1H2011 Financial Results

Transcription

1 1H2011 Financial Results September 2011

2 Disclaimer This presentation has been prepared and issued by Joint stock company Eurasian Bank. This publication is intended for professional and institutional customers. Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Eurasian Bank with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. This presentation is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation. Eurasian Bank and/or its subsidiaries may use the information in this presentation prior to its publication to its customers. Eurasian Bank or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. Eurasian Bank may also provide banking or other advisory services to interested parties. Eurasian Bank accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation. 2

3 Contents 1. Overview 2. Business 3. Financials 4. Risk Management 5. Key Financial Indicators 6. Appendices All figures under IFRS unconsolidated, unless otherwise stated YE2010 and YE2009 figures are according to KPMG audited financial statements Throughout presentation exchange rate USD/KZT: 1/146 is used for convenience YoY represents results as of 01/07/2011 compared to 01/07/2010, unless otherwise stated YtD represent results as of 01/07/2011 compared to 01/01/2011, unless otherwise stated 3

4 OVERVIEW 4

5 Eurasian Bank profile Ninth largest bank in Kazakhstan by assets as of Initially created by three individuals (current owners of 44% of ENRC group of companies) to provide financial services to affiliated companies in the areas of natural resources and mining, the bank has eventually transformed into a universal financial institution, providing all types of services to corporate clients, SMEs and individuals. The only Kazakhstan-based bank retaining its international credit ratings since downturn start: S&P B stable (outlook upgraded in Jan. 2011), Moody s B1 negative. As at Bank is represented by 18 full service branches, 48 outlets, and over other points of sale. IFRS, KZT, million USD, million Total assets Tier 1 capital Total equity Capital adequacy, Tier 1 (AFN) 7.8% Capital adequacy, Total (AFN) 12.5% NIM (YTD), annualized 4.7% NPLs* (AFN) 8.3% NPL coverage ratio (AFN) 120.2% Branch Network Beneficial owners Alijan Ibragimov 33.33% Alexander Mashkevich 33.33% Patokh Chodiev 33.33% * Loans overdue by more than 90 days 5 Beneficial owners contributed capital to Bank in 2009 to support provisioning for asset deterioration

6 Accomplishments and competitive advantages January 2011: Standard &Poors upgraded national scale rating of Eurasian Bank from kzbb to kzbb+, affirmed counterparty credit ratings at B/B, and reviewed outlook of Eurasian Bank from negative to stable. The only bank since the economic downturn with no downgrades. Bank s local and foreign currency deposit rating is B1 by Moody s with a negative outlook. Four issues of Bank s local currency denominated bonds for a total amount of KZT57bn (USD390m) were assigned a B1 long-term local currency debt rating by Moody s. YtD Total Assets decreased by 6.7%. Loans to customers (gross) grew by 8.6% to KZT254.2bn (USD1.7bn) for the same period. Cash and cash equivalents decreased by 56.7% YtD to KZT15.6bn (USD106.5m) while securities portfolio consisting of short-term highly liquid securities fell by 35.9% for the same period to KZT47.4bn (USD324.8m) from KZT73.9bn (USD506.5m). Liquidity cushion remains at healthy 17.6% of total assets. Monthly negative carry losses from excess liquidity amounted to KZT40m (USD0.3m) per June 2011, a significant reduction from KZT420m (USD2.9m) in June YtD Liabilities fell by 7.9% to KZT303.5bn (USD2.1bn). Current accounts and deposits of customers reduced by 11.9% YtD to KZT215.2bn (USD1.5bn). The Bank returned to profitability in 2010 (on both a pre and post provision basis), after large loan loss provisions taken at the end of 2009 with a corresponding increase of capital by the Bank s shareholders (the only local bank which did not take capital from the government when new capital was required) 6

