The National Fund has lost about $4 billion because of bad investments in bonds issued by Kazakhstani banks as part of governmental support for those banks. Chair of the National Bank Timur Suleymenov, revealed this data while responding to an inquiry from members of parliament.
«We had been helping banks since the middle of the 2000s by acquiring their bonds. Those bonds were issued at a very low rate of 1% to 3%. Their nominal value is more than $5.9 billion, while their fair market value is just $2.1 billion. We’ve got that difference because the bonds were bought under non-market conditions,» Suleymenov said.
The head of the regulator also added that Kazakhstan changed its rules for National Fund management in 2022. Under these rules, National Fund assets can only be invested in financial instruments that have an interest rate aligned with medium-term inflation (10-12%). This level matches the rate of public debt.
The official didn’t clarify under which governmental support program the banking bonds had been acquired. In 2017, the National Bank approved a financial sustainability program for the banking sector, allocating $1.3 billion for its implementation. Public relief was provided to ATFBank, Bank RBK, Eurasian Bank, Bank CenterCredit and Nurbank. Before that (in 2015), there was another recipient of public funds: Kazkommertsbank, which received state support in the form of $499 million deposited in the bank. In April 2024, Halyk Bank, which acquired Kazkommertsbank in 2018, announced that it had repaid all those public funds ahead of schedule. The remaining banks are still paying back public money.
According to World Bank estimates, from 2009 to 2020, the government of Kazakhstan provided roughly $16.3 billion in public relief to domestic banks, with only $3.7 billion paid back to the budget. This equation stems from an analysis of banks reports by the international institute, which also took into account a 10% discounting of flows (the rate on sovereign debt as of the end of 2020). However, Chair of the Agency for Regulation and Development of the Financial Market Madina Abylkassymova called this figure incorrect, though she offered no alternative estimates.
