High Rates No Longer Keep Kazakh Banks’ Profits Rising, Analysts Say

Kazakh banks have begun losing profitability despite expensive loans and high interest rates, according to an analysis of the banking sector for March 2026, Orda.kz reports.

Halyk Research found that banks earned 592.3 billion tenge in net profit in the first quarter of 2026, down 10.8% from the same period last year. Net interest income rose to 1.067 trillion tenge, but the sector still became less profitable. Return on equity fell from 32.5% to 23.6%, while return on assets dropped from 4.4% to 3.4%.

Analysts link the decline to tax reforms and tighter regulatory requirements. Minimum reserve requirements for banks were raised in September 2025, and the corporate income tax rate for second-tier banks increased in January 2026. These measures have begun putting pressure on the sector’s profitability.

Loans for households are becoming more expensive. In March, the average rate on loans to individuals rose to 20.9%, up from 19.8% a month earlier.

At the same time, overdue loans continue to grow in the banking system. The share of loans overdue by more than 90 days reached 4%, compared with 3.4% a year earlier. The total volume of such loans rose to 1.7 trillion tenge.

Among major banks, Alatau City Bank had the highest share of problem loans at 7.2%, followed by Bereke Bank at 7%, Home Credit Bank at 6.8%, and Kaspi Bank at 6.2%.

Despite this, the banking system still has substantial liquidity. In March, the National Bank withdrew 8.3 trillion tenge in excess liquidity from the sector, almost 15% more than a month earlier.

Original author: Alexander Zhdanov

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