06 December 2018
Fund of Problem Loans JSC, Astana, December 6. By Decree of the Government of the Republic of Kazakhstan dated November 16, 2018, it was decided to reorganize Fund of Problem Loans JSC (hereinafter - the Fund) by joining to it “Rehabilitation and Asset Management Company” JSC (hereinafter – RAMC).
RAMC was established in 1998 on the basis of the State Rehabilitation Bank of the Republic of Kazakhstan within the framework of the World Bank’s Financial Sector Program to strengthen the banking system of Kazakhstan and carries out functions in the field of ensuring the repayment of loans allocated from the republican budget.
The decision was made in order to consolidate homogeneous assets, eliminate duplicate functions, reduce costs and improve the quality of services through the consolidation of resources.
In general, the reorganization measures will allow to optimize the subordinate organizations of the Ministry of Finance of the Republic of Kazakhstan for the implementation of the objective set by the Head of the State to reduce by 2020 the share of the state participation in the national economy to the level of OECD countries - 15% of GDP.
At the same time, the enlarged Fund will retain its main mission - to promote the recovery of the national economy through the repurchase of problem assets of banks, the recovery of loan debts and integrated approach to asset management. Currently, the Fund is working in two strategic areas: the recovery of the banking sector and the involvement of the repurchased non-performing loans in the economic turnover.
Within the first direction, the Fund, in order to improve the quality of the loan portfolio in the banking system, made a number of large transactions.
In particular, in order to ensure stable functioning of the country's financial system, in July 2017, the Fund bought out BTA assets for the purchase price of 2.6 trillion tenge. This transaction allowed to preserve jobs, deposits of the population, legal entities and state-owned companies, prevent a decline in loan growth, and to support liabilities on payments under Eurobonds.
In August 2018, the Fund made a transaction on the assignment of claims to the Borrowers of the Bank of Astana to the Fund in order to repay the bank’s debt to Astana LRT LLP for the further implementation of the “New Transport System of the city of Astana. LRT” Project.
Also, for the rehabilitation of the agro-industrial complex of the country, the Framework Agreement was signed between the Government of the Republic of Kazakhstan, the National Bank of Kazakhstan, KazAgro, the Fund, Tsesnabank and other parties. The Framework Agreement is being implemented for the purpose of improving the agricultural sector of the Republic of Kazakhstan. On September 25, 2018, the Fund and Tsesnabank JSC signed an asset purchase agreement in the amount of 450 billion tenge. This transaction resulted in ensuring food security of the agricultural industry and preservation of jobs.
Within the second direction, the Fund is actively engaged in the involvement of assets in the economic turnover.
In order to improve the quality of purchased assets, measures will be taken to rehabilitate borrowers and restore their solvency. To increase the market value of acquired assets and land plots, joint projects with investors and local executive bodies are planned.
At the present moment the Rules for managing the Fund’s assets governing the processes of managing and selling the assets of the Fund have been developed, which provide for transparency when selling assets of the Fund.
The majority of the facilities have been prepared for sale on the electronic trading platform of the Information and Accounting Center, as well as on the Fund’s website www.fpl.kz.