ALMATY, Aug 27 (Reuters) - BTA, Kazakhstan's third-largest bank by assets, swung to a profit in the first half of 2013 after a debt restructuring last December and expects to boost its finances with funds seized from its fugitive former head, it said on Tuesday.
BTA said it made a net profit of 15.579 billion tenge ($112 million) in the January-to-June period, compared to a net loss of around 658 billion tenge a year earlier when it wrote down a mass of problem loans.
Around four fifths of BTA's loan portfolio is classified as non-performing.
Kazakhstan's sovereign wealth fund Samruk-Kazyna bailed out the bank in 2009 during the financial crisis and is estimated to have spent around $8 billion to stabilise its financial position. Samruk-Kazyna now owns 97 percent of BTA.
BTA Chairman Kadyrzhan Damitov said the bank planned to put its finances on a surer footing by securing assets owned by its former head Mukhtar Ablyazov, accused of embezzling up to $6 billion of BTA's money.
The 50-year-old fugitive oligarch, an outspoken critic of Kazakh President Nursultan Nazarbayev, is in a French jail as he awaits a decision on whether he will be extradited.
Russia, Ukraine and Kazakhstan brought fraud cases against Ablyazov after BTA, which he once controlled, was seized by Kazakh authorities and declared insolvent. Ukraine and Russia have both demanded his extradition.
The case has drawn widespread public attention in Kazakhstan, where Nazarbayev tolerates no dissent.
Ablyazov says allegations against him are designed to rob him and eliminate him as an opponent to Nazarbayev, who has ruled the oil-rich Central Asian nation for more than 20 years.
He was arrested in southern France on July 18, months after fleeing Britain, which granted him political asylum but later handed him a jail sentence for contempt of court.
"This work (to return BTA's funds) is under way, and this is one of the main aspects of the bank's activities," Damitov said.
"We see a certain turning point in this work, and the efforts the bank has been making in the last three to four years ... are beginning to materialise now."
Damitov said that, to date, BTA had won permission from a British court to liquidate assets belonging to Ablyazov worth around $3.9 billion.
He said the process of recovering the assets from Ablyazov would begin this year, although it was unlikely the bank would be able to recover the entire amount.
A net interest margin of 17 billion tenge was one of the main reasons for BTA's better performance in the first half, Damitov told a news briefing.
BTA reduced its loan portfolio by 1 percent in the six-month period to 636 billion tenge. ($1 = 152.47 tenge) (Reporting by Mariya Gordeyeva; writing by Dmitry Solovyov; editing by Tom Pfeiffer)