Kazakhstan’s Agency for Regulation and Development of the Financial Market (ARDFM) reported that it has attracted three foreign banks to the country’s market. These include the Korean BNK microfinance organization, which is currently transitioning into a bank, as well as the Al Hilal Islamic Bank and Bereke Bank, both acquired by foreign entities. Therefore, all three institutions have already been active in Kazakhstan for several years.
The Korean BNK has been active in Kazakhstan’s financial market since 2018. In early June, it was allowed to restructure into a bank after President Kassym-Jomart Tokayev approved the decision. As of January, BNK Financial Group, the South Korean parent company founded in 2011, controlled assets totaling $128 billion and operated 28 branches along with three international representative offices.
Additionally, in early October, Abu Dhabi Commercial Bank, a banking group from the UAE, acquired the Al Hilal bank and rebranded it as ADCB. The holding company’s assets are evaluated at $155.2 billion. It is worth noting that in terms of assets, ADCB ranks third among 56 institutions in the UAE banking sector.
Furthermore, last month, the Baiterek National Holding completed the sale of 100% shares of Bereke Bank, which was formerly owned by Russian Sberbank, to Qatari Lesha Bank. As of Oct. 1, Lesha Bank assets were estimated at $2.09 billion.
In September 2023, President Tokayev instructed the cabinet to attract at least three foreign banks to Kazakhstan’s financial sector. Additionally, two more microfinance organizations with foreign shareholders, KMF and Solva, are currently in the process of transitioning into banks.
The ARDFM noted that it has developed a set of amendments to the legislation aimed at increasing competition in the banking sector. For instance, the agency plans to simplify requirements for international banks intending to establish their branches in Kazakhstan. One of these initiatives was a proposal to decrease the minimum value of total assets from $20 billion to $10 billion.
The subsidiaries of foreign financial institutions will allegedly be allowed to place reserve assets in low-risk financial instruments and execute extra licensed activities. In addition, the agency plans to shorten the set of documents for financial organizations depending on their credit rating level. Additionally, the proposal aims to optimize the list of documents that the ARDFM can obtain directly from information systems or from a financial regulator in an applicant’s home country. The corresponding draft law is currently under review in the parliament and has already been approved in the first reading.
