Kazakhstan’s commercial banks recorded a record increase in lending in August despite sharp outflows of corporate deposits. Aggregate sector net profit reached 1.61 trillion tenge through August, down 13.6% year-over-year, showing a slight recovery from July as lending growth accelerated.
Corporate outflows hit record levels
Corporate deposits shrank by 802 billion tenge, or 3.8%, in August, marking the second-largest monthly business withdrawal of 2026. Real capital flight was partially cushioned by foreign exchange revaluations as the tenge appreciated 2.4% against the U.S. dollar. Halyk Bank accounted for more than half of the monthly decline, losing 445 billion tenge in corporate funds. Overall, six lenders avoided corporate outflows during the month, led by Kaspi Bank and Freedom Bank, alongside foreign subsidiaries including Citibank and ICBC.
Retail deposits and lending fuel sector expansion
In contrast to business withdrawals, household deposits rose by 133 billion tenge in August, bringing eight-month retail deposit growth to 2.4 trillion tenge. Kaspi Bank captured nearly one-third of net retail inflows year-to-date, narrowing the gap with market leader Halyk Bank to 236 billion tenge in consumer deposits.
Driven by consumer demand, total sector loans expanded by 865 billion tenge, or 1.9%, in August. This represented the fastest monthly credit expansion recorded in 2026. Halyk Bank generated one-third of August loan growth, followed by ForteBank, Kaspi Bank, and state housing lender Otbasy Bank.
Rapid credit growth masks rising default risks
Non-performing loans, comprising Stage 3 and defaulted assets, rose by 62 billion tenge in August to reach 3.13 trillion tenge. Over the first eight months of 2026, toxic assets expanded by 18.7%, driven primarily by Halyk Bank and Kaspi Bank. However, because new loan issuances expanded faster than default accumulation, the sector’s non-performing loan ratio edged down slightly from 6.82% to 6.77%.
State housing lender Otbasy Bank and institutional corporate lender Citibank led profitability growth, whereas Alatau City Bank registered a 91.4% profit collapse following balance sheet revaluations and early state aid repayments.