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The Problem Loan Fund is one of the measures to ensure a sustainable financial system

11 March 2020

The creation of the Problem Loans Fund JSC is one of the government's measures aimed at ensuring a stable financial system and economy. Deputy Chairman of the Problem Loans Fund Inkar Turekhodzhaeva stated this in an interview with the Kazinform correspondent.

“The Fund was created as an organization specializing in improving the quality of loan portfolios of the banking sector of the Republic of Kazakhstan. At the moment, the Fund is working in two strategic directions: the rehabilitation of the banking sector and the involvement of redeemed non-performing loans in the economic circulation, ”notes Inkar Tyurekhodzhaeva.

The expert explained that within the framework of the first direction, the Fund carried out a number of large transactions:

- redemption of BTA assets, which made it possible to preserve jobs, deposits, prevent a decrease in lending growth, maintain obligations on payments on Eurobonds;

- the assets of the Bank of Astana were assigned with the simultaneous transfer of the commensurate debt of the bank to the Fund;

- the purchase of assets of Tsesnabank was carried out in order to improve the agro-industrial complex of the Republic of Kazakhstan, ensure food security of the agricultural industry and preserve jobs.

As part of the second direction, in order to improve the quality of the repurchased assets, the following activities are carried out:

- debt restructuring in order to ensure maximum debt recovery and recovery of debtors' activities;

- collection of debts for borrowers, for which there is no expediency of restructuring;

- implementation of joint projects with investors in order to increase the market value of the acquired assets and land plots.

At the same time, in February 2020, support was provided to second-tier banks after summing up the results of the Asset Quality Review (AQR) by providing the Fund with a cash-free paid guarantee (for 5 years), as a tool to cover potential risks of a decrease in the value of assets on the balance sheets of banks.

“This mechanism allows shareholders of second-tier banks to independently cover assets with provisions or capital, thereby improving their quality, limiting potential risks and improving the banking system as a whole. In addition, the budget of the country will receive additional income due to the payment of remuneration by banks under the guarantee provided, ”Inkar Tyurekhodjaeva summed up.