Kazakhstan's banks reduce the level of toxic loans

29 October, 2018, 12:37 348
Kazakhstan's banks reduce the level of toxic loans

The level of 'bad' loans with late payments up to three months has declined by 37% within the year.

The banks compete in the quality of loan portfolios. By the end of September 2018, the level of loans by Kazakhstan's banks with late payments up to 90 days (NPL+90) has seen a 37 per cent fall and made up 8.52%, which is 1.1 trillion tenges. For comparison, the figure was 12.75% or 1.8 trillion tenges, respectively. The loan portfolio has also decreased by 5% over the year, BNews.kz reports referring to Fineprom.kz.  

It is worthy of note that the loan portfolio and NPL+90 are negatively correlated. So in September 2016 the loan portfolio of the banks increased by 7.9%, but the amount of NPL+90 decreased by 7.5%. And in the same month of the next year, the loan portfolio of the second-tier banks declined by 10.2%, and NPL+90 observed a considerable increase by 45.6%. 

As for the second-tier banks, only four banks have loan portfolios without late payments, which is explained by their business models: Citibank, the trade and industrial bank of China, First Heartland Bank and Islamic Bank 'Al Hilal'.  

Among other second-tier banks with the minimum share of toxic loans in the loan portfolio are the public House Construction Savings Bank of Kazakhstan - 0.2% (a year ago - 0.32%), Altyn Bank - 0.55% (a year ago - 2.1%) and Tengri Bank (3.47% against 1.33% a year ago). The top-5 also includes the Islamic Bank 'Zaman-Bank' (3.47%, despite the bank working on the system of Islamic financing did not have toxic loans in the past year), and Bank Home Credit (3.51%, a year ago - 3.75%).   

Anti-leaders with the biggest NPL+90 figures are the National Bank of Pakistan in Kazakhstan with the highest level in late loans reaching 33.89% of the loan portfolio, as well as Halyk Bank that has taken financial inability of Qazkom resulting in 12.13% in the share of NPL+90 in the loan portfolio (a year ago - 8.9%). The third outsider in the quality of the loan portfolio is Capital Bank - 10.14% against 6.38% a year ago.