The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan briefed chief executives of second-tier banks on the results of its 2024 work and presented the main priorities for banking supervision and sector development in 2025, anchored in a more risk-based approach using the Supervisory Review and Evaluation Process (SREP) and ongoing Asset Quality Reviews (AQRs). The Agency cited sector indicators including a 19.7% rise in bank assets to KZT 61.6 trillion and a 90+ days non-performing loan ratio of 3.1%. Annual SREP assessments under an updated methodology shifted from checking the formal existence of risk management and corporate governance frameworks to detailed reviews of internal processes, with automation of the SREP process positioned as a step in digitising supervision. Regular AQRs were described as showing improving credit portfolio quality, while a capital adequacy assessment for 11 banks fell from 17.4% to 16.3% but remained above regulatory minima; supervisory stress tests were reported to confirm system resilience. Institution-specific supervisory capital add-ons are applied based on SREP and AQR results, and supervision is moving away from comprehensive inspections; 2025 priorities include corporate governance and interest rate, operational, credit and model risks, as well as anti-money laundering and counter-terrorist financing and sanctions. Reforms described included a new approach to calculating bank conglomerate own-funds adequacy and new risk management and internal control requirements for bank conglomerates, an increase in the capital conservation buffer for non-systemic banks to 2.5% from 2%, an expanded definition of NPLs for loans, limits on direct repo transactions and phased-in disclosures on capital and credit risk. The Agency also outlined measures to stimulate lending, including lower risk weights for business lending, eased provisioning requirements, higher liquidity coefficients for collateral and expanded lending possibilities for subsidiary foreign banks, alongside plans for an SME loan guarantee system, syndicated lending and co-financing for large projects and improvements to the corporate bankruptcy mechanism; it also pointed to anti-fraud measures in a bill under parliamentary consideration. Preparation of a new Banking Law was identified as a priority, with weekly market meetings planned, and the refined 2025 banking supervision policy priorities are to be published on the Agency’s website.

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