FIRST HALF 2013 RESULTS PRESENTATION

Transcription

1 FIRST HALF 2013 RESULTS 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 in the Iiformation not attributed to a specific source are estimates of the Company and have not been independently verified. 2

3 TABLE OF CONTENTS 1. MACROECONOMIC OVERVIEW 2. EURASIAN BANK 3. EURASIAN GROUP 4. DYNAMICS OF KEY FINANCIAL INDICATORS 5. SUMMARY CREDIT HIGHLIGHTS Appendices First half 2013 figures under IFRS are consolidated and unaudited. Year figures are in accordance with KPMG audited consolidated financial statements, unless otherwise stated. The exchange rate used in this presentation is $1 to tenge. (The Kazakhstan National Bank rate as of June 30, 2013). References to FMSC financial data in this presentation are to financial data prepared in accordance with FMSC requirements. The Bank provides FMSC financial data in this presentation for comparisons with other Kazakhstan banks. All financial information in this presentation is in accordance with IFRS requirements unless expressly stated as being in accordance with FMSC requirements. 3

4 MACROECONOMIC OVERVIEW

5 KAZAKHSTAN FIRST HALF 2013: MACROECONOMIC SUMMARY* GDP amount Unemployment Banking assets / GDP 43.1% Sovereign ratings Banking sector non-performing loans 34 trillion tenge 5.2 % of population Fitch: BBB+ Stable S&P: BBB+ Stable Moody s: Baa2 Stable 3 of total loans Five largest banks share of total assets in banking sector 56.9% (down from 6 in 2012) ANNUAL GDP GROWTH 8.9% 7.3% 7.5% % 5.3%** 3.3% 1.2% F BANKING SECTOR LOAN PORTFOLIO STRUCTURE: FIRST HALF 2013* BANKING SECTOR EVOLUTION OF ASSETS AND LOANS* Small and medium-sized enterprises 16% Individuals: consumer finance 13% Other 9% Banks 1% Corporations 54% billions of tenge 11,890 11,557 12,032 9,245 9,639 9,066 12,818 10,473 13,880 11,658 14,969 12,256 Individuals: mortgages 7% *Source: FMSC website ** IMF forecast Total assets Loans 5

6 EURASIAN BANK

7 PROFILE Tenth largest bank by assets as of first half of Established in 1994 by owners of ENRC group of companies (44% ownership) to serve affiliated companies in natural resources and mining. The ENRC group 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 the first half of 2013, the Bank has 20 full-service branches, 121 service centers and over 2,800 other points of sale. Over 5,200 employees In July 2013, S&P revised its outlook to positive from stable, affirmed its 'B+ long-term ratings and raised its local national scale rating to 'kzbbb+'. The local company KZ-Rating upgraded the Bank s ratings in December 2012 to A+ from A- on its national scale and to BB+ from BB on its international scale. Moody s rating remains B1 negative. INTERNATIONAL AWARDS RECEIVED IN BEST BANK IN KAZAKHSTAN 2012 Award from Euromoney DOMESTIC RETAIL BANK OF THE YEAR 2012, 2013 Award from Asian Banking & Finance BANK OF THE YEAR IN KAZAKHSTAN Award from The Banker THE BANK S PRESENCE IN KAZAKHSTAN IFRS, First half 2013 Tenge, million Dollars, million Total assets 537,389 3,544 Statutory capital 30, Total equity, including retained earnings 51, Capital adequacy, Tier 1 (FMSC)* 7.9% Capital adequacy, Total (FMSC) 12.2% Net interest margin 8.1% Non-performing loans** 7.6% Non-performing loan coverage ratio 95.4% * Under FMSC rules, Tier 1 capital adequacy ratio does not include current year earnings **Loans overdue by more than 90 days. Restructured loans not included in non-performing loans 7

8 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 Excellent loan portfolio management in deteriorating macroeconomic conditions OVER-ALL BANKING Expansion of distribution network in Kazakhstan Cross-sales among existing client base Product innovations and top-quality service CORPORATE Focus on the Natural Resources, Energy and Power, Transport 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 Samruk- Kazyna and DAMU funds PRIVATE BANKING Expansion of product line for High net worth individuals Cross-sale window for Corporate and Retail RETAIL Development of consumer finance via acquisition of ProstoCredit New product development with enhanced score-card system focusing on Ability to Pay Focus on lower-risk corporate business in current markets Expanding branch and ATM networks, alternative sales sources 8

