S&P: Kazakh banks outgrowing domestic capital sources

Standard & Poor's said banks in the Republic of Kazakhstan (BBB-/stable/A-3) are entering a critical period in their development, as they are fast outgrowing current domestic owners' ability to make fresh capital infusions, which are crucial to support growth.

The agency said it believes owners are reaching a watershed and will soon have to consider loosening control and opening up bank capital to outside investors.

"The continued favorable macroeconomic environment in Kazakhstan, good progress in developing a legal and regulatory framework and gradual business diversification have improved domestic banks' commercial profiles, profitability and creditworthiness," S&P credit analyst Ekaterina Trofimova said in an agency report.

"But fresh impetus, including further regulatory enhancements, is needed to maintain progress in the Kazakh banking system."

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