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Kazakh banking sector revenues drop 40% in 2017

Kazakh banking sector revenues drop 40% 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.  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.