ASTANA, Kazakhstan, August 8. Liquidity of Kazakhstan's banks is expected to remain sufficient, while high interest rates will keep market financing to a minimum, Moody's rating agency said, Trend reports.
As the obtained data shows, liquid assets at Kazakh banks accounted for a high 41 percent of tangible banking assets at the end of 2022, helped by moderate demand for loans and continuing growth of deposits.
"We expect little change in the months ahead. The banks' reliance on confidence-sensitive market funding is low (9 percent of tangible banking assets at end-2022) and a significant part of that is sourced from local development institutions that channel government funding to the banks," the agency said.
Meanwhile, according to the agency, the banks' access to capital market funds is constrained by high interest rates and modest risk appetite from foreign investors partly due to geopolitical risks and past defaults. Depositors at largest banks will continue to benefit from government support.
The banking system in Kazakhstan is relatively compact, as bank loans account for around 24 percent of the GDP, Moody's says.
"Furthermore, the government's foreign currency reserves surpass the total foreign currency deposits held by banks. As a result, depositors at major banks are expected to receive ongoing government backing. Nevertheless, based on previous years' trends, it's likely that the government will permit the least viable and inefficient lenders to face failure," the agency concluded.
