FIRST HALF 2015 PRESENTATION

Transcription

1 FIRST HALF 2015 PRESENTATION

2 DISCLAIMER IMPORTANT: The information in this presentation may not be reproduced, redistributed, published or passed on to any other person, directly or indirectly, in whole or in part, for any purpose. The information has been prepared by the company. No other party accepts any responsibility, or makes any representation or warranty, express or implied, for the contents of the information, including its accuracy, completeness or verification, or for any statement made or purported to be made in connection with the company. Nothing in this presentation shall be considered a promise. The information includes forward-looking statements. All statements, other than statements of historical fact, that are included in the information are forward-looking statements. Forward-looking statements include the company s current expectations and projections of its financial condition, and results of operations, plans, objectives, future performance and business. These statements may include words such as target, believe, expect, aim, intend, may, anticipate, estimate, plan, project, will, can have, likely, should, would, could and other words and terms of similar meaning. Known and unknown risks, uncertainties and other important factors beyond the company s control could cause the company s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements are based on numerous assumptions about the company s present and future business strategies and the environment in which it will operate in the future. No representation, warranty or undertaking, express or implied, is made about - and no reliance should be placed on - the fairness, accuracy, completeness or correctness of the information or the opinions contained therein. The information has not been independently verified and will not be updated. The information, including but not limited to forward-looking statements, applies only as of the date of this presentation and is not intended to give any assurances of future results. The company expressly disclaims any obligation to disseminate any updates or revisions to the information, including any financial data or forward-looking statements. It also will not publicly release any revisions it may make to the information that may result from any change in the company s expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this presentation. Market data used that are not attributed to a specific source are estimates of the company and have not been independently verified. 2

3 TABLE OF CONTENTS 1. EURASIAN BANK 2. DYNAMICS OF KEY FINANCIAL INDICATORS 3. CREDIT HIGHLIGHTS Appendices Figures for six months ended June 30, 2015, are under International Financial Reporting Standards (IFRS) and are consolidated and unaudited, unless otherwise stated. Year-end figures are KPMG-audited consolidated financial statements unless otherwise stated. The exchange rate used in this presentation is $1 to tenge, the National Bank of Kazakhstan s rate on June 30, NBRK data means data that meets National Bank of Kazakhstan requirements. NBRK financial data are used for comparisons with other Kazakhstan banks. All financial information in this presentation meets IFRS requirements unless otherwise expressly stated. 3

4 EURASIAN BANK 4

5 EURASIAN BANK PROFILE Ninth-largest bank by assets and the leading bank in car financing as of June 30, Established in 1994 by owners of ENRC group (now ERG) to serve affiliated companies in natural resources and mining. ERG is no longer a material part of the bank s business. Currently provides all types of banking services to corporate clients, small and medium-sized enterprises and individuals. As of June 30, 2015, the bank had 4,745 employees, 16 full-service branches, 134 service centers, 455 ATMs, 401 information payment terminals and more than 2,500 other points of sale. Eurasian Bank also has a subsidiary in Russia, with a presence in Moscow, Novosibirsk and Omsk. KEY INDICATORS: JUNE 30, 2015 Millions of tenge Millions of dollars Total assets 766,783 4,118 Net loans 593,456 3,187 Customer deposits 494,418 2,655 Total equity, including retained earnings 68, Capital adequacy, total (NBRK) 11.8% Non-performing loans 10.0% Return on Average Equity, ROAE (1) 4.3% Return on Average Assets, ROAA (1) 0.4% INTERNATIONAL AWARDS Net Interest Margin, NIM (1) 6.5% BEST BANK IN KAZAKHSTAN Award from EMEA Finance BANK OF THE YEAR IN KAZAKHSTAN 2012 and 2014 Award from The Banker BEST BANK IN KAZAKHSTAN 2014 Award from IAIR DOMESTIC RETAIL BANK OF THE YEAR , 2015 Award from Asian Banking & Finance RATINGS Short-term NP B Long-term B2 B+ Outlook Stable Stable (1) Annualized 5

