Over the last two decades, the banking sector has expanded significantly in the economy of Kazakhstan. The highest development in the banking sector took place in the period between 2000 and 2008 (until 2008 world economic crisis). At that period, growing oil prices and cheap funding in external financial markets had positive effects on the country’s banking sector. Along with the favorable external factors, the absence of strict regulation in the banking sector allowed it to grow at a rapid pace. However, the world economic crisis took the overheated Kazakhstani banking sector by surprise and caused serious destabilizing effects in the sector in 2009. The government of the country rescued the banking sector by nationalizing some commercial banks, namely, BTA Bank, Kazkommertsbank, Halyk Bank, getting a significant financial support amounted to 332 billion tenge ($2.2 billion) from the National Fund of Kazakhstan. This measure helped to avoid the collapse of the banking sector, but the sector was still in a bad situation and even in 8 years after the global economic crisis, the sector was not able to return back to pre-crisis conditions.
Daniyar Nurbayev is a research fellow at the Eurasian Research Institute. Daniyar completed his bachelor’s degree in Finance in the Kazakh-British Technical University in 2013. In addition, he holds Masters degree in Finance from the Kazakh-British Technical University (2015).