ONCE THE ENVY not just of central Asia but the whole former Soviet bloc, Kazakhstan’s banking system has fallen on troubled times. The leading lenders, notably BTA Bank and Kazkommertsbank, once acted as de facto financial imprimaturs of the country’s financial rise: the latter, listed in London, was a favourite of investors; both borrowed billions of dollars of capital from foreign investors with ease.
Those days are over. The sector is slowing rapidly, if not actually contracting, and both BTA and Kazkommertsbank are saddled with huge foreign debt obligations, and struggle to raise capital to fulfil basic growth expectations. BTA is attempting to sell off a prized asset – the smaller lender Temirbank – but is finding takers put off by excessive valuations. "Nominally speaking [the banking sector] is growing but in reality it is shrinking as a sector," says Michael Carter, chief executive of Almaty-based...
