 Banking
and Finance |
One of the most developed sectors of Kazakhstan
economy is the banking sector. It is considered
to be the most progressive in the Commonwealth
of Independent States (CIS). It is developing
very fast and modifying its structure. The banking
sector is guided according to international standards;
it is very open to foreign participants and it
is quite democratic and liberal.
Kazakhstan has a "2-tier" banking system.
The first tier is government bank. Halyk Bank,
Central Bank, Eximbank, New Government Bank is
part of the second tier - commercial banks. Also
several banks with foreign participation operate
in the market of Kazakhstan, HSBC, ABN Amro, City
bank, etc.
For the last two and a half years the banking
sector has tripled its assets and deposits have
increased by 3,5 times in dollar terms. Household
deposits have increased by 4,5 times. So, there
is much more trust and confidence of the population
in the banking system. The payment system works
also very efficiently; there is much less barter
and cash.
"Standard and Poor's recently has increased
the rating of Kazakhstan. The rating of Turanalembank,
Kazkommertsbank, Halyk bank and Almaty Merchant
bank has increased. Having the ratings of such agencies
is good for Halyk bank. Since we are working with
the foreign financial institutions, it is good in
terms of credit lines," Mr.
Satylganov, Chairman of the board of Halyk bank
said.
Kazakhstan has started introducing Basel Committee
recommendations on capital adequacy, single borrower
exposure, liquidity rations and things like that
in 1995.
There was a major consolidation in the banking sector.
There was two hundred thirty banks in 1993. Now
there are thirty-eight banks operating in the country.
Technically, there are forty-two, but four of them
are being converted into credit unions. "There
is a general consolidation in the market of Kazakhstan.
So you could see a lot of banks, around 400 banks
back in 1998, as for today we have, maybe, 43. That
is the result of many mergers, which they can see
as a result of consolidation. Banks are much better
capitalized. They are much better regulated. There
is more money in the country," Mr.
van den Bosch, General Manager, ABN Amro Kazakhstan
expressed.
According to the very last results the best bank
in Kazakhstan is Kazkommertsbank. Banking system
Kazkommertsbank has become the largest bank of
the country. The share of Kazkommertsbank is something
in between 27% and 32%.
The major banks in Kazakhstan, which do audit
using one of the Big Five companies, account for
over 95% of assets of the banking system. Eight
banks, larger banks, have already ratings from
one of the three international rating agencies.
So the quality of loan portfolio is fairly stable.
Standard loans account for about 75%. And there
have been an explosive growth in loans. In 2000
it was 84%, and last year it was 77%. But it is
a lot of balancing back and catching up. For instance,
bank loans to GDP currently are a bit less than
15%. There was a lot of growth in the last two
to three years, but it has been a lot of catching
up from the level of development, which Kazakhstan
had in the 90s.
Mr. Marchenko, Governor
of the National Bank of Kazakhstan said that
"For instance, if you look at the oil and gas
sector for us it is only 15% of GDP. So it is not
as overwhelming as in some Middle Eastern countries.
As for budgetary revenues, they take about 25 to
30% from the oil and gas sector. It is very substantial
figure, but it is not over 50% or 70% like in some
countries. Traditionally Kazakhstan has been more
a mining country than an oil country. And oil has
basically overtaken metals as the cheap and the
most important part of our exports in the year 2000.
Throughout all the 90s we were exporting in dollar-terms
more metals as a country than oil. Oil has been
growing faster. It has been growing by 20 % in the
last few years, but if you take last three years
- food processing has been growing 30 to 40 % and
the financial sector has been growing 50 % to 70
%. So the financial sector is by far the fastest
growing sector in our economy."
Among the reasons for success, Mr. Marchenko listed
implementions of international standards or if international
standards are not available, the best practices.
For example as for the payment system -the Swiss
example is the best. Kazakhstan uses it. The US
model of the mortgage market is the most successful,
Kazakhstan take the US model. Looking at a variety
of "housing savings" banks, the German
model was chosen. With regards to "postal savings"
the country decided that the Japanese model was
the most appropriate. In respect of "pension
system" the republic looked at Chilean, Swiss
and Singapore examples and basically decided to
go for something in between, more suitable for Kazakhstan.
"the banking business in Kazakhstan is quite
universal and classical, I would say standard even.
Retail services are represented by retail lending,
different types of consumer lending products and
credit cards," Chairman
of BankTuranAlem, Mr. Tattishev said about banking
business in Kazakhstan.
The Kazakh financial system is driving the economy
forward. In comparison to other sectors the financial
system is much better regulated, much better managed
and better equipped to deal with these challenges,
than many other sectors of Kazakhstan.
The process of macroeconomic changes in the country
is irreversible. Major components and basic conditions
of the market economy have been established in
Kazakhstan.
