Kazakhstan’s banks significantly reduce past-due debts

Astana, Kazakhstan, Feb. 5

By Daniar Mukhtarov - Trend:

The year 2014 saw the most large-scale cleaning of bank assets in Kazakhstan, as the banks have reduced the past-due debts by 676 billion KZT ($1 - 184.45 KZT), the analytical service Ranking.kz said Feb. 5.

The ranking service's analysts noted that the large-scale reduction in the past-due loans is one of the pillars of Kazakh National Bank's new concept of development of Kazakhstan's financial sector.

In late August 2014, the document was signed by the Kazakh Prime Minister Karim Massimov.

"By Jan. 1, 2016 the banks should bring the share of the past-due loans to a level not exceeding 10 percent of the portfolio. This requirement is introduced as a prudential normative," the experts said.

The analytical service also noted that in December 2014, only three banks of the top 10 largest lenders were meeting this requirement.

Throughout a year (between Dec. 2013 and Dec. 2014), the share of the past-due loans in the portfolio of the second-tier banks fell from 34.5 percent to 27.7 percent.

Some 16 banks reduced the specific gravity of bad loans in their portfolios.

At the same time, 29 banks out of 38 increased loan portfolios over the year.

As a result, the volume of performing loans (without past-due loans) rose by 17 percent up to 10.3 trillion KZT.

Kazakhstan's Alliance Bank is the absolute leader in the recovery of the loan portfolio. Throughout 2014, the new shareholders of the bank reduced the amount of the past-due loans by 3.7 times, from 339.5 billion KZT to 91.5 billion KZT.

The share of the delay in the portfolio decreased in Dec. 2013-2014 from 58 percent to 35.6 percent.

In 2015, the Alliance Bank and Temirbank brands will leave the market.

They have been replaced by ForteBank, a merger of three banks - Alliance Bank, Temirbank and ForteBank).

In total, the combined ForteBank got rid of 295.7 billion KZT worth toxic assets.

The second place is held by the BTA Bank with a reduction of 10.5 percent (218.1 billion KZT) in bad loans over the year.

The volume of the problem loans of the bank fell from 2.1 to 1.9 trillion KZT. At the same time, a major share of bad loans in the market, i.e., 47.5 percent still account for the BTA Bank. This is even more than in 2013 (45.2 percent).

The third place is held by the Kazkommertsbank. The delay was reduced by a quarter, by 206.9 billion KZT to 625.8 billion KZT.

The ATF Bank comes after the three leaders. In 2014, the bank reduced the problem loans by 24.6 percent (by 78.3 billion KZT) to 240.2 billion KZT.

The amount of reduction in toxic assets of other banks does not exceed 50 billion KZT.

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