6 CONSISTENT STRATEGY GROWTH TARGETS 5-6% market share over the medium term Further expansion in the CIS region, with focus on Russian Federation in mid-term Diversification of funding sources Growth opportunities given changes in strategies of bigger banks ASSET QUALITY Enhancement of risk management system Unified information-technology system Top qualifications and strong business culture among team members Conservative loan portfolio and control of credit risks UNIVERSAL BANK Healthy balance between corporate, SME and retail operations Optimization of distribution network in Kazakhstan Cross-sales among existing client base Product innovations and top-quality service Robust IT infrastructure supporting business growth, product development and operational efficiency RETAIL Leadership positions in consumer-finance lending Focus on service quality, customized approach, innovations and convenience Alternative channels prioritization, physical network optimization CORPORATE Focus on the Natural Resources, Energy and Power, Transportation and Agricultural sectors of economy Opportune time to gain market share Current accounts and deposits support funding profile SMALL AND MEDIUM-SIZED ENTERPRISES Selective approach in small and medium-sized enterprises market Analyzing and building client base for future expansion, taking into account risk dynamics born out of crisis Cautious participant in State Support Programs, jointly with the Baiterk and DAMU funds PRIVATE BANKING Expansion of product lines for high-net-worth individuals Cross-sale opportunity for corporate and individual accounts 6

7 HIGHLIGHTS STRONG TRACK RECORD AND NEW INITIATIVES New management that took over at the end of 2009 turned the bank around from a loss in 2009 to a stable rate of net interest margin (1) at 6.7%, against the sector average of 5.9%, as ofjune 30, Michael Eggleton joined the Bank as CEO at the end of 2009 and assembled the current management team of experienced local and international experts. Mr. Eggleton previously held top positions with Merrill Lynch, Credit Suisse and National Bank Trust. Since the current management team arrived, the bank has been an industry leader in growth, new lines of business, credit quality, innovative services and stable financial results. The bank has increased its active customer base almost seven times in the past five years under the new management team. The number of clients reached 1,224,085 as of June 30, At the end of 2013 the bank started a loan assignment and servicing program for standard retail loans that is unique to the market. The program allows the bank to obtain higher-margin retail business, including post-deal servicing fees, and better manage business mix and risk exposure. In 2014 the bank assigned about 22 billion tenge in loans. It received an award for its innovation from EMEA Finance - Best Securitization Program in Central and Eastern Europe. In spite of the difficult economic situation in the region, the bank was able to place a $500 million Eurobond in November It improved the bank s liquidity just before a market liquidity crunch started in December. RETAIL FINANCE SPECIALIST The acquisition of ProstoCredit s consumer loan portfolio from SocieteGenerale, together with the ProstoCredit brand name in 2010, gave the bank a functioning business that helped it achieve a significant increase in its loan portfolio and client base. It also helped develop branches and the bank s network, and increased consumer awareness of the bank. The bank is the market leader in auto financing, issuing about half of all car loans in Kazakhstan. Our continued success in the auto loans segment has led to 9% growth in the portfolio as of June 30, 2015 (to billion tenge), and accounts for 48% of the retail portfolio (up from 32% in 2013). The bank has significantly increased the number of payments made directly through its network. This has been done with the growth of the branch network, as well as through technology with the roll out of payment terminals and debit and repayment cards. The bank now handles 90% of all repayments within it s network, up from 67% at the beginning of (1) Source: NBRK unconsolidated data 7

