The Development Bank of Kazakhstan JSC announced that they plan to sell KZT151 billion or US$1 billion worth of bad loans to the Investment Fund of Kazakhstan. The bank's loan-loss reserves were tagged at an estimated KZT130 billion last year, which is 27% of the total lending. The rate was compared to the 31% average for 2011.
The Development Bank loan holdings climbed up to an estimated KZT474 billion last year, which is a big increase of KZT73 billion from 2011. The Investment Fund of Kazakhstan said that they will pay in cash for the acquisition of the loans over a five-year payment span.
"Development Bank wants to sell the loans at a discount equal to the amount of provisions set aside to cover potential losses", Deputy CEO Mirzhan Karakulov said by phone. "The assets will be transferred by year-end so the bank will be eligible for tax breaks", he further added.
Join the Conversation