Kazakhstan’s banking sector has once again undergone a comprehensive health check. The Agency for Regulation and Development of the Financial Market has published the results of its regular Asset Quality Review (AQR) for 2025, offering one of the clearest snapshots of credit risks and resilience in the system, DKNews.kz reports.
The findings suggest that, despite rapid credit growth and a changing economic environment, the banking system remains stable at a systemic level – while also highlighting where risks are still accumulating.
Who was reviewed and how big the check was
The 2025 AQR covered 11 of the country’s largest banks, which together account for 86% of total banking assets. The scope of the assessment expanded significantly: total analyzed debt reached KZT 32.8 trillion, up 19.7% year on year.
This growth reflects the continued expansion of lending across the economy. The largest exposures were concentrated in:
- unsecured consumer loans – KZT 11 trillion,
- loans to large businesses – KZT 4.7 trillion,
- small business lending – KZT 4.5 trillion,
- investment projects – KZT 3.6 trillion.
In other words, both households and businesses are borrowing more – and regulators are watching closely how banks manage the associated risks.
How risks were assessed
The AQR combined two levels of analysis.
On an individual basis, the Agency reviewed:
- 1,299 large borrowers,
- 580 co-borrowers and guarantors, with total liabilities of KZT 9.9 trillion.
At the same time, 37.7 million loans worth KZT 22.9 trillion were assessed on a collective basis, covering mass retail and standardized lending products.
This dual approach allows supervisors to identify vulnerabilities among major borrowers while also capturing trends across the wider credit market.
Core result: the system is resilient
The headline conclusion of AQR-2025 is clear: Kazakhstan’s banking sector remains resilient.
Across the 11 banks, the capital adequacy ratio stood at 17.7%, well above the regulatory minimum. This means banks still have sufficient capital buffers to absorb potential losses, even if economic conditions deteriorate.
Where the pressure points are
At the same time, the review highlighted differences between banks’ internal risk assessments and the regulator’s more conservative view.
The gap in reserve estimates reached KZT 377.4 billion, reflecting stricter classification under the AQR.
As a result:
- Stage 2 loans (loans with increased credit risk) rose by KZT 678.1 billion, with their share increasing from 1.4% to 3.5%;
- Stage 3 loans (non-performing or defaulted exposures) increased by KZT 422.4 billion, from 7.5% to 8.7%.
This does not necessarily signal a deterioration of asset quality, but rather a more realistic and forward-looking recognition of risks.
Compared to 2024, the picture improved
Importantly, when compared with AQR-2024, the overall trend is positive.
Despite the continued growth of loan portfolios:
- total reserve adjustments declined by KZT 37.7 billion,
- the share of Stage 3 loans fell by 1.1 percentage points.
This suggests that banks are gradually improving the quality of their credit portfolios, even as they lend more.
Investment loans show the strongest progress
The most notable improvement was recorded in the investment loan portfolio, where additional provisions fell by KZT 61.6 billion.
According to the Agency, this was driven by:
- the implementation of updated recommendations on LGD (loss given default) calculations,
- a general decline in probability of default (PD) across the portfolio.
In practical terms, banks are becoming more accurate in measuring risk, rather than simply increasing provisions as a precaution.
A major step toward transparency
For the first time, the AQR report includes a separate section with results for each individual bank.
This bank-by-bank disclosure is designed to:
- enhance transparency of supervisory information,
- provide a clearer and more comparable picture of credit risk across the sector,
- strengthen trust and dialogue between the regulator and market participants.
For investors, analysts, and the market as a whole, this marks a meaningful shift toward greater openness.
What this means for the economy
The 2025 AQR shows a banking system that is growing, but not overheating. Credit risks are being identified earlier, capital buffers remain strong, and supervisory standards continue to tighten.
For borrowers, this likely means more differentiated credit conditions. For investors, improved transparency. And for the broader economy, lower chances of sudden banking shocks.
In short, the system is lending more – but it is also learning to manage risk better.