8 HIGHLIGHTS ROBUST RISK MANAGEMENT SYSTEM An automated retail scoring system developed by the new management team allows the majority of loan applications to be processed in 15 to 30 minutes. We now have credit scoring for all borrowers in all segments. Non-performing loans made up 9.7% (1) of all loans on June 30, The figure for the over-all banking sector was 9.9% (1). New collection procedures led to soft collections efficiency at the end of 120 days reaching more than 90% for retail loans as of June 30, Also under the new management team, the percentage of non-performing retail loans (2) fell from 57.6% of loans issued before 2010 to 11.3% for loans issued between 2010 and June 30, GOOD LIQUIDITY POSITION The shortage of tenge liquidity that started toward the end of 2014 has continued into the first months of 2015, affecting both the deposit base and the loan book. A high level of liquidity was maintained after the devaluation in early February 2014 (3). The bank s liquidity decreased year-to-date from 20.8% to a comfortable level of 16.2% as of June 30, Management has implemented policies to reduce liquidity problems and focus more on attracting funds from corporations, where there is less rate-sensitivity. The bank enjoys longstanding relationships with key corporate providers of deposits, including state-owned companies and ERG. Private Banking further diversifies liquidity sources. Supportive shareholders are one of the bank s key competitive advantages. STRONG SHAREHOLDER SUPPORT Shareholders made a capital injection of 5.9 billion tenge ($39 million) (4) in June In 2013 the bank paid shareholders its first dividend -- 2 billion tenge -- since starting the turnaround in In May 2014 the bank made another dividend payment of 1.5 billion tenge (about 12% of 2013 earrings). The bank s shareholders are key players inthe Kazakhstan economy and are included inforbes World s Billionaires List. (1) Source: Source: NBRK unconsolidated data (2) Principal of loans overdue by more than 90 days. Balance at July 1, 2015 (3) On February 11, 2014 NBRK devalued the tenge versus the $ by 19%, setting the new exchange rate at 185 tenge per $1 with a 3 tenge range either side (4) NBRK exchange rate is $1 to tenge as of June 30,

9 EURASIAN BANK IS A STRONG MIDDLE PLAYER IN MARKET TOP 15 BANKS BY NET INTEREST MARGIN MARKET SHARE BY ASSETS MARKET SHARE BY GROSS LOANS (1) MARKET SHARE BY DEPOSITS HomeCredit 27,8% KKB 20,7% KKB 22,5% KKB 15,4% Exim 11,8% Halyk 15,4% Halyk 15,2% Halyk 14,9% Zaman 10,1% Tsesna 7,8% Tsesna 8,8% Tsesna 8,8% NB Pakistan 10,0% Sber 7,5% Sber 7,6% Sber 7,7% Capital 9,3% BCC 6,1% BCC 7,2% BCC 6,7% KKB 8,3% KASPI 5,7% KASPI 6,6% KASPI 6,4% KZI 7,9% ATF 5,6% ATF 5,0% ATF 5,7% Pozitiv 7,5% Eurasian 4,4% Eurasian 4,7% Eurasian 5,1% PNB 6,8% Forte 4,8% Forte 3,8% Forte 4,5% Eurasian 6,7% RBK 3,4% RBK 3,5% RBK 4,4% Kazinvest 6,7% Zhilstroisber 2,6% Zhilstroisber 2,2% Zhilstroysber 3,4% Kassa Nova 6,6% Citi 1,9% Citi 0,5% Citi 2,5% Al Hilal 6,5% Nur 1,8% Nur 1,5% Nur 2,2% Delta 6,5% Delta 1,8% Delta 2,2% Delta 1,6% Astana Bank 6,3% Alfa 1,4% Alfa 1,2% Alfa 1,5% (1) Gross loans including repurchase agreements and interbank operations Source: NBRK unconsolidated data as of July 1,

10 DYNAMICS OF KEY FINANCIAL INDICATORS 10

11 OPERATING PERFORMANCE Cost-cutting and reduction of excess liquidity under the new management reduced the Cost/Income ratio to 63.4% as of June 30, 2015, from 75.7% at the end of Net Interest Margin grew from 2.4% in 2010 to 6.5% as of June 30, Although Net Interest Margin remained high, it was lower than the 8.8% reached in 2013 mostly due to increased funding costs reflecting the current market environment. The bank reported net profit of 1.5 billion tenge ($7.8 million) for the first six months of The projected figure for all 2015 is 8.5 billion tenge ($45.6 million). Loans to customers accounted for over 98% of all interest income. NET PROFIT (LOSS) DYNAMICS billions of tenge ,4 9,8 10 8,5 6,0 5 0,6 1,5 0 12M M M M M M M M 2015B NET INTEREST MARGIN ,1 New management joined 10% 6,3% 7,8% 8,8% 7,2% 6,5% INTEREST INCOME, FEE AND COMMISSIONS INCOME 5% 0% 2,4% billions of tenge ,8 20,6 COST / INCOME RATIO % 50% 75,7% 52,2% 55,2% 50,5% 54,7% 63,4% ,6 4,9 0% 0 Net interest income Net fee and commission income 6M M