Kazakhstan's economy has been gradually recovering
from the crisis and enhancing the rates of economic
growth. Since the second half of 1999, a positive
trend in GDP growth was observed and, according
to the figures for 1999, it reached 2.7%. Economic
growth continued in 2000, with a GDP growth of 9.6%
and industrial production of 14.6%. It is notable
that for the first time some growth was registered
in the manufacturing industry. Foreign trade turnover
increased by almost 56.7%, with exports increasing
by 71.8% and a positive trade balance of 2.6 bln.
USD was achieved. |
The reliability of the
Kazakhstan Banking system has increased, as evidenced
by the growth of the population deposits by 83%.
Consequently, fixed capital investment increased
by 29.4% and real sector credit by 70%. Also, the
nominal and real average money income of the population
increased by 19.8% and 5.9% correspondingly.
Main
parameters of macro-economic forecast for 6 month
2002 showed stable speed of economical development
of Kazakhstan. In 2001 the GDP totaled 13.5 per
cent. It was the highest in the CIS countries.
During 6 month of 2002 industrial production growth
volume came to 5,9 %. Increase of investments
in fixed capital came to 8,9%. Inflation rate
- 1.9 per cent (higher 0.5 percent that was planned).
Oil export (including gas and condensate) increased
by 8.2 percent. During 9 month of 2002 rate of
industrial growth came to 8-8.2 percent. 2001
Investment increase in fixed capital made 19-20
percent in compare with the same period of last
year. Inflation increase during 9 month of 2002
made 0.8-1.2 percent.
Major components and basic conditions of the market
economy have been established in Kazakhstan. "As
far as the structural reforms of the economy is
concerned, Kazakhstan is also considered to be a
developed country, and the United States as well
as the European Union have established a special
status for Kazakhstan, a country with a market economy.
It means that all the major financial institutions
in the world are giving very high records for the
banking system as well as for the financial credibility
of Kazakhstan," State
Secretary - Minister of foreign affaires. Mr.Tokayev
said in interview.
In recent years, Kazakhstan has become more integrated
into the world economy and Foreign investment
has increased, especially in the oil and natural-gas
sectors. In 1994 Uzbekistan and Kazakhstan established
a free-trade zone between the two countries, and
Kyrgyzstan soon joined the agreement. In the same
year, Kazakhstan signed a partnership agreement
for developed economic contacts with the European
Union (EU). In 1996, seeking closer economic integration
with Belarus, Kyrgyzstan and Russia, the country
approved an agreement on a common market and customs
union.
The government of Kazakhstan conducts active work
on entering the WTO. The process began in 1996.
Entering WTO is part of the strategic course of
the external economical policy of Kazakhstan, which
aims at an effective integration into the world's
economy and trade. "Kazakhstan is planning
to become a member of WTO. We are taking all the
necessary measures for the liberalization of our
economy," Minister
of economy and trade, Mr. Yessenbayev said
in interview about entering WTO.
"Kazakhstan has raised a question about WTO
and want China to help the country enter WTO. But,
so far, we have not gone into that issue. That question
was raised during the visit of Mr. Tokayev, State
Secretary and Minister of foreign affairs of Kazakhstan,
to China (...) As a neighbouring country, China
wishes to see Kazakhstan in the family of WTO,"
H.E.
Yao Peisheng, Ambassador Extraordinary and Plenipotentiary
of the People's Republic of China, said. Accession
to WTO is a priority of the Kazakhstan government,
reflecting its desire to participate in global trade
on equal terms.
The European Union encourages Kazakhstan accession
to WTO and continues to take measures to encourage
EU trade and investments in Kazakhstan, in particular
by supporting economic and legislative reforms
through technical assistance. Kazakhstan is moving
slowly from relying on trade with the former Soviet
Union countries towards boosting its trade with
other countries, including the member states of
the EU. The EU as a whole is the second trade
partner of Kazakhstan after the CIS and plays
great importance to the development of its trade
terms in a context of free market economy.
The
national insurance market has been going subjected
to rapid reforms since 1999, when Kazakh insurance
laws were thoroughly revised. The State Program
of Insurance Development in the Republic of Kazakhstan
in 2000-2002 was approved, which sets out the
main goals for the country's insurance market.
By January 1st, 2002 38 licensed insurers in Kazakhstan
were reported, including those with government
and foreign interests. An extensive network comprising
about 280 branches and representative offices
is in place covering the whole country. Nowadays
Kazakhstan's insurance market is fully adapted
for broader involvements in international insurance
and reinsurance arrangements, and for becoming
one of the most rapidly evolving elements in the
Kazakh financial sector.
Wise
policy, flexible legislation, professional management,
integration into the world economy help financial
and banking sectors to be the most successful
fields and to serve as one of the locomotive elements
of Kazakh economy.
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