Stress assets fund to support Republic's banking system

Astana, 3 October 2008, (Khabar) - Despite the world economic crisis,
Kazakhstan's budget is being executed in accordance with the scheduled plan is a statement made by the Minister for Finance of the country, Bolat Zhamishev, speaking at a media conference in Astana.

This year's budget income has increased by almost 30% compared with 2007 with all the
investment and social projects to be implemented on time, the minister
reassured the journalists.

Bolat Zhamishev, Minister for Finance of RK:
- We can not foresee any liquidity problems at the moment but there is still
some mistrust from the investors' community. It is quite reasonable, because
the major share of all assets is under stress now.

The Minister explained that some of liability accomplishment is threatened
to remain unexecuted, especially long-term housing mortgages issued by banks
and secured with real estate items.

Bolat Zhamishev, Minister for Finance of RK:
- Today, the cost of security has dropped and it is now difficult to say for
sure what the real price of real estate is in the market.

As a result, some borrowers found it easier not to pay out the mortgage and
give up the apartment. The stress assets fund has been formed to help
financial institutions and provide stability for their activity. As part of
the project, the government will buy out banks' risk loans which are
threatened with depreciation. However, banks will have to purchase their
assets back in the future. According to Bolat Zhamishev, the stress assets
fund is set to start operating this year with the government to allocate
close to one billion tenge for its establishment and operation. The fund
will also feature the money which was not used as part of budget projects
within the past 9 months.