УДК 336.71
CURRENT STATE OF ACTIVITY OF THE SECOND LEVEL BANKS OF THE REPUBLIC OF KAZAKHSTAN IN CONDITIONS OF FINANCIAL GLOBALIZATION
Kodasheva Gaukhar Smagilovna
2 year of doctoral course «Finance» ENU, Master of Economics
Niyazbekova Shakizada Uteulievna
PhD PFUR, PFUR, Master of Economic Sciences
Slyamova Balnur Isataevna
lecturer in «Finance» ENU, Master of Science in Finance with merit
This article reveals the current state of the second level banks of Kazakhstan in the financial globalization conditions. The analysis of activity for the last five years is provided. In addition the structure of the banking sector of the Republic of Kazakhstan is presented in this article. This work also describes the main directions of reforming the banking sector in Kazakhstan The important measures necessary for improving situation in the banking sector of Kazakhstan are also shown in this article. Main focus of this article is share of banks with foreign participation for the last five years and the main problems of the banking sector of Kazakhstan.
Keywords: assets, liabilities, shareholders' equity, rating, banking sector, banking regulation, banking services, affiliated second-level banks, refinancing, mortgages, borrower, liquidity, consumer loans portfolio, credit products.
СОВРЕМЕННОЕ СОСТОЯНИЕ ДЕЯТЕЛЬНОСТИ БАНКОВ ВТОРОГО УРОВНЯ РЕСПУБЛИКИ КАЗАХСТАН В УСЛОВИЯХ ФИНАНСОВОЙ ГЛОБАЛИЗАЦИИ
Кодашева Г.С.
докторант 2 курса специальности «Финансы» ЕНУ им.Л.Н.Гумилева,
магистр экономики,E-mail:
Ниязбекова Ш.У.
к.э.н.РФ, PhD РУДН, Российский университет дружбы народов,
E-mail:
Слямова Б.И.
преподаватель кафедры «Финансы» ЕНУ им. Л.Н. Гумилева,
магистр по специальности «Финансы», E-mail:
В данной статье раскрыто современное состояние деятельности банков второго уровня Казахстана в условиях финансовой глобализации. Проведен анализ деятельности банков второго уровняРК за последние пять лет. В данной статье представлена структура банковского сектора Республики Казахстан. Приведены основные направления реформирования банковского сектора Казахстана. Показаны меры, необходимые для улучшения ситуации в банковском секторе Республики Казахстан. Рассмотрены доля банков с иностранным участием за последние пять лет, основные проблемы банковского сектора Казахстана.
Ключевые слова:активы, обязательства, собственный капитал, рейтинг, банковский сектор, банковское регулирование, банковские услуги, аффилированные банки второго уровня, рефинансирование, заемщики, ликвидность, портфель потребительских кредитов, кредитные операции.
Today Kazakhstan's banking sector still remains the largest and dominant segment of the financial sector. The banking system of the country is - one of the channel through which the state economy is regulated. The essence of banking regulation and the need for its implementation are determined by increasing role of banks in the economy. Because of its ability to accumulate the economic risks, the banking system has always been the subject of quite strict regulation.
Banking regulation is a vital part of the state regulation of the economy, expressed in terms of monetary policy. In Kazakhstan, the financial strength and stability of the banking system is one of the priority tasks of the state [1].
Therefore the country's task is to develop banking sector, provide conditions for fair competition, to expand the range of banking services, and enhance the attractiveness and accessibility of banking services for the population [2].
Thus in October 8, 2015, the National Bank of Kazakhstan held a meeting with representatives of the Association of Legal Entities «Association of Financiers of Kazakhstan» and the major second-level banks in order to consider lending to the economy. The meeting noted that in 2015 credit activity of second level banks slowed down. Each part exchanged views on the current trends in the credit market of the country, the reasons for the current situation and possible measures to resolve the situation. Commercial banks noted the necessity of forming a system of instruments of the National Bank of Kazakhstan in providing liquidity of tenge, the continued implementation of government programs to support the economy.
National Bank of Kazakhstan acknowledged the commitment to countercyclical regulation, whereby in periods of economic slowdown and credit mitigation easing regulatory requirements is needed. The meeting also noted the need to increase the activity of banks in the refinancing of mortgages under the program implemented by the National Bank of Kazakhstan.
