Consolidation of Bank CenterCredit and Tsesnabank

Azamat TalgatbekovFebruary 02, 2017

Our recommendations on the debt obligations of JSC "Bank CenterCredit" - Buy and JSC "Tsesnabank" - Hold, remain unchanged against the background of the official announcement of a possible merger of the two banks, or other form of reorganization with the aim of creating a large and strong financial institution.

02.01.16 published the official announcement of a possible merger of the two banks, or other form of reorganization with the aim of creating a large and strong financial institution.  Negotiations starts between Kookmin Bank (sells its stake of 41.93%), International Finance Corporation (sells its 10%), shareholder and Chairman of the Board of JSC "Bank CenterCredit" Baiseitov Bakhytbek Rymbekovich (owns 25.60 %), JSC "Tsesnabank" and JSC "Financial holding company" Tsesna ". 

Our opinion: As a result of possible consolidation of the two banks, the banking sector will get a large player, which will own 16.3% of market share (for comparison, the market share of "Halyk Bank of Kazakhstan" 15.3%, "Kazkommertsbank" 23.9%). Assets of a new financial institution will be able to make the amount of T3.4 trillion. According to this indicator, it will take 3 place, and came close to the Halyk Bank and Kazkommertsbank (according to statistics of NBK on 01/01/2017). Considering stated we positive about consolidation, subject to the equity will increase. Our recommendations on the debt obligations of JSC "Bank CenterCredit" - Buy and JSC "Tsesnabank" - Hold, remain unchanged.