Kazkommertsbank accounts for over 25% of Kazakhstan’s loan market

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ALMATY (TCA) — Competition on the credit market in Kazakhstan is falling as 10 largest banks continue to account for over 80% of the market. However, Kazakhstan’s credit system is more competitive than in its Eurasian Economic Union partners — Russia and Belarus, Ranking.kz reports.

The bulk of loans were issued by Kazkommertsbank – 25.3%, and a sharp growth in its share from 16.2% to 22.5% took place in the summer 2015 after its acquisition of BTA Bank. By June 2016, Kazkommertsbank claimed additional 2.8% of the loan market, accounting for over a quarter of the market. Overall, the share of top 10 banks exceeded 80% of the total loan market.

Compared to the level of competition in the EEU member countries, Kazakhstan has an edge over Russia and Belarus. The market is monopolised by two state-owned banks in Belarus which account for over 50% of the market, with the largest bank Belarusbank’s share at 37.8%. Russia’s dominant Sberbank controls 34.4% of the loan market, followed by VTB with 11.2%. All this has led to the level of monopolisation in Russia being higher by 26.7% than that in Kazakhstan.

A more balanced and developed loan market is in Turkey, where state-owned Ziraat Bank accounts for only 13% of the loan market – the highest share among all 47 commercial banks.

As a result, Kazakhstan needs to more closely study Turkey’s experience as it has ensured higher levels of market competition at a relatively small number of banks than the Russian banking sector which has not managed to create a competitive medium.

Out of major players in Kazakhstan, significant growth in the market share (apart from Kazkommertsbank) was posted by Tsesnabank – an increase of 1.4 percentage points to 10.2% of the loan market. Insignificant reduction in the market shares of three out of the top five Kazakh banks – Halyk, Sberbank and CenterCredit – did not impact the total volume of the loan portfolio controlled by these banks which share a combined 60% of the market. The 20 bottom banks accounted for less than 10% of the total credit portfolio – 7.6%.

Sergey Kwan

TCA