9 HIGHLIGHTS TURNAROUND STORY New management that took over at end of 2009 turned the Bank around from losses in 2009 to an institution with one of the highest rates of return on average equity* in the market Ranked 5th in return on average equity* and 7th in net profit in the first half of 2013.* Michael Eggleton, CEO, an experienced Western manager, previously held top positions with Merrill Lynch, Credit Suisse and National Bank Trust. Roman Maszczyk joined the Bank as Chief Risk Officer after holding top risk-management positions in large Polish, Russian and Ukrainian banks. Mr. Maszczyk brought international standards of risk management to Eurasian Bank. Recently the Bank added a new Chief Information Officer Herman Tischendorf and Chief Operating Officer Romain Hochet. Cost cutting and reduction of excess liquidity under new management reduced the Cost/Income ratio to 50.5% in the first half of 2013 from 75.7% at the end of 2010, as well as growth of net interest margin from 2.3% in 2010 to 8.1% in the first half of % year-to-date growth in the loan portfolio in the first half of 2013, mainly from a 34.1% increase in retail lending. Reduced loan concentration. Share of top 10 loans increased from 15.5% of gross loans during 2012 to 16% in the first half of Becoming strong player in fast-growing and highly profitable consumer-finance niche. CONSUMER FINANCE SPECIALIST Two acquisitions -- a non-default retail loan portfolio and ProstoCredit provided significant growth in the Bank s loan portfolio beginning in The Bank more than tripled its number of clients the past three years under the new management team to 752,490 as of the first half of Also under the new management, the percentage of Retail non-performing loans** fell from 32.8% of loans issued before 2010 to 5.8% for loans issued between 2010 and the first half of * Source: FMSC website, based on the unconsolidated results of Kazakhstan banks prepared using FMSC accounting standards **Principal of loans overdue by more than 90 days plus accrued interest 9

10 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. A small and medium-sized enterprise loan scoring system was rolled out in Loan portfolio is diversified by industry and geography. New collection procedures led to collections efficiency reaching 9 for retail loans and 87% in loans to small and medium-sized enterprises in the first half of Non-performing loans made up 6.9%* of over-all loans in the first half of The figure for the over-all banking sector was 3.* Eurasian Bank is of the few in Kazakhstan that international rating agencies have never downgraded since the start of the financial turmoil. High level of liquidity was maintained during the financial crisis. GOOD LIQUIDITY POSITION Management has implemented policies to reduce liquidity problems with retail deposits, which are interest-rate-sensitive, and to focus more on attracting funds from corporations, where there is less rate-sensitivity. As a result, the amount of liabilities has been reduced considerably, improving the Bank s net interest margin and profitability. The Bank enjoys long-standing relationships with key corporate providers of deposits, including Samruk-Kazyna and the ENRC group of companies. Private Banking further diversifies liquidity sources. STRONG SHAREHOLDER SUPPORT Supportive shareholders are one of the Bank s key competitive advantages. The Bank s shareholders made a capital injection of 5.9 billion tenge ($40 million) in June The Bank s shareholders are key players in the Kazakhstan economy and are included in the Forbes World s Billionaires List. * Source: FMSC website, based on the unconsolidated results of Kazakhstan banks using FMSC accounting standards. 10

11 Halyk KKB BTA Halyk KASPI Sber KKB BCC Tsesna Tsesna Sber Citi Eurasian ATF HomeCredit BTA Citi Eurasian Alfa Alliance Zhilstroysber Bank of China HSBC Dealta Delta KASPI Bank of China Temir AsiaCredit Nur KKB KKB BTA Halyk Halyk BTA 7.1% 6.1% 5.1% % 4.8% 3.5% BCC BCC ATF Sber Sber ATF Alliance Tsesna KASPI KASPI Tsesna Alliance Eurasian Eurasian Temir Citi Nur Zhilstroisber Citi Nur Delta Temir Zhilstroysber HSBC MARKET POSITION VERSUS OTHER KAZAKHSTAN BANKS ON JUNE 30, 2013 (FMSC unconsolidated) TOP 15 BANKS BY NET PROFIT MARKET SHARE BY ASSETS billions of tenge % 16.2% % 7.2% 6.1% 5.5% % 4.1% 3.6% % 1.9% 1.9% 1.1% MARKET SHARE BY DEPOSITS MARKET SHARE BY GROSS LOANS 17.9% 16.3% 7.9% 7.5% 6.9% 6.4% 4.7% % 19.8% 16.8% 12.7% 2.8% 2.2% % 1.8% 1.7% 2.1% 1.6% 1.2% 1.2% 1.2% 11

