Although the debt restructurings at three of the leading Kazakh banks have now been completed, there are few signs of a meaningful revival in risk appetite among many of the country’s lenders.
According to the latest statistics, although net lending rose by 0.3% in August, it has shrunk by 5.4% over the year, despite the fact that the Kazakh economy expanded by 7.9% over the same period and the full-year forecast is for GDP growth of at least 5%.
Although there are signs that asset quality is stabilizing, with provisions for non-performing loans falling to 33.2%, overall NPLs remain a drag on lending sentiment in the sector.
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"We believe that the recently completed BTA debt restructuring and state support programmes will support loan portfolio expansion in the autumn" Milena Ivanova-Venturini, Renaissance Capital |
Commenting on the latest statistics, Milena Ivanova-Venturini, banking analyst at Renaissance Capital in Almaty, says: "The results are disappointing as we still cannot see any strong signs of recovery in lending in Kazakhstan. However, the stabilization in provisions promises positive news on asset quality, which might support a rebound in the sector.