Kazakh Wealth Fund to Cut Deposits in Foreign Banks by Half

Kazakhstan’s sovereign wealth fund said it’s seeking to cut the share of deposits it has in foreign banks and provide more liquidity to domestic lenders.

Banks hold 2.9 trillion tenge ($19 billion) for companies owned by the Samruk-Kazyna fund, while 24 percent of that amount is deposited in foreign banks, Deputy Chief Executive Officer Yelena Bakhmutova told reporters in Almaty today. The fund plans to cut the share in foreign banks to 10 percent of total deposits in two years, she said.

Samruk-Kazyna is also seeking to unify and lower the rates that banks charge its companies, Bakhmutova said.

Kazakhstan’s government has used Samruk-Kazyna to prop up banks and companies rocked by a credit squeeze in 2008 and 2009 via, tapping $10 billion from the National Oil Fund. The sovereign wealth fund accounts for a third of corporate deposits with domestic lenders, Bakhmutova said in November, according to its website. Samruk-Kazyna controlled 17 percent of Kazakh bank assets as of Jan. 1, through its stakes in BTA Bank, Alliance Bank and Temirbank.

OAO Sberbank, Russia’s largest lender, is complaining about Kazakhstan’s planned restrictions on the movement of money via foreign banks, Izvestia reported on Jan. 28, citing a letter from CEO German Gref to Russian Deputy Prime Minister Igor Shuvalov. Sberbank’s Kazakh unit, the seventh-largest by assets in the central Asian nation, may lose 120 billion tenge ($795 million) of deposits because of the decision, the newspaper said.

Sberbank’s Kazakh unit boosted assets by about 50 percent last year to 732.4 billion tenge as of Jan. 1 from a year earlier, according to the Kazakh central bank’s financial oversight committee website. The state-run Russian lender entered the Kazakh market by acquiring Almaty-based Texakabank in 2006.

Before it's here, it's on the Bloomberg Terminal.