Best bank – Kazkommertsbank
Best debt house – DB Securities
Best local partner – Nurbank
This has been an excellent year for several Kazakh banks. Strong investor demand for Russian bonds has lowered their cost of funding, and central bank governor Grigori Marchenko’s reforms have helped the best banks to strong profitability, improved corporate governance and improved ratings.
Three banks have had a particularly good year. Bank TuranAlem has launched a Eurobond that enjoyed strong demand, and has also carved out a leadership role as market-maker in the country’s domestic bond market. Halyk Bank has undergone a remarkable turnround since its privatization in 2001 and, after a year of strong profitability, is likely to enter the Eurobond markets itself. But the clear leader remains Kazkommertsbank, which takes the best bank award.
Kazkommertsbank enjoys 24% of the loan market and 22% of all banking assets in the country. It was the first Kazakh bank to tap the Eurobond market this year, and its issue was a big success, with the deal being extended from a planned seven-year $150 million deal to a 10-year $500 million blow-out.
The roadshow for the deal was helped by upgrades from Fitch and Standard & Poor’s earlier in the year. Fitch raised the bank’s rating from BB- to BB, citing “good profitability and risk management and maintenance of an adequate level of capital”.
The bank has been pushing into innovative new markets, including even setting up its own corporate rating service for clients, something New York state attorney-general Eliot Spitzer might question. And the bank’s own corporate governance was given a lift in June 2003, when the EBRD announced that it had bought 15% of the bank’s voting shares, and was going to take a seat on the bank’s board.
As far as debt houses go, however, the best award goes to DB Securities, a subsidiary of Deutsche Bank, through which it enjoys a leading presence in the domestic and international debt markets in Kazakhstan. Deutsche has arranged a Eurobond issue for TuranAlem, as well as syndicated loans for Kazkommertsbank, TuranAlem and ATF Bank.
Among the local financial institutions, Nurbank stands out as the best local partner. It has risen quickly from being a lower-tier bank to being the country’s fourth biggest. It is respected for its dynamism, and envied for its political connections by competitors. Its owner, Rakhat Aliyev, is married to the daughter of the president.
