Today the society and the media in Kazakhstan are watching closely the upcoming takeovers of Kazkommertsbank by Halyk Bank and of TsentrKredit Bank by Tsesnabank. It is obvious, however, that these are not isolated events and practically all existing Kazakh banks are experiencing sectoral problems.

The only exception is the small financial institutions with foreign participation that do not take part in the competitive fighting on the market. As for the others, the further sudden bankruptcies, takeovers, and mergers are inevitable.

To prove it, let us consider the situation with ForteBank that belongs to Bulat Utemuratov, an official Kazakh billionaire according to the Forbes magazine. On December 26, 2016, the ForteBank board of directors decided to terminate the authorities of Chairman Talgat Kuanyshev and appoint Magzhan Auezov instead. Mr. Auezov was the former chairman of Kazkommertsbank who had later acted as the head of the Kazakhstan Financiers Association Council.    

Evaluating the performance of the former ForteBank management as the majority stake-holder, Bulat Utemuratov says, “I value highly the professional success of the ForteBank management team. First, I want to underscore the special role of Timur Isatayev and Talgat Kuanyshev. They have successfully realized several key projects on the financial market of Kazakhstan. These projects include the sale of ATFBank to the UniCredit group in 2007 and the unprecedented merger of three banks, AlyansBank, Temirbank, and ForteBank in 2014-2015. Thanks to this merger, these financial institutions are now recovered. It has also helped in creating the strong and successful ForteBank that is now showing a high return level and good results. The ForteBank team has done a colossal job to build a modern, innovative bank that has become one of the leaders of the Kazakh financial system”.

Nonetheless, based on insider information, Magzhan Auezov, the new ForteBank head, has some questions for the former management team.

In particular, we are talking about the 2 billion tenge embezzlement. Perhaps this is the reason a large group of the ForteBank managers including Timur Isatayev has left Kazakhstan and is currently outside the country (this, once again, is based on insider information).

Since these kinds of “black swans” are going appear in the other banks as well, the uncertainty on the market will only grow. It looks like this year is going to be a revolutionary one for the bank system of Kazakhstan. The bankers will be concerned not so much about improving the quality of their loan portfolios, writing off defaulted debts, and stabilizing passives as surviving in the new, much tougher, and competitive conditions. Therefore, the cleansing of the financial system is inevitable – from the above with the hands of the National Bank as well as from the below, through banks fighting for the clients and the approval of the government.