The agency published a demographic analysis of credit risk as part of the regular AQR 2023
The Agency of the Republic of Kazakhstan for regulation and development of financial market has published a demographic analysis based on data from the regular assessment of the banking sector's asset quality review (AQR) conducted in 2023. This analysis is a supplement to the previously released "Regular AQR 2023 Report", which provides a detailed analysis of credit risk, and focuses on behavioral aspects of borrowers, taking into account their gender and age characteristics.
The study is based on data from banks' active loan portfolios and statistics used to calculate loss given default (LGD). The report analyzes portfolios of mortgage, unsecured consumer and secured personal loans. Total outstanding debt in the consumer loan portfolio in AQR 2023 amounted to KZT6.9 trillion, while mortgage (excluding Otbasy Bank data) and secured loans amounted to KZT1.6 trillion each.
The study identified that the share of accumulated credit losses among men is 10.3%, while for women, this figure is at 7.8%. In the mortgage loan portfolio, the share of EAD at stages 2 and 3 among men is 4 p.p. higher than that of women, and the share at stage 1 is 8 p.p. lower. In terms of default and write-off statistics, men dominate both by number of cases and the volume of outstanding debt at the time of default, whereas women have a higher average debt at the time of default only in the mortgage portfolio.
The main body of borrowers within the regular AQR 2023 comprises millennials (born from 1982 to 2000), whose overall credit quality is better than that of other generations.
Statistics on defaults and write-offs on secured loans show the predominance of Generation X (1963-1981) and Millennials, especially among men, on unsecured loans. Among female borrowers, the largest share of defaults among baby boomers (1943-1962) is recorded in the unsecured consumer loan portfolio. The first cases of default on unsecured consumer loans among Generation Z (2001-2005) are also noted, although their share is still small.
The agency emphasizes that it is crucial to understand demographic trends and behavioral patterns in the context of growing consumer loans and rising household debt levels. This analysis assists banks in better risk assessment and effective development of targeted lending strategies; and contributes to greater transparency and accountability within the banking industry.
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