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8 I Companies & Markets bne September 2022
ATF Bank had two obvious options for attracting fresh capital: to go public to or sell to a strategic investor. Having settled on exploring both options, the bank commissioned JP Morgan to assist with finding a strategic investor.
It received serious interest from six western banking giants, including HSBC, ING, BNP Paribas and Italy’s UniCredit. After painstaking rounds of whittling and presenting the bank to potential buyers, ATF Bank received two offers. The most attractive proposition came from UniCredit, which wanted
to buy 100% of the bank’s shares for around three times the bank’s book value (total assets minus liabilities).
“ATF Bank had two obvious options for attracting fresh capital: to go public to or sell to a strategic investor”
At this point, Isataev told Forbes how the main shareholder Bulat Utemuratov persuaded the CEO of UniCredit Bank Alessandro Profumo to fly to Astana for a single day to close the deal. After hours of negotiations which lasted until four in the morning and caused the planned celebration dinner to be cancelled, UniCredit agreed to increase its offer to five times the book value of ATF – around $2.3bn. The Financial Times hailed the deal as “the first big investment in Central Asia by a top Western financial services group”.
2007 was a big year for banking deals. Across Eastern Europe and Central Asia, established banks were looking for strategic investors and public shareholders to give them the edge over their peers. But ATF Bank’s deal with UniCredit was historic. At five times the book value, a bank which had been founded as a small outsider only 12 years ago secured the best-valued M&A in the region.
Déjà vu
As ATF’s new owners were learning the ropes in Kazakhstan, another bank was coming into existence. Banking mogul Bulat Utemuratov turned his attention to consolidating other Kazakh financial assets using the money and reputation he had gained in the UniCredit deal. He acquired Metrokombank in 2010, a bank which specialised in small business and corporates.
In 2014, Utemuratov went on to buy 80% of Temirbank – the same bank from which he poached Isataev – and 16% of Alliance Bank, later acquiring a controlling stake in the latter too.
“Signing these sales contracts is merely the first step on the path to reviving these two banks,” Utemuratov told Forbes after completing the purchases. “The process of reviving
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Temirbank will begin as soon as the deal is closed. As for Alliance Bank, there is still some joint work to be done
with the Samruk Kazyna Fund and with creditors in order
to ascertain the path to revival of the bank’s economic capital, liquidity and profitability. My team has considerable experience in Kazakhstan’s banking sector, and I am certain that, together with the Fund, we can bring both banks to a whole new level,” he added. Then in 2015, the three banks were combined under the name of ForteBank, which is listed on the Kazakhstan Stock Exchange. Like ATF Bank when Isataev took over, ForteBank is majority owned by Utemuratov. Also like ATF when its growth spurt began, Forte has surpassed its $500mn valuation.
“The market is now ripe for expansion in the banking sector, as large credit institutions are busy solving old problems. I want to build the best credit institution in Kazakhstan, which will be able to bring new standards of service to our country and spur the current competitive environment," Utemuratov told TengriNews.
In July 2022, S&P Global Ratings upgraded ForteBank’s long-term credit rating from “B+” to “BB-”, with a stable outlook. S&P said that ForteBank’s capital reserves appeared to be increasing and predicted that the bank would go on
to become one of the five biggest in Kazakhstan by assets.
ForteBank’s strategy involves growing all its business segments, but with a particular focus on digital solutions. “At the heart [of our strategy] lies a considered, conservative credit policy, digital products and services, and the creation of ecosystems for retail investors and business clients,”
said ForteBank’s new chairman of the board, Bekzhan Pirmatov, when he was appointed in July 2022. “Continuity is very important to us, as is the continuation of an effective universal bank strategy aimed at growth in all business segments, with a focus on digital solutions,” Pirmatov said.
Just as in the early 2000s, Kazakhstan’s economy is growing dynamically relative to the rest of the world. GDP is set to increase by as much as 3.6% this year even as other countries face stagnation. With banking inextricably tied to the national economy, now seems a propitious time to build
a second banking giant.
“The market is now ripe for expansion in the banking sector, as large credit institutions are busy solving old problems. I want to build the best credit institution in Kazakhstan”