The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Kazakhstan: Problem loans subside but growth still subdued

Loan write-off legislation delayed; Banks “too cautious”, analysts allege

Bad debt levels finally look to have stabilized in Kazakhstan but analysts are still predicting a lean year ahead for the country’s banks as new lending remains subdued.

Non-performing loans for the sector (excluding restructured banks BTA and Alliance) declined to 23.6% of the total outstanding at the end of June from 25.8% in March, according to central bank statistics, while the ratio of debts more than 90 days in arrears fell 30 basis points to 18.6% and coverage remained high at 99.9%.

Lending growth, however, remained sluggish at 3.2% in the first half and is expected to come in at just 5% to 7% for the full year – well below both the double-digit levels targeted by many banks in January and current estimates of up to 15% nominal growth in the wider economy.

Part of the problem, say analysts, lies with the government’s failure to push through reforms to the tax legislation to make loan write-offs less painful for lenders. At present, writing down bad debts incurs tax liabilities on any provisions made against them – with the result, says Ainur Medeubayeva, equities analyst at Troika Dialog in Almaty, that banks are still extending "hopeless" loans from long before the financial crisis.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree