Kazakhstan’s banking system avoided the immediate risk associated with the imposition of sanctions on the country’s Russian subsidiary banks but the risk of secondary sanctions still remains, reports a correspondent of QazMonitor.
At the annual conference of S&P Global Ratings, the company’s director Sergey Voronenko said that Kazakhstan was able to resolve the first risks relatively quickly and successfully.
"We haven’t seen any significant disruption of Russian banks in Kazakhstan, since the mechanism behind it was quite market-based because of the support of the regulatory authorities, of course," the expert said.
Voronenko added that the banking sector in Kazakhstan has become more concentrated as a result of reducing the operations of Russian banks.
"We believe that despite the concentration and polarization, the competition will remain rather strong as banks still have room for business growth, given the fairly low level of debt of the real economy and households," he explained.
The total loan portfolio of the banking sector in the country's GDP is now approximately 26% and thus, according to the estimates of S&P Global Ratings, Kazakh banks have room to grow.
The director also touched on the risk of secondary sanctions citing the position of the state regulatory bodies and individual banks. “Banks aren’t ready to take on the additional risks related to secondary sanctions. We can see it in the case of the Mir payment system," specified Voronenko.
Another point the head of S&P made was that the compliance services’ influence on the banks has increased significantly during 2022.
"I would say that the banking sector of Kazakhstan will do everything possible to distance itself from the potential impact of secondary sanctions. So I would assess this risk as unlikely for banks in Kazakhstan," concluded the expert.
