Financial Sector Assessment : Republic of Kazakhstan
The Kazakhstan financial sector remains dominated by domestic commercial banks. The banking sector is largely domestically owned, private, and relatively concentrated, with the largest five banks accounting for 78 percent of total banking assets. T...
| Main Author: | |
|---|---|
| Language: | English |
| Published: |
Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000334955_20090701024605 http://hdl.handle.net/10986/3058 |
| Summary: | The Kazakhstan financial sector remains
dominated by domestic commercial banks. The banking sector
is largely domestically owned, private, and relatively
concentrated, with the largest five banks accounting for 78
percent of total banking assets. The share of foreign banks
has increased to about 15 percent of total banking assets
after some recent acquisitions. The stress testing included
single factor sensibility and scenario analysis and focused
on the potential impacts of the two main risks being faced
by the banking system, liquidity and credit risks. The
exercise looked into the potential impact of: (i) the
ongoing liquidity crunch and worsening external funding
conditions; and (ii) asset and collateral quality
deterioration, particularly for construction, real estate,
and consumer lending. Some progress has been achieved in
strengthening the prudential framework and improving bank
governance. However, there is a need to move towards
risk-based supervision with more attention to banks'
use of risk management systems and internal controls,
strengthen the capacity to implement effective consolidated
and cross-border supervision, build up stress testing
capacity, improve the approach to asset classification and
valuation, and develop liquidity risk monitoring capacity.
The financial sector assessment (FSA) has taken a more
proactive approach in dealing with banks under stress but
staff turnover and capacity building issues hinder efforts.
The 2004 mission recommendation to increase focus on
liquidity risk of individual institutions has not been
implemented effectively and, as a result, reliance on
wholesale funding continues to pose risks. |
|---|