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Kazakhstan has to undertake a delicate balancing act. The state is trying to put the country’s most vulnerable banks back on their feet while not provoking a run on them or exhausting its $40 billion in foreign reserves. But bond investors are unhappy that a multi-billion dollar government bailout could leave part of the burden from an international debt crisis at two of the biggest banks on their shoulders. Also, a group of north American and western European bankers’ associations wrote to Kazakhstan’s president Nursultan Nazarbayev at the end of October, raising concerns at how trade finance could be subject to the banks’ restructuring plans. They said this would be "unprecedented in the global markets for banks with systemic national importance". One of the banks whose debt is being restructured is Bank TuranAlem (BTA), the country’s biggest, with gross debt of $10.3 billion. The other bank being restructured is Alliance Bank, the fourth biggest, with gross debt of $4.2 billion.
"Discounting repayment of these [trade finance] obligations could have negative implications for future business in the Kazakhstan banking sector," the bankers said.