7 Accomplishments and competitive advantages Acquisition of micro-lending company ProstoCredit from SocieteGenerale was successfully completed in first quarter of 2011, enhancing Bank s strategy to expand into retail segment. Increased client base, lending levels and ranked at top of KASE (local stock exchange) for FX business Hired a highly qualified management team (both foreigners and Kazakhs) with very specific roles and responsibilities The (or one of the) cleanest balance sheets of any Kazakh Bank. The collections and reduction of NPLs programs in 2010 exceeded the targets of management Successful completion of a detailed AFN inspection (every 3 years) Centralization of risk and business processes were completed Quality control division created to monitor level of service at branches and other service centers Reduction offixed expenses (2 rounds of redundancies) KPI system implemented Volume of credit lines from international banks increased by 70% YoY Voluntary polygraph testing implemented for key employees 7

8 Group structure as of Alijan Ibragimov* Alexander Machkevich* Patokh Chodiev* Eurasian Financial Company*** Total assets: USD2.8bn Total equity: USD506.5m Eurasian Industrial Company Total assets: USD195.4m Total equity: USD140.3m ENRC** Total assets: USD15.7bn Total equity: USD11.1bn Eurasian Bank Total assets: USD2.3bn Total equity: USD192.4m Eurasian Capital Total assets: USD4.0m Total equity: USD4.0m Eurasian Insurance Total assets: USD441.4m Total equity: USD301.8m * 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 empire with significant assets in Kazakhstan, Russia, China, Africa and Brazil. Eurasian Aluminium Company EuroCenterAstana Shubarkol Komir Impala Intercom Altyn-Tay BN-Invest-Komir Giproshakht Granitek Eurasia Development Eurasia Finance Group Eurasiaenergoprom EPEK-Trade House Information Agency Inter Asia Express-K newspaper office Rudnensky vodokanal Sary-Arka spetskoks Folias Energosystema Yuzhugol invest Yuzhenergoprom Eurasian Construction Eurasiaenergoprom Other companies ** ENRC is one of largest producers of ferrochrome and exporters of iron ore in the world 11.65% of the company is owned by Ministry of Finance of Kazakhstan; one of the largest taxpayers in Kazakhstan Company is listed in LSE and included in FTSE 100 *** Eurasian Financial Company is the holding company of Eurasian Bank, Eurasian Capital and Eurasian Insurance. Ferroalloys: Iron Ore: Kazchrome Zhairem GOK Serov (Russia) Tuoli (China) SSGPO BML (Brazil) Chambishi Comit Resourcse (Zambia) Alumina & Aluminum: Aluminium of Kazakhstan Kazakhstan Aluminium Smelter Energy: Logistics: Eurasian Energy Corporation ENRC Logistics 8

9 Bank structure Alijan Ibragimov (33.33%) Alexander Machkevich (33.33%) Patokh Chodiev (33.33%) Board of Directors Chairman Alexander Mashkevich EIC (0.4%) EFC (99.6%) Members Alijan Ibragimov Patokh Chodiev Michael Eggleton Boris Umanov Audit Commitee Board of Directors Internal Audit Compliance controller Compliance Independent Directors Nikolay Radostovets Ruslan Adylov Alma Nurguzhaeva Credit Committees ALCO Budget Committee Management Board Michael Eggleton CEO, Chairman of Management Board Product and Tariff Committee Problem Loans Comittee IT Committee Zain Majidulla First Deputy Chairman Yerkeblan Okayev First Deputy Chairman Seitzhan Yermekbayev Deputy Chairman Talgat Abdukhalikov Deputy Chairman Roman Maszczyk Deputy Chairman Anna Bichurina Managing Director Nurbek Ayazbayev Managing Director Methodology HR Financial Institutions DCM Global Trade Finance Stressed Assets Department PR & Marketing Government Relations Retail Distance Service Plastic Cards Corporate Business SME Business Middle Office Operational Business Branch Network Payment System Custody Operation Resources Department Risk Management Problem Loans and Stressed Assets Credit Risk and Collateral Evaluation Finance Controlling Accounting Internal Efficiency Evaluation Financial Analysis and Budgeting Relations with auditors ALM Treasury Department IT Collections, Security and Information Security Management of New Bank Technologies and businessprocesses Legal 9

