OREANDA-NEWS. On February 04, 2007 Joint Stock Company ‘Halyk Savings Bank of Kazakhstan’ (Halyk Bank) (LSE: HSBK) announced its preliminary unaudited consolidated financial results for the year ended 31 December 2007. These have been prepared in accordance with International Financial Reporting Standards, reported the press-centre of Halyk Bank.

Net income increased by 49% from KZT 27,2 billion in 2006 to KZT 40,5 billion in 2007

The key driver of net income growth was net interest income before impairment charges, up 53% in comparison to 2006

Net interest margin remained strong at 6,7% in 2007

The ratio of operating expenses1 to operating income before impairment charges2 (cost-toincome ratio) improved from 39,7% in 2006 to 34,9% in 2007 at YE2007
Loans to customers increased by 74% to KZT 1,040.3 billion as at YE2007

 Total assets were up 61% to KZT 1,595.5 billion as at YE2007

Growth in retail deposits reached 70% in 2007: from KZT 209,9 billion as at YE2006 to KZT 357,4 billion as at YE2007

Total amounts due to customers increased by 56% to KZT 935,1 billion as at YE2007

Total equity increased by 33% from KZT 120,6 billion as at YE2006 to KZT 160,8 billion as

Capital adequacy remained strong with the total capital adequacy ratio at 12% and the Tier 1 ratio at 9% as at 15 January 2008 according to the requirements of the FMSA3.

Loans to customers / amounts due to customers ratio increased from 1,00x as at YE2006 to 1,11x as at YE2007

Liquid assets/total assets remained strong at 31,2% as at YE2007

Return on average common shareholders equity as well as return on average assets remained strong in 2007 at 32,8% and 3,2%, respectively

According to the Statistical Bulletin of the National Bank of Kazakhstan, Halyk Bank’s market shares (based on unconsolidated numbers) as at 30 November 2007 were 12,7% in total assets, 21,3% in total deposits, 24,9% in retail deposits, and 17,1% in net income The exact announcement date of the final audited consolidated financial results for the year ended 31 December 2007 will be communicated in due course through RNS and Halyk Bank’s web-site.

Key events in 2007
In March 2007 Halyk Bank successfully completed a post-IPO issue of 9,432,877 common shares.

On 18 April 2007 Halyk Bank’s special purpose vehicle subsidiary, HSBK (Europe) B.V., raised a syndicated loan facility for a nominal principal amount of USD 400 million with a two year tenor and an extension option for one year via a syndicate of international banks. The benchmark loan bears a margin of 30 bps over LIBOR for the first two years with a step-up to 70 bps for the third year.

On 23 April 2007 the Annual General Shareholders Meeting of Halyk Bank resolved to increase the number of members of the Board of Directors and to elect Mr. Christof Ruehl and Sir Gavyn Arthur (both London-based) as new independent non-executive directors.

At the Annual General Shareholders Meeting held on 23 April 2007 shareholders approved a dividend of KZT2,50 per common share, totaling approximately KZT 2,450 million, and KZT15,04 per preferred share, totaling KZT1,579 million.

On 3 May 2007 the Bank’s special purpose vehicle subsidiary, HSBK (Europe) B.V., successfully placed 10-year Eurobonds for the nominal principal amount of USD 700 million fully guaranteed by the Bank and priced at 220 bps over mid-swaps.

• On 9 June 2007 the Bank was nominated the Best Retail Bank in Central Asia by the Asian Banker.

On 28 September 2007 the Bank registered its third bond program for an aggregate nominal principal amount of KZT 200 billion with the FMSA. Under this program in October 2007 the Bank issued 10-year subordinated bonds denominated in Tenge in the aggregate nominal principal amount of KZT 10 billion bearing a coupon of 11%. The major holders of the bonds are domestic pension funds and asset management companies.

On 1 October 2007 the Bank raised a syndicated loan facility for a nominal principal amount of USD 300 million with a 3-year tenor from a syndicate of international banks. The benchmark loan bears a margin of 40 bps over LIBOR.

In November 2007 the Board of Directors of Halyk Bank approved an update and continuation of its Group Strategy until 2010. The full outline of the Halyk Group Strategy for 2008-2010 is available at: http://eng.halykbank.kz/bank/halyk_group_strategy_for_2008_2010

On 7 December 2007 FMSA authorized Halyk Bank to establish subsidiary banks in Georgia and Mongolia, as well as a subsidiary non-banking financial organisation in Mongolia.

On 26 December 2007 Halyk Bank, together with “Kar-Tel” LLP (www.beeline.kz) and Visa International (www.visa.com) announced the launch of a joint project, which placed Halyk Bank applet on the Beeline SIM-card, enabling direct payment for goods and services from mobile phones using “Verified by Visa” technology.

Euromoney recognized Halyk Bank as “A Leading Bank in Corporate Governance in Emerging Europe” in its “World’s Best Banks in Corporate Governance 2007” survey.