12 ASSETS Assets as of June 30, 2015, had decreased 5.2% to billion tenge ($4.1 billion) from billion tenge ($4.3 billion) at the end of Management continues to focus on balance-sheet efficiency. For the past five years the bank has been eliminating low-yielding liquid assets and reducing negative carry. Reflecting that strategy, the share of loans to customers grew from 59.8% of assets at the end of 2010 to 77.4% as of June 30, The liquid-assets position is managed with care, with the bank taking into consideration external market factors. After the devaluation at the beginning of 2014 the bank raised liquidity in the short term as a precautionary measure. Liquidity remained at a comfortable level of 16.2% of assets as of June 30, A key management goal is a liquidity level of 15% of assets. 100% 80% 60% 40% 20% 0% STRUCTURE OF ASSETS 59.8% 69.3% 75.4% 73.5% 72.7% 77.4% Cash and cash equivalents Securities Loans to customers Amounts receivable under reverse REPO Loans to banks Property, equipment and intangible assets Other assets LIQUID ASSETS (1) ASSETS AND LOANS GROWTH 33,2% 24,9% 19,7% 20,7% 20,8% 16,2% billions of tenge Assets Gross loans Net loans (1) Liquid assets: cash and short term funds due from the central banks, trading securities, interbank assets and short-term KZT-denominated government securities 12

13 LOAN PORTFOLIO The bank has grown its loan portfolio by 20-30% per year from 2010 to 2014, with 40-60% growth in the retail segment. For the first six months of 2015, gross loan portfolio increased by 2% year-to-date, due to uncertain market conditions and a slowdown in the economy. In the bank focused on corporate clients to reduce borrower risk during the financial turmoil. In 2011 the bank decided to ramp up its consumer-loan operation by acquiring the ProstoCredit loan portfolio. Loans to distressed industries are about the same as in As of June 30, 2015, real estate loans accounted for 0.02% of the total portfolio, and construction loans for 4.7%. The figures for 2014 were 0.03% for real estate and 7.4% for construction. Construction mainly includes road construction, infrastructure projects and electricity grids. The bank s strategy, as a full-service universal bank, is to have a balance between segments: a loan book mix of about 50% corporate and SME, and 50% retail. Retail customers 53% GROSS LOAN BREAKDOWN BY INDUSTRY, JUNE 30, 2015 Wholesale trade 8% KZT bn Construction 4% Transport 4% Other -23% Agriculture, forestry and timber 3% Mining/Metallurgy 2% Manufacturing 2% Retail trade 1% Services 1% 100% BREAKDOWN OF GROSS LOANS LOAN BREAKDOWN BY CURRENCY, JUNE 30, 2015 LOAN BREAKDOWN BY EXPECTED MATURITY, JUNE 30, % 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% EUR RUB USD KZT 100% overdue 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% more than 5 years from 1 to 5 years from 3 to 12 months up to 3 months Corporate customers SME Retail customers 13

