THE ROLE OF PROVISIONS IN EARNINGS AND CAPITAL MANAGEMENT IN KAZAKHSTANI BANKS
This thesis examines whether banks in Kazakhstan were involved in earnings management behavior through manipulation of loan loss provisions. In addition, banks were tested for possible use of loan loss provisions in order to manage regulatory capital. The sample size consists of the tenth largest banks of Kazakhstan as at 1 January 2013. Research is conducted using ordinary least-squares regression for periods 2007 - 2012. Additionally, the data was split into two sub-samples to test the banks for possible manipulation of loan loss provisions for earnings and capital management during the time of financial crisis (sub-sample period 2007 - 2009) and after financial crisis (sub-sample period 2010 - 2012). The analysis finds no support for the hypothesis that banks in Kazakhstan used loan loss provisions for earnings and capital management neither during 2007 -2012, nor during 2007 - 2009 or 2010 - 2012.