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| Zhamishev, former governor of Kazakhstan's central bank, continues to develop banking supervision |
Bolat Zhamishev was formerly the governor of Kazakhstan's central bank. Now his task is to continue developing banking supervision as chairman of the agency for financial supervision. With bank asset growth doubling every two years and some banks doubling their assets last year, are you worried that growth is too fast?
I agree that some banks' asset growth is rapid but we have to bear in mind that the starting point was quite low. Two years ago, the percentage share of assets in GDP was only 20%. So the rapid asset growth is not something that we have concerns about.
However, it has affected the quality of loan portfolios and assets. As of January 1 2003, 71% of the loan portfolio was classified standard, whereas this year this indicator has gone 10% down (61%).
Does that worry you?
It is a problem that needs to be addressed. But because the tax code sets tax rates in accordance with the asset classification that we use for supervision, banks have a tendency to classify their loans based on tax rather than risk management considerations.