10 General strategy Corporate SME Retail Focus on Natural Resources, Energy and Power, Transport and Agriculture sectors of economy Window to cross-sell Retail products Opportune time to gain market share Current accounts and deposits support funding profile Selective approach in SME market Analyzing and building client base for future expansion taking into account risk dynamics bourn out in crisis Cautious participant of State Support Programs jointly with Samruk-Kazyna and DAMU funds Development of consumer finance via acquisition of ProstoCredit New product development with enhanced score-card system focusing on AtP Cross-selling with employees of corporate clients Expanding branch and ATM networks, alternative sales sources Focus on retail deposits, favorable period to increase market share Growth Asset Quality Universal Bank 5-6% market share in the medium term perspective Further expansion in the CIS region Diversification of funding sources Growth opportunities given changes in strategies of bigger banks Enhancement of risk management system Unified IT system High professional qualification and business culture of the team Loan portfolio management in deteriorating macroeconomic conditions Expansion of distribution network in Kazakhstan Cross-sales among existing client base Product innovations and high quality service Focus on lower risk corporate business in current markets 10

11 Retail client product spectrum: 2011 vision MASS MARKET HNWIs ProstoCredit Mid - market VIP Private banking KazPost POS (Consumer Finance) cash corp. channel branch network deposits mortgages specialized deposit products mortgages credit cards: Gold/Platinum strategic relationship with partner standard product line with premium rates asset management in KZ and off-shore, concierge services credit cards: standard FX credit cards: Platinum/Diamond cash loans business financing dept. with corp. auto loans 11

12 BUSINESS ASSETS 12

13 Tsesna Sber Eurasian KASPI Alliance BCC ATF Halyk KKB BTA Sber Tsesna Alliance KASPI BTA KKB Halyk ATF Eurasian BCC Position against peers % 50% 40% 30% 20% 10% 0% -10% -20% 48% 48% Assets growth YoY, % 19% 16% 6% 5% 2% -1% -7% -12% Eurasian 3% Kaspi 3% Sberbank 3% Alliance 4% Tsesna 2% ATF 9% Market share. Assets Other 15% BCC 9% KKB 19% BTA 16% Market share. Gross loans Halyk 17% 120% 100% 100% 85% 80% 60% 40% 20% 0% -20% -40% Source: AFN website Loans* growth YoY, % 29% 21% 18% 11% 4% 4% -5% -15% Eurasian 3% The Bank is now considered one of the core banks in the Kazakh banking sector Kaspi 3% Sberbank 3% Tsesna 3% Eurasian 4% Kaspi 4% Alliance 6% Alliance 4% ATF 11% Tsesna 3% Other 10% ATF 9% KKB 24% Halyk 13% BCC 8% Market share. Net loans BCC 10% Other 11% KKB 23% BTA 12% BTA 18% Halyk 15% 13

14 Assets Total assets reduced by 6.7% YtD to KZT331.6bn (USD2.3bn) at Slowdown of asset growth was a result of Bank s decision to unwind low yielding liquid assets by liquidating and returning deposits or converting into a higher-yielding loan portfolio and avoid the losses from negative carry effect. As a reflection of that strategy, share of Cash and cash equivalents and Available-for-sale securities reduced by 56.7% and 49.8% respectively throughout 1H2011. Property, equipment and intangible assets 3% Loans to banks 3% Investment in subsidiary 1% Assets structure Other assets 4% Cash and cash equivalents 5% Securities 14% Despite the cash drop, liquidity remained at a comfortable level of 17.6% of total assets. Management targets 15-17% liquidity level. ** net loan portfolio Loans to customers** 70% KZT, bn Assets and loans* growth Loans* breakdown SME 20% Retail 22% H2011 Assets Loans Corporate 58% * gross loan portfolio Mid-term target loan portfolio breakdown is 45% Corporate, 35% Retail and 20% SME 14

