The European Bank for Reconstruction and Development is acquiring a 25 per cent stake in the Kyrgyz Republic's Ineximbank through a $1.4 million investment aimed at helping the sixth-largest Kyrgyz bank to develop into a strong medium-sized lending institution with a focus on small enterprises and retail loans.
The EBRD acquisition is being made alongside a strategic investment by Kazakhstan's Temirbank, whose stake in Ineximbank will eventually amount to 46 per cent. This is the second example of cross-border cooperation among Kyrgyz and Kazakh commercial banks after the acquisition of Kyrgyz Avto Bank by Kazakhstan's Kazkommertsbank last year.
Ineximbank was set up in 1996 and its capital at the end of 2002 was $2.2 million, while its assets stood at $8.2 million. The new investments involve a capital increase of approximately $3.1 million, which will bring Ineximbank's capital base to more than $5 million.
Strengthening Ineximbank's capitalization will support the bank's further growth and development of its retail business, as well as promote regional cooperation between Kyrgyz and Kazakh banks, said Kurt Geiger, Business Group Director of the EBRD's Financial Institutions Team.
The EBRD's aim is to foster competition and transparency in the Kyrgyz banking sector and it is pinning high hopes on the improvements in corporate governance standards and management techniques that such an investment should help stimulate, Mr. Geiger added at the signing ceremony.
This transaction will allow Ineximbank to benefit from the know-how acquired by Temirbank in the fast-growing Kazakh banking sector, said Oleg Kononenko, chairman of the board of Temirbank, commenting on his bank's investment in the Kyrgyz market.
The Times of Central Asia, November 06, 2003