OREANDA-NEWS. September 1, 2010. “BTA Bank” JSC (the “Bank”) is pleased to announce the successful completion of the Restructuring relating to USD 16.65 billion of the Bank’s financial indebtedness (the “Restructuring”). On August 31, 2010, the Specialised Financial Court of Almaty (the “Court”) issued an order terminating the Restructuring on the basis of submissions confirming the successful completion of all procedures set out in the Restructuring Plan of the Bank (the “Restructuring Plan”).

As part of the Restructuring all of the existing financial indebtedness of the Bank has been cancelled and in consideration thereof the Bank distributed to creditors cash in the amount of USD 945 mln. and new debt securities: Recovery Units for the amount of USD 5.2 bln., senior Notes for the amount of USD 2.3 bln., OID Notes for the amount of USD 429 mln., subordinated Notes for the amount of USD 773 mln. and the Revolving Committed Trade Finance Facility (RCTFF) for the amount of USD 698 mln. Moreover, the Bank issued 44 175 794 956 of common shares. Following the completion of the Restructuring, the Bank’s financial indebtedness decreased from USD 16.65 bln to USD 4.2 bln. and its maximum maturity profile was extended from 8 to 20 years.

Following the conversion of a proportion of the Bank’s financial indebtedness for the amount of USD 4.6 bln. into common shares as part of the Restructuring, local and foreign creditors became shareholders of the Bank holding in aggregate 18.5% of its share capital. The majority shareholder of the Bank is still National Welfare Fund “Samruk-Kazyna” whose shareholding increased to 81.48% of the Bank’s share capital also as a result of the conversion of the debt into common shares. Minority shareholders now own 0.02% in aggregate of the Bank’s shares.

As part of the terms of the Restructuring Plan, the membership of the Bank’s Board of Directors changed due to the appointment of two “Creditor Directors” nominated by the Steering Committee of the creditors to represent creditors on the Board of Directors in their capacity as shareholders of the Bank. As previously reported, pursuant to the resolutions of the extraordinary general meeting of the Bank’s shareholders held on August 19, 2010, the appointment of independent director Mr. Ulf Wokurka was terminated, along with those of Mr. Yerlan Tatishev and Kairat Aitekenov as members of the Board of Directors. The same meeting of shareholders appointed Mr. Christoph Shoefboeck and Mr. Maarten Leo Pronk to the Board of Directors as Creditor Directors and Mr. Bulat Babenov to the Board of Directors as an independent director.

The completion of the Restructuring led ,inter alia, to the level of the Bank’s equity becoming KZT108.8 bln. Regulatory capital is KZT286.1 bln. which allows the Bank to be in compliance with all applicable capital adequacy requirements. As of August 31, 2010 capital adequacy ratios were: K1-1 – 11%, K1-2 – 10.7%, K2-14.6% given required ratios of 5%, 5% and 10%.

According to the Bank’s unaudited and non-consolidated financial statements as at and for the eight months of 2010, prepared in compliance with Kazakh accounting standards, as of August 31, 2010, the Bank’s assets comprised KZT1 952.9 bln. (including loans to customers – KZT665 bln.), equity – KZT108.8 bln. , liabilities – KZT1 844.1 bln and its net income for 8 months of 2010 amounted to KZT1 090.9 bln.

Following the successful completion of the Restructuring, the Bank intends to concentrate on active business development and restore its pre-crisis positions. The medium-term business strategy of the Bank will retain its universal nature and focus on the domestic market, aiming to achieve by 2014 a loan portfolio comprising 50% share of corporate business, 30% of small and medium business and 20% of retail.

The funding strategy of the Bank also focuses on internal markets and looks to an active increase in deposits from both the retail and the SME and corporate sectors. By 2014 the Bank hopes to have doubled its deposit base from 2008 levels.

In the corporate business segment, the Bank is intending to improve the quality of its loan portfolio, diversify risk and increase efficiency and the return on its loan portfolio. Moreover, the Bank intends to continue working on the recovery of its collateral base and misappropriated assets in close cooperation with its legal and financial advisors.

In the small and medium sized business sector, the Bank will continue participating in the DAMU Fund state support programmes.

In the retail business sector, the Bank is intending to increase its loan portfolio by 14% per annum on average. Loans under market programmes will be made only to the officers of the companies cooperating with the Bank under salary projects and those which are accredited and are financially stable.

Mr. Anvar Saidenov, Chairman of the Management Board believes that the successful completion of the Bank’s Restructuring will lead to a long-awaited end to the uncertainties in the Kazakh banking sector and will be positive for both domestic and foreign investors.

“BTA Bank JSC has been building up to this moment for nineteen months. Tremendous work has been done by all Bank’s departments and advisors. Today we are happy to realize that all of the efforts to rescue BTA Bank have been crowned with success. The restructuring of the Bank’s liabilities is over now, but we are not going to stop. We have a complicated but interesting task ahead of us to restore BTA’s positions. I am positive that all our efforts will be successful. I express my gratitude to all our customers, partners, investors, shareholders and all staff members of BTA for their trust and support during these difficult times”.