12 STEADY GROWTH RATE DESPITE GLOBAL TURMOIL The Bank reported net profit of 6.3 billion tenge ($41.3million) in the first half of The projected figure for all 2013 is 12 billion tenge ($79.1 million). Drivers of improvement were continued growth of the loan book, the positive contribution of consumer lending activity, reduction in loan-carry costs and continued improvement in the quality of the loan portfolio. Net interest income rose 56.2% in the first half of 2013 compared with the first half of 2012, as interest income rose 38.2% while interest expenses grew only 20.9%. Loans to customers accounted for over 97.6% of all interest income. billions of tenge ASSETS AND LOANS GROWTH Assets Gross loans Net loans billions of tenge NET PROFIT (LOSS) DYNAMICS New management joined FY2013B billions of tenge INTEREST INCOME, FEE AND COMMISSIONS INCOME Net interest income Net fee and commission income 1H2012 1H

13 Sber Tsesna Citi Zhilstroysber KASPI Eurasian BCC Halyk Aliance Kazkom HSBC Temir RBS ATF BTA Citi HSBC Zhilstroysber Sber Eurasian Tsesna Halyk KASPI BCC ATF Alliance Temir Nur KKB BTA QUALITY OF GROWTH A significant amount of accrued interest on Kazakhstan banks balance sheets continues to be at risk despite growth in loans in the sector. Eurasian Bank carefully monitors the ratio of interest received (cash flow) to interest income accrued (P&L), considering it one of the most significant indicators of asset quality. On the top right-hand side chart, the largest 15 banks ratio of accrued interest to total assets shows that Eurasian Bank held one of the top positions at the end of Eurasian Bank maintains a cash interest gap of less than 1, which it considers one of its most important achievements, reflecting the quality of the loan portfolio. ACCRUED INTEREST TO TOTAL ASSETS RATIO ON DECEMBER 31, 2012* 23.5% 11.8% 12.7% 13.1% 14.9% % 3.9% 4.6% 4.6% 4.7% 0.3% 0.5% 0.7% 0.7% billions of tenge CASH INTEREST GAP (IFRS, CONSOLIDATED) % GROSS LOANS GROWTH SINCE NEW MANAGEMENT TOOK OVER: 2009-first half of 2013* 351% 297% 221% 139% 126% 3 26% 21% 5% 5% 1% -9% -12% -19% 10 0 Interest income accrued Interest receipts * Source: FMSC website 13

14 IMPROVING FINANCIAL STABILITY FUNDING DYNAMICS billions of tenge % 121.9% 117.2% % Gross loans Customer accounts Loans/Deposits RATINGS Moody s Standard & Poor s KZ Rating Short-term NP B National scale: A+ Long-term B1 B+ International: BB+ Outlook Negative Positive Stable CAPITAL ADEQUACY* Tier 1 capital adequacy ratio Total capital adequacy ratio 15% 14.2% 11.8% % 1 5% 9.4% % 7.9% KEY RATIOS Liquid Assets / Total Assets 33.2% 24.9% 19.7% 18.7% Gross loans / Total Assets 65.8% 76.1% 81.5% 82.5% Gross loans / Customer Deposits 95.5% 114.5% 121.9% 117.2% Net Interest Margin 2.3% 6.1% 7.7% 8.1% Cost / Income Ratio 75.7% 52.2% % Return on Average Equity 2.2% % 25.1% Return on Average Assets 0.2% 1.7% 2.3% 2.5% * Based on the unconsolidated results prepared using FMSC accounting standards. 1 5% 10 5 NET INTEREST MARGIN 6.1% 7.7% 8.1% 2.3% COST / INCOME RATIO 75.7% 52.2% % 14

15 EURASIAN GROUP

16 GROUP STRUCTURE Alijan Ibragimov* Alexander Machkevich* Patokh Chodiev* Eurasian Financial Company** Eurasian Industrial Company ENRC*** Eurasian Bank Eurasian Capital Eurasian Insurance Eurasian Investment-Construction Corporation Vesta-Invest Tabys Kokmaisa Zhybek Zholy Ferroalloys: Kazchrome Zhairem GOK Serov (Russia) Tuoli (China) Iron Ore: SSGPO BMBV (Brazil) Alumina & Aluminum: Aluminium of Kazakhstan Kazakhstan Aluminium Smelter Energy: Eurasian Energy Corporation Logistics: ENRC Logistics Other non-ferrous: Boss Mining SMKK Chambishi Northam Platinum Camrose * Alijan Ibragimov, Alexander Machkevich and Patokh Chodiev are included in Forbes World s Billionaire List. Together, they established Eurasian Natural Resources Company (ENRC), a publicly traded metals and mining corporation with significant assets in Kazakhstan, Russia, China, Africa and Brazil. ** Eurasian Financial Company is the holding company of Eurasian Bank, Eurasian Capital and Eurasian Insurance. *** ENRC is one of largest producers of ferrochrome and exporters of iron ore in the world % of the company is owned by Kazakhstan s Ministry of Finance. ENRC is one of the largest taxpayers in Kazakhstan. It is listed on the London Stock Exchange and included in the Financial Times Stock Exchange

