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Bank TuranAlem acquired a stake in Ukraine's Major insurer

03.10.2007 / Press-service

On October 2, 2007 Kiev, Ukraine, hosted a tender for the sale of a state-owned shareholding in Ukraine’s national joint insurance company Oranta (NJSIC). Major CIS financial groups bid for the stake. JSC "Bank TuranAlem", Kazakhstan, JSC Bank CenterCredit, Kazakhstan, and Russia’s OJSC Alfa Bank were among bidders.

Bank TuranAlem (BTA) won the tender paying 500.75 million hryvnya ($99.2 million) for a 25% plus one share in NJSIC Oranta. Meanwhile, Alfa Bank retired with an offer of $98.2 million.

Chairman of BTA Board of Directors Mukhtar Ablyazov indicated, "Insurance is a core business of BTA not only in Kazakhstan, where its subsidiary insurers dominate the market, but also throughout the CIS, in particular in Ukraine. The acquisition of a 25% stake in Oranta is a landmark for us towards the consolidation of BTA insurance assets with a view to make governance of the major Ukrainian insurer more efficient."

Member of BTA Board of Directors Yerkin Tatishev has confirmed, saying: "The bids were high, but we are ready to make investments in the acquisition and development of the company. Moreover, in the future we will invest to the extent it is necessary to develop the company and make it an ultimate leader on the insurance market of Ukraine."

Chairman of the management board of Oranta JSIC Oleg Spilka commented on the deal saying, "The bid of Bank TuranAlem is high enough for any business, the more so for the insurance market, however it is absolutely justified givev Oranta development rates. Premiums collected by the Company for the first 9 months of 2007 soared by more than 60%. We view the share purchase by Bank TuranAlem extremely favorably as the deal confirms credibility of the investor’s mind as regards the further development of the Company."

Chair of the Ukrainian State Property Fund Valentyna Semeniuk maintains that the price paid for Oranta JSIC stake is unexampled. "We thought we'd get 200 million-250 million hryvnya," stated Semeniuk adding, "However, the bidder doubled the expected price. Beyond dispute, these are significant revenues to the state budget of Ukraine. This tender was fair and transparent."

Oranta JSIC is a major insurance company in Ukraine set up in 1921. It has been a leader on the Ukrainian insurance market by volume of premiums and payments to the state budget over several decades.

Oranta runs a biggest agency network in Ukraine with more than 7,000 underwriting agents, 700 offices and over 1,000 outlets throughout the country. Oranta employs every third underwriting agent in Ukraine.

Insurance payments made by Oranta over the first half of 2007 totaled 276 million hryvnia ($54.6 million), the highest among all insurers in Ukraine, meanwhile insurance claims totaled 92 million hryvnya ($18.2 million). The insurance fees of the Company surged by more than 60% over the reference period.

Oranta was awarded Brand of the Year - 2004 in Ukraine, in 2005 it joined the Guard of Brands as the Biggest Insurance Company of Ukraine and in 2006 Oranta was named the Choice of the Year. Oranta JSCI appears in the TOP-100 authoritative companies of Ukraine every year.

JSC "Bank TuranAlem" is among biggest banks and leader in creation of banking network in CIS. Group’s consolidated assets soared from $16.3 billion at the end of 2006 reaching $24 billion as of July 1, 2007, balance equity capital almost doubled from $1.53 billion to $2.97 billion.

BTA operating in the CIS and far-abroad countries is expanding into the CIS countries. Activities of its strategic bank partners cover Ukraine, 4 regions in Russia, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. BTA runs its representative offices in Russia, Ukraine, China and the United Arab Emirates.

In Kazakhstan, BTA’s network consists of 22 branches and 256 cash settlement units.

"Itogi" magazine recognized Bank TuranAlem as "Bank of the Year in CIS 2006." Meanwhile, Euromoney named BTA "A Leading Bank in Corporate Governance in Emerging Europe 2006" and "Best Bank in Central Asia 2007". BTA also appears in the Banker’s TOP 300 and ranks the third in its Highest Movers.