14 LEADING POSITION IN CONSUMER AND CAR LENDING The bank is a key player in the fast-growing and profitable consumer and car lending niche. The bank and it s retail activity was completely transformed by the 2010 ProstoCredit acquisition. An innovative auto-loan approach -- the Car in One Day program -- has led to the bank issuing about half of all car loans in Kazakhstan. The mix in the retail loan portfolio has changed in the past five years. From 2010 to June 30, 2015, car loans and uncollateralized consumer loans have grown from 6.2% to 91.1% of the retail portfolio. Mortgage loans decreased significantly at the end of 2013 (by 46.9% year-over-year), as the bank sold about a third of the mortgage loan bookto the Kazakhstan Mortgage Company. Loan amount Loan maturity RETAIL BUSINESS Retail (Except Mortgages) Mortgage $80 - $106,581 $799 - $799, months months Average number of loans made per month 30,363 5 Average loan amount Average loan maturity $1,938 $66, months 208 months Number of clients EVOLUTION OF CUSTOMER BASE (1) RETAIL LOAN MIX % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Car loans Uncollateralized consumer loans Loans collateralized by cash Small business loans Mortgage loans (1) Unique clients are counted as the number of individuals or corporations with one or more accounts with the Bank 14

15 LOAN PORTFOLIO QUALITY New management has established sound risk control. However. non-performing loans issued before 2010 still comprise about 20% of total non-performing loans. The share of restructured loans was 8.7% of gross loans as of June 30, 2015, vs. 7.3% in The portfolio is well collateralized, with unsecured loans comprising less than one third of the portfolio. The average loan-to-value ratio was 47% as of June 30, 2015, compared with 47.1% in Reduced loan concentration. The share of top 10 loans fell from 33.3% of all loans in 2010 to 18.7% as of June 30, About 90% of interest income is collected in cash, versus accrued. 15% 13% 11% 9% 7% 5% 3% 1% NON-PERFORMING LOANS (1), PROVISIONS 9,4% 9,0% 9,9% 10,0% 7,5% 8,5% 9,1% 7,6% 6,9% 7,6% 5,2% 5,7% NPLs / Total loans Provisions / Total loans TOP TEN BORROWERS SHARE OF GROSS LOAN PORTFOLIO LOAN CLASSIFICATION: CORPORATES AND SMEs JUNE 30, 2015 LOAN CLASSIFICATION: RETAIL PORTFOLIO JUNE 30, % 33,3% 30% 19,4% 18,2% 18,7% 20% 15,5% 14,5% 10% 0% (1) Gross book value of impaired loans overdue by more than 90 days (2) Impaired loans 100% overdue more 90% than 1 year(2) 80% 70% 60% 50% 40% 30% 20% 10% 0% overdue more than 90 days and less than 1 year (2) overdue less than 90 days (2) not overdue (2) loans without individual signs of impairment 100% overdue more 90% than 360 days 80% 70% 60% 50% 40% 30% 20% 10% 0% overdue days overdue days overdue days overdue less than 30 days not overdue 15

16 QUALITY OF LOANS ISSUED BEFORE AND AFTER 2010 INCLUDED IN BALANCE SHEET ON JUNE 30, 2015 (1) LOANS GRANTED BEFORE 2010 VOLUME OF LOANS ISSUED BEFORE 2010 vs. 06/30/2015 Total Corporate SMEs Retail Principal, millions of tenge 46,705 32,412 6,632 7,661 Non-performing loans, millions of tenge % non-performing loans 12,230 2,288 5,531 4, % 7.1% 83.4% 57.6% millions of tenge issued before 2010 issued /30/2015 Total Corporate SME Retail LOANS GRANTED, /30/2015 Total Corporate SMEs Retail Principal, millions of tenge 542, ,184 41, ,432 Non-performing loans, millions of tenge % non-performing loans 44,999 7,494 3,520 33, % 3.7% 8.6% 11.3% 100% 80% 60% 40% 20% 0% NON-PERFORMING LOANS BY SEGMENT issued before 2010 issued /30/ ,4% 57,6% 26,2% 8,3% 7,1% 3,7% 9.5% 11,3% Total Corporate SME Retail (1) Source: NBRK unconsolidated data 16

