President Nazarbayev on NPLs

At the extended government sitting on Friday 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. As of December 1, 2013 NPLs stood at 31.4% of the overall banks’ portfolio, 19.7% up against the start of 2013. “There’s a task for you to reduce the share of NPLs to 15% by January 1, 2015 and further to 10% by January 1, 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. According to Nazarbayev, “the high share of NPLs is a result of poor work of banks. They had been bleeding loans in the pre-crisis period (…) shareholders had been taking loans for themselves, their close ones and cronies (…) now they have failed to pay off (…) though they have purchased land ploats for the borrowed money”, he said. Nazarbayev believes it important to “take drastic measures (…) the Central Bank and the Government are to submit suggestions on purchasing toxic assets from banks. One of the criteria for banks to be eligible to obtain financial resources out of the National Oil Fund [accumulating windfall oil revenues] is to reduce the share of NPLs”, he said.