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Kazkommertsbank denies state bailout rumors

JSC Kazkommertsbank on Dec. 26 denied reports that Kazakhstan's government and central bank have discussed a financial rescue plan for the lender.

"People familiar with the plans" told Bloomberg News in a Dec. 22 report that Kazkommertsbank had been granted an emergency loan by the central bank, while its management and the regulator had been discussing various rescue options for the bank, including a bailout. The newswire also said JSC Halyk Savings Bank of Kazakhstan could launch discussions about taking control of Kazkommertsbank if Kazakhstan were to cover a roughly 1.5 trillion tenge hole in its balance sheet.

Kazkommertsbank said, however, that it is not involved in any negotiations with the central bank and the government regarding a bailout, and that a loan of 400.8 billion tenge that it applied for Dec. 14 under standard procedures was aimed at supporting its short-term liquidity ahead of an anticipated increase in payments during the holiday season. The bank said it has already repaid 200 billion tenge of the loan and that it will repay the remainder by the end of the first quarter of 2017.

Kazkommertsbank also said it has sufficient liquidity to ensure smooth operations over the New Year holidays and that it complies with all regulatory requirements, including capital adequacy and liquidity. The central bank on Dec. 20 confirmed the lender's compliance with regulatory standards, adding that it was in talks with Kazkommertsbank shareholders about increasing the bank's capital.

Kazakh President Nursultan Nazarbayev had said in November that Kazkommertsbank, the country's largest lender, would not be allowed to collapse, Bloomberg noted. Halyk Bank and Kazkommertsbank were rumored earlier that month to be in merger talks, although both rejected the speculation.

A controlling stake in Halyk Bank is held by Nazarbayev's daughter and son-in-law, while Kazkommertsbank's majority shareholder, Kenges Rakishev, is the son-in-law of Kazakh Deputy Prime Minister Imangali Tasmagambetov.

As of Dec. 27, US$1 was equivalent to 333.64 Kazakh tenge.