As the rating agency Fitch pointed out devaluation of credits in three Kazakhstani banks, including the country’s leading private bank KazKom, and smaller ones, the Alliance and Caspian banks, the reaction of Kazakh bankers was immediate. They said that the Fitch’s methodology of evaluation of the assets quality is conservative.

The rating agency’s report, actually, reads that the Kazakh banking system’s quality of assets degraded, although the critical bottom level has not been reached yet. Kazkom - recently rebranded from Kazkommertzbank to a more “user-friendly interface” - says the bank is working closely with Western risk management consultants from ABN Group and underscores that Kazkom is very stiff in retail credit sector, thus ensuring stability of the credit portfolio. The Caspian Bank’s CEO blamed the agency for hasty conclusions based on the the first quarter’s data, which is uncertain due to seasonal decline of payment discipline and business activity. The Alliance bank’s leadership sweeped aside Fitch’s concerns by saying that their business model is based on retail crediting and non-standard methods of risk management, which quarantee quality of their assets.

Among other news, the Central Asian branch of a Moscow-based Institute of Economic Strategies released a statement saying that as of March 1, 2008, six leading banks of Kazakhstan — Kazkom, BTA, Halyk, Alliance, ATF and CenterCredit — acknowledged $1,178,9 million in credits as losses. Meanwhile the national regulator of financial sector, Agency of Financial Supervision, proposes introduction of criminal liability of the bank leaders, whose actions led to the institution’s bankruptcy. Some bankers are afraid that vagueness of the formulations and definitions may lead to persecution for the actions that constitute a business risk, rather than crime.