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The presence of Kazakh banks in Russia will increase in the near future, Tengrinews reports citing the Minister of Economy and Financial Policy of the Eurasian Economic Commission (EEC) Timur Suleimenov.
The presence of Kazakh banks in Russia will increase in the near future, Tengrinews reports citing the Minister of Economy and Financial Policy of the Eurasian Economic Commission (EEC) Timur Suleimenov.
Eurasian Economic Commission is a permanent supranational regulatory body of the Customs Union and Single Economic Space. The Single Economic Space of Russia, Belarus and Kazakhstan is a common market of 170 million people, over 20 million square km and 15% of the world's firm land.
Speaking at the forum Growth of Financing in Kazakhstan, Suleimenov said that both the number of Russian banks in Kazakhstan and the number of Kazakh banks in Russia were going to increase.
"When we talk about the mutual financial market, we expect that a certain number of Russian banks will appear in Kazakhstan and Kazakh banks will increase their presence in Russia. We understand that these connections will intensify,” Suleimenov said.
The Minister stated however that only banks complying with standards of the Kazakh legislation would be able to enter the Kazakh market.
“We [Russia and Kazakhstan] have significantly different minimum capital requirements for banks. In Russia they are 3-5 times lower than in Kazakhstan. Do we need to bring them to a common denominator? Probably, yes. Because what is called a “bank” in Russia, cannot be called a "bank" here [in Kazakhstan]," the speaker stressed.
“Consolidation is going at a slower pace there. (...) Only those banks that are able to compete will come, that is 10-20 banks," Suleimenov said.
According to the speaker, the Kazakh banking sector will undergo changes, which would ensure that each of the remaining banks is competitive.
"Consolidation is underway in the banking sector of Kazakhstan. There are plans to increase the minimum equity requirement in 2019. That is, from the existing 38 banks today, maybe 20 or 15 will remain. And of course, banks with such level of equity will certainly be competitive at any market," he said.
Suleimenov added that the Eurasian Economic Union had to have common rules of the game for the financial sector.
"Access to finance should be clearly regulated and clearly specified. We should not allow undermining the competition at the financial market via state participation in various banks. That is, we cannot allow cheap financing from public resources. If this is the case, then such banks have no place at the common market," he concluded.
Reporting by Azhar Ashirova, writing by Dinara Urazova
