Kazakhstan is currently in negotiations with large banks from China, South Korea, and Turkey to open branches. Deputy Chairman of the Kazakh Agency for Regulation and Development of the Financial Market, Nurlan Abdrakhmanov, highlighted the President's directive to enhance competition in the banking sector during a roundtable discussion in the Senate on March 28.
Abdrakhmanov discussed the presence of three Russian banks - Sberbank, VTB, and Alfa-Bank, and how their withdrawal from the market in 2022 led to an increased concentration of clients and borrowers in Kazakhstan's major banks. To address this, ongoing discussions are being held with Chinese, Korean, and Turkish banks to establish branches in Kazakhstan with the aim of boosting competition and reducing loan interest rates.
Efforts are also being made to encourage more active participation from existing foreign subsidiaries, such as Chinese banks - Bank of China, ICBC, TBC Bank, Shinhan Bank, and a Korean bank. Abdrakhmanov emphasized the need for these banks to increase their investments in the Kazakh economy and expand beyond payment services and consumer lending.
Plans are underway to facilitate the transition of these foreign banks to a more substantial level of engagement, aligning with legislative changes to promote financial market development and consumer protection. This strategic move is in line with President Kassym-Jomart Tokayev's September 1, 2023 address, where he highlighted the limited involvement of a few major banks in corporate lending within the country and mandated the establishment of branches for three foreign banks to enhance competition.
