April 3 (Bloomberg) -- HSBC Holdings Plc’s Kazakh unit is benefiting from the country’s financial crisis as depositors flee bigger rivals being bailed out by the government, HSBC Bank Kazakhstan Chief Executive Officer Simen Munter said.

Retail deposits at HSBC’s Kazakh branches jumped 70 percent in the first two months of the year to 6.8 billion tenge ($45 million), while lending advanced 17 percent in the same period to 73.7 billion tenge, according to the Financial Supervision Agency.

“I’ve never seen such liquidity at HSBC,’’ Munter said in an interview in his office in the commercial capital Almaty yesterday. “There is a lot of uncertainty in the Kazakh banking sector.”

President Nursultan Nazarbayev, who has run the oil-rich Central Asian nation for 20 years, is spending 2.2 trillion tenge ($14.6 billion), or 14 percent of gross domestic product, on measures to prevent the first economic contraction in a decade, including buying stakes in the four largest banks.

The government last month bought 75.1 percent of BTA Bank, the biggest, for 212 billion tenge. Depositors pulled 53.8 billion tenge out of BTA in January and February, reducing its total to 223.6 billion tenge, according to government data.

20% Interest

Munter, 44, said HSBC “is rebalancing its portfolio” from lending to other banks to lending to companies and individuals. “Our commercial banking jumped 300 percent last year and we plan to double that, but the key challenge is to find clients.”

Munter said some Kazakh banks are charging corporate clients as much as 20 percent interest. “We offer much more attractive loans to our clients,’’ Munter said, without elaborating. “Some Kazakh banks have a 10 percent interest rate margin, an incredible figure.”

London-based HSBC, Europe’s biggest bank, opened its first office in Kazakhstan in 1998 and is now 15th of 37 lenders by assets, up from 16th a year ago, according to the Financial Supervision Agency. Only Russia’s state-run OAO Sberbank has been “more aggressive’’ in Kazakhstan than HSBC, Munter said.

The government of Kazakhstan, holder of 3.2 percent of the world’s oil reserves according to BP Plc, expects economic growth to slow to 1 percent this year after a decade of 10 percent average growth. The central bank devalued the tenge by 18 percent last month for the first time since it started managing the currency in 2007, after draining $3.5 billion, or 16 percent, of its foreign-currency reserves.

“I am more bearish than the Kazakh government and will be surprised if there’s positive economic growth this year, though contraction won’t be big,’’ Munter said. Inflation will come down significantly, he said.

“The pressure on the exchange rate was reduced after the devaluation, and I don’t believe there will be a further devaluation,’’ Munter said.

-- Editors: Brad Cook, Stephen Kirkland.

To contact the reporter on this story: Nariman Gizitdinov in Almaty, via the Moscow newsroom at ngizitdinov@bloomberg.net

Last Updated: April 3, 2009 06:06 EDT