Government Confirms Desire to Start Withdraw from Banking Business

    Kazakhstani Prime Minister Karim Massimov stated during an interview on Tuesday that the state, primarily meaning Samruk-Kazyna, the national holding company and sovereign wealth fund, would begin planning its withdraw from the banking sector.
    Kairat Kelimbetov, Head of the Kazyna Sustainable Development Fund, speaking at a press conference the same day, noted that the government was new a shareholder in five banks, and stated that liquidating its position safely may take three to five years, though he did leave open the possibility of an earlier departure, assumedly if conditions are right.
    Until mid-2007, the banking sector in Kazakhstan was held up by the nation as the paradigm of successful diversification in this natural resource dependent nation, even to the point of touting the sector as the most developed example among all the CIS nations. Then came the downfall. With commercial banks accounting for 50% of the country’s external debt, massive commercial loans from the construction boom, and the associated mortgages, the banks began to falter. This led the government to begin soft loans to the banks, followed by cash injections, and finally to outright takeover of some financial institutions when they began to default on their debts. The banks that have found themselves in hock to the national government include Alliance Bank, BTA, Astana Finance, Kazkommertzbank, and Halyk Bank, according to Kazakhstan Today, KazTAG, Gazeta.kz, Kazinform, PBN (crisiscrunch.pbndc.com), the Economist Intelligence Unit, the Silk Road Intelligencer, and Government.kz.