Sberbank Kazakhstan is subject to sanctions from the US. Credit: Andreas Breitling from Pixabay.

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Russian banking major Sberbank has reached an agreement with Kazakh government-backed financial holding Baiterek for the divesture of Sberbank Kazakhstan, citing geopolitical tensions, Interfax reported. 

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The financial details of the deal, which is anticipated to close soon, were not divulged. 

Following the Russian invasion of Ukraine in late February this year, Sberbank and several of its subsidiaries including those in Ukraine, Kazakhstan, and Belarus were added to the US sanction list.

Sberbank said that the sale will allow the Kazakh arm to resume full operations, take deposits and process payments while developing products and services for customers.

The Russian bank said: “Sberbank has decided to exit the Kazakh market owing to the current geopolitical situation and acting in the interests of the subsidiary bank’s clients. 

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“Sberbank Kazakhstan has an adequate liquidity reserve, a high-quality loan portfolio, and has been one of the key participants in Kazakhstan’s financial market for many years

“The modern infrastructure and technologies owned by the bank will allow the bank to return to full-fledged work in a short time, and begin financing the real sector of Kazakhstan’s economy.” 

Baiterek is a development institution set up to foster entrepreneurship, support the agro-industrial sector and provide housing.

The Kazakh arms of Sberbank’s peers VTB and Alfa-Bank are also subject to sanctions by the US. 

In early May 2022, Kazakh-based Bank CenterCredit acquired a 100% stake in Alfa-Bank’s Kazakhstan arm, which now operates under the Eco Center Bank brand.

Meanwhile, VTB plans to maintain a presence in Kazakhstan, the news agency reported citing its VTB chief Andrei Kostin.