Agency of Republic of Kazakhstan for Regulation and Development of Financial Market stripped AsiaCredit Bank of license for conducting banking and other transactions on securities market

/KASE, February 12, 2021/ – Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market on February 12, 2021 published on its website the following press release: quote In accordance with the resolution No. 22 of the Board of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (hereinafter – the Agency) dated February 11, 2021, it was decided to strip AsiaCredit Bank (AsiaCredit Bank) JSC (hereinafter – the Bank) of the license for conducting banking and other transactions on the securities market issued to the Bank by the Agency. The grounds for revoking the license, in accordance with sub-items 7), 15) of item 1 of Article 48 of the Act of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan", were: – systematic (three or more times within twelve consecutive calendar months) violation of prudential standards and (or) other mandatory norms and limits; – systematic (three or more times within twelve consecutive calendar months) failure to comply with surveillance response measures; – failure of a major participant of the Bank to comply with the requirements of the authorized body for additional capitalization. The size of the Bank's assets as of the date of revocation of the license amounted to KZT45.4 bn, the loan portfolio – to KZT45.0 bn, including KZT31.6 bn, or 70.0 % of the Bank's loan portfolio is represented by non-performing loans overdue more than 90 days ... The amount of the Bank's liquid assets is KZT75 mln, while the amount of unexecuted customer payments exceeds KZT8.0 bn. Since October 2019, due to the lack of liquid assets to cover the outflow of customer funds, the Bank began to violate the prudential standards established by the regulator. Since this period, the Agency has taken 14 surveillance response measures against the Bank aimed at improving the Bank's position and drew up 73 protocols on administrative violations. In October 2019, the National Bank applied a coercive measure in the form of a requirement to additionally capitalize the Bank, to the shareholder of the Bank, which was not executed. In 2020, due to the continued unsatisfactory financial position, the Agency classified the Bank as a bank with an unstable financial position and demanded that the Bank and its shareholder implement the Action Plan on improvement of the financial position of the Bank. As part of the implementation of this Plan, the Bank's shareholder provided liquidity support in the amount of KZT15.4 bn. For the period from January 2020 to February 2021, due to cash redemption and transfer of assets, the Bank's liabilities were reduced by KZT21.8 bn. From November 2020 to February 2021, on account of the Bank's shareholder, liabilities to socially significant institutions (schools and hospitals) and the Unified Accumulative Pension Fund JSC were fully paid off. The term of the Action Plan to improve the financial condition of the Bank expired on December 25, 2020. The measures taken by the Bank and its shareholder did not lead to stabilization of the Bank's financial position. The Bank continues to violate prudential standards and does not fulfill its obligations on payments and transfers to the Bank's clients. The deficit of equity capital required for the formation of additional provisions of the Bank is KZT19 bn. As of February 1, 2021, the Bank had deposits of 23,174 individuals with a total balance of about KZT19 bn. Deposits of 97.7% of depositors, individuals of the Bank, are covered by the guarantee of Kazakhstan Deposit Insurance Fund in full. By an order No. 51of the Chairman of the Agency dated February 11, 2021, , a temporary administration was appointed, to which the powers of all management bodies of the Bank were transferred. The provisional administration will operate until the appointment of the Bank's liquidation commission. Yerlan Sarsenbekuly, an employee of the Agency, was appointed as the head of the temporary administration. From February 12, 2021, all operations on bank accounts of customers and the Bank itself have been terminated, except for cases provided for by the legislation of the Republic of Kazakhstan. The Agency, in accordance with the procedure established by the legislation, will turn to the court with a request for a compulsory discontinuation of the Bank's activities (liquidation). From the date of initiation by the court of the case on compulsory liquidation of the Bank, creditors' claims against the Bank can be presented only in liquidation proceedings, with the exception of claims related to the current expenses on maintaining the Bank and other cases established by the legislation of the Republic of Kazakhstan. With all questions of interest, you can contact the temporary administration of "AsiaCredit Bank (AsiaCredit Bank)" JSC by phone+7 (727) +7 (727) 330 88 11, 355 05 35. External communications department of ARDFM: +7 (727) 27090 e-mail: PRESS@finreg.kz gov.kz unquote [2021-02-12]