S&P: Kazakh banks tested

Standard & Poor's said it that the global liquidity squeeze has put Kazakh banks and regulators to their toughest test in years.

"The Kazakh banking system has reached a decisive point in its development, with the ongoing turbulence highlighting the need for a deep transformation of business practices, strategies and regulation," said S&P credit analyst Ekaterina Trofimova.

The external financing shortage is shaking up the Kazakh banking system, but inherent structural weaknesses exacerbate the slump and represent a more-lasting concern, the agency said, adding that Kazakh banks' creditworthiness remains constrained by limited disclosure of ownership, a corporate sector in need of restructuring, high lending and funding concentrations, rapidly built unseasoned loan portfolios, substantial dollarization of operations, tight capitalization and untested risk management.

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