Kazakhstan banking sector overview
Central bank: National Bank of Kazakhstan (NBK)
The NBK represents the 'first tier' of the country's banking system. Commercial banks are 'second tier' organizations. The NBK is responsible for financial system stability, monetary policy, the payments system and the implementation of foreign exchange regulations. It also handles the issuing of notes and coins and acts as banker to the government.
Principal banking regulator: Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations (Financial Supervision Authority/FMSA)
The agency has three goals: ensuring financial stability and maintaining confidence in the financial system; ensuring the protection of consumers' rights; and 'leveling the playing field' to ensure genuine competition in the financial market. Banking trade association: Kazakhstan Banking Association (KBA) www.kba.kz Established in 1993, the KBA represents the interests of banks to the government and the central bank. It also runs training programs.
As of September 31, 2010 the Kazakhstan banking system consisted of 38 second tier banks of which 1 bank - JSC Bank of Development is 100% owned by the government. There are 355 branches with 1856 retail outlets throughout the country, while there are 18 bank brunches outside the country. Foreign banks have 29 representative offices.
World crisis hit Kazakh banks heavily dependent on international financing in mid 2007. In the three following years the sector had to deal with challenges coming from the instability in the real sector, freezing of the real estate market, fluctuations of the commodity prices, the tenge devaluation, and rapid deterioration of the loan portfolio.
In 2009 the banking sector assets decreased 21% while provisions soared by 216% sending total sector capital to negative USD 6.6 billion. The situation in the 8 months of 2010 improved with the increase of total assets by...