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20 Aprile 2021

Kazakistan

KAZAKHSTAN-BANKS-RATINGS-UPDATE Fitch revised Kazakhstan banking sector outlook to stable

Fitch Ratings revised Kazakh banking sector outlook to stable from negative in April 2021, due to moderate loan impairment charges (LICs) and  banks’ healthy profitability and large capital/liquidity buffers, the ratings agency said in its presentation on Tuesday. The country’s slower GDP growth and the economic implications of the pandemic resulted in an only moderate rise in LICs in 2020.  Due to only moderate loan growth and healthy profit retention in recent years, most banks accumulated large capital buffers  and Fitch expects capital ratios to remain elevated. Fitch estimates the sector average Stage 3 ratio at 15% at end-2020. Some banks still have high shares of legacy Stage 3 loans, but, with a few exceptions, net impaired loans are only moderate relative to banks’ pre-impairment profits and capital buffers Most credit risks reside in the banks’ concentrated and dollarised corporate loan portfolios; longer-term project finance exposures are particularly riskyHowever, corporate lending comprises only 24% of sector assets, while other assets are of lower credit risk, according to Fitch. Fitch expects corporate and retail loans to grow by 5% and 20%, respectively, in 2021. There is a lack of good-quality corporate borrowers in Kazakhstan. Banks continue to channel their growth to retail because of higher margins. Retail loan growth in Kazakhstan has been ahead of  nominal household income growth in recent years, but credit penetration remains low (retail loans/GDP of about 9%) and expect corporate and retail loans to grow by 5% and 20%,respectively, in 2021 . There is a lack of good-quality corporate borrowers in Kazakhstan.  Banks continue to channel their growth to retail because of higher margins. Retail loan growth in Kazakhstan has been ahead of  nominal household income growth in recent years, but  credit penetration remains low (retail loans/GDP of about 9%),  according to Fitch. Fitch believes that ATF Bank’s resolution in December 2020 was an important step towards the decisive clean-up of the Kazakh banking sector’s legacy problem assets. Fitch believes that there remain only a couple of banks in the sector which may be the target of regulatory clean-ups in the next few years. Since 2016, seven smaller banks with high amounts of unreserved problem loans and/or liquidity issues have been liquidated, while larger banks received state support (mostly in the form of Tier 2 debt and asset transfers) . In assessing whether or not to support or liquidate a particular bank, the authorities seemingly consider the following:– Systemic importance (market share) and relatedcontagion risks,– Size of potential asset-quality problem,– A bank’s liability structure. Fitch believes that the sector core is now healthy.  Some unrecognised problems may sit in smaller/weaker banks, but their share in sector assets is small, thereby limiting contagion risks . Most debt securities are held by state institutions; external foreign funding is very limited . Fitch estimates the overall share of state-related funding at a high 20%-25% of sector liabilities. Solid liquidity position is a rating strength for most Kazakh banks.  Deposit dollarisation remains high (40% at end-2020), but foreign-currency liquidity is comfortable for most banks. Currently the banking sector of Kazakhstan is represented by 25 banks. (ICE ALMATY)


Fonte notizia: interfax