Kazakhstan PM pledges to solve the issue of NPLs within two years

The issue of NPLs of the Kazakhstan’s banking system will be tackled within the nearest 2 years, the country’s PM Serik Akhmetov pledged when speaking at the extended sitting of the Ministry for Economic Affairs February 28. “The second tier banks should be responsible (…) if the executives of some bank fail to perform effective lending operations and perform major tasks, why do we need the bank? Or should we let it go bankrupt if the bank has excessive NPLs? Head of State had earlier said that such banks might not be needed (…) there are 38 banks operating in Kazakhstan (…) Maybe the economy only needs 10 banks”, the PM said. He emphasized tackling the NPLs issue is a key measure to restore the country’s banking system. “It is a pressing issue. We are looking for ways to solve it. I hope it will be resolved within two years’ time. If need be, let’s solve the problems at the legislation level”, he said. At the extended government sitting mid-February Kazakhstan’s President Nursultan Nazarbayev commissioned banks’ heads to reduce the share of NPLs “in any possible ways” to 15% of their portfolio by 2015 and further to 10% by 2016. “Let banks take any conceivable measures to reach the goal, let them write them off (…) it’s their fault that they have amassed such NPLs”, Head of State said. As of December 1, 2013 NPLs stood at 31.4% of the overall banks’ portfolio, 19.7% up against the start of 2013.