discussing a merger of the two lenders, which issued new bonds and offered shares and cash to creditors in 2010 after writing off and extending payments on some debt.
“In the medium term, we think the risk of Alliance defaulting again will remain a function of state involvement,” Nikitin said. “However, we see no reason or incentive for Kazakh financial authorities to make it another failure. On the contrary, Alliance could be a counter example to the perceived weakness of post-crisis governance in the Kazakh banking sector.”
Calls to Alliance’s press office in Almaty after business hours weren’t returned.
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