ALMATY, NOV. 15 2016, (The Conway Bulletin) — Kazakhstan’s largest lenders, Halyk Bank and Qazkom, are in talks to merge and create a super- sized bank with strong links to the Kazakh elite that would dwarf its rivals, according to sources quoted by Reuters.

Reuters quoted two anonymous sources, who both confirmed that talks were under way and that the merger could be agreed after Halyk redeems a $638m Eurobond in May 2017.

Importantly, one of the sources said that the idea behind the merger traces all the way up to the presidential family.

President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev coown Halyk Bank. Kenes Rakishev, son-in-law of Mr Nazarbayev’s close ally Imangali Tasmagambetov, owns Qazkom. Mr Tasmagambetov is minister of defence.

Qazkom which rebranded last month from Kazkommertsbank, gave a guarded denial that a merger was about to happen. Halyk Bank did not comment.

“Responding to recent rumours, I can say that Qazkom has neither made nor received offers regarding a merger with Halyk Bank,” Qazkom’s press officer, Sergei Chikin, told media

A merger would form a banking superpower in Kazakhstan, four times larger than its biggest competitor, Tsesnabank, owned by Adilbek Dzhaksybekov, head of the Presidential Administration. Analysts, though, are skeptical at the prospects of a merger, which would create a bank with a 40% of the loans market.

“Even if the talks are proved true, the Central Bank is unlikely to allow a merger that would monopolise the market,” Rasul Rysmambetov, director of the Public Fund Financial Freedom, told the Inform-Kazakhstan news agency.

In the past two years, both Qazkom and Halyk have cleaned up their toxic assets, which built up during the Global Financial Crisis of 2008/9. Qazkom had also bought Kazakhstan’s once-largest lender BTA Bank, now riddled with non- performing loans. It also changed ownership, with Mr Rakishev sidelining founder Nurzhan Subkhanberdin.

ENDS