Tuesday, 24 March 2009

JP Morgan launches in Kazakhstan

Financial News

Jason Corcoran in Moscow
12 March 2009

JP Morgan opened a representative office in Kazakhstan last week just as the government began to appoint financial advisers to restructure its troubled banking sector.

Bill Winters, co-chief executive of investment banking at JP Morgan, travelled to Kazakshstan for the opening last week and had talks with Kazakhstan’s prime minister Karim Masimov and government officials.

The representative office is staffed by “a handful of people”, according to a spokeswoman for JP Morgan, and is headed by Timur Kunanbayev, who had been the London-based head of investment banking coverage for Kazakhstan since 2007. Prior to JP Morgan, he had been managing director of Kazakh bank Alliance.

Kazakhstan’s banking sector has been badly hit by the collapse of the property sector in Almaty and Astana, failing oil prices and the closure of the international credit markets.

The Kazakh government took control over Alliance and BTA Bank, two of the countries largest lenders in February, after they breached liquidity and capital adequacy ratios. The government has said the takeovers are only a temporary measure directed at stabilizing the banking system.

BTA, the largest lender, said on Tuesday it was not in talks to restructure its debt despite market speculation and the appointment of Goldman Sachs as an adviser.

Russian bank Renaissance Capital won a mandate in November to co-manage the Kazakhstan government's distressed asset fund. Other Western banks are believed to be talking to the government about potential mandates.

The spokeswoman for JP Morgan said Winters had met with government officials but declined to comment on any role the bank might play in advising restructuring of the banking sector.

She said: “In terms of clients, we will focus largely on servicing quasi-sovereign institutions, selected banks and high-quality corporates.”

The rep office located in Kazakhstan’s financial capital of Almaty will support the bank’s industry and product teams in London and worldwide. Domestic clients will be offered access to investment banking products, including debt and equity capital markets, mergers and acquisitions, and global markets solutions. The office will also promote JP Morgan’s range of treasury and securities services.

Credit Suisse, Renaissance Capital and Troika Dialog all have operations in Almaty.

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