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Kazakhstan: Banks still feeling the pinch

Banks in Kazakhstan continue to be the subject of concern in the wake of the global credit crunch, with Standard & Poor’s the latest organization to turn its spotlight on the sector. In mid-December, the ratings agency revised from stable to negative the outlook on its ratings on eight banks – including the leading quartet of Kazkommertsbank, Bank TuranAlem, Halyk Savings Bank of Kazakhstan and Alliance Bank.

While acknowledging that so far Kazakh banks have coped well with any funding squeeze, S&P expressed its worries over the longer-term impact of reduced access to capital. "The rating actions reflect Standard & Poor’s concerns over the increasing pressure on asset quality and liquidity that Kazakh banks are subject to as the current market turmoil stretches on, despite their having overcome the immediate impact of the global liquidity squeeze through adequate asset-liability management."

Last month rival ratings agency Moody’s Investors Service cut its outlook for six Kazakh banks to negative, citing the sector’s high dependence on foreign funding.

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