17 DYNAMICS OF KEY FINANCIAL INDICATORS

18 ASSETS STRUCTURE OF ASSETS As of the first half of 2013 assets increased by 14.2% to billion tenge ($3.5 billion) from billion tenge ($3.1 billion) at the end of For the last two years the Bank was eliminating low-yielding liquid assets and reducing negative carry. As a reflection of that strategy, the share of loans to customers grew from 46.4% of assets at the end of 2009 to 76.5% in the first half of Liquidity remained at a comfortable level of 18.7% of assets in the first half of A key management goal is a liquidity level of over 15% of assets % 69.3% 75.4% 76.5% Other assets Property, equipment and intangible assets Loans to banks Amounts receivable under reverse REPO Loans to customers Securities Cash and cash equivalents NON-PERFORMING LOANS/GROSS LOANS RATIO BREAKDOWN OF LOANS (GROSS) millions of tenge 500, , , , , , , , ,000 50, % 7.6% 6.9% 7.6% 1 9% 8% 7% 6% 5% 4% 3% 2% 1% Gross loans NPLs/ Gross Loans Corporate customers SME Retail customers 18

19 LOAN PORTFOLIO LOANS. BREAKDOWN BY INDUSTRY FIRST HALF 2013 As of the first half of 2013 gross loan portfolio increased by 15.7% derived from growth in Retail portfolio. Throughout the Bank was mainly targeting large corporate clients to mitigate borrower risks during financial turmoil. However, starting 2011 the new strategy to enhance profitability resulted in the acquisition of the ProstoCredit non-defaulted retail loan portfolio and brand, which in turn is reflected in a 67.7% growth of Retail lending in 2011 and further 34.1% growth as of the first half of Loans to distressed industries such as real estate and construction amount to 0.3% and 6.6% respectively of total loan portfolio as of the first half of 2013 (YE2012: real estate 0.5% and construction 6.8%). Construction mainly includes road construction, infrastructure projects and electricity grids. Second tier banks are obliged to create 2 provisions on loans to non-exporters denominated in foreign currencies. This justifies the gradual decrease of loans in foreign currencies to 19% of loan portfolio as of the first half of LOAN PORTFOLIO GROWTH BY SEGMENT, YTD Construction 7% Agriculture, forestry and timber 7% Manufacturing 1% Wholesale trade 14% Transport Lease, rental and 4% leasing 1% Other 1% NET LOANS. BREAKDOWN BY EXPECTED MATURITY FIRST HALF OF 2013 Mining/metallurgy 4% Reasearch and activities 1% Retail customers 51% Services 3% Financial intermediary 1% Foods production 2% Retail trade 3% NET LOANS. BREAKDOWN BY CURRENCY FIRST HALF OF 2013 billions of tenge Total Corporate SME Retail 10 overdue more than 5 years from 1 to 5 years from 3 to 12 months up to 3 months EUR RUB USD KZT

20 LEADING POSITION IN CONSUMER FINANCE The Bank is becoming a key player in the fast-growing and highly profitable consumer finance niche. The acquisition of ProstoCredit s non-default retail loan portfolio from SocieteGenerale, together with the ProstoCredit brand name, gave the Bank a functioning business that help the Bank achieve a significant increase in its loan portfolio in 2011 and ProstoCredit gave the Bank a strong point-of-sale network and over 100,000 new credit customers. Loan amount Loan maturity RETAIL BUSINESS Retail (Except Mortgages) $100 - $80,000 Mortgage $1,000 - no more than 9 of property value 3-84 months months Average number of loans disbursed per month 44, The acquisition of the ProstoCredit business and subsequent growth of the Bank s business has almost tripled the number of unique clients* under the current management team. Average loan amount Average loan maturity $2,302 $31, months 187 months EVOLUTION OF BANK S UNIQUE CLIENTS* RETAIL LOAN MIX Number of clients 800, , , , , , , , , , , , Other Auto loans Uncollateralized consumer loans Loans collateralized by cash Small business loans Mortgage loans * Unique clients are counted as the number of individuals or corporations with one or more accounts with the Bank 20

