Transcript Document
Kazakh banking system: Learning the grammar of global crisis 1 Past Simple Tense Loans and deposits/GDP, 2007 Banking penetration (% and USDm) (%) Loans and deposits/GDP, 2007 2001 Loans Deposits 4,208 4,008 2002 5,949 5,934 2003 8,725 8,106 2004 14,543 9,861 Comments 2005 24,875 13,967 2006 47,213 26,492 Source: NBK, EIU Source: EIU, local central banks, FMSA Note: Represents loans and deposits to individuals and non-financial corporations Deposit s include SPV’s deposits • One of the most developed in a peer group of emerging European countries • Assets/GDP ratio tripling in a span of five years only • The most penetrated banking sector with a 71% loan/GDP ratio • Comparably low 42% deposit*/GDP ratio means there is a still lots of cash “stashed away under mattresses” • Aggressive targets for deposit gathering • Credit ratings upgrade • Public offerings and listing at LSE 2007 73,351 32,652 Present (Not) Simple Tense Deposit, loan portfolios / GDP over last year Banking assets / GDP over last year (%) Comments Profitability over last year January 2008 RoAA RoAE February 2008 2.47 21.62 Source: National Bank 2.52 22.13 March 2008 2.21 19.6 April May 2008 2008 2.23 18.96 2.08 17.81 June 2008 July 2008 1.83 1.64 15.77 13.74 • August 2007/July 2008 – decrease of banking assets / GDP, loans / GDP, deposits / GDP ratios with trend to flatten on the back of GDP decrease and slight assets increase • Profitability indicators decreased all over the sector • Huge amount of foreign debt to be paid and limited access to international capital markets caused by liquidity squeeze • 3% decrease in external liabilities for the period January – July 2008 • Downgrades of sovereign and individual credit ratings Present Continuous Tense Actions by authorities: Actions by banks: ■ FMSA has strongly recommended banks to limit their foreign borrowings ■ Conservative approach to asset&liability management ■ NBK has offered short-term stand-by credit lines vs. banks’ reserve requirements ■ ■ Government has pledged $ 1 bn in December and further $ 3 bn in 2008 to help finance the following sectors: Limited access to global capital markets in order to diminish the dependence from foreign markets ■ Liquidity management - Liquid assets to remain at 20-25% of the total assets ■ Switch from asset growth stage to quality development: • SMEs; • Mortgages (by capitalizing Kazakh State Mortgage Company to refinance bank’s mortgage portfolios) • Better understanding of concern as assets quality worsening • Infrastructure and import substitution (by refinancing through Kazyna Fund or DBK) • Risk-management adjusted to current market conditions • Construction (by refinancing through Kazyna Fund or DBK) • Slowdown in real estate/construction lending or cautious mortgage, real estate/construction lending ■ Distressed Assets Funds – private and state ■ Working Group under Ministry of Finance in Kazakhstan assigned for collaboration with IFI’s ■ Proactive work with rating agencies on understanding the current performance of the banks Future Continuous Tense Lessons of crisis Positive factors: As expected for YE 2008: • Liquidity management Government and shareholders support GDP about USD 132 bn • Asset quality and risk management in high priority • Emphasis on local funding sources + • Development of local interbank operations Still high oil&gas prices Banking assets/GDP ratio about 80% Assets restructuring Loans/GDP ratio about 57% Local currency stabilisation to maintain confidence of population Deposits/GDP Ratio about 45% RoAA about 1% RoAE about 7% • Maintain level of capitalisation For long – term period: Strong quality and diversified asset performance for whole banking sector Well developed local funding sources Stable moderate profitability growth Stable levels of credit ratings Strong confidence from the Government, shareholders, investors and population Thank you for attention!