Kazakh banks face market shake-up
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Kazakh banks face market shake-up

Kazakhstan’s three biggest banks dominate the industry, but there are opportunities for the country’s second-tier institutions. Patrick Gill reports.

By Patrick Gill

THE KAZAKH ECONOMY is continuing to grow strongly, so new opportunities are opening for a wider range of banks than the traditionally strong top three. Although Kazkommertsbank, Halyk Bank and Bank TuranAlem still control about 60% of the market by assets, smaller banks are making headway with loans to small and medium-size enterprises and consumer financing.

Although the top three remain focused on corporate loans, Bank Caspian, CenterCredit, ATF Bank and Eurasian Bank are among those vying for greater market share in retail lending, the fastest-growing area of an increasingly competitive environment. With GDP expected to grow by 9% this year and 8.3% in 2006, the macroeconomic environment looks set to drive further demand for the services that are underpinning the expansion of Kazakh banks. As in Russia, wealthier consumers and nascent small businesses are the main targets of these services.

Bank Caspian, the country’s seventh largest by assets, is an example of a bank that has switched its focus to the lucrative retail segment in response to rising demand from individuals and small businesses. Bank Caspian already claims to issue about 1,500 loans a day, and head of financial institutions Vladimir Shelemba sees plenty of scope to build on this.

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