INTERVIEW-UPDATE 1-Kaspi Bank eyes loan portfolio growth

Published 09/28/2010, 06:24 AM
Updated 09/28/2010, 06:28 AM

* Expects 10-15 percent loan portfolio growth in 2010

* Will consider borrowing $50-100 million abroad in 2011

(Adds details, quotes, background)

By Maria Gordeyeva

ALMATY, Sept 28 (Reuters) - Kaspi Bank, one of Kazakhstan's top 10 lenders, plans to grow its loan portfolio by up to 15 percent in a profitable 2010 and will consider foreign borrowings of up to $100 million next year, its head said.

Mikhail Lomtadze, chairman of the management board, told Reuters he expected Kaspi Bank, one of the largest retail lenders in Kazakhstan, to reverse last year's net loss as the economy recovers from the financial crisis.

"We had a small profit in the first six months of the year, and we will also have a good profit for the full year," Lomtadze said in an interview.

Kaspi Bank posted a net loss of 6.3 billion tenge ($43 million) in 2009, compared with a profit of 3.9 billion tenge in the previous year.

Kazakhstan, Central Asia's largest economy, was among the first and hardest hit by the global financial crisis and is only now beginning to recover as growth picks up and several banks emerge from lengthy debt restructuring programmes.

Kaspi Bankavoided the need for a debt restructuring programme and did not receive state support during the crisis.

The bank estimates it has a 15 percent share of Kazakhstan's retail banking sector and its billboard advertisements are displayed prominently around the country's largest cities.

Lomtadze said Kazakhstan's banking sector had become more predictable after the crisis and that Kaspi Bank was capable of boosting its loan portfolio by 10 percent to 15 percent in 2010.

"Next year it will be 20 to 30 percent," he said.

"Consumer demand is gradually recovering and, in some sectors, it has returned to the levels of 2007. The most important thing is that the banking sector has actively begun to lend."

INTERNATIONAL BORROWING

Kazakhstan's financial regulator has said the fledgling recovery in the country's banking sector would yield only modest profits this year and that the biggest challenge facing the sector was a shortage of solvent borrowers.

Lomtadze said it would take some time before Kazakhstan's banks could return in force to international markets, but that his bank might begin looking abroad next year.

"The market is not ready for Kazakhstan's banks to resume borrowing on international markets," he said.

"As soon as opportunities occur and the market opens up, we would, in principle, become a player in this sector," he said. "We are interested in borrowing at favourable rates."

Lomtadze said international borrowing could again become possible next year. "We don't have the need to borrow hundreds of millions of dollars ... At a good rate, we could borrow about $50 million to $100 million," he said.

Lomtadze also said Kaspi Bank would consider expanding its business into other countries of the former Soviet Union, though this would be a project for the medium to long term.

"This definitely won't be in 2010 or 2011, because there is enough potential to grow here (in Kazakhstan)," he said. (Writing by Robin Paxton; Editing by Michael Shields)

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