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The ratio of the Kazakhstan’s bank assets to the country’s GDP is to be brought up to 80% by 2020, Newskaz.ru reports, citing the Financial Sector Development Concept drafted by the Central Bank.
“Banks’ assets should be 80% of the country’s GDP, with loan portfolio standing at least at 60% of the GDP. The latter figure implies greater involvement of banks in state-run development programs”, according to the Concept.
According to the National Bank, from 2011 to 2013 Kazakhstan-based banks’ assets grew by 28.5% to reach $85 billion, with the assets to the GDP ratio diminishing from 55% to 46%. Banks’ loan portfolio as of January 1, 2014 stood at $73.4 billion, growing by 47.2% from the start of 2011. The ratio of loans to the country’s GDP keeps at 40%, down from the record high 70% back in 2007.
“Though the estimates may seem overly ambitious, they are deemed necessary to restrict expansion of foreign banks in the Kazakhstan’s market and diminish losses incurred by local banks with a free entry of foreign financial institutions into the market”, experts with the National Bank believe, adding that the estimated targets may not be reached given the large-scaled borrowings of major Kazakhstan-based enterprises from external markets.
“As a result of these borrowings, the country’s banking system primarily serves small and middle-sized businesses and households; the potential of these borrowers won’t enable to boost banks’ operations without inflating bubbles”, the Concept reads.
