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Kazakhstan to allocate $1.3bln through NPLs Fund for financial support of STB

July 22, 2014

Kazakhstan will allocate $1.3 billion through the Non-Performing Loans Fund for the financial support of the second-tier banks, Chairman of the National Bank of Kazakhstan Kairat Kelimbetov said during the CCS media briefing on Tuesday.

These funds will primarily go to the Kazkommertsbank and BTA Bank, especially after their merger, ATF Bank and Alliance Bank, Kelimbetov said.

In view of introduction of the new concept of development of the financial sector of Kazakhstan, the restriction on the level of non-performing loans up to 10% of the total loan portfolio will be set.

"Starting from 1 January 2016, the maximum level of 10% of problem loans will be a prudential standard. That is, if this standard is not met, we will revoke the license of the bank," the central bank head said.

In order to reduce the level of non-performing loans in the second-tier banks, the STBs will also get the tax breaks. The relevant legislative amendments have been already developed, Kelimbetov said.

"The National Bank and the Government of Kazakhstan have a political goal to reduce the level of problem loans to 10% before January 1, 2016," the chairman said.

So far, the level of non-performing loans in the second-tier banks of Kazakhstan is at about 33% of the total loan portfolio.

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Source: AKIpress News Agency (Kyrgyz Republic)

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