Kazkommertsbank, BTA Bank Merger Named 2015’s Best M&A Deal in CIS

ASTANA – The merger of Kazakhstan’s large banks Kazkommertsbank (Kazkom) and BTA Bank was assessed as “the best M&A (merger and acquisition) deal of 2015 in the Commonwealth of Independent States,” by the Kazakh-British Chamber of Commerce, according to a Forbes.kz report dated Jan. 26.

According to Kazakh-British Chamber of Commerce experts, the deal was the largest in the M&A market in the financial history of the Commonwealth of Independent States (CIS) and the first time in the former Soviet Union that two major financial institutions of comparable size had merged. The new financial institution is operating under the brand name and on the technology platform of Kazkom.

“After the integration was completed, we have assumed an important social role of fulfilling obligations to depositors of the troubled bank as well as improving banking assets. At this stage, we are working with international consultants on a new business strategy, which aims to ensure further effective business development and growth of the bank’s profits. We have an ambitious goal, which is to make Kazkom a national champion in the banking market, and today we have all the resources necessary to achieve our goal,” said CEO of the new institution Magzhan Auezov in a Kazkom press statement on the bank’s website.

The merger was extremely complex due to the large size of both banks, as well as legal and technical issues. The process was completed in a surprisingly short period of time, just over a year and a half, without any technical failures, according to Kazkom’s website.

This integration has resulted in the significant increase of the customer base of the combined bank, which has grown to up to 6 million. Bank customers have access to the most extensive banking infrastructure in the country: about 25 percent of all ATMs across the country, 300 offices and 40 percent of all point-of-sale terminals and approximately the same market share of card payments.

In February 2014, the consortium of investors represented by Kazkom and Kenes Rakishev, former chairman of BTA Bank’s Board of Directors, agreed to acquire BTA Bank from the Samruk Kazyna Sovereign Wealth Fund. In June, the deal on the acquisition of BTA shares was made. (Rakishev, as a general partner of the public-private parent company of Kazkom, Alnair Capital Holding, is now a major shareholder in the new bank.)

The National Bank approved the assets exchange scheme in May 2015. Upon completion of the asset exchange in June, BTA returned its banking license to the regulator. On June 29, 2015, the provision of integrated services to the clients of both banks was initiated along the entire banking network. Kazkommertsbank and BTA officially announced the deconsolidation on June 30, 2015.

For now, Kazkom is one of the largest banks in Kazakhstan and Central Asia, with subsidiaries in investment portfolio management, insurance and brokerage. The bank has subsidiaries in other CIS countries, including Russia and Tajikistan.

The Kazakh-British Chamber of Commerce is a bilateral business association that aims to strengthen and develop economic relations between the business structures of Kazakhstan and the U.K. It was founded with support from Kazakhstan’s embassy in London and the Ministry of Industry and Trade of Kazakhstan.

 

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