Baku, Azerbaijan, Jan. 14
By Rashid Shirinov – Trend:
S&P Global Ratings has included the banking sector of Kazakhstan to the Group 9 based on its Banking Industry Country Risk Assessment (BICRA), Trend reports citing the Kazakh media.
The BICRA analysis includes financial institutions that attract deposits or issue loans. In the BICRA gradation, banking systems are divided into 10 groups in terms of their risk exposure, with the strongest countries in the Group 1 and the weakest in the Group 10.
Thus, S&P Global Ratings’ economic risk assessment of the banking sector of Kazakhstan is 8, and the industry risk assessment is 9.
The positive factors determining the BICRA of Kazakhstan are Kazakhstan’s strong budget and foreign economic indicators and the expected further significant growth of customer deposits.
The negative factors include extremely high credit risk due to the continuing aggressive lending and underwriting standards, weak banking regulation and supervision, as well as high resource base and loan dollarization.
S&P expects credit losses in the country's banking system to stabilize at 1.5-2 percent in 2018-2020 after reaching a peak of 9 percent in 2017.
"We assess the trend of development of industry risk in the banking sector of Kazakhstan as stable. We expect that consolidation in the country's banking sector will continue as a result of revocation of licenses of weak banks," S&P Global Ratings noted.
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