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Halyk Says Kazakh Trade Finance Is Curbed by BTA Default

Halyk Savings Bank, Kazakhstan’s largest lender by assets, said it can only provide about a third of the money its clients are seeking through trade financing as export-credit agencies are still limiting funding in the aftermath of rival BTA Bank’s default three years ago.

BTA, which missed a January interest payment on its dollar bonds, defaulted in April 2009 when it was the Central Asian nation’s biggest lender. That’s closed the syndicate-loan market for Kazakh banks, as well as constraining export finance, according to Halyk’s Chief Executive Officer Umut Shayakhmetova.

“Because of BTA they don’t open trade-financing credit lines for us,” Shayakhmetova said today in an interview in Almaty. “We could potentially borrow $600 million via trade financing but we only have $200 million of credit lines.”

Halyk, which is controlled by President Nursultan Nazarbayev’s daughter and son-in-law, overtook Kazkommertsbank last month to become the country’s biggest lender by assets, according to the central bank. It predicts net income reached 40 billion tenge ($270 million) to 45 billion tenge last year from 36.2 billion tenge in 2010. Halyk will release 2011 earnings on April 2. It traded 1.6 percent higher at $6.50 at 2:29 p.m. in London.

BTA, which was taken over by sovereign-wealth fund Samruk-Kazyna in February 2009, is negotiating its second debt restructuring since 2010 after failing to make the interest payment on its July 2018 dollar bonds. It accounted for 11 percent of Kazakh banking assets with 1.48 trillion tenge as of March 1, down from a 24 percent share in January 2009, according to the central bank’s financial oversight committee.

Asked about the consequences of a potential BTA bankruptcy, Shayakhmetova said the lender isn’t as systemically important as it used to be so there wouldn’t be a “large negative effect on the banking system.”

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