Kazakh wealth fund to cut deposits in foreign banks

ALMATY Jan 30 (Reuters) - Kazakhstan's sovereign wealth fund will cut the share of its deposits held in foreign banks to 10 percent in two years, from 24 percent now, and will invest the cash at home, a deputy head of the fund said on Wednesday.

State-run Samruk-Kazyna is Kazakhstan's largest holding with investments totalling over $80 billion in local companies ranging from natural resources firms and airlines to railway companies and banks.

Yelena Bakhmutova said the cut in the fund's deposits held in foreign banks or their subsidiaries was part of a general strategy of diversifying assets.

Companies receiving investments should start spending them on their development, she added.

"We believe that with time the volume of reserves ... deposited in banks will fall," Bakhmutova told journalists, referring to the banking system in general. "Money will be mobilised to implement investment projects."

The total volume of reserves the fund holds in Kazakh banks, foreign banks, the central bank and banks with foreign-owned shares amounted to 2.885 trillion tenge ($19.1 billion) as of Jan. 1, 2013, official data show.

A total of 378 billion tenge of this amount is held in foreign banks and a further 302 billion in banks with foreign-owned stakes.

Companies in which Samruk-Kazyna owns stakes boosted their combined net profit to 686.7 billion tenge last year from 629.9 billion in 2011.

$1 = 150.82 tenge (Reporting by Mariya Gordeyeva; Writing by Dmitry Solovyov; Editing by Mark Potter)