Kazakhstan-based Jysan Bank has agreed to acquire rival lender ATF Bank, according to an exchange filing with the Kazakh Stock Exchange (KSE).

The deal is part of the divestment of family assets by Galimzhan Yessenov, the owner of the ATF Bank.

First Heartland Jysan Bank is the subsidiary of First Heartland Securities, while ATF Bank is the subsidiary of KNG Finance.

Deal terms

Under the deal terms, KNG Finance will offload its entire 99.76% stake in ATF Bank to Jysan Bank.

In exchange, KNG will be entitled to receive shares in the combined bank. The size of this shareholding is yet to be confirmed.

Jysan Bank has KZT1.57trn ($3.74bn) in assets and with KZT874.5bn ($2.09bn) in loans, while ATF has KZT1.37trn ($3.26bn) in assets and KZT872.8bn ($2.08bn) in loans.

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Both the banks are now waiting for the receipt of approval from The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market.

Following the receipt of ATF Bank’s shareholders’ approval at an extraordinary general meeting on 20 December, the deal is expected to be closed next year.

Background

ATF’s divestment was required due to rising bad loans at the bank, and Yessenov’s divorce.

Back in 2012, Yessenov bought ATF Bank for $500m. Yessenov is married to Ayzhan Akhmetzhankyzy Yessim since 2007.

As a result of the divorce, the division of family assets was necessitated.

In 2017, the National Bank of Kazakhstan (NBK) bailed out ATF Bank by injecting $260m in the bank.

The bank received another $80m rescue fund earlier this year after its bad debts surged to 29% of its loan book.

Samruk, the sovereign wealth fund run by Yessenov’s father-in-law Akhmetzhan Yessimov, has also been supporting the bank with cash deposits.

Samruk has nearly $350m of cash deposits at ATF, plus its subsidiaries hold more such deposits.

The decision to withdraw these funds after the deal with Jysan Bank concludes have not been made yet.

Comments

In a statement to the KSE, Jysan Bank said: “After the conclusion of the purchase and sale agreement, it is also assumed that both banks will work in a unified format within a single strategy.”

ATF Bank said: “While all above transformations undergoing, ATF Bank will continue operating as usual with preserved access provided to current services of ATF Bank in full.”