Fitch Ratings Publishes Kazakh Banks Datawatch 3Q21
22.11.2021
Источник:
Banker.kz
Fitch Ratings-Moscow-19 November 2021: Fitch Ratings has published its Kazakh Banks Datawatch for 3Q21, covering 22 banks that represent 99% of the country’s banking assets. The report assesses key data from the banks’ regulatory financial statements and disclosures, sourced primarily from the National Bank of Kazakhstan (NBK) and Kazakhstan Stock Exchange.
Over 3Q21, sector-average credit metrics have remained broadly stable. In 3Q21, Kazakh banking sector loan impairment charges (LICs), adjusted for one-off items, were a moderate 1.2% (annualised) of gross loans. Fitch believes credit costs from the economic downturn of 2020 have mostly been fully recognised by the banks, and expects LICs to remain in the 1%-2% range in the near term. This is well below the banks’ pre-impairment profit (10% of gross loans), allowing the banks to record robust profits. The sector’s average return on equity (ROE) was a high 34% (annualised) in 3Q21. We expect performance to remain strong in the near term.
A few banks in the sector are still burdened with significant legacy net problem assets, but most Kazakh banks have clean balance sheets, with robust asset structures, strong pre-impairment profitability and large buffers. Legacy problem assets have been trending down in recent years (both in absolute terms and also relative to sector equity). Asset-quality risks in the medium term may stem from rapid growth in unsecured retail lending.
In 3Q21 and 2Q21, retail loans expanded by a high 12% qoq and 11% qoq, respectively, with an emphasis on consumer loans. Over the last
few years retail loan growth has run ahead of nominal household income growth, increasing the debt burden of retail borrowers and giving rise to market overheating risks in the medium term.
Over 3Q21, sector-average credit metrics have remained broadly stable. In 3Q21, Kazakh banking sector loan impairment charges (LICs), adjusted for one-off items, were a moderate 1.2% (annualised) of gross loans. Fitch believes credit costs from the economic downturn of 2020 have mostly been fully recognised by the banks, and expects LICs to remain in the 1%-2% range in the near term. This is well below the banks’ pre-impairment profit (10% of gross loans), allowing the banks to record robust profits. The sector’s average return on equity (ROE) was a high 34% (annualised) in 3Q21. We expect performance to remain strong in the near term.
A few banks in the sector are still burdened with significant legacy net problem assets, but most Kazakh banks have clean balance sheets, with robust asset structures, strong pre-impairment profitability and large buffers. Legacy problem assets have been trending down in recent years (both in absolute terms and also relative to sector equity). Asset-quality risks in the medium term may stem from rapid growth in unsecured retail lending.
In 3Q21 and 2Q21, retail loans expanded by a high 12% qoq and 11% qoq, respectively, with an emphasis on consumer loans. Over the last
few years retail loan growth has run ahead of nominal household income growth, increasing the debt burden of retail borrowers and giving rise to market overheating risks in the medium term.