Kazakhstan to Bolster Banks

Bakhyt Sultanov
Bakhyt Sultanov

Kazakhstan is considering a 2.1 trillion-tenge ($6.5 billion) plan this year to restore banks to health, widening its budget deficit and tapping its oil wealth fund to cover the costs.

Finance Minister Bakhyt Sultanov proposed the additional spending Monday in a presentation to the cabinet, according to a website statement. The government plans to triple a special transfer from the national oil fund to the budget to 1.5 trillion tenge, while similarly widening the deficit to 1.5 trillion tenge, according to an e-mailed copy of National Economy Minister Timur Suleimenov’s speech.

Kazakhstan is weighing support for its largest lender by assets, Kazkommertsbank, which is struggling under bad loans acquired when it took twice-defaulted BTA Bank off the state’s hands in 2014. Following the collapse of crude prices that year, which dragged down the tenge and eroded economic growth in Central Asia’s biggest oil producer, almost one in three loans in Kazakhstan are either non-performing or renegotiated, according to estimates from S&P Global Ratings in October.

Halyk Bank, which is controlled by President Nursultan Nazarbayev’s daughter Dinara and son-in-law Timur Kulibayev, announced the start of the talks with Kazkommertsbank last month on a possible deal. If Kazakhstan agrees to provide money to plug holes in Kazkommertsbank, Halyk may discuss gaining control of the troubled lender, according to two people.

The central bank will inject the 2 trillion tenge of budget funds into its Problem Loan Fund unit to buy bad assets from banks, Interfax reported Monday, citing National Bank Deputy Governor Oleg Smolyakov at parliamentary talks where Sultanov and Suleimenov presented the draft amendments after their meeting with the cabinet.

The Kazakh central bank doubled emergency loans to lenders to about 400 billion tenge on Feb. 9, half of which was borrowed by Kazkommertsbank. In December, the bank said it had returned half of the 400.8 billion tenge it had borrowed earlier that month from the central bank. Kazkommertsbank repaid about 400 million euros ($425 million) of bonds, according to a separate regulatory filing Monday.

1875 views


More World news

Daesh announces withdrawal from Syria#039s Al Bab

Daesh announces withdrawal from Syria's Al Bab

The Islamic State (ISIL or Daesh, outlawed in Russia) terrorist group has started to leave the besieged northern Syrian town of Al Bab, media reports said Thursday. The Daesh has announced the start of its withdrawal …

Geneva holds new inter-Syrian round of peace talks

Geneva holds new inter-Syrian round of peace talks

Syrian government and opposition delegations started today a new round of peace talks at the UN headquarters in Geneva, Switzerland, after 10 months of the failure of the last attempt to end the conflict, Prensa Latina reports. …

Explosion hits chemical plant in Eastern Uzbekistan

Explosion hits chemical plant in Eastern Uzbekistan

An explosion hit chemical plant Farg’onaazot, a producer of nitrogen fertilizers, in the east of Uzbekistan, resulting in several victims, the country's Emergencies Ministry said in a statement. The …

Austrian Chancellor calls on EU to soften sanctions against Russia

Austrian Chancellor calls on EU to soften sanctions against Russia

Chancellor of Austria, Christian Kern, made an appeal to review the sanctions against Russia. According to him, such measures have not led to an improvement in the situation on the key contentious issues, Bloomberg reports. The EU must …

Mosul airport #039liberated#039 from Isis in battle for western half of Iraq#039s second city

Mosul airport 'liberated' from Isis in battle for western half of Iraq's second city

Iraqi forces have seized Mosul's airport and a nearby military base from Islamic State, according to state-run media. The US-backed government forces hope to use the airport as a launchpad for their campaign to expel the jihadists from …

Putin names Russian targets in Syria

Putin names Russian targets in Syria

Moscow does not attempt to intervene in the internal affairs of Syria, Russian President Vladimir Putin said, stressing the need to deliver a decisive blow to terrorism. The President noted that today it is a difficult situation in …

Tashkent and Astana to establish daily flight connection

Tashkent and Astana to establish daily flight connection

Uzbekistan and Kazakhstan plan to launch daily flights between the two capitals. It is also is expected to launch a rail connection between Almaty and Tashkent. These issues were on the agenda of the meeting of the Intergovernmental …

NATO ships show aggression towards Russian ships at Syrian coast

NATO ships show aggression towards Russian ships at Syrian coast

Today, at a meeting with Russian President Vladimir Putin, the Russian sailors claimed that NATO ships were near the Russian ships, serving at the Syrian coast. Also, the sailors noted that the actions of the Alliance ships were not …

Four thousand immigrants from Russia fight on Syrian side, Putin says

Four thousand immigrants from Russia fight on Syrian side, Putin says

A huge number of fighters from Russia and former Soviet republics fight in Syria, Russian President Vladimir Putin said at a meeting with officers of the Northern Fleet. According to the President, there are thousands of Russian …

Will EU continue to support Kiev?

Will EU continue to support Kiev?

Видео

Ukraine need to stop declaring war on Russia and acting on behalf of Europe

more World news