OREANDA-NEWS. April 25, 2008. Kazkommertsbank held a press conference to discuss the 2007 audited financial statements of the Bank. The Banks management commented that the strong financial results of the Bank in 2007 provides a stable foundation for continued development of the Bank even though market conditions will be less favourable in 2008, reported the press-centre of Kazkommertsbank.

The press-conference was held at the Interfax bureau in Kazakhstan and brought together representatives from the leading information agencies of Kazakhstan, television channels and newspapers. Kazkommertsbank was represented by CEO Ms. Nina Zhussupova, Managing Directors Mr. Magzhan Auezov, Mr. Adil Batyrbekov and Mr. Andrey Timchenko.

Commenting on the 2007 IFRS consolidated audited financial statements, the CEO Ms. Zhussupova underlined the growth in all major indicators, such as assets (increased by 22,7 per cent in 2007 to KZT 2,997 billion), equity (grew by 24,2 per cent to KZT 307 billion) and net income (a 108 per cent increase to KZT 57,751 million).

Kazkommertsbank remains the most effective commercial bank in Kazakhstan with the lowest C/I ratio in 2007 of 17,5 per cent. “We grew at higher than expected rates in the first half of 2007 resulting in both increased interest and non-interest income”, said Ms. Zhussupova.

A positive evaluation of the Bank’s activities in 2007 was confirmed during the recent road show, when the senior management of Kazkommertsbank met with investors. “We had a feeling that, in general, we exceeded the investors’ expectations, especially on net income. Our current forecasts of 20 per cent net income growth in 2008 were also positively received by investors”, commented Mr. Andrey Timchenko.

In 2007 the Bank rebranded its retail operations in line with its strategy to increase market share in the retail and SME segments. The Bank actively expanded its branch network under the new KAZKOM logo, and opened more than 80 new outlets in 2007 resulting in a total of 191 branches at the end of the year. KKB plans to open a further 30 outlets in 2008. Pro-active measures in the retail business saw an increased retail loan book by 72,8 per cent to KZT 452,330 million (USD 3,8 billion).

The Bank’s market share in retail lending increased by 0,4 per cent to 14,5 per cent in 2007. The same trends were noted in the SME segment where the increase in the loans to SME was 58,5 per cent as at the end of 2007 compared to 2006.

Talking about international funding Mr. Timchenko noted: “Due to unfavourable market conditions the banks does not currently have any plans to borrow significant amounts by issuing Eurobonds or arranging syndicated loans in 2008. If the situation changes, we will reconsider our plans.

“Kazkommertsbank redemptions in 2008 amounted to USD 2,3 bn, part of which has already been repaid. We have more than USD4,5 bn liquid assets on our balance sheet, as compared to USD1,5 bn left to repay till the year end. In addition, our assets and liabilities are matching in tenors, currencies, interest rate types, thus there is no refinancing risk at all”, said Mr. Timchenko. He says that foreign borrowings will be repaid using funds received from maturing customer loans (corporate loan portfolio increased by 35% in 2007, resulting in KZT 1,914 bn., or USD15,9 bn) and also from customer deposits collection (5-10% yoy growth of customer deposits is expected in 2008.).

As of 1 January 2008, Kazkommertsbank’s share in the banking sector was 21,08% by retail deposits and 27,75% by corporate deposits. The volume of customer accounts increased by 57,9% during the year, resulting in KZT 895,083 millions (USD4,9 bn).

Concluding the conference, Ms. Nina Zhussupova said “Kazkommertsbank, in common with other banks doesn’t have, and never has had, any liquidity problems. The Financial results in 2007 supports our intention to remain the leader in the key banking sectors, despite the consequences of the global financial crisis.”