15 Loan portfolio Gross loan portfolio increased by 8.6% YtD, mostly derived from growth in Retail and Corporate portfolios. Throughout years Bank was mainly targeting large corporate clients to mitigate borrower risks during financial turmoil. However, starting 2011 new strategy to enhance profitability resulted in acquisition of ProstoCredit micro-lending organization, which in turn reflected in 12.5% growth of Retail lending in first half of 2011 only. KZT, m Loan portfolio growth by segment, YtD Total Corporate SME Retail Loans to distressed industries such as Real estate and Construction without government guarantees amount to 0.9% and 6.7% respectively of total loan portfolio. Construction mainly includes road construction, infrastructure projects, electricity grids. Second tier banks are obliged to create 20% provisions on loans to non-exporters denominated in foreign currencies. This justifies the gradual decrease of US$-denominated loans to 19% of loan portfolio as of , down from 29% as at % provisions are required on loans granted to borrower registered in off-shore zones. EB has no off-shore lending projects. KZT, bn FY2010 1H2011 Off-balance sheet commitments* FY2008 FY2009 FY2010 1H * Unutilized lines are revolving Bank is under no legal obligation to fund Loan and credit line commitments Total Guarantees Loan and credit line commitments Letters of credit 15

16 Loan portfolio breakdown Breakdown by industry Breakdown by maturity* Other corporate 11% Real estate 1% Services 1% Lease, rental 1% Energy production and supply 1% Manufacturing 2% Research and activities 2% Retail loans 22% Retail trade 2% Construction with government Transport guarantees 5% 3% Wholesale trade 14% Agriculture, forestry, timber 12% Foods production 8% Mining/metallurg y Construction 7% without government guarantees 7% 1-5 years 57% 3-12 months 14% > 5 years 20% up to 3 months 9% Breakdown by currency Breakdown by region USD 19% Other 0% South 4% West 7% East 19% North 22% KZT 81% Almaty and Almaty region 48% * Ex. Overdue, Maturity is considered the date of the last payment (not average duration) 16

17 Loan portfolio quality As at : Volume of provisions relative to NPLs (over 90-days) and NPLs plus related accrued interest amounts to 120.2% and 108.8% respectively. Share of unsecured loans is 8.3% of total loan portfolio. 1.2% of total loan portfolio are guaranteed by deposits. Average LTV ratio is 39.6%. Revaluation of collateral takes place every half year. Lending focus in 2010 was on large corporate accounts (discontinuing their relationship with other non-functioning banks), with excellent credit history, cash flows and collateral to post against their loan. This high concentration corporate focus was for 2010 only. Share of restructured loans is 16.6% of total loans. Top 20 loans concentration* 16% 14% 12% 10% 8% 6% 4% 2% 0% NPLs ***and provisions, % of loans 14,2% 10,3% 9,9% 10,9% 4,3% 8,3% 4,4% 7,1% Provisions/Total loans 90+/Total loans Loans classification** Loan portfolio Top 20 loans, % of total Collateralized by cash, % of top 20 37% 23% 39% 20% 40% 33% 18% 7% Doubtful 1 category 17% Doubtful 2 category 7% Doubtful 3 category 1% Doubtful 4 category 1% Doubtful 5 category 5% Loss 6% 01/01/ /01/ /01/ /07/2011 * Management targets a multiple of less than 3.5 and 2.5 times equity by the end of 2011 and 2012, respectively ** Gross portfolio *** Ex. accrued interest All info on present slide is under AFN regulation Standard 63% 17

18 120% 100% 80% 60% 40% 20% 0% Effective loans issued before and after Number of loans KZT KZT Volume of loans Issued after Issued before Quality of vintage 2010 and after loans as of * AFN classification 99,66% 96,32% 95,95% Corporate SME Retail Standard 99,66% 96,32% 95,95% > 180 days 0,00% 1,38% 0,58% days 0,00% 0,26% 0,42% days 0,28% 0,02% 0,31% days 0,01% 0,12% 0,85% < 30 days 0,06% 1,89% 1,89% -15,3-3,8 New loans 1H2011: quality of growth Gross loans YtD variance by industry Other Retail Wholesale trade Mining/metallurgy Research and activities Construction without government Auto loans Foods production Construction with government guarantee Financial intermediary Services Manufacturing Mortgage loans Machinery production Medical and social care Publishing Small business loans Other Corporate Real estate Transport Energy production and supply Agriculture, forestry and timber Lease, rental & leasing Entertainment Retail trade Loans collaterised by cash -1,0-1,2-1,4-1,9-2,0-0,1-0,2-0,3 KZT bn ,3 0,3 0,1 0,0 1, ,5 3,8 3,6 3,3 4,9 7,2 17,9 * Gross loans -20,0-15,0-10,0-5,0 0,0 5,0 10,0 15,0 20,0 18 Although loan growth was significant in 2011, credit quality remained paramount

