For 2022, the distressed assets in Kazakhstan amounted to 2.3 trillion tenge or six percent of the banking system assets, reported by the Chairman of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market Madina Abylkassymova, El.kz reports according to BaigeNews.kz.
Abylkassymova also noted that the draft law on the development of the stress asset market was developed in accordance with the instruction of the Head of State to return stressed assets to economic turnover, announced in the Address to Kazakhstan people.
"The main purpose of the bill is to create conditions for the further development of the liquid market of stressed assets on market principles and their involvement in economic turnover," she explained.
The Chairman of the Agency said that since 2017, a program has been implemented to improve the financial stability of individual banks, which is aimed at supporting banks on the terms of joint participation of bank shareholders in covering the identified losses of banks.
Since the program implementation, banks have formed additional provisions in the amount of 977 billion tenge. As a result, problem loans for 1.4 trillion tenge were written off and new loans in the amount of 5.4 trillion tenge were issued.
"Since 2017, the agency has revoked the licenses of eight insolvent banks. From 2017 to 2021, as a result of the measures taken, stress assets in the amount of only 6.7 trillion tenge is debited. For January 1, 2022 the size of stressed assets amounted to 2.3 trillion tenge or six percent of banking system assets," Abylkassymova said.
According to her, stress assets include four groups: overdue loans more than 90 days in the amount of 870 billion tenge, restructured loans in the amount of 936 billion tenge, recovered property in the amount of 156 billion tenge and assets of subsidiaries of banks in the amount of stress assets of 356 billion tenge.
"To create a market mechanism for cleaning banks' balance sheets from non-performing loans without attracting public funds, it is necessary to develop a liquid market for stressed assets," Madina Abylkassymova summed up.