Презентация к докладу заместителя председателя Национального банка Казахстана Данияра Акишева на казахстанско-американском инвестиционном форуме в Нью-Йорке 7 декаьря 2011 года.

1. The impact of the financial crisis and
main directions of financial sector
development in post-crisis period
National Bank of Kazakhstan
1

2. GDP, real growth, %
259,3
115 216,7 223,8 226,5 242,4
163,9 179,7 199,0
110 124,6 136,8 149,5
109,8
105
100
109,8 113,5 109,8 109,3 109,6 109,7 110,7 108,9 103,3 101,2 107,0 107,0
95
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Jan.-
Sep.
real growth, % accumulated GDP growth (right) 2011
According to the data for 2010 we can say that the phase of
crisis is already passed. 2

3. The crisis evolution in Kazakhstan
• relatively high sovereign credit rating and ratings of domestic
enterprises made for the increase in resources availability on the
global capital markets
• favorable macroeconomic environment, high demand for credits
in Kazakhstan promoted external borrowings by domestic banks
• rapid development of some sectors of Kazakhstani economy,
which led to the emergence of “price bubbles”
• as conditions in international financial markets tightened in
August 2007, local banks found it more difficult to raise external
financing
• with oil and commodity prices falling sharply and global financial
markets freezing up, the economy has been hit hard
• the lending activity of Kazakhstani banks shrank in 2008
• the development of the sectors dependent on the banking loans
has almost stopped. As a result, Kazakhstan’s economy was
slowing after years of exceptionally strong growth 3

4. The Reasons
• undervaluation of risks by financial institutions
• the pro-cyclicity of the financial system development with the
features of high growth rates of lending, leverage and assets
prices
• significant amount of payments on external liabilities of
domestic banks (at present the problem of the foreign debt of
banking sector is solved by its restructuring)
4

5. Gross external debt of Kazakhstan*
140 120
98,2
120 92,4 100
19,9 18,6
100 80,9
30,2 80
79,8 79,9
bln. USD
80
39,2
45,9
%
60
60
93,4 99,0 40
40 79,4
67,1
49,3 20
20
0 0
31.12.2007 31.12.2008 31.12.2009 31.12.2010 30.06.2011
Other Sectors Banks General Government
Monetary Authorities to GDP ratio (%)
5

6. Measures to stimulate economic growth
1. A Joint (the Government, the National Bank, the Financial Supervisory Agency)
Two-Year Action Plan for stabilizing of the economy and financial system:
Funding (USD 10bln.) has come from the National Oil Fund
provision of public support to the top four banks
steps to aid the completion of unfinished residential construction projects and
spur housing demand
financial assistance to the SME and agricultural sectors
increased public investment in the industrial sector
2. A new Tax Code was adopted (on January 1, 2009):
corporate income tax has been reduced to 20%
mineral Extraction Tax replaces the royalties on oil production
the VAT was reduced from 13% to 12%
3. The Government, in cooperation with the local authorities, will provide
employment for workers temporarily unemployed
4. The National Bank of Kazakhstan:
low interest rates (refinancing rate)
provision of refinancing loans to banks to ensure adequate short-term liquidity
low deposit rates to discourage banks from holding funds and push lenders to
credit the real sector
6

7. %
11,0
14,0
17,0
20,0
5,0
8,0
Jan-07
8,5
Mar-07
May-07
2007
Jul-07
World prices
and oil products
increase for food
Sep-07
18,7
Nov-07
Jan-08
Mar-08
May-08
2008
Jul-08
Sep-08
9,5
20,1
Nov-08
Jan-09
Mar-09
May-09
2009
Jul-09
Sep-09
Nov-09
Jan-10
6,2
Mar-10
May-10
2010
Jul-10
times
Annual Inflation in 2007-2011
Sep-10
decreased by 3
7,8
Nov-10
Jan-11
Mar-11
May-11
8,8
2011
Jul-11
9,0
Sep-11
8,7
Nov-11
7,8
7

8. Financial Stability Measures
 the policy interest rate has been NBK's refinancing operations
gradually cut from 11% to 7% (its 16
(turnover)
lowest level ever) 14
USD bln.
12 SWAP
 in March 2011 policy interest rate 10 Reverse repo
8
was increased to 7.5% 6
 since 2007, to ensure adequate short- 4
2
term liquidity, the NBK provides 0
Jan-07
May-07
Jan-08
May-08
Jan-09
May-09
Jan-10
May-10
Jan-11
May-11
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
refinancing loans to banks
 the list of instruments accepted as
collateral was expanded
 the reserve requirements were 5
NBK's refinancing operations (balance)
reduced to the minimum level ever SWAP
4
(1.5% for domestic liabilities and
USD bln.
Reverse repo
3
2.5% for other liabilities), however
banks still hold excessive reserves 2
 in November 2009 reserve 1
requirements for banks under debt 0
Jan-07
May-07
Jan-08
May-08
Jan-09
May-09
Jan-10
May-10
Jan-11
May-11
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
restructuring process were set at 0%
for all liabilities
8

