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Kazakh Government May Drop BTA Support Over Debt Repayment


ALMATY (Reuters) -- Kazakhstan's government may drop its support for the biggest domestic bank, BTA, if any of its creditors ask for early debt repayment, the bank's chairman said on March 24.

BTA, hit hard by the global financial crisis, has been at the centre of much scrutiny from foreign investors since the state took it over last month to prevent it from collapsing.

Two of its senior managers have fled the oil-rich Central Asian country since, blaming the government for mishandling its rescue efforts.

"If any of the creditors ask for early debt repayment, Samruk-Kazyna [state fund] may review its attitude towards supporting BTA group," BTA Chairman Arman Dunayev told reporters.

The government invested about $2 billion in BTA, with assets of $31 billion, through Samruk-Kazyna as part of its takeover, saying it would have otherwise collapsed due to a deepening financial crisis that has hammered Kazakhstan's economy.

The government says BTA might have to restructure some of its $12 billion foreign debt, sparking concern about the broader health of Kazakhstan's once buoyant banking sector.
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