RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of December 28, 2018 No. 317

About establishment of the factors influencing deterioration in financial position of bank and banking conglomerate, branch of nonresident bank of the Republic of Kazakhstan and also approval of Rules of approval of the actions plan providing measures of early reaction, and the Technique of determination of the factors influencing deterioration in financial position of bank (banking conglomerate), branch of nonresident bank of the Republic of Kazakhstan

According to the Law of the Republic of Kazakhstan of August 31, 1995 "About banks and banking activity in the Republic of Kazakhstan" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Establish the following factors influencing deterioration in financial position of bank, branch of nonresident bank of the Republic of Kazakhstan (further - banks):

1) decrease in liquidity rates;

2) increase in loans with overdue debt on principal debt and (or) the added remuneration over 90 (ninety) calendar days without the created reserves on them;

3) increase in ratio of the net classified loans to equity;

4) increase in loans with overdue debt on principal debt and (or) the added remuneration from 61 (sixty one) to 90 (ninety) calendar days without the created reserves on them;

5) excess of the relation of loans with overdue debt on principal debt and (or) the added remuneration over 90 (ninety) calendar days without the created reserves on them to the total amount of loan portfolio of bank without the created reserves on it;

6) increase in share of the classified receivables without the created reserves on it in cumulative receivables without the created reserves on it;

7) decrease in profit ratio of assets;

8) decrease in average value of the relation of free assets in national currency to obligations poste restante in national currency.

For the purposes of this Item:

the created reserves are understood as the reserves created according to requirements of international accounting standards;

calculation of loans joins the amount of principal debt;

the net classified loans are understood as book value of loans (principal debt taking into account discounts (awards), positive (negative) adjustments, the added remuneration and the reserves created on them) on which according to accounting data reserves at the level of more than 10 (ten) percent are created.

1-1. The equity of branch of nonresident bank of the Republic of Kazakhstan is understood as the assets accepted as reserve, calculated according to Prudential standard rates and other regulations and limits, obligatory to observance, for branches of nonresident banks of the Republic of Kazakhstan (including branches of Islamic nonresident banks of the Republic of Kazakhstan), their normative values and technique of calculations, including procedure for forming of assets of branches of the nonresident banks of the Republic of Kazakhstan (including branches of Islamic nonresident banks of the Republic of Kazakhstan) accepted as reserve, and their minimum size, approved by the resolution of Board of the Agency of the Republic of Kazakhstan of February 12, 2021 No. 23, registered in the Register of state registration of regulatory legal acts at No. 22213.

2. Establish the following factors influencing deterioration in financial position of banking conglomerate:

1) decrease in coefficients of sufficiency of equity of banking conglomerate;

2) increase in coefficients of the maximum extent of risk at one borrower of banking conglomerate;

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