Timur Turlov, head of the Freedom Holding Corp., talks about the specific role of the new bank and its differences from other market players.
Earlier on Tuesday, August 4, Freedom Holding Corp. announced the acquisition of Bank Kassa Nova, which is owned by Forte Bank. Once the deal has closed, Kassa Nova will become a subsidiary of Freedom Finance. The deal is expected to close by the end of the year.
According to Timur Turlov, the bank acquired by the holding will focus on the investment bank business.
Today the head of Freedom Holding Corp. shared his vision of the bank in front of customers and employees.
“We believe that we will be able to build an efficient digital bank with good card products and easy access to investments. We will provide clients with an opportunity to invest in stocks just by using their bank card,” Turlov said.
Also, he revealed a plan to obtain a custodian license for Kassa Nova bank.
“We see that currently, custody services are too expensive for the vast majority of players, and this is a huge barrier for our players at the global market. We will try to rebuild the basic infrastructure of the bank, to reduce operating costs and to accelerate these processes as fast as possible,” the head of Freedom Finance said.
Once the deal closes, Kassa Nova Bank will no longer be engaged in lending as it operated before. According to the terms of the deal, the current owner of the bank, Forte Bank JSC, will acquire the entire loan portfolio of Kassa Nova in the amount of 62 billion tenge (about $148.3 million).
“We do not enter into the lending; this is not our core business, neither here nor in Moscow (Freedom Finance Bank). We do not focus on the lending market and do not plan to lend to either our structures or small and medium-sized businesses in the current format,” stated Sergey Lukyanov, Chairman of the Board of Freedom Finance JSC.
However, this doesn’t mean that the bank will not engage in lending at all. Thus, investment banks may provide products in different segments, including consumer lending and mortgages. At the same time, they do not keep loans on their balance sheets, but turn them into securities and sell them on the stock market.
“Even credit card loans can be traded on the exchange to some big players. For example, a small regional bank can make some loans and sell them to a large bank later. This is also an interesting and good business. Someone issues loans, someone keeps them on its balance sheet and makes money by having access to cheap cash,” explained Turlov.
According to him, there are some banks in Kazakhstan that have accumulated a large amount of free money.
“We want to give our clients, partners and even competitors an opportunity to get a wide range of interesting financial tools they can trust. They will be well structured and will increase earnings for us and shareholders of other large banks as well. This is also one of the key pillars of an investment bank,” Turlov stated.
Earlier, Freedom Holding Corp. announced its net profit for the fiscal year of 2020 as $22 million.