19 Accrued interest Bank s 2Q2011 interest receipts (Cash flow) amounted to 107% of accrued interest (P&L) (AFN unconsolidated). Accrued interest ratios as at The cash interest gap has been reducing from 16% in 2 nd quarter 2010 to - 7% in 2 nd quarter 2011 (i.e. collected more cash that recognized income), which Bank considers one of the most important achievements reflecting on improving quality of loan portfolio. by assets Bank Accrued interest, KZT m. Accrued interest / Total assets Accrued interest/ Total equity Accrued interest / Securities & Loans Bank considers this ratio a very significant indicator of asset quality and maintains top position among peers. 1 KKB % 111.9% 12.6% 2 Halyk % 52.8% 7.3% 3 BTA % 184.5% 18.1% Cash interest gap: Quarter by quarter 4 BCC % 83.7% 6.5% Interest income accrued Interest income received Gap % 5 ATF % 82.0% 8.1% % 6% 1% 11% -7% 2Q2010 3Q2010 4Q2010 1Q2011 2Q Alliance % 195.6% 9.3% 7 Sber % 7.6% 1.1% 8 Kaspi % 68.5% 7.9% 9 Eurasian % 31.9% 3.1% 10 Tsesna % 64.1% 6.9% Sector % 77.3% 10.1% All info under AFN standards 19

20 Securities portfolio Securities portfolio VAR analysis Securities portfolio breakdown Position, KZT m. Available for sale VAR* Effect, KZT m. MD, yrs Position, KZT m. Held to maturity VAR* Effect, KZT m. MD, yrs Corporate shares 0% Corporate bonds 4% * VAR is calculated to a 99% confidence level Government and municipal bonds 96% Securities duration breakdown Corporate bonds ratings breakdown < 1 year 97% Non-rated** 0% > 5 years 0% 3-5 years 1% 1-3 years 2% BBB and above 100% ** by international rating agency The securities portfolio is very liquid and of low duration 20

21 BUSINESS LIABILITIES 21

22 Tsesna Sber BTA Kaspi Alliance KKB Halyk BCC Eurasian ATF Sber Tsesna Alliance ATF Kaspi KKB Halyk BTA Eurasian BCC Tsesna Sber Alliance Kaspi KKB BTA ATF Halyk BCC Eurasian Position against peers as of Total deposits of Eurasian bank reduced by 21% YoY, in line with Management s strategy to mitigate the negative effect of excess liquidity. Total deposits and current accounts growth YoY 53% 50% 43% Bank specifically focused on decreasing share of Retail deposits in order to reduce cost of funding. 50% 30% 32% There are no government guarantees on corporate deposits while Retail deposits are insured up to KZT5 mln by State Fund. 10% 12% 11% 7% 4% Eurasian bank loans/deposits ratio as at is 107.8%. -10% -7% -21% -30% Retail deposits and current accounts growth YoY Legal entities deposits and current accounts growth YoY 80% 60% 74% 69% 55% 49% 48% 50% 47% 44% 41% 37% 40% 30% 24% 30% 20% 0% -20% 8% -33% -37% 10% -10% 7% 5% -4% -7% -14% -17% -40% -30% -60% Source: AFN website. Ex. SPV deposits The Bank remains very disciplined in accepting new deposits 22

