(SRI) - Bad loans remain the main systemic risk for Kazakh banks while liquidity and currency risks are gradually declining, Kazakhstan's central bank said Monday, citing its survey of the country's commercial banks.
"A big share of bad loans remains the main systemic risk of banks, though their quantity has stabilized, according to banks' estimates," the central bank said in a summary of its survey.
The survey indicates that low liquidity in the real estate market has made it difficult for banks to dispose of growing amounts of real estate seized due to poor loan performance. Most Kazakh banks have significant exposure to property prices in their credit portfolios, through corporate and retail loans directly related to real estate, as well as through collateral on loans in segments without direct relation to real estate.
Liquidity and currency risks for banks are gradually declining, the survey showed. Of the survey's participants, 17 percent said liquidity risk was rising, down from 20 percent in the third quarter last year, and 8 percent said currency risk was increasing, down from 17 percent in Q3, the bank said.
Banks say a pickup in lending will depend on Kazakhstan's macroeconomic situation, loan portfolio quality and action by financial regulators.