Baku, Azerbaijan, June 28
Trend:
Total assets of the banking sector of Kazakhstan for the five months of this year have decreased by 2.7 percent and amounted to 23.5 trillion tenge, the analytical center of the Association of financiers of Kazakhstan (AFK) stated June 27.
The Association noted that, in May, the assets of the second-tier banks of the country decreased by 356.3 billion tenge against the growth of 94.9 billion tenge in April.
The analysts say the decrease in assets in May occurred against the background of reduction of liabilities (-379.1 billion tenge) and funding base of Kazkommertsbank, which has a decrease in deposits of legal entities (-99.9 billion tenge) and repayment of Eurobonds (-100 billion tenge).
"At the same time, the total decrease in assets since the beginning of the year amounted to 650.7 billion tenge (down to 23.5 trillion tenge), which occurs against the background of an equivalent decrease in liabilities (-687.9 billion tenge) and less significant negative revaluation of the loan portfolio (-192.9 billion tenge)," the AFK analytical center said.
In January-May 2018, the volume of loans issued in the country amounted to 4.7 trillion tenge, which is 24 percent higher than in the corresponding period last year.
The next reduction of the base rate by the Central Bank at the June meeting (June 4) to nine percent may have only a limited positive effect on the further intensification of lending. At the same time, the further decline in the yield of money market instruments (TONIA – eight percent, USDKZT SWAP – 7.9 percent) and notes of the National Bank of Kazakhstan (8.1 percent) makes them less attractive, gradually increasing the motives for redirecting free liquidity to lending," the message says.
"The bill "on currency regulation and currency control" adopted by the Senate of the Parliament and the package of amendments to the Civil Code of Kazakhstan accompanying it suggest the expansion of the second-tier banks' deposit line on tenge instruments by allocating a separate tool - savings deposits, which will be a source of sustainable funding in the structure of banks’ liabilities, thereby increasing the lending potential," the message reads.
The AFK also noted that, the share of all loans with late payments in the system for January-May 2018 increased from 14.6 percent to 15.5 percent (+0.2 percent in May). At the same time, problem loans with a delay of more than 90 days decreased from 9.3 percent to 9.1 percent (+0.1 percent in May). The total provisions of the sector since the beginning of the year decreased by 178.5 billion tenge (-8.4 percent), to 1.9 trillion tenge (the main influence of Kazkommertsbank-267.8 billion tenge). Excluding Kazkommertsbank, the growth of provisions since the beginning of the year is 7.1 percent, or 89.3 billion tenge.
The total decrease in liabilities of the banking sector since the beginning of the year amounted to 687.9 billion tenge (-3.3 percent), down to 20.4 trillion tenge.
"More than half of this decrease (52 percent) is due to a decrease in corporate deposits," the message says.
The analytical center also noted that, since the beginning of 2018, the equity capital of the banking sector of the country shows a striking positive trend – plus 37.2 billion tenge (+1.2 percent), up to 3.1 trillion tenge.
"The growth of capital is also offset by the need to form additional provisions in view of the entry into force of IFRS 9," - said the analytical center of the AFK.
The total decrease in the deposit portfolio in January-May amounted to 358.4 billion tenge (-2.1 percent), down to 16.3 trillion tenge. Due to the reduction of deposits of legal entities (-360.5 billion tenge), there is a gradual rebalancing of the main source of funding for deposits of individuals (+2.1 billion tenge), the share of which increased to 50.4 percent of the total portfolio.
As of June 1, 2018, the banking sector of Kazakhstan is represented by 32 banks.
The official exchange rate on June 27 was 338.84 KTZ / USD.