23 Liabilities Main source of funding for the Bank is the local deposit market accounting for 71% of all liabilities as of Throughout 2010 and 2011 the Bank was aggressively moving towards a planned 15-17% liquidity level via reduction of excess liquidity, primarily targeting deposits and current accounts of legal entities and individual clients. For that interest rates on deposits were cut substantially, which led to an outflow of YoY, and resulted in overall reduction ofcost offunds for the Bank. Subordinated debt securities issued 8% Debt securities issued 9% Liabilities structure Other borrowed funds 7% Other liabilities 2% Deposits and balances from banks 0% Amounts payable under repurchase agreements 3% Bank is planning to diversify sources of funding via international capital markets with a planned RUR bond and Eurobond totaling USD mln in Current accounts and deposits from customers 71% Current accounts dynamics YtD Current accounts breakdown Corporate 85% Retail Corporate Term accounts dynamics YtD Retail 15% Term deposits breakdown Retail 38% Retail Corporate Corporate 62% 23

24 BUSINESS PROSTOCREDIT 24

25 ProstoCredit business model Tailor-made credit offers to individual customers Loan amount: KZT (USD100 USD60 000) Loan maturity: 3-84 months Insurance packages ProstoCredit is a leading actor in consumer finance which operates through a diversified range of distribution channels proposing credit offers to individual customers. Partnerships with Pension Funds (PCL) 10 major agreements The distribution network is supported by 13 regional offices. ProstoCredit cooperates with 536 business partners (independent retailers, chains of retailers, car dealers, companies, pension funds) active customers as end of June total clients base as end of June loans on average are disbursed monthly. Points of sales (POS) 424 partners Car finance (NCL/UCL) 61 cooperation contracts Diversified commercial channels Distribution of loans through KazPost channel Partnership with big companies (PSL) >5 000 employees 25 group partners KZT (USD1 200) is an average loan amount. Loyalty programs 25

26 Production Production at end of June 2011 (actual) vs. YTD budget per segment Jun 2011 Dec POS PSL PCL KAZPOST LOYALTY INSURANCE NEW CAR LOANS USED CAR LOANS TOTAL Production 2009A 2010A 2011B 1H2010A 1H2011A Δ Production, KZT, million % Production, USD, million % WAEIR (weighted average effective interest rate) including insurance 48.26% 37.00% 36.70% 38.46% 33.48% % Average loan duration 17 months 17 months 19 months 21 months 20 months - 1 month Acceptance rate 41.68% 54.00% 57.06% 54.28% 56.60% 4.3% Production level for the 1H2011 has already reached 95.6% of the production for the full year

27 FINANCIALS 27

28 Balance sheet IFRS YE2010 KZT 000 1H2011 KZT 000 % Change YE10 to 1H11 ASSETS Cash and cash equivalents % Financial instruments at fair value through profit or loss Available-for-sale financial assets - - Held by the Bank % - Pledged under sale and repurchase agreements % Loans and advances to banks % Loans to customers % Held-to-maturity investments - Held by the Bank % - Pledged under sale and repurchase agreements % Investment in subsidiary % Current tax asset % Property, equipment and intangible assets % Deferred tax asset % Other assets % Total assets % LIABILITIES Financial instruments at fair value through profit or loss % Deposits and balances from banks % Amounts payable under repurchase agreements % Current accounts and deposits from customers % Debt securities issued % Subordinated debt securities issued % Other borrowed funds % Other liabilities % Total liabilities % EQUITY Share capital % Share premium % Reserve for general banking risks % Revaluation reserve for available-for-sale financial assets ( ) (26 647) 94% Accumulated losses ( ) ( ) 34.2% Total equity % Total liabilities and equity % 28

