Despite avoiding the worst effects of the global credit crunch, Kazakh banks will need to undertake reforms in the coming months if they are to regain trust and confidence, concludes Standard & Poor’s credit analyst Ekaterina Trofimova. She says: “The Kazakh banking system has reached a decisive point in its development, with the continuing turbulence highlighting the need for a deep transformation of business practices, strategies and regulation.”
She adds that Kazakh banks’ creditworthiness remains constrained by limited disclosure of ownership, a corporate sector in need of restructuring, high lending and funding concentrations, rapidly built unseasoned loan portfolios, substantial dollarization of operations, tight capitalization and untested risk management.
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