Today Kazakhstan's banking sector is still the largest and dominant segment of the financial sector. As of January 1, 2015 the banking sector of Kazakhstan is represented by 38 banks (Table 1).
Table 1 - The structure of the banking sector of the Republic of Kazakhstan for 2010-2014
The structure of the banking sector / 1.01.11 / 1.01.12 / 1.01.13 / 1.01.14 / 1.01.15The number of second-level banks, incl / 39 / 38 / 38 / 38 / 38
Banks with 100% state participation in the authorized capital / 1 / 1 / 1 / 1 / 1
Second-level banks with foreign participation / 19 / 19 / 19 / 17 / 16
affiliated second-level banks / 16 / 16 / 16 / 14 / 14
Number of branches of second-level banks / 365 / 363 / 362 / 378 / 395
Note - compiled by the authors based on data from FSC NBRK http://www.afn.kz/index.cfm?docid=475 [8]
As it can be seen from Table 1, for the analyzed period, the number of banks decreased from 39 to 38 between the period 2010 and 2014, while the number of branches of second level banks in five years increased by 30, from 365 to 395 between the years 2010 and 2015. According to the National Bank of Kazakhstan on January, 2015 the net profit of the banking sector was 280 billion tenge. [6]
The results of qualitative parameters in the credit market based on the survey, confirm that low activity of banks shown by both from banks and from borrower’s side in the 4th quarter of 2014. The level of the country's general economic risks, including the decline in oil prices, expectations, and reduced tenge liquidity, according to the banks opinion, have a deterrent effect on the credit activity of banks. However, banks expect a slight improvement in the liquidity situation in the 2nd quarter of 2015 in connection with the beginning of the implementation of new government initiatives to support the economy (in particular, the state program «Nurly Jol», the policy of de-dollarization of the economy).
Loans to non-financial organizations were provided mainly for the purpose of financing working capital and restructuring existing debt. Credit activity of banks in the retail segment was reduced by regulatory measures which are aimed at minimizing the risk of excessive growth of the consumer loans portfolio. Mortgage lending is also characterized by low activity and future prospects of its development in the short term, according to the banks expectations are limited due to the absence of growth factors and limited funding.
As a result of tight credit policy of banks and keeping high standards for borrowers limited the growth in demand from both non-financial organizations and individuals. However, there has been some intensification of lending to small and medium businesses under government programs to support SMEs.
From the second half of 2014, a lot of effort has been done to reduce the level of non-performing loans. But despite the decline in problem loans, the quality of the loan portfolio is still unsatisfactory. As a top priority measures in dealing with problem loans are selling loans to the debt collection companies, write off bad debts, prolonging the overall life of the loan, reschedule payments, refinance debt.
The main directions of reforming the banking sector in Kazakhstan are shown in Figure 1.
Figure 1. The main directions of reforming the banking sector of Kazakhstan
Note: developed by the authors on the basis of the studied materials
The measures necessary to improve the situation in the banking sector are as follows (Figure 2).
Figure 2. The measures necessary to improve the situation in the banking sector of the Republic of Kazakhstan
Source: developed by the authors on the basis of the studied materials
Indicators of Kazakh commercial banks in the past five years are shown in Table 2.
Table 2 - Indicators of the banking sector of Kazakhstan for 2010-2014
Bn KZT
Financial indicators / 01.01.2011 / 01.01.2012 / 01.01.2013 / 01.01.2014 / 01.01.2015Assets / 12 032 / 12 818 / 13 880 / 15 462 / 18239
Liabilities / 10 715 / 11 515 / 11 875 / 13 384 / 15879
Shareholders' equity / 1 317 / 1 303 / 2 005 / 2 078 / 2360
Source: http://www.nationalbank.kz/?docid=1055&switch=russian [4]
Table 2 shows that compared to 2010, in 2015 the assets within five years increased by 6.207 trillion tenge, or by 66%.
The banking sector on 1 January 2015 is represented by 38 second-level banks, of which 16 banks with foreign participation, including 14 subsidiary banks. The share of banks with foreign capital and the proportion of banks with state participation of more than 50% is presented in Table 3.