29 Income statement IFRS 1H2010 KZT 000 1H2011 KZT 000 % Change 1H10 to 1H11 Interest income % Interest expense ( ) ( ) 14.7% Net interest income % Fee and commission income % Fee and commission expense ( ) ( ) 47.4% Net fee and commission income % Net income/(loss) on other financial instruments at fair value through profit or loss % Net foreign exchange income % Net gain on available-for-sale financial assets % Other operating income/(loss) ( ) ( ) % Operating income % Impairment losses ( ) ( ) 54.2% Personnel expenses ( ) ( ) 45.9% Other general administrative expenses ( ) ( ) 40.7% Profit/(loss) before income tax ( ) Profit Income tax (expense)/benefit ( ) ( ) % Profit/(loss) for the period ( ) Profit Other comprehensive income, net of income tax Revaluation reserve for available-for-sale financial assets: - Net change in fair value % - Net change in fair value transferred to profit or loss ( ) (25 573) 96% Other comprehensive income for the period, net of income tax % Total comprehensive income/(loss) for the period ( ) Profit 29

30 IFRS / AFN reconciliation 1H2011 KZT 000 Net profit/(loss) for 1H2011, IFRS Differences: Interest income Fee and commission income Difference in valuation methodology of financial instruments / derivatives (28 461) Loan loss provisions (79 417) Other general administrative expenses (6 039) Income tax expense Net effect Net profit/(loss) for 1H2011, NBRK (AFN)

31 Key ratios 2,7% 1,4% Net interest margin 1,9% 2,1% 2,4% 4,1% 4,7% >5% NIM continues to increase as excess liquidity is being routed into high yielding assets. Lending will continue a shift from lower yielding secured corporate loans to higher yielding retail loans. The percentage of retail loans to total loans is lower that peers however business was largely put on hold while new scorecards were developed in 2010 (retail loans re-launched in 10M10) based on Ability to Pay methodology. Cost/income 68% 115% 89% 80% 70% Cost/Income continues to decline from a high in 1Q10 when the entire management team was being hired and new deals/lending came to a stop. 63% 57% 64% 63% The Cost/Income Ratio increased slightly in Q310 as staff raises were given as well as significant redundancies which were accompanied with statutory payout. Plan in 2011 is to reduce to below 65% with a further reduction to below 55% in Headcount Actual paid headcount Total headcount Reduction of headcount starting 4Q2009 was a part of cost optimization plan in a difficult market environment, which was possible to achieve as a result of centralization of all main processes Variable compensation / total compensation ratio increased by 114% from 5.26% of total salaries and bonuses in 2009 to 11.25% in In 1H2011 the ratio amounted to 9.7%. The overall target of management for the portion of variable compensation to overall compensation is 15-20%. It is expected that this level will be reached in

32 RISK MANAGEMENT 32

33 NPL dynamics Bank SME 12,0% 10,6% 25,0% 21,8% 10,0% 8,0% 6,0% 4,0% 8,6% 9,9% 9,7% 10,6% 9,3% 8,4% 7,1% 8,1% 8,3% 20,0% 15,0% 10,0% 12,6% 15,3% 14,4% 17,0% 21,4% 18,7% 16,6% 20,2% 21,3% 2,0% 5,0% 0,0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 0,0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Corporate Retail 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% 6,2% 4,4% 3,4% 3,1% 3,3% 3,2% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% 14,0% 13,9% 14,3% 12,9% 11,7% 11,7% 10,4% 10,5% 10,4% 10,0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 33 SMEs remain very volatile

34 RETAIL Retail and SME soft collections efficiency Efficiency by total clients (number), % Financial efficiency (volume), % 100% 80% 83,2% 89,0% 89,8% 88,3% 91,4% 100% 80% 76,6% 82,3% 90,5% 88,4% 93,1% 60% 60% 40% 40% 20% 20% 0% 0% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 SME Efficiency by total clients (number), % Financial efficiency (volume), % 100% 80% 77,8% 92,5% 81,4% 82,0% 85,4% 100% 80% 64,3% 78,9% 71,3% 72,3% 79,6% 60% 60% 40% 40% 20% 20% 0% 0% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 34