17 LIABILITIES Diversified funding mix, primarily consisting of customer deposits supported by international and domestic bonds, subordinate debt and other borrowings. The bank relies mainly on the local deposit market for funding. As of June 30, 2015, clients deposits accounted for 70.8% of liabilities (year-end 2014: 73.9 %). Total deposit base decreased by 10% year-to-date, reflecting the current market environment. Corporate deposits continue to be the mainstay of the deposit funding base and represented 65% of total client deposits. The devaluation of the tenge in early 2014 led to an increase in demand for dollardenominated accounts. Tenge-denominated deposits have dropped by 12.1% year-todate. The bank issued a $500 million Eurobond and swapped it efficiently into tenge in November These three-year notes give the bank secure longer-term funding, helping to reduce the gap between assets and liabilities over time. Repurchase agreements Due to banks 0,3% 0,2% Other liabilities 2,5% LIABILITIES STRUCTURE, JUNE 30, 2015 KZT bn Subordinated debt 3,7% Other borrowings 6,6% Debt securities issued 15,9% Customer deposits 70,8% BREAKDOWN OF CURRENT ACCOUNTS millions of tenge BREAKDOWN OF CUSTOMER ACCOUNTS AND DEPOSITS BY CURRENCY % 0 90% 28,7% 24,5% 80% 38,9% 33,6% 70% 54,9% 53,6% Corporate Retail 60% BREAKDOWN OF TERM DEPOSITS 50% 40% millions of tenge ,3% 75,5% % 61,1% 66,4% % 45,1% 45,6% % % 0 KZT FX Corporate Retail 17

18 CREDIT HIGHLIGHTS 18

19 Strong shareholder support One of the cleanest balance sheets on the market Eurasian Bank Financial stability Mix of top Western and local management 19

20 APPENDICES 20

21 BALANCE SHEET IFRS 06/30/2015 Thousands of tenge (unaudited) 12/31/2014 Thousands of tenge (audited) % change year-to-date ASSETS Cash and cash equivalents 90,215, ,083, % Financial instruments at fair value through profit or loss 4,989,516 4,547, % Available-for-sale financial assets 3,972,167 5,913, % Deposits and balances with banks 8,544,029 13,476, % Amounts receivable under reverse repurchase agreements 1,209, Loans to customers 593,455, ,232, % Held-to-maturity investments 17,857,812 35,184, % Current tax assets 2,586,289 2,146, % Property, equipment and intangible assets 23,592,708 22,847, % Other assets 20,359,645 24,171, % Total assets 766,782, ,602, % LIABILITIES Financial instruments at fair value through profit or loss 2,990 - Deposits and balances from banks 1,479,593 3,469, % Amounts payable under repurchase agreements 2,000,274 7,353, % Current accounts and deposits from customers 494,417, ,499, % Debt securities issued 111,117, ,242, % Subordinated debt securities issued 26,175,598 26,028, % Other borrowed funds 45,934,865 37,862, % Deferred tax liabilities 1,791,287 1,795, % Other liabilities 15,442,240 13,662, % Total liabilities 698,361, ,914, % EQUITY Share capital 30,110,207 30,110,207 0% Share premium 25,632 25,632 0% Reserve for general banking risks 8,234,923 8,234,923 0% Dynamic reserve 6,733,233 6,733,233 0% Revaluation reserve for available-for-sale financial assets (40,916) (74,143) % Cumulative translation reserve (1,974,132) (2,213,707) % Retained earnings/(accumulated losses) 25,332,037 23,871, % Total equity 68,420,984 65,688, % Total liabilities and equity 766,782, ,602, % 21