Table 3 - Share of foreign banks and the share of banks with state participation of more than 50% between 2010-2014
Indicator / 01.01.2011 / 01.01.2012 / 01.01.2013 / 01.01.2014 / 01.01.2015The share of banks with foreign capital / 34,0 % / 30,8 % / 30,1 % / 25,5 % / 24,7 %
The share of banks with state participation of more than 50% / 23,1 % / 20,4 % / 19,4 % / 17,7 % / 2,3 %
Source: http://www.nationalbank.kz/index.cfm?docid=1541&switch=russian [4]
Table 3 shows that the share of foreign banks in the past five years has decreased by 9.3%. Thus, the basis of the group of foreign players generates four Russian banks. The largest foreign bank - Sberbank (100% owned by OJSC "Sberbank of Russia").
In second place - Alfa-Bank (controlled OJSC "Alfa-Bank", Russia), the Bank's loan portfolio in 2015 amounted to 158.8 billion tenge.
On the third - VTB Bank (the sole shareholder of JSC "VTB Bank", Russia), with a loan portfolio to 113.8 billion tenge.
In fourth place - Home Credit Bank (the sole shareholder of "Home Credit and Finance Bank", Russia).
Another bank included in the top 5 among foreign creditors of financial institutions, along with the Russian - Citibank (controlled by Citibank NA, USA).
It is planned in 2020 to expand the presence of foreign banks in Kazakhstan and therefore should improve the conditions of access to financial resources for small and medium-sized enterprises [5].
Significant impact on the competitiveness of Kazakhstan's banks has the presence of foreign banks, as their advantage is the transfer of innovative technologies from parent banks in the field of automation and business process reengineering. Moreover, these banks have access to cheaper sources of funding (capital of parent banks) and thus exert pressure on reducing the cost of credit products in the Kazakhstan market [5].
We highlight the main key problems of the banking sector of Kazakhstan - isinsufficiently developed system of risk management, poor corporate governance, low profitability, poor quality of the loan portfolio, the relatively high level of non-performing loans, the high concentration of loans and deposits, the sensitivity of the economy to the influence of external negative factors.
In 2014, government adopted the Concept of development of the financial sector of the Republic of Kazakhstan until 2030 [7]. Improving the competitiveness of the banking sector covers the following areas: institutional development of the banking system, the definition of the individual business - the bank's strategy, ensuring competitiveness in the international integration.
The key drawback is the very low participation rate of banking services in Kazakhstan's economy, which, in turn, allows the financial sector to develop as both extensively, increasing the volume of services provided, and the intensity, providing quality services and introducing modern technologies for their provision. For the full realization of the potential of Kazakhstan's financial sector and improve its competitiveness we need to improve asset quality, increase the stability of the funding base, to ensure the transition to the standards of Basel III, other international standards in the financial market and improve business strategies of financial institutions to increase the return on assets and equity [3].
Thus, the banking sector - it is one of those sectors, which gives the economy the necessary impulse for development, attracting free funds from the accounts of the owners of some of the contributions and transferring them as loans to other owners on terms of maturity, interest, repayment.
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1. http://www.sravni.ru/rating/info/mezhdunarodnye-rejtingovye-agentstva/
2. http://www.sravni.ru/rating/info/chto-oznachaet-rejting-banka/
3. file: /// C: / Users /% D0% A8% D0% B0% D1% 85% D0% B8% D0% B7% D0% B0% D0% B4% D0% B0 / Downloads / publish474426_29111.pdf
4. http://www.nationalbank.kz/index.cfm?docid=1541&switch=russian Financial Stability Report of Kazakhstan
5.http://www.kursiv.kz/news/finansy/Inostrannye-banki-napryamuyu-poyavyatsya-v-Kazahstane/
6. file:///C:/Users/%D0%A8%D0%B0%D1%85%D0%B8%D0%B7%D0%B0%D0%B4%D0%B0/Downloads/publish283-1067002%20(1).pdf
7. http://adilet.zan.kz/rus/docs/P1400000954 Resolution of the Government of the Republic of Kazakhstan dated August 27, 2014 № 954, the Concept of development of the financial sector of the Republic of Kazakhstan till 2030
8. http://www.afn.kz/index.cfm?docid=475
Управление общественными и экономическими системами 2016 № 2