Lending rates may reduce in Kazakhstan

Almaty. November 26. Kazakhstan Today - In September 2012, the total volume of bank lending for the economy increased by 1.5% to 9,531.0 billion tenge.

According to Caspionet, in September 2012, the volume of loans in national currency increased by 2.8% to 6,583.2 billion (year to date growth of 15.9%) in foreign currency - fell by 1.4% (year to date decline of 5.8%), reaching 2,947.9 billion tenge. The specific weight of tenge loans increased to 69.1% in September 2012 compared to 68.2% in August 2012.

Since the beginning of the year the volume of lending has grown by more than 8% in Kazakhstan. Long-term loans exceeded 1,791 billion tenge. As a result, the share of long-term loans increased to 81%. Over a month, loans issued to legal entities increased by 1.3% to 6,836 billion tenge, and those issued to individuals increased by 2% to 2,695.5 billion tenge. In September, the weighted average interest rate on loans in national currency was 11%.

"The banks are reducing rates. You said that they used to be 40% whereas now I see consumer loans at 21% in the market. And in general, loan interest rates are falling," said Umut Shayakhmetova, Chairman of Board of Halyk Bank.

A sharp decline in lending rates which was observed 1.5 - 2 years ago should not be expected, bankers say. Currently, banks have a shortage of "long money" due the European debt crisis. It was previously reported that Moody's international credit rating agency estimated Kazakh banks' liquidity as satisfactory, since the share of liquid assets exceeds 25%. Moreover, foreign analysts predicted maintaining of acceptable liquidity position due to persistent deposit growth while lending growth not to be significant.

"Today's funding base is formed by domestic assets. These are 9% deposits of private individuals and 6% of legal entities. However, this is short-term money and we said that it has a limit of one year. At the end of last year, short-term liquidity was at 70%, today it has grown to 80%. Liquidity is shortening," Umut Shayakhmetova added.

In the sectoral breakdown, the most significant amount of bank loans to the economy fall at trade, construction, manufacturing industry, transport and agriculture. Moreover, the agricultural sector is showing a steady increase in borrowing. According to market participants, the loan portfolio related to agricultural units has doubled in six years. The portfolio of banks rose 58% while the portfolio of the KazAgro national holding showed almost a five-fold increase. Consumer finance market has been demonstrating excellent performance for the third year in a row. After overcoming a minimum peak, the consumer loan portfolio of Kazakhstan's banking system has grown by at least 20% by now. People often take unsecured loans to purchase computer equipment. Approximately 20% of loans are used for the purchase of smartphones.

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