2009年-世界发展银行全球_Financial_Sector_Assessment___Republic_of_Kazakhstan_16页_2mb

Kazakhstan Financial Sector Assessment Summary (June 2009)

Core Content

The Financial Sector Assessment (FSA) of Kazakhstan, conducted by the IMF and World Bank in 2008, evaluates the country's financial system, macroeconomic developments, and financial stability framework. The assessment highlights both the rapid growth and increasing vulnerabilities of the sector, especially in the context of the global financial crisis.

Main Features of the Financial System

• Banking sector dominance: Domestic commercial banks dominate the financial system, with the top five banks holding 78% of total banking assets.
• Foreign bank presence: Foreign banks account for about 15% of total banking assets, with recent acquisitions increasing their share.
• Capital markets: Capital markets are small and illiquid. As of 2007:
  • Stock market capitalization was 65.6% of GDP.
  • Total debt securities amounted to 17.1% of GDP.
  • Government securities represented 5.8% of GDP.
  • Corporate bonds accounted for 11.3% of GDP.
  • Pension funds held 10% of GDP in invested assets.
  • Mutual investment funds and insurance companies had smaller shares (2.5% and 1.8% of GDP, respectively).

Macroeconomic and Financial Developments and Risks

Main Macro-financial Risks

• Rapid credit growth: Credit growth was exceptionally strong, especially in real estate and consumer credit.
• Foreign funding dependence: Banks relied heavily on foreign capital, which reached 45% of GDP in 2007.
• Real estate concentration: Real estate lending (including residential mortgages) rose to about 30% of GDP by 2007.
• Exchange rate and commodity price volatility: Kazakhstan is vulnerable to changes in global commodity prices and exchange rates.
• Economic dependence on oil: Oil accounts for 60% of merchandise exports, making the economy susceptible to oil price fluctuations.

The August 2007 Liquidity Crisis

• Trigger: The U.S. sub-prime crisis disrupted international credit markets, leading to liquidity constraints in Kazakhstan.
• Impact: Banks faced a liquidity squeeze, deposit losses, and a drop in domestic credit growth.
• Government intervention: The National Bank of Kazakhstan (NBK) injected $26 billion in liquidity, and the government created a $4 billion facility to support construction and SMEs.
• Exchange rate pressure: The tenge depreciated due to capital outflows and deposit losses.
• Outcomes: While the crisis was contained, the intervention had significant costs and did not fully restore market confidence.

Financial Stability Assessment

Financial Soundness Indicators

• Capital adequacy: Reported CARs remained above the regulatory minimum (14.5% as of end-March 2008), with Tier I capital at 10%.
• Profitability: ROA and ROE reached 2.2% and 18.2% in 2007, the strongest in recent years.
• Liquidity: Liquidity ratios have declined, and classified loans increased sharply, particularly in the construction sector.

Stress Test Results

• Liquidity and credit risks: Stress tests indicated the banking system is under significant stress.
• Capital needs: If negative assumptions materialize, CARs could fall below the regulatory minimum, requiring large recapitalizations.
• Recommendations: Banks need to increase capital without relying on government support, and the FSA should improve its ability to assess credit and liquidity risks.

Financial Stability Framework and Policies

Prudential Framework

• Institutional shortcomings: The Agency for Regulation and Supervision of Financial Market and Financial Organizations (FSA) lacks experienced staff, operational autonomy, and a fixed term for its chairman.
• Consolidated supervision: The FSA has formal consolidated supervision arrangements, but challenges remain when dealing with unregulated parent entities.
• Asset valuation: The FSA uses a complex scoring system for asset valuation, which may not reflect current risk levels due to lack of recent downturn data.

Liquidity Risk Supervision

• Liquidity management: The FSA has not ensured prudent liquidity management by banks.
• Regulatory improvements: The NBK and FSA have tightened foreign borrowing limits and credit standards, but more work is needed.
• Liquidity requirements: Banks should have liquidity management policies approved and monitored by the board and FSA.

Governance

• Legal framework: The legal structure supports good corporate governance, but implementation remains weak.
• Board responsibilities: Boards approve internal policies, but many are too general, leading to insufficient accountability.
• Ownership transparency: Identifying controlling shareholders remains a challenge, with some interests disguised through indirect holdings.

Financial Safety Net Framework

• Financial surveillance: The NBK established a Financial Stability Unit (FSU) in 2006 to monitor risks and vulnerabilities.
• Early warning systems (EWS): The FSU and FSA have developed macro-level and bank-level EWS, but more emphasis is needed on enforcement and micro-level analysis.
• Stress testing: The FSA has a formal methodology but lacks sufficient technical capacity.

Contingency Planning and Bank Resolution

• Need for CPF: A contingency planning framework should be established to manage and resolve banking crises.
• Memorandum of Understanding (MOU): The November 2007 MOU is a key step, but operational details need finalization.
• Crisis management unit (CMU): A CMU should be set up at the FSA to coordinate crisis responses.
• Legislative action: The current bank resolution framework is inadequate and requires legislative reform to define systemic crises and clarify roles in restructuring and resolution.

Key Recommendations

• Strengthen risk-based supervision with a focus on internal risk management systems and governance.
• Improve liquidity risk monitoring and develop robust contingency plans.
• Enhance financial stability framework by operationalizing the MOU and establishing a CMU.
• Amend legislation to clarify the FSA's role in bank resolution and define systemic crisis criteria.
• Boost capacity building for the FSA, including staff training and better data collection.
• Ensure transparency in ownership and connected lending practices.
• Promote domestic capital markets to reduce reliance on foreign funding and improve liquidity.

Conclusion

The assessment underscores the importance of systemic stability and prudential supervision in the Kazakhstani financial system. While the sector has grown significantly since 2004, it remains vulnerable to external shocks, liquidity constraints, and credit quality issues. Strengthening the financial stability framework, improving risk management, and enhancing governance and transparency are essential to ensure long-term resilience and stability.