21 TOTAL LOAN PORTFOLIO QUALITY As of the first half of 2013: Coverage ratio is 95.4% (year-end 2012: 109.3%). Share of unsecured loans in total portfolio is 26.3% (year-end 2012: 23.9%). 0.7% of loans in total portfolio are guaranteed by deposits (year-end 2012: 1.4%). Average loan-to-value ratio is 41.7% (year-end 2012: 37.2%). Revaluation of collateral takes place every six months. Lending focus in 2010 was on large corporate accounts that had discontinued their relationship with non-functioning banks and had an excellent credit history, plus cash flows and collateral to post against their loans. Management continues to focus on reducing high concentration of loans among a few clients. Share of restructured loans is 10.2% of gross loans (year-end 2012: 12.9%). 35% 3 25% 2 15% 1 5% TOP TEN BORROWERS SHARE OF GROSS LOAN PORTFOLIO 33.3% % 19.4% 15.5% 15.2% Top 10 borrowers Top 10 borrowers excluding cash covered loans** ** loans where the Bank holds cash collateral equal or greater to the amount of the loan 15% 1 5% LOANS CLASSIFICATION: CORPORATES AND SMEs FIRST HALF OF overdue more 9 than 1 year* * impaired loans NON-PERFORMING LOAN, PROVISIONS 9.1% % 7.6% overdue more than 90 days and less than 1 year* overdue less than 90 days* not overdue* loans without individual signs of impairment LOANS CLASSIFICATION: RETAIL PORTFOLIO FIRST HALF OF overdue more 9 than 360 days % 7.3% 6.9% 7.6% NPLs / Total loans Provisions / Total loans overdue days overdue days overdue days overdue less than 30 days not overdue 21

22 QUALITY OF LOANS ISSUED BEFORE AND AFTER 2010 INCLUDED IN BALANCE SHEET IN FIRST HALF OF 2013 LOANS GRANTED BEFORE 2010 VOLUME OF LOANS ISSUED BEFORE 2010 vs FIRST HALF OF 2013 Total Corporate SMEs Retail millions of tenge issued before 2010 issued H2013 Principal, millions of tenge Non-performing loans, millions of tenge % Non-performing loans 64,913 36,805 13,535 14,572 18,409 5,040 9,067 4, % 13.7% % 400, , , , , , ,000 50,000 0 Total Corporate SME Retail LOANS GRANTED 2010-FIRST HALF OF 2013 NON-PERFORMING LOANS BY SEGMENT Principal, millions of tenge Non-performing loans, millions of tenge Total Bank Corporate SME Retail 361, ,427 39, ,081 11,439 1,008 1,195 9,236 % Non-performing loans 3.2% 0.8% % issued before 2010 issued H % 29.5% 13.7% 3.2% 0.8% % Total Corporate SME Retail 22

23 LIABILITIES LIABILITIES STRUCTURE The Bank strongly relies on the local deposit market for funding. As of the first half of 2013, clients current accounts and deposits accounted for 77.9% of liabilities (year-end 2012: 74.5%). In 2010 and 2011 the Bank aggressively moved toward a 15% liquidity level by reducing excess liquidity, primarily by targeting deposits and current accounts of individual clients. The Bank plans to diversify sources of funding by tapping international capital markets and increasing private banking Millions of tenge 100,000 50, ,774 BREAKDOWN OF CURRENT ACCOUNTS 10,542 14,390 15,047 45,812 58,159 56,795 52,505 Corporate Millions of tenge 200,000 75,172 53, ,000 0 Retail BREAKDOWN OF TERM DEPOSITS 113, , ,910 84, , , % 3 25% 2 15% 1 5% Current accounts and deposits 78% Due to banks 4% Other liabilities 2% Debt securities issued 7% Sub-debt securities issued 4% Other borrowed funds 5% TEN LARGEST CORPORATE DEPOSITORS SHARE OF TOTAL AMOUNT DUE TO CLIENTS 31.9% 37.7% 29.1% 29. Corporate Retail 23

24 CREDIT HIGHLIGHTS

25 Strong shareholder support One of the cleanest balance sheets on the market Eurasian Bank Financial stability throughout and after the crisis Mix of top Western and local management 25