22 INCOME STATEMENT IFRS 06/30/2015 Thousands of tenge (unaudited) 06/30/2014 Thousands of tenge (unaudited) % change year-to-year Interest income 44,081,104 36,097, % Interest expense (23,459,618) (18,314,033) 28.10% Net interest income 20,621,486 17,783, % Fee and commission income 5,190,680 4,918, % Fee and commission expense (311,049) (346,922) % Net fee and commission income 4,879,631 4,571, % Net (loss)/gain on financial instruments at fair value through profit or loss 932,682 (10,198) NSF% Net foreign exchange gain (1,859,376) 1,988, % Net loss on available-for-sale financial assets 13, NSF% Gain from sale of mortgage loans 384, , % Other operating gain (106,516) 31, % Operating income 24,866,254 24,533, % Impairment losses (6,986,000) (6,181,610) 13.01% Personnel expenses (8,983,345) (8,255,208) 8.82% Other general administrative expenses (6,792,239) (5,954,077) 14.08% Profit before income tax 2,104,670 4,143, % Income tax expense (644,520) (923,941) % Profit for the period 1,460,150 3,219, % Revaluation reserve for available-for-sale financial assets: Net change in fair value 47,015 28, % Net change in fair value transferred to profit or loss (13,788) (345) NSF% Foreign currency translation differences for foreign operations 239, , % Total other comprehensive income for the period, net of income tax 272, , % Total comprehensive income for the period 1,732,952 3,932, % 22

23 HOLDING STRUCTURE Alijan Ibragimov (33.33%) (1) Alexander Machkevich (33.33%) (1) Patokh Chodiev (33.33%) (1) Eurasian Financial Company (2) 100% Eurasian Bank (Kazakhstan) 99.99% Eurasian Bank (Russia) 100% Eurasian Capital 100% Eurasian Insurance (1) Alijan Ibragimov, Alexander Machkevich and Patokh Chodiev are included in Forbes World s Billionaires List. Together, they established Eurasian Natural Resources Corporation ENRC (now ERG). ERG is one of the largest diversified companies in the world, developing natural resources with integrated mining, processing, energy, logistical and marketing operations. ERG accounts for one third of activity in the mining and metallurgy sector of Kazakhstan. (2) Eurasian Financial Company is the holding company of Eurasian Bank, Eurasian Capital and Eurasian Insurance. - Eurasian Insurance is the leading insurance company in Kazakhstan, providing insurance solutions both in Kazakhstan and worldwide. - Eurasian Capital is a Kazakhstan-based broker-dealer and asset-management company. It is a member of the Kazakhstan Stock Exchange. 23

24 BANK ORGANIZATIONAL STRUCTURE Alijan Ibragimov (33.33%) Alexander Machkevich (33.33%) Patokh Chodiev (33.33%) EURASIAN FINANCIAL COMPANY Committees of the Management Board (100%) Committees of the Board of Directors Board of Directors Operational Risk Management Committee Front and Back office Project Management Committee Market Risks and Liquidity Committee Equal Opportunities Committee IT and Business Processes Commission Board of Directors Management Board Audit Committee Remuneration Committee Assets and Liabilities Management Committee Strategic Planning and Social Issues Committee Risk and Internal Control Committee Credit Committee of the Board of Directors Chairman Alexander Machkevich Members Alijan Ibragimov Patokh Chodiev Michael Eggleton Boris Umanov Michael Eggleton CEO, Chairman of Management Board Internal Audit Compliance Independent Directors Nikolay Radostovets Olga Rozmanova David Alun Bowen Management Board Roman Maszczyk Deputy Chairman- Director of Department, Board Member, CRO Seitzhan Yermekbayev Deputy Chairman- Director of Department, Board Member Anna Bichurina Deputy Chairman- Director of Department, Board Member, CFO Nurbek Ayazbayev Deputy Chairman- Director of Department, Board Member Hermann Tischendorf Managing Director- Director of Department Zhanna Bubeyeva Managing Director- Director of Department Romain Hochet Managing Director- Director of Department, COO Bertrand Gossart Managing Director- Director of Department Gulmira Ubegaliyeva Managing Director- Director of Department Risk management Corporate, Institutional, SME and Transactional Banking Accounting, methodology and resources Treasury and ALM Information technologies Human resources Debt capital markets Operational Business Retail Business Finance and reporting Zhanar Zhubaniyazova Managing Director- Director of Department Olga Kindyakova Managing Director- Director of Department Viktor Yevdokimov Executive Director- Director of Department Victoriya Sadykova Executive Director- Director of Department Sergey Borovitskiy Acting Executive Director- Director of Department Cross-sales Legal affairs IT Security Corporate communications Security 24