Regulatory authority continues to streamline acquisition of Kazakhstani banks by foreign investors

The Agency for Regulation and Development of the Financial Market (ARDFM) has proposed amendments to a 2012 National Bank resolution that sets credit rating requirements for foreign buyers and owners of Kazakhstani banks. These amendments, now open for public comment on the https://legalacts.egov.kz/ portal, demonstrate the regulator’s continued efforts to ease the conditions for international investors purchasing local banks. A similar regulatory relaxation was applied during the recent sale of Bereke Bank to Qatar-based Lesha Bank.

Under current regulations, foreign companies intending to acquire or those already owning Kazakhstani banks or insurers, as well as banks seeking to open branches in the country, are required to hold a long-term credit rating of at least «BBB» from S&P or equivalent from other international agencies. However, foreign companies from countries with a sovereign credit rating of at least “BB-” (according to S&P or an equivalent agency) that share financial information with Kazakhstan are exempt from this requirement.

The ARDFM now proposes additional exemptions for state-owned investors from countries that share financial data with Kazakhstan. If these amendments are approved, investors would only need to meet two criteria, rather than the current three, to qualify for the simplified acquisition process. According to the draft resolution, these changes aim to attract three reliable foreign banks to Kazakhstan, increasing competition in the banking sector. This initiative aligns with President Kassym-Jomart Tokayev’s call for greater foreign investment in his state-of-the-nation address last year.

In April, ARDFM relaxed some requirements for foreign buyers of Kazakhstani banks. Amendments were made to a separate document outlining the requirements for becoming a major shareholder in a bank, insurance company, investment portfolio manager, or bank or insurance holding company. These amendments introduced exceptions to the standard process, which usually requires mandatory approval from the ARDFM (unless the status is acquired through a foreign company that already possesses it). The exceptions apply to those having at least a minimum credit rating from an international agency. Regardless of other conditions, the applicant must still be registered in a country that exchanges financial data with Kazakhstan.

These earlier amendments referred to a section of the law «On Banks and Banking Activities,» which had not yet been enacted at the time. This section is related to the acquisition of Bereke Bank by Qatari Lesha Bank, a deal expected to be finalized in the coming weeks.

The current amendment is open for public discussion until October 14.