35 KEY FINANCIAL INDICATORS 35

36 1H2011 Financial Summary (according to KFN results) Key indicators 6M10 6M11 % Change YOY Total gross loans % Total loans (net of reserves)* % Total assets % Total capital % In KZT 000 Pre-provision net operating revenues % Total net income (loss) Profit Total comprehensive income (loss), net of tax Profit Pre provision operating net income (loss), net of tax % Pre provisions comprehensive income (loss), net of tax % Headcount (ex-maternity) % Net commission income/pre provision net operating revenues 20.7% 13.7% -33.8% Cost/income ratio 81.6% 63.5% -22.2% Compensation/income ratio 34.9% 27.6% -21.1% Loans/deposit ratio (including current accounts and gov t deposits) 66.6% 107.8% 61.8% Gross loans/assets 54.5% 75.6% 38.7% Accrued interest / total loans 3.7% 3.6% -2.7% Interest income received in cash / Total interest income 89.1% 95.4% 7.1% Provisions/NPL ratio (Coverage ratio) 124.5% 120.1% -3.5% Number of client accounts % ROAE (YTD, annualized) -10.8% 16.9% Profit ROAC (YTD, annualized) -5.4% 20.1% Profit ROAA -0.7% 1.3% Profit NIM (YtD) 1.7% 4.7% 176.5% NIM (Annual for previous 12 months) 2.0% 3.7% 85.0% 36 1 * YTD Growth is 7.3%

37 APPENDICES 37

38 Management Mr. Eggleton has been appointed CEO and Chairman of the Management Board of Eurasian Bank in October Previously he spent almost twenty years in investment and commercial banking in the United States, United Kingdom, Turkey and Russia. In August 2006, he joined National Bank TRUST Bank (Russia) as CEO and Chairman of the bank and resigned in September 2009 to join Eurasian Bank. He remains a Board member of National Bank TRUST. Earlier he held positions of Managing Director and Head of Emerging Markets (CEEMEA) for Merrill Lynch based in London and Moscow. Before that Mr. Eggleton was responsible for both banking and markets in developing markets across the world as Head of the Tactical Markets Group prior to which he acted at various times as responsible for Russia, Turkey and North Africa at Credit Suisse First Boston in the position of Managing Director. Mr. Eggleton acted as Independent Non-Executive director of ENRC PLC (a FTSE 100 company) from the moment of company IPO until October 2009 when he accepted his new position with Eurasian Bank. Michael EGGLETON CEO, CHAIRMAN OF MANAGING BOARD Mr. Eggleton holds a BA with Honors from the University of San Diego and a Masters degree in Business from San Diego State University. He is certified to head a bank by Kazakh, Russian, Egyptian and Turkish Central Banks. Mr. Eggleton is a Certified US Public Accountant and was UK FSA qualified whilst at Credit Suisse and Merrill Lynch. 38

39 Management Zain Majidulla Yerkeblan Okayev Roman Maszczyk Talgat Abdukhalikov Seitzhan Yermekbayev Anna Bichurina Nurbek Ayazbayev First Deputy Chairman, COO First Deputy Chairman Deputy Chairman, CRO Deputy Chairman Deputy Chairman Managing Director, CFO Managing Director Responsible for Distressed Assets Dept, Marketing, Debt, capital markets Responsible corporate government relations for and In charge of Risk management Supervises branch network, Operations and Administration divisions In charge of corporate business & SME Supervises Financial Analysis and Accounting In charge of Treasury and ALM Headed TAIB Bank Kazakhstan Held positions with top international banks, such as Chase Manhattan, Societe Generale etc. Held positions of Chairman at ATF Bank and CEO, Member of Board at KIB Bank. Independent director at Troika Dialog Kazakhstan Served as Managing Director of Risk Division at the largest Polish bank, Chief Risk Officer in Russian National Bank Trust, and Chief Risk Officer at Nadra Bank, Ukraine Held top managerial positions at ATF Bank, Astana Finance, Verny Capital Asset Management at various times Held top managerial positions at EBRD, served as Deputy Chairman at HSBC Kazakhstan and Head of «НSВС Bank Plc» in Ukraine Served at National Bank of Kazakhstan in various positions Was in Internal Audit at Temirbank prior to joining Eurasian Bank Headed Treasury and Asset and Liability Management at ATF Bank prior to joining Eurasian Bank 39 The Management Board has over 130 years of Banking Experience