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 "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;

9) excess of the relation of idle loans to the total amount of loan portfolio of bank without the created reserves on it;

10) excess of the relation of average monthly value of transactions of "repo" with securities to average monthly value of cumulative obligations.

For the purposes of this Item:

idle loans are understood as the loans issued to legal entities and physical persons on which the impairment signs corresponding to the criteria established by International Financial Reporting Standards and Rules of creation of provisions (reserves) according to the International Financial Reporting Standards and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting approved by the resolution of Board of National Bank of the Republic of Kazakhstan of December 22, 2017 No. 269, registered in the Register of state registration of regulatory legal acts at No. 16502, the acquired or created financial assets in the form of loans on which there was confirmation about impairment at the time of initial recognition are revealed;

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;

in calculation of the factors influencing deterioration in financial position of bank, branch of nonresident bank of the Republic of Kazakhstan according to the subitem 9) of this Item the credit depreciated loans issued since January 1, 2024 are considered;

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;

3) increase in the amount of requirements of members of banking conglomerate to each other according to intra group transactions between members of banking conglomerate (except for investments of members of banking conglomerate into the capital of other participants, transactions with the affiliated organization acquiring doubtful and bad assets of parent bank, the transactions closed on reporting date).

3. Approve:

1) Rules of approval of the actions plan providing measures of early reaction according to appendix 1 to this resolution;

2) 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 appendix 2 to this resolution.

4. Recognize invalid regulatory legal acts of the Republic of Kazakhstan, and also structural elements of some regulatory legal acts of the Republic of Kazakhstan according to the list according to appendix 3 to this resolution.

5. To department of supervision of banks (Kizatov O. T.) in the procedure established by the legislation of the Republic of Kazakhstan to provide:

1) together with Legal department (Sarsenov N. V.) state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days from the date of state registration of this resolution its direction in the Kazakh and Russian languages in the Republican state company on the right of economic maintaining "The republican center of legal information" for official publication and inclusion in Reference control bank of regulatory legal acts of the Republic of Kazakhstan;

3) placement of this resolution on official Internet resource of National Bank of the Republic of Kazakhstan after its official publication;

4) within ten working days after state registration of this resolution submission to Legal department of data on execution of the actions provided by subitems 2), 3) of this Item and Item 6 of this resolution.

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