“Bad” loans has become less as the loans is generally

In November 2019, the total loan portfolio of STB of Kazakhstan has decreased by 199,6 billion tenge. At the beginning of December, the total volume of Bank loans amounted to 14 trillion 092,3 billion – at least for the last 3 months, but significantly more than in January-August.

The decline in lending has occurred in 14 of 27 Kazakh banks

Hardest on the overall index was affected by Jusan bank. If on November 1, 2019 loan portfolio of the STB according to the national Bank amounted to 884,3 billion tenge a month later – 583 billion Thus, in November the volume of lending fell by 300,9 billion tenge.

For comparison: on 1 January 2019, the loan portfolio of commercial banks (then “Tsesnabank”) exceeded 1.4 trillion tenge, and at the peak it was higher 1.8 trillion. And it was quite recently – in early September 2018.

To partially compensate for the outflow as a whole for the banking system of the country managed by two banks. Gross loans of Kaspi bank for the month increased by 53.9 billion tenge (up to 1.36 billion), which was stimulated by the action Kaspi GMA. By the way,

the scale of this action some members even saw a threat to the national economy

A bit less 51.8 billion – grew portfolio of the Bank. Thus, its loan portfolio has exceeded 1 trillion tenge. Now these banks in five of Kazakhstan (Halyk Bank, Sberbank, Kaspi bank “Bank CenterCredit” and ZHILSTROYSBERBANK).

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Multi-year lows

Almost half of the reduced loan portfolio Jysan bank loans were overdue. Such a conclusion can be drawn, traced the dynamics of indicators of the Bank. If on 1 November, the volume of loans with overdue payments amounted to 345.5 billion tenge, a month later 207,7 billion Difference – kzt137. 8 billion, or 45.8% of the volume decline. Interestingly, even this did not help significantly improve the performance of second-tier banks: the share of overdue loans from 39.07% to 35.6%. More only “Zaman-Bank” (42,55%) and Capital Bank (82,78%).

Overall, however, the Nov for the banking system has been favorable. Reduction of delay in Jusan bank and ATFBank (-42,6 billion tenge) has led to the fact that their total volume for all STB fell to 1.67 trillion. This is a long-term minimum.

The national Bank publishes data on the volume of overdue payments in 2013, and not once in that time figure was so low. Regarding the share of overdue loans at the end of November it was reduced from 13.06% to 11.85%. Such low indicators have also not been at least 7 years.

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20 banks have reduced the volume of toxic loans

Reduced the volume of loans overdue by 90 days (NPL). During the month the ratio fell from 1.3 to 1.15 trillion tenge, share – from 9.11% to 8.18%. And again the main role was played by Jusan bank, the NPL, which fell at 136.7 billion tenge (that is, almost all “fallen” overdue loans were toxic) to 201 billion, But their share in the Bank’s portfolio remained high – the accounting period by 34.45%.

In General, the NPL has declined in 20 of 27 second-tier banks of the Republic. The strongest growth was in Capital Bank, in November the volume of NPL increased from 6.6 to 31 billion tenge (that 51.4% of the Bank’s loan portfolio).

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The fall in the share of NPL is good news, but the national Bank, it seems, do not believe that this indicator should focus on. Commenting on the results of the assessment of Bank assets (AQR), Deputy Chairman of the regulator (and now first Deputy Chairman of Agency on regulation and development of financial markets) Oleg Smolyakov said:

— Pon the analysis of world practice ms see that the criterion of “non-performing loans over 90 days” is used less and less, because this figure is formal and does not take into account certain aspects relating to problem loans. It is more used for international comparisons of statistics.

AQR is considerably broader, since it is based on international accounting standards, especially standard 9. It focuses on expected losses, which can arise in cases of deterioration in the financial condition of borrowers. The number of criteria is not clearly regulated, it can be various options of profitability, capitalization, etc.

The standard requires an evaluation of the improving condition of the borrower, regardless of the timing delay. So AQR is not done based on the volume of non-performing loans. We proceeded from the fact, what is the amount of potential adjustments and how it is comparable with the existing stock of capital.

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