Kazakh Fintech Giant to Buy Ukrainian Bank – The Diplomat


London-listed Kaspi.kz is poised to acquire the Ukrainian subsidiary of BTA Bank, a sign that Kazakhstan’s fintech giant plans to expand into new markets.

In its financial report for the third quarter of 2021, Kaspi signed a preliminary agreement to buy BTA Bank in Ukraine, essentially a way for the bank to obtain a financial license in the country.

“[BTA Bank] has very limited operating activity, no branches, no loan portfolio and is solely acquired for full banking license purposes only,” said the report

Importantly, Kaspi reassured its shareholders that “the proposed acquisition will have no material financial impact on Kaspi.kz and is expected to close in the first half of 2022.”

The deal would cost between $4 – $10 million, according to local news outlet Kursiv.

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Kaspi successfully listed 15.45 percent of its shares in the London Stock Exchange last year, raising around $1 billion in one of the largest IPOs of 2020.

CEO Mikhail Lomtadze (22.9 percent), Russian investment firm Baring Vostok (31 percent), and Vyacheslav Kim, one of the Kazakhstan’s richest retailers (24.5 percent), own the group. U.S. banking giant Goldman Sachs owns 3.4 percent.

BTA in Ukraine has been practically dormant since its Kazakhstani owner, BTA Bank, was acquired by rampant businessman Kenes Rakishev and once-leading lender Kazkommertsbank in February 2014, days before a 20 percent devaluation of the local currency, the tenge, against the U.S. dollar.

The deal essentially relieved the country’s sovereign wealth fund, Samruk-Kazyna, of the weight of toxic loans that BTA held, a heritage of the Global Financial Crisis of 2007-2008. In addition, Rakishev and Kazkommertsbank inherited the lawsuits that BTA had lodged internationally against its previous owner, Mukhtar Ablyazov, a staunch opponent of the country’s long-time president, Nursultan Nazarbayev.

Some of these lawsuits remain active, and it is unclear if and how they will affect Kaspi.

The story of BTA Bank is complex, sitting at the intersection of business and politics. After Ablyazov fled in 2009, the bank became part of Samruk-Kazyna, which injected capital and kept it afloat, until it was privatized by the Rakishev-Kazkommertsbank deal. 

Rakishev is one of the country’s richest men, with business interests spanning from gold mining to technology. Being the son-in-law of Imangali Tasmagambetov, one of Nazarbayev’s oldest lieutenants, Rakishev enjoys a privileged position among the country’s elite.

After the BTA deal, Rakishev also acquired a majority stake in Kazkommertsbank and then sold it to Halyk Bank, the country’s biggest lender, for the symbolic figure of 1 tenge (a fraction of a cent). Halyk significantly increased its market share, while Rakishev seemingly left the banking business.

The trade rumors regarding the sale of BTA subsidiaries have been consistent with Rakishev’s strategy to shave off unprofitable businesses from his empire. By the end of 2020, in fact, BTA Ukraine’s asset were worth 385 million hryvnia (around $14.5 million), making it the 71st largest bank in the country out of 74, and a marginal business segment of BTA.

In November 2020, Nikolay Vorobey, a citizen of Belarus, offered to buy a majority stake in BTA Ukraine, but one month later the regulatory commission at the Ukrainian Central Bank halted the trade because of Vorobey’s reputation. The Central Bank based its decision on the publication of a fresh list of people under sanctions by the European Commission, which featured Vorobey.

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In 2019, BTA sold its subsidiary in Kyrgyzstan. Between 2009 and 2012, BTA Kazakhstan had lost control of BTA Kyrgyzstan, but a local court reversed the hostile takeover.

Strong links between the elite owning Kaspi and the businessman controlling BTA Ukraine are likely to make the deal successful, granting Kaspi a banking license in Ukraine. 

Two questions still remain unanswered: What are Kaspi’s long-term plans in Ukraine and when will BTA Kazakhstan’s efforts in asset recovery and lawsuits end?



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