By Masha Gordeyeva
ALMATY, Nov 20 (Reuters) - Kazakhstan's financial regulator said on Friday it had ordered defaulted lender Astana Finance to cut its stakes in its banking and insurance subsidiaries until it strikes a debt restructuring deal.
Astana Finance was one of three Kazakh lenders that went into default this year citing asset quality problems and creditor demands for accelerated repayment of debt.
The Financial Supervision Agency (FSA) gave Astana Finance until Nov. 15 to settle debt and capital adequacy problems but the lender is still in talks with domestic creditors.
"Since the company has not met its obligations, the Agency insists that it gives up control over the subsidary bank and insurance companies reducing its stake to less than 10 percent," the FSA head Yelena Bakhmutova told Reuters.
"The reduction can be achieved either by selling parts of stakes or temporarily handing them over to a trustee for no longer than 3-4 months," she said in a writen reply to questions asked by Reuters.
Astana Finance was not immediately available for comment.
Kazakh banks have been hit hard by the global crisis after years of rapid growth financed largely by foreign borrowing and associated with a domestic real estate bubble.
As the oil-dominated economy started to contract and property prices plunged, many borrowers found themselves unable to pay back, prompting banks to write down billions of dollars in bad loans.
Astana Finance used to perform most operations typical for a bank except for working with retail deposits but gave up its lending and brokerage licences after going into default.
Two other Kazakh lenders, BTA and Alliance bank are also in the process of restructuring their debt and economists say resolving those issues is key to securing economic recovery in the Central Asian state.
(Writing by Olzhas Auyezov; Editing by David Cowell) Keywords: ASTANAFINANCE/
(olzhas.auyezov@reuters.com; +7 7272 508500; Reuters Messaging: olzhas.auyezov.reuters.com@reuters.net)
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