The competition is getting tougher in the banking sector of Kazakhstan
25.09.00 00:00
/IRBIS, Sep.25, 00/ - REUTERS informs that the Kazakhstani banks, which
lack for reliable borrowers, are talking about toughening of the competition
on the market under a consolidation of the banking system.
Kazakhstani participants of the banking conference of the CIS and Baltic
countries admitted that traditional niche of the Kazakhstani banks are
narrowing due to an appearance of more cheaper ways to borrow funds, is
said.
Managing director of Kazkommertsbank says that big clients are more
knowledgeable about raising funds at the capitals market, and they arrange
syndicates with the western banks by themselves, issue euronotes, arrange
trade financing.
The interests of the western banks that work in Kazakhstan cross that of
local banks regarding the Kazakhstani companies.
Vice general manager of ABN AMRO Bank Kazakhstan says that major
Kazakhstani companies are becoming more transparent with several years
of profitable work, and it makes them interesting, and which is more
interesting is that their are expanding their business and need more cheaper
and longer, and significant amount of funds.
Stock market is offering an alternative to both types of banks, and the
development of this market segment is making it impossible for the banks to
offer loans at high rates, is said. It is said that bond issues are more cheaper
due to growing interest of accumulative pension funds in them.
These funds, with aggregate assets of $600 mln, are exerting great pressure
on the banks, says the representative of Kazkommertsbank.
During the last few months several companies have issued their own debts
such as Kazakhoil, Kazakhstan Temir Joly, Almaty Kus, several banks, local
administrations of Almaty, Atyrau, and Astana cities. The issues from
KazTransOil, KEGOC are around the corner. The bonds market is $100 mln
now, and at least, it is expected to double by the end of the year, is said.
It is believed that the development of corporate securities market will cause
the clients of the banking sector to leave this sector.
ABN AMRO Bank Kazakhstan expects pension assets to exceed $1 bln by
the year 2002, and now they already exceed total capital of the banks.
On the other hand, it is believed that this will give the banks to work as
investment banks, dealing with underwriting and issue of the securities.
It is said that Kazakhstani banks have to develop other services. For
instance, the country's biggest private bank, Kazkommertsbank, which
always worked with corporate clients, is trying to develop a retail market.
Managing director of the bank believes that it is hard to do because of low
population density and vast territory, as well as low income base of the
people.
High revenues that are received by the government and the exporters are
not working in this way; other people are poor and it is hard to sell credit
cards or consumer loans to those, the manager added.
The banking sector is "overdeveloped" relative to other sectors and it is still
risky to invest into real sector because of insufficient number of effective
companies there, believe the participants of the conference.
The banks agree with the government on one point that the real sector
should undergo reforms, and that small and medium businesses should be
developed, is said. It is said that the growth observed in the country second
year in a row is due to high prices on oil and metals that constitute the main
items of the Kazakhstani exports.
The representative of Kazkommertsbank said that nothing had changed in
the country, and that the country was still dependent on external factors than
on internal factors, and hence, business people and the government had to
change these fundamental things.
The National Bank informs that there are 48 banks in Kazakhstan, including
20 banks with foreign capital, and 12 foreign banks. It also believes that the
consolidation of the banks will continue. As of July 1 total capital of the banks
equaled $546 mln, is said.