S&P Global Ratings, one of the “big three” global ratings agencies, has revised its outlook and upgraded the ratings for five banks in Kazakhstan — Halyk Bank, Kaspi Bank, Bank CenterCredit, ForteBank and Nurbank.
S&P experts pointed out that in recent years Kazakhstan’s banking sector has demonstrated increased resilience to macroeconomic risks, especially against the backdrop of increasing geopolitical instability in the region. Asset quality and the financial performance of banks have significantly exceeded analysts’ expectations. As a result, S&P improved its economic risk assessment and revised the industry risk trend to “Positive.” For example, as of the beginning of 2024, the share of overdue loans (more than 90 days overdue) was only 3% of the total portfolio — significantly lower than in previous years.
Comparing the banking sector with the segment of microfinance institutions (MFIs), it is clear that MFIs are in a more attractive shape. The share of delinquencies in MFIs is growing, which indicates an inherently higher risk profile in their loan portfolios. It’s possible that the adoption by Kazakh parliament of a law on risk minimization in lending — and protecting borrowers’ rights — could remedy the situation.
According to the National Bank of Kazakhstan, the level of loan application approvals remains moderate, indicating a careful approach to issuing loans and control over their repayment by banking structures. Also complicating the retail and corporate lending landscape is the high key rate in Kazakhstan, which was cut to 14.75% in February from 15.25%.
Media source: https://timesca.com/five-kazakhstani-banks-improve-their-positions-in-sp-rating/