Hong Kong Buys First Bank Under OBOR Initiative
June 14, 2017
Hong Kong’s CITIC Bank International has completed the purchase of 60% of equity in Kazakhstan’s Altyn Bank from its majority Kazak owner, the Halyk Bank for an undisclosed amount. It marks the first time that China has invested in Kazakhstan’s banking sector. CITIC Bank International is a Hong Kong based bank controlled by mainland CITIC Financial Holdings, and traces its history back to 1922 and the formation of the Ka Wa Savings Bank established in the territory by the former President of Hong Kong’s Baptist College. Today, CITIC Bank International has total assets of USD50 billion and an annual turnover of USD10 billion. It is listed on the Hong Kong Stock Exchange.
Kazakhstan’s Halyk Bank meanwhile is known for its offshore remittance network, allowing expatriate Kazaks to transfer money overseas as well as back to Kazakhstan. The Altyn Bank has assets of about USD930 million. The bank was formed in 2014 when Halyk purchased HSBC Kazakhstan. Altyn Bank’s CEO, Umut Shayakmetova, stated about the deal “Within the OBOR Chinese initiative we are seeing Kazakh companies express a clear desire to develop their business in China and we need to follow the needs of our clients”.
China has seen overseen an uptick in Kazakh deals recently, with the Shanghai Stock Exchange stating its intention to purchase 25.1% of the Astana Stock Exchange and COSCO Shipping purchasing 49% of the inland Khorgos Port on the Kazakh side west of Urumqi.