Page 10 - Kazakh Outlook 2025

country, according to anecdotal evidence, though official statistics make it hard to confirm this figure. Kazakhstan’s financial market regulator recently raised alarm bells about the popularity of BNPLs as hidden fees in BNPL offers contributing to inflation in retail stores and online marketplaces, as regular prices are adjusted to match the prices offered by the BNPL offers. Kazakh lenders’ BNPL portfolios reached KZT2.3 trillion ($4.5bn) as of September 2024, representing a 17% increase since the year began.
As such, any attempts by Kazakh authorities to regulate BNPL lending may also affect the rate of retail sales growth in 2025, though harsh regulatory measures seem unlikely in the current environment.
4.2 Banks
Fitch Ratings’ projections from late October expect the Kazakh banking sector to maintain strong profitability through 2025, driven by continued emphasis on high-margin retail lending and elevated interest rates.
“This lending comes with risks, which could push up credit costs, and loan growth may be dampened by regulatory restrictions intended to avoid overheating. However, we expect key performance metrics to remain strong, and potential tax increases on banking operations are unlikely to have a material credit impact on the sector,” Fitch said.
In 2024, the banks reported profitability at an average annualised return on equity of 34% for the first nine months, consistent with 2022 and 2023 levels, according to Fitch data.
Banks benefited from elevated market interest rates throughout 2024. With the central bank deciding to raise its policy rate by 100 basis points in late November and no signs of a significant slowdown in inflation next year, this trend is likely to continue in 2025.
Fitch projects a slight decline in net returns in 2025 compared to 2023–2024 levels, primarily due to rising risk costs.
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