06 июня 2013 13:05

Toxic Assets Fund has been slow to buy out toxic assets: Central Bank Governor

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© tengrinews.kz © tengrinews.kz

The Toxic Assets Fund launched a year ago under the country’s National Bank has been slow to buy out toxic assets so far; up to now it has only bought out 4 NPLs from Kazakhstan’s banks, Tengrinews.kz reports, citing Central Bank Governor Gregory Marchenko as saying. “There are some NPLs valued by American Appraisal, an independent valuation company. The banks have formed a 25% provision for these loans. According to American Appraisal, the discount should be 70%. And following the three-month-long negotiations, the banks’ leadership says they are ready to sell the NPLs at their book value. How on earth can they be bought at the book value? Excuse my saying so”, Marchenko said. According to him, banks are suggesting finding some mechanisms to recover NPLs within 3-5 years’ time. “The National Bank is considering such mechanisms; however, they might call for some amendments into applicable legislation. Therefore, the process has been sluggish. It’s obvious who is to blame; banks never admit their faults”, he believes. “Kazakhstan’s banks should sell their NPLs at a reasonable discount (…) they had better not concentrate on such NPLs; let the Toxic Assets Fund deal with them”, Central Bank Governor summed up. Toxic assets fund under the National Bank of Kazakhstan was launched in April 2012. Earlier National Bank Governor Gregory Marchenko announced that “should the toxic assets fund be successful, second tier banks will get rid of toxic assets worth $2 billion”. NPLs with maturities over 90 days comprise around 30 percent of the total loan portfolio of Kazakh banks and stand at 3.5 trillion tenge ($23 billion), Reuters reported late April 2013, citing the local financial market regulator.


The Toxic Assets Fund launched a year ago under the country’s National Bank has been slow to buy out toxic assets so far; up to now it has only bought out 4 NPLs from Kazakhstan’s banks, Tengrinews.kz reports, citing Central Bank Governor Gregory Marchenko as saying. “There are some NPLs valued by American Appraisal, an independent valuation company. The banks have formed a 25% provision for these loans. According to American Appraisal, the discount should be 70%. And following the three-month-long negotiations, the banks’ leadership says they are ready to sell the NPLs at their book value. How on earth can they be bought at the book value? Excuse my saying so”, Marchenko said. According to him, banks are suggesting finding some mechanisms to recover NPLs within 3-5 years’ time. “The National Bank is considering such mechanisms; however, they might call for some amendments into applicable legislation. Therefore, the process has been sluggish. It’s obvious who is to blame; banks never admit their faults”, he believes. “Kazakhstan’s banks should sell their NPLs at a reasonable discount (…) they had better not concentrate on such NPLs; let the Toxic Assets Fund deal with them”, Central Bank Governor summed up. Toxic assets fund under the National Bank of Kazakhstan was launched in April 2012. Earlier National Bank Governor Gregory Marchenko announced that “should the toxic assets fund be successful, second tier banks will get rid of toxic assets worth $2 billion”. NPLs with maturities over 90 days comprise around 30 percent of the total loan portfolio of Kazakh banks and stand at 3.5 trillion tenge ($23 billion), Reuters reported late April 2013, citing the local financial market regulator.
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