Kazakh banks hit the capital buffers
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Kazakh banks hit the capital buffers

Kazakhstan's banking system is a success story whose rapid growth brings a need for capital injections, hence growing foreign interest. But while the banks are operationally transparent, ownership is opaque. What's more, a small population might limit foreign participation beyond investment banking.

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TIMUR ISSATAYEV, THE chairman of ATF Bank, Kazakhstan's fourth largest, collects old maps of central Asia. There are eight in his spacious office, some dating to the 16th century. "I bought most of them in London and I noticed that they tend to cost half of what comparable maps of Europe cost," he says. "But the dealers tell me they are beginning to appreciate."

Like the maps of this once opaque region, Kazakhstan's banks are beginning to catch European  eyes – not just as borrowers but also as takeover targets. Since 1993, bank numbers have fallen from 230 to 35 but total assets are up from $1 billion to $19 billion. "We're meeting with a foreign bank practically every week," says Issatayev.

Kazakhstan's banks are on a roll, as is the economy of the former Soviet republic. According to Bolat Zhamishev, head of the Financial Supervision Authority, an offshoot of the central bank that regulates the financial sector, last year banking assets grew 60.5%, equity capital 49% and deposits 65%.

"It's good to be a banker in a booming economy," says Issatayev. "But this can't last."

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