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BTA Bank Updates Investors on Restructuring Process

20.08.2009

BTA Bank JSC (“BTA”), together with KPMG, PriceWaterhouse Coopers and international law
firm Lovells, provided investors and creditors with an update on the progress of the bank’s restructuring process via webcast on 18 August 2009.  Hosted by Mr. Anvar Saidenov, Chairman of the Executive Board, this webcast also addressed the bank’s strategic priorities, KPMG preliminary findings, the bank’s troubled assets portfolio and assets recovery strategy.

As outlined in the briefing, a summary of the key strategic priorities includes:

Funding Liquidity:  BTA’s objective is threefold: 1) Stop deposit outflow from clients; 2) Continue to participate in State funds; 3) Attract new and stable client funds.

Loan Portfolios Restructuring & Asset Recovery:  So called “troubled” or “dubious” assets have been identified and a dedicated team supported by external advisors will tackle these to maximise recovery.

Strategic Plan:  BTA is currently reviewing its strategic position across all business lines and assessing growth and development opportunities.  These opportunities shall (i) ensure long term viability & profitability of the bank using a diversified portfolio and enhanced commission driven revenues and (ii) improve the bank’s overall risk profile.

Clients:  BTA is now implementing measures to regain clients and select best the risks among Retail & Corporate segments.  Successful completion of the restructuring process will help clients regain confidence in BTA which will have synergistic effects such as increased deposit in-flow.

Optimisation of the Bank’s Structure:  BTA is focusing on the domestic Kazakhstan market, and exiting subsidiaries and affiliates that are not viewed as strategically important.  BTA is also downsizing its network by closing some outlets as well as reducing the number of staff in order to reduce its cost base.

Focus on Sustainability Profitability:  BTA’s new strategy will be focused on attaining strong and sustainable profitability instead of asset base expansion. 
 
“I want to reassure all investors that, while BTA faces unprecedented challenges from decisions made by past leadership, the bank is doing everything it can to recover assets,” said Mr. Saidenov.  “With the new management team, strategy committee and a strategic plan for recovery and growth in place, BTA Bank continues to be operational and has already made significant progress in prioritising key assets and advancing on recovery action.”

In the briefing, KPMG also shared the preliminary findings of recent financial performance by the bank, as well as loan loss provisions and investments/financial assets.  It must be noted that these findings are still a work in progress with further investigation to be concluded.  For more details on the numbers shared in the investor/creditor call, please refer to the presentation posted on BTA’s website at www.bta.kz.
Finally, BTA Bank provided an overview of the restructuring process and strategy, which included new credit process reforms, overview of corporate portfolio problems, troubled asset categories, and BTA’s asset recovery strategy.  This information is further outlined in the presentation posted on BTA’s website.

The next steps in the restructuring process include:

Final Due Diligence – 2nd to 4th September 2009 – Release of financial due diligence loan reports results by KPMG and release of Due Diligence review by White & Case.

Asset Recovery – 2nd to 4th September 2009 – PwC/Lovells to report on progress in development and implementation of asset recovery strategy.

Strategic Assessment of the Bank/ Business Plan - 2nd to 4th September 2009 –Management presentation and presentation of BTA Bank’s revised Business Plan results.

Restructuring and Recapitalisation Plan – by 18th September 2009 – Submission to AFN of a restructuring plan, identification of required solvency capital in accordance with conclusions stemming from the financial due diligence and the Business Plan

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BTA Group is a leading banking network in the CIS.

The network of BTA’s partner banks extends to Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. BTA’s representative offices operate in Russia, Ukraine, China, and UAE.
 
The bank has one of the largest branch networks in Kazakhstan (22 branches with 269 service locations) along with an extensive chain of ATMs (864) and self-service terminals (160). BTA serves about 1.2 million retail and 132,000 corporate customers.


For media contacts:

Kalamkas Tuleshova
BTA Bank, Brand Office
International Activity

Tel.: +7 (727) 266-47-99
Fax. +7 (727) 250-12-55
Email: tuleshova@bta.kz