INTERVIEW - Citibank does not hurry to go to Kazakhstan retail market

/REUTERS, Almaty, Oljas Auezov, April 28, 05/ - Citibank Kazakhstan, a subsidiary of American Citigroup, does not plan to develop the quickly growing Kazakhstan market of mortgage and consumer crediting still orienting in big corporate clients, bank's head said. Kazakhstan banks within latest three-four years increased population crediting several dozens times explaining it by growth of peoples' incomes as well as by the necessity to diversify client base. Big western banks represented in Kazakhstan - Citibank, ABN AMRO and HSBC - almost do not work with physical persons, excluding employees of companies-clients. "This is the matter of scale. Kazakhstan population - 15 m. - is comparable with population of Moscow region", - Daniel Konnelli chairman of executive committee of Citibank Kazakhstan said. Besides, the high trust of population in local banking system, which has avoided serious shocks, does not give big international banks "image" advantages, which they have in many developing countries, the banker says. FOREIGN BORROWINGS WILL CONTINUE TO GROW In order to finance their expansion, on both domestic market and in CIS, Kazakhstan big banks actively borrow foreign loans, the growing volume of which causes anxiety of the government and regulating structures. However, Konnelli says, the rapid growth of credit portfolios and foreign borrowings of banks seems to be natural on the background of macroeconomic indicators of Kazakhstan, where GDP grows by 9-10% every year during several years already. Konnelli has also noted that despite the leading role of oil and gas sector in Kazakhstan economy, its stake in domestic banks' credit portfolios is not big, because big oil companies have a direct access to international financial markets or transnational corporations' resources. At the same time, effect of the possible falling in oil and gas sector will inevitably be reflected in adjoining branches and in economy as the whole, he added. "These are factors, which one should observe, but there is no reason for serious anxiety", - he said. Konnelli says, Kazakhstan issuers will continue borrowing funds abroad, despite growth of the world rates. "I think deals on foreign borrowings, through syndicated loans as well as by issuing eurobonds, will continues", - he said. "It's enough to compare conditions of foreign borrowings with rates and terms, on which banks can attract deposits in Kazakhstan", - he added. [2005-04-29]