Target Information

Lesha Bank LLC (Public), commonly referred to as Lesha Bank, has successfully acquired the entire share capital of Bereke Bank JSC, a prominent banking institution in Kazakhstan. The acquisition was formalized through a share sale and purchase agreement signed on 31 March 2024 between Lesha Bank as the purchaser and Baiterek National Management Holding JSC as the seller. The transaction was finalized on 8 October 2024, with an agreed purchase price of 65 billion Kazakh Tenge, equivalent to approximately USD 134,899,552 at completion.

Bereke Bank is a versatile financial institution that provides a range of banking services to both individual and corporate clients across Kazakhstan. With a stable BB financial rating and an extensive branch network comprising 18 locations, Bereke Bank holds a crucial position in the Kazakh banking sector, catering to diverse customer needs through its multifaceted services.

Industry Overview

Kazakhstan's banking industry has seen significant developments in recent years, driven by a growing economy and an increasing demand for financial services. The Central Bank of Kazakhstan has implemented several reforms to enhance the stability and transparency of the financial sector, which has bolstered investor confidence. A robust legal framework and improved regulatory oversight are paving the way for increased foreign investments while fostering competition among local banks.

Moreover, the digital transformation in the banking sector is reshaping how financial institutions operate, with an increasing shift towards online banking and fintech solutions. This evolution offers a unique opportunity for banks to enhance operational efficiencies and improve customer experience. Initiatives aimed at boosting financial literacy among the population are also expected to expand the customer base for banks, thereby driving growth in the industry.

Despite the challenges posed by global economic fluctuations and domestic market conditions, Kazakhstan's banking sector remains resilient. A focus on innovation and customer-centric services is steering banks towards better profitability and sustainability. The overall economic outlook is positive, with expectations of steady growth, which will further solidify the banks' roles in fostering economic development.

Rationale Behind the Deal

The acquisition of Bereke Bank by Lesha Bank is strategical for expanding its footprint in the Central Asian banking landscape and diversifying its investment portfolio. By integrating Bereke Bank's extensive experience and established presence in Kazakhstan, Lesha Bank enhances its operational capabilities and positions itself to capitalize on emerging market opportunities.

This deal aligns with Lesha Bank's long-term vision of fostering cross-border investments and enhancing collaboration between Kazakhstan and Qatar. The acquisition not only strengthens Lesha Bank’s position but also reflects its commitment to supporting regional economic development through banking services and products tailored to local needs.

Investor Information

Lesha Bank LLC (Public) is recognized as the first independent Shari’a-compliant bank endorsed by the Qatar Financial Centre Regulatory Authority (QFCRA). As a publicly listed entity on the Qatar Stock Exchange (QSE: QFBQ), Lesha Bank caters to a diverse clientele while adhering to Islamic banking principles. The bank is committed to providing innovative financial solutions that meet the expectations of its customers while promoting economic growth in the markets it serves.

With a strong leadership team and a strategic vision focused on international expansion, Lesha Bank continues to explore opportunities that not only enhance its service offerings but also foster meaningful partnerships. The acquisition of Bereke Bank serves as a pivotal milestone in the bank's journey towards becoming a leading financial institution in the region.

View of Dealert

The acquisition of Bereke Bank by Lesha Bank represents a significant opportunity for both entities, considering the growing potential of Kazakhstan's banking sector. This strategic move is likely to bolster Lesha Bank's market presence, enabling it to leverage Bereke's established operations and customer base. With Kazakhstan's favorable economic outlook and increasing demand for banking services, the timing of this acquisition appears to be well-calculated.

Moreover, the integration of Bereke Bank's services into Lesha Bank’s portfolio could enhance product offerings and increase competitiveness in the local financial market. By aligning its operations with Bereke Bank, Lesha Bank stands to benefit from shared expertise, leading to improved efficiencies and better financial performance.

However, there are inherent risks associated with international acquisitions, including cultural differences, regulatory compliance, and integration challenges. A thorough focus on these aspects will be paramount to ensure the success of the acquisition. Overall, this deal holds promise for long-term growth, aligning with Lesha Bank's strategic goals and commitment to expanding its footprints in emerging markets.

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