Kazakh banking sector revenues drop 40 percent in 2017

ASTANA – Total Kazakh banking sector revenues decreased almost 40 percent compared to last year, however, banks also reduced expenses and increased revenues from core activities, according to ranking.kz.banking-730x480

In January to July, the revenues of the country’s banking sector decreased to 17.8 trillion tenge (US$52.7 billion) compared to the same period of last year, when the revenues of banks increased almost fivefold, amounting to 29.6 trillion tenge (US$87.6 billion).

Expenses for the first six months of this year were 17.9 trillion tenge (US$52.9 billion), which is 38.9 percent less than in January-July of 2016, when the number was 29.4 trillion tenge (US$87 billion).

As a result, as of July 2017, taking into account the income tax expenses, the loss of the second-tier banks of Kazakhstan was 203.9 billion tenge (US$603.7 million), while in July 2016 the banks showed a profit of 243.8 billion (US$721.8 million), says the source.

Non-remunerated incomes accounted for 91.7 percent of the gross income of the second-tier banks, which is 42.6 percent less than in January-July 2016. Non-remunerated expenses are 95.5 percent of total expenses.

After the increase in expenses in the first six months of 2015-2016 for almost five times, this year they decreased 40.2 percent. Analysts explain that such fluctuations in income and expenses from a sharp increase the previous year to a decrease this year were entirely caused by the revaluation of assets and liabilities.

Revenue from revaluation is 81.9 percent of total revenue, or 14.6 trillion tenge (US$43.2 billion), a year earlier it was 86.5 percent, or 25.6 trillion tenge (US$75.8 billion). Revenues from the recovery of reserves are 576.9 billion tenge (US$1.7 billion) for January-July of this year, which is 27.1 percent less than in the previous year. Thus, the share of total revenues increased from 2.8 percent to 3.5 percent for the year.