26 APPENDICES

27 BALANCE SHEET IFRS 06/30/ /31/2012 % Change tenge, 000 tenge, 000 year to year (unaudited) (audited) ASSETS Cash and cash equivalents 54,877,731 54,920, % Financial instruments at fair value through profit or loss 1,170,769 1,262, % Available-for-sale financial assets 10,877,154 18,423, % Loans and advances to banks 9,368,491 8,187, % Loans to customers 411,292, ,642, % Held-to-maturity investments 24,307,551 10,327, % Current tax asset 552, , % Property, equipment and intangible assets 17,243,588 16,760, % Other assets 7,698,269 5,100, % Total assets 537,388, ,510, % LIABILITIES Financial instruments at fair value through profit or loss % Deposits and balances from banks 13,413,260 21,228, % Amounts payable under repurchase agreements 6,000,042 - Current accounts and deposits from customers 378,504, ,720, % Debt securities issued 32,964,719 34,441, % Subordinated debt securities issued 21,704,603 27,871, % Other borrowed funds 22,487,181 18,562, % Deferred tax liabilities 750,378 41, % Other liabilities 9,640,806 5,859, % Total liabilities 485,465, ,726, % EQUITY Share capital 30,110,207 30,110,207 Share premium 25,632 25,632 Reserve for general banking risks 8,234,923 6,650, % Revaluation reserve for available-for-sale financial assets (32,428) (114,258) % Cumulative translation reserve (214,304) (7,755) NSF% Retained earnings/(accumulated losses) 13,799,197 11,120, % Total equity 51,923,227 47,784, % Total liabilities and equity 537,388, ,510, %

28 INCOME STATEMENT IFRS 06/30/2013 tenge, 000 (unaudited) 06/30/2012 tenge, 000 (unaudited) % Change year to year Interest income 31,280,881 22,633, Interest expense (13,986,035) (11,563,397) 20.95% Net interest income 17,294,846 11,070, % Fee and commission income 6,184,510 3,622, % Fee and commission expense (748,922) (318,582) % Net fee and commission income 5,435,588 3,303, % Net (loss)/gain on financial instruments at fair value through profit or loss 7,631 (265,424) % Net foreign exchange gain 1,334,708 1,921, % Net loss on available-for-sale financial assets (274) (25,279) % Other operating (loss)/income (160,569) (109,340) 46.85% Operating income 23,911,930 15,896, % Impairment losses (3,714,345) (2,179,655) 70.41% Personnel expenses (7,317,496) (5,378,056) 36.06% Other general administrative expenses (4,749,104) (3,807,027) 24.75% Profit before income tax 8,130,985 4,531, % Income tax expense (1,867,113) (1,061,273) 75.93% Net profit for the period 6,263,872 3,470,021 80/51% Revaluation reserve for available-for-sale financial assets: Net change in fair value 81,556 44, % Foreign currency translation differences for foreign operations (206,549) (45,922) % Total other comprehensive income for the period net of income tax (124,719) 23, % Total comprehensive income for the period 6,139,153 3,493, %

29 BANK ORGANIZATIONAL STRUCTURE Alijan Ibragimov (33.33%) Alexander Machkevich (33.33%) Patokh Chodiev (33.33%) Board of Directors Chairman Alexander Machkevich Members Alijan Ibragimov Patokh Chodiev Michael Eggleton Boris Umanov Independent Directors Nikolay Radostovets Ruslan Adylov Olga Rozmanova Corporate Management Service Credit committees ALCO EFC (10) Board of Directors Management Board Internal Audit Compliance control Collections committee Compliance Procurement committee Michael Eggleton CEO, Chairman of Management Board Problem loans committee Ayaz Bakasov Deputy Chairman, MB Seitzhan Yermekbayev Deputy Chairman, MB Talgat Abdukhalikov Deputy Chairman, MB Nurbek Ayazbayev Deputy Chairman, MB Roman Maszczyk Deputy Chairman, MB Anna Bichurina Deputy Chairman, MB Hermann Tischendorf Managing Director Romain Hochet Managing Director Private and VIP Banking Corporate Business SME Business Subsidiary Eurasian Bank (Moscow) Branch Network ALM Treasury Risk Management Credit Risk and Collateral Evaluation Soft Collections Consumer Finance Finance Control Accounting Internal Efficiency Evaluation Financial Analysis and Budgeting Relations with Auditors Information Technology Bank s operations Payment system Custody Quality Control Retail Lending PR, HR, IR, Collections, Security and Informational Security, Business Technologies, Legal, Problem loans, Marketing, Plastic Cards, Retail Product Development 29