ALMATY, APRIL 20 2017 (The Conway Bulletin) — South Korea’s Kookmin Bank sold its remaining 41.93% stake in Bank CenterCredit to Bakhytbek Baiseitov’s Tsenabank, bringing to an end its unhappy nine year foray into the Kazakh banking sector.
Kookmin’s retreat from Kazakhstan also highlights just how foreign banks have struggled in the Kazakh banking sector. The 2008/9 Global Financial Crisis inflated Kazakh banks’ bad debt portfolios turning what had looked like an attractive market to foreign investors into a headache virtually overnight.
A short note released on the Kazakh Stock Exchange by Center- Credit didn’t give much way accept to confirm the sale. Earlier this year, Tsenabank said it would buy up all of Kookmin Bank’s stake. In March it also confirmed that Mr Baiseitov, one of Kazakhstan’s richest people, had bought a 10% stake from the IFC, part of the World Bank. The IFC had always intended to sell its stake, bought in 2010, by 2017.
There was no statement from Kookmin which has been looking to sell its stake in CenterCredit almost as soon as it bought it.
Kookmin’s timing was initially poor. It bought a 30% stake in CenterCredit from Mr Baiseitov, who set up the bank, in March 2008 for $500m. By August 2008 the Global Financial Crisis had virtually wiped out its investment. The devaluation of the Kazakh tenge in 2015 also hit the bank, forcing Kookmin to write- down its value again. The 2008 deal to buy into CenterCredit had been part of a now globalisation push by Kookmin. It forced the resignation in 2010 of then-CEO Kang Chung-won.
Other foreign banks which have invested in Kazakhstan only to pull out a few years later include Britain’s HSBC and Italy’s Unicredit.
ENDS
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(News report from Issue No. 325, published on April 17 2017)