“The priority is to ensure the safety and health of Bank Home Credit employees, which the PPF Group owns in Kazakhstan. We have news that everyone is fine. We continue to monitor the situation on a regular basis, “said Leoš Rousek, PPF Group Communications Director. The group, through its Kazakh bank, has been operating in the local market since 2006. The company’s representatives do not want to comment on current events in the country. “It is our rule not to comment on the political situation in the individual countries where PPF does business,” adds Rousek.
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Not even a 4% stake in Polymetal is currently valued by the London Stock Exchange at around 6.3 billion crowns, while the total assets of the PPF Group were at the threshold of one trillion crowns at the end of 2020. Even so, the Kazakh crisis managed to reduce Polymetal’s shares to the lowest level since January 2020 in just a few days. “Polymetal generates around 38 percent of operating profit in Kazakhstan. Therefore, the situation in Kazakhstan provokes a certain negative sentiment among investors, and its shares are thus losing, “says Cyrrus portfolio manager Tomáš Pfeiler.
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However, Kazakhstan does not represent a major business exposure for the PPF Group. “Home Credit’s credit exposure in Kazakhstan accounts for less than three percent of PPF’s financial segment assets, so the business there does not represent a significant exposure for the group,” he adds to the Home Credit Group’s lending business. However, the climate of a ruined country would not be conducive to consumer lending.
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“PPF has huge capital resources, so it should overcome the current crisis in Kazakhstan. However, the profitability of its activities in the country will be significantly lower than in the years before the pandemic. If a larger coup in the country could lead to a loss in Kazakhstan for the whole year, “says Finlord analyst Boris Tomčiak.
According to economists, calm in the markets is important for lenders, because then households and companies repay their debts and at the same time want to borrow. An example is the Nagorno-Karabakh war, which erupted in the region in 2020. “Together with the coronavirus pandemic, this has caused significant financial problems for many Armenian non-bank lenders,” Tomčiak said.
Vladimir Putin
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Vladimir Putin
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Kazakhstan is the largest and richest of the Central Asian countries. Recent protests have shaken the image of a politically stable and tightly controlled country that Kazakhstan has used in three decades of independence to attract hundreds of billions of dollars in foreign investment in the oil industry, Reuters reported. For the same reason, miners who took advantage of the rich reserves of oil and cheap electricity took refuge in the Central Asian republic.
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