Sberbank sells subsidiary in Kazakhstan to Baiterek holding, deal to be closed soon

MOSCOW. Aug 23 (Interfax) - Sberbank and the Kazakh national management holding, Baiterek, have signed a deal to buy and sell shares of Sberbank Kazakhstan, with the deal expected to close in the near future, the Russian credit institution said in a statement.

The deal should allow the bank to resume full operations, attract deposits and render payments, as well as continue developing products and services for individuals and businesses.

"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. 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," Sberbank said.

"When deciding to acquire Sberbank Kazakhstan, the Baiterek holding appreciated its high significance in the country's financial system. 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," according to the press release.

The bank will continue to fulfill all of its obligations to customers. All conditions for banking products for existing customers will remain the same.

Baiterek is an integrated development institution set up to support entrepreneurship, develop the agro-industrial sector and provide housing. The Kazakh government is its ultimate beneficiary.

Blocking sanctions imposed by the United States have affected the international business of Sberbank, including its subsidiary in Kazakhstan.

"Over the past two years we have done a tremendous job, more than doubling our assets. Due to introduction of sanctions, our assets declined nearly twofold, that is, in two months we have actually drawn a line under the results of the last two years," Timur Kozintsev, Sberbank's senior vice president and head of Sberbank International, said in May.

Kozintsev said investors from Russia and potential buyers from Turkey and the Middle East had expressed an interest in the Kazakhstan subsidiary.

The Kazakhstan-based subsidiaries of the Russian banks VTB , Alfa-Bank and Sberbank were added to the U.S. sanctions list in March of this year. Kazakhstan's Bank CenterCredit completed the acquisition of 100% of Alfa-Bank's subsidiary in Kazakhstan at the beginning of May 2022. The bank launched its rebranding at the time. The U.S. sanctions were lifted from it and it now operates under the Eco Center Bank brand.

VTB, for its part, plans to maintain a presence in Kazakhstan, its chief, Andrei Kostin, has told Interfax.