Citic Bank Joins ‘Belt-Road’ Train With Kazakhstan Investment

(Beijing) – China Citic Bank said it is planning to buy 60% of a major peer in the central Asian nation of Kazakhstan, as Chinese lenders heed Beijing’s call to participate in infrastructure development along the ancient Silk Road under the country’s “One Belt, One Road” initiative.

Citic Bank, a unit of the entrepreneurial Citic Group, said its board approved the deal to buy the stake in Altyn Bank, held by Halyk Bank, one of Kazakhstan’s largest lenders. Citic said it would purchase the stake in partnership with China Shuangwei Investment Corp., a wholly-owned unit of China Tobacco Corp., according to a statement issued late Wednesday.

No financial terms were given for the deal, which is still subject to regulatory approval. Citic Bank said it will make the purchase through public transactions on the Kazakhstan Stock Exchange, at a price to be determined on the day that such transactions occur.

Halyk Bank is publicly traded in Kazakhstan, and has a current market value of about $2.1 billion.

The investment could mark the first in a bank based in countries that are part of the former Soviet Union, said one analyst at a major Western brokerage who follows China’s banking sector, speaking on condition of anonymity due to company policy.

“This could mark the start of a new wave of investment in banks in connection with the One Belt, One Road initiative,” he said.

One Belt, One Road has become one of the signature campaigns of Chinese President Xi Jinping, as he tries to raise China’s profile and influence on the global stage. The program centers on infrastructure development along the old land and maritime Silk Roads. It is generally understood to cover most of Asia and Africa, but China has said it welcomes participation from countries as diverse as ones in Europe, Australia and even North America.

Last month China held a major One Belt, One Road conference for two-days in Beijing, where it touted more than 270 cooperation projects and agreements related to the initiative. The country is planning to hold another similar event in 2019.

Contact reporter Yang Ge (geyang@caixin.com)