9. Exchange Rate of Tenge to USD
Medium-
term band
From February 28, 2011 the National Bank switched to managed floating
exchange rate regime
9

10. bln.tenge
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
10,1% growth
Nov-09
Dec-09
legal entities
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Deposits of Residents
Jul-10
Aug-10
Sep-10
Oct-10
12,5% growth
Nov-10
Dec-10
Jan-11
Feb-11
individuals
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
16,7% growth
Sep-11
Oct-11
10

11. bln. tenge
3 000
4 000
5 000
6 000
7 000
8 000
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
to legal entities
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Banks Credits to Economy
Nov-10
Dec-10
to individuals Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
11

12. Islamic financing
• In February 2009 a Law of the Republic of Kazakhstan on
issues of organization and operating of Islamic banks and
organization of Islamic financing (the Law) was adopted.
The Law covers issues of operating of Islamic banks,
Islamic investment funds, and issuance of Islamic
securities in Kazakhstan.
• Development of a legal base for Islamic finance in
Kazakhstan is accompanied with coming of new players. A
first Islamic brokerage company and an Islamic consulting
firm started their operations.
12

13. Islamic financing
• The Law specifies following types of Islamic securities: shares
and common stock of Islamic investment funds, Islamic lease
certificates, and Islamic participation certificates. Islamic lease
certificates are issued to finance purchase of real estate, ground
areas, etc.
• The Governments of Kazakhstan and the UAE have signed an
agreement to launch Al Hilal Bank in Kazakhstan. In March,
2010 the first Islamic bank was opened in Kazakhstan.
• At present the legislative field for the action in the republic of
Islamic insurance (takaful) companies is developed.
13

14. The main purposes of financial sector
development in post-crisis period
• providing the financial sector’s stability
• creating conditions to prevent effect of instability factors and
negative events which were detected during the current
financial crisis
• stimulation of investment activity in the post-crisis period
• restoration of trust and confidence in the financial sector by
both investors and consumers of financial services
14

15. The main goals
1. financial resources mobilization in the post-crisis period
2. consolidation of the financial sector supervision and regulation
system
3. strengthening of the mechanisms of rights protection for
investors and consumers of financial services
4. regulation of the systemic risks
15

16. The financial resources mobilization
• attracting of institutional investors’ funds by elaboration of
public private partnership as a main mechanism. It will make
possible to implement and develop the potential of private
initiative and preserve the function of the state in socially
significant sectors of the economy
• development of the instruments of Islamic financing
16

17. Consolidation of financial sector
supervision and regulation system
• implementation of the counter-cyclicity principle in regulation
through tightening (for financial leverage, owner's capital,
reserves and liquidity, and reserve requirements) in the periods
of economic growth and softening in the periods of recession
• the gradual increase of minimum size of a capital, especially for
banks
• strengthening of regulation of the complex financial
instruments up to prohibition of separate operations
• strengthening of the risk control of «systemically important»
financial institutions, considering their impact on the other
financial organizations, markets and instruments
• elaboration of the procedure of shock transformation charts and
tools for analysis of regulatory effect
17

18. Strengthening of the mechanisms of rights
protection for investors and consumers of
financial services
• making more stringent the responsibility of officials of joint-
stock companies, and assigning direct responsibility area to
every independent member of the board of directors and
management of the corresponding committees, accountable to
the board of directors
• establishment of «black lists» of financial organizations, their
officials, issuers, shareholders whose activity resulted in the
bankruptcy of financial institutions
• the quality of corporate governance and rising transparency in
the activities of financial organizations will be improved
• the bonus system of the management of financial organizations
will be improved
• the term «affiliated persons» will be expanded
18

19. Regulation of systemic risks
• implementation of the system of macroprudential regulation:
– early detection of risks on the base of financial stability
indicators
– differentiated approaches in regulation of institutions
depending on their significance and their «systemically
important» character
• strengthening of the role of the National Bank, as a central body,
responsible for providing of financial stability and performing of
macroprudential regulation in:
– determination of the main sectoral principles and
approaches of the prudential regulation;
– development of anti-crisis management and losses
minimization measures in a case of systemic risks
realization.
19

20. Expected results
• attraction of financial resources to realization of the goals for
the forced industrial-and-innovation development of the
country
• creating conditions for sustainable development of the financial
sector and confidence-building measures
• further development of all the segments of the financial sector
taking into account the world experience
• gradual exit of the state from financial organizations capital
20