Deposits play a crucial role in stabilizing the banking system and supporting economic growth in Kazakhstan, as in many countries.
They ensure the safety of savings for the public and serve as a source of financing for credi.organizations. Deposits are a vital funding source for second-tier banks (hereinafter referred to as BVUs), which utilize them for issuing loans, investing in securities, and other assets, thereby contributing to the country's economic growth.
According to data from the National Bank of the Republic of Kazakhstan (NB), the banking system, on average, has increased its deposit portfolio by 1.08 percentage points per month in 2022 and 2023. By the end of December 2023 deposits in depositary institutions reached 34.7 trillion tenge, marking a 7.64 percentage point increase compared to November 2023. In annual terms, the deposit portfolio by the end of December 2023 grew by 12 percentage points compared to December 2022.
The growth mentioned can be attributed to several factors:
- Heightened economic uncertainty: In conditions of economic uncertainty, individuals and companies tend to preserve their funds in reliable assets, such as bank deposits.
- Inflation: High inflation in Kazakhstan in 2022 and 2023 stimulated both individuals and legal entities to place their funds in banks to preserve their purchasing power.
- Increased deposit interest rates: In 2023, the National Bank of Kazakhstan raised deposit interest rates, making them more attractive to depositors.
In the overall deposit structure, deposits in the national currency dominate, constituting an average share of 68.9% over the last 2 years. The most significant growth in deposits is observed in 2023, where higher benchmark rates increased the attractiveness of deposits. This indicates growing trust in the national currency by economic agents in the country.
The growth of the deposit portfolio in Kazakhstan has several positive consequences for the country's economy, such as:
- Additional funding for BVUs: It provides BVUs with an additional source of financing that they can use for issuing loans and investing in the economy.
- Successful implementation of NB policies: The increase in the benchmark rate aims to stimulate economic agents to limit their demand for goods and services by increasing savings.
- Stimulus for banks to innovate: Deposit growth can encourage banks to develop new financial products and services, providing the population with more opportunities to manage their savings.
