Problem loans of second-tier banks in the Republic of Kazakhstan and methods of their management

Abstract

The growth of problem loans in the bank's loan portfolio entails serious consequences for the bank's ability to generate profit and develop dynamically in modern conditions. Banks are faced with the task of forming and improving existing methods of regulation and management of problem loans. In this scientific publication, the authors studied the theoretical and practical conceptual foundations for the definition of problem loans, which was the purpose of the study. An economic and statistical analysis of the loan portfolio of second-tier banks of the Republic of Kazakhstan for 2020-2023, its dynamics and structure was carried out. The authors identified the regions of the country by the amount of overdue loans for the same period. Much attention was paid to the analysis and assessment of the quality of the loan portfolio of the banking sector of Kazakhstan, during which five second-tier banks with the highest NPL were identified, such as «Halyk Bank of Kazakhstan» JSC, «Kaspi Bank» JSC, «First Heartland Jusan Bank» JSC, «Bereke Bank» JSC and «Eurasian Bank» JSC. The loan portfolio of the above banks for 2020-2023 was also analyzed, loans were ranked in three groups according to the quality of loans issued and the likelihood of their non-repayment. Based on the analysis, the authors give recommendations for the recovery of the banking sector from problem loans. A high-quality and reliable analysis of the loan portfolio makes it possible to adequately assess the state of asset quality and take the necessary measures in a timely manner.