OREANDA-NEWS. On January 05, 2009 JSC Kazkommertsbank announced its consolidated financial results reviewed by auditors for the period ended 30 September 2008”, reported the press-centre of Kazkommertsbank.

Highlights:
Net profit increased by 16.6% from KZT 42.8 billion innine months 2007 to KZT 49.9 billion in nine months 2008. Earnings per share increased from KZT 59.03 to KZT 71.36

Net profit before income tax increased by 30.4% from KZT 55.2 billion to KZT 71.9 billion

Operating income increased by 29.4% from KZT 77.4 billion to KZT 100.2 billion

Net interest income increased by 79.5% from KZT 52.4 billion to KZT 94.1 billion

Total assets decreased by 5.4% from KZT 2,997 billion as at 31 December 2007 to KZT 2,835 billion as at 30 September 2008

 Total equity increased by 9.9% from KZT 319.2 billion to KZT 350.7 billion

Loans to customers less allowance for impairment losses decreased by 4.8% from KZT 2,366 billion to KZT 2,254 billion

Customer accounts increased by 22.5% from KZT 895.1 billion to KZT 1,096 billion

Debt securities issued decreased by 5.0% from KZT 739.7 billion to KZT 702.8 billion

Return on equity amounted to 20.0%
 
Business Performance Overview
Income

Net interest income before provisions for impairment losses increased by 47.6% to KZT 150.8 billion in the period ended 30 September 2008 from KZT 102.1 billion in the same period of 2007, resulting primarily from the 8.9% growth in average interest-earning assets and an increase in Net interest margin from 5.9% in nine months of 2007 to 7.9% in nine months of 2008.

Net non-interest income amounted to KZT6.1 billion in nine months of 2008 compared to KZT25.0 billion in the same period of last year. The decrease was caused by revaluation of derivatives and securities of large Kazakh companies in the portfolio of the Bank.

Provisions for possible impairment losses on interest earning assets
Provisions for impairment losses increased by 14.0% making up KZT 56.7 billion for the period ended 30 September 2008 compared to KZT 49.7 billion in nine months of 2007. Reserves on customer loans represented the major part of the provisions. The effective provisioning rate on customer loans increased from 5.6% at the start of 2008 to 8.0% as at September 30, 2008.

Operating expenses
Operating expenses increased by 26.6 per cent in nine months of 2008 to KZT 26.2 billion, from KZT 20.7 billion in nine months of 2007. The personnel expenses made up the largest share of operating expenses, constituting 49.8 per cent of operating expenses in nine months of 2008 (compared 51.9 per cent in nine months of 2007).

Loans to Customers
The Bank’s total gross loan portfolio reduced by 2.3 per cent to KZT 2,450 billion as at 30 September 2008 from KZT 2,507 billion as at 31 December 2007. Net loans to individuals, including consumer and mortgage lending, made up 17.1 per cent of total loans to customers as at 30 September 2008 or KZT 385.0 billion, compared to 19.1 per cent as at 31 December 2007.

Loans and advances to banks
Loans and advances to banks, less allowance for impairment losses, increased by 19.2 per cent to KZT 253.6 billion as at 30 September 2008, compared to KZT 212.8 billion as at 31 December 2007. At the same time, loans and advances to banks as a percentage of total assets increased to 8.9 per cent as at 30 September 2008 from 7.1 per cent as at 31 December 2007.

Cash and balances with National Bank
Cash and balances with the National Bank of Kazakhstan, the National Bank of Kyrgyz Republic, National Bank of Tajikistan and the Central Bank of Russia increased by 8.9 per cent to KZT 183.1 billion as at 30 September 2008, compared to KZT 168.1 billion as at 31 December 2007.

Securities portfolio
The size of the Bank’s securities portfolio (financial assets at fair value through profit or loss, investments available for sale and investments held to maturity) decreased by 55.2 per cent to KZT 86.1 billion during nine months of 2008, from KZT 192.2 billion at the end of 2007. This change was primarily attributable to the retirement of debt securities of international financial institutions.

Funding
Customer accounts increased by 22.5 per cent, from KZT 895.1 billion as at the end of 2007 to KZT 1,096 billion as at 30 September 2008, mainly, as a result of an increase in term deposits by 24.3 per cent. Term deposits amounted to KZT 893.7 billion as at 30 September 2008, compared to KZT 718.8 billion as at the end of 2007. The demand deposits increased to KZT 202 billion as at 30 September 2008, compared to KZT 176.1 billion as at 31 December 2007.

Term deposits and demand deposits comprised 81.5 and 18.4 per cent of the customer accounts as at 30 September 2008 respectively, compared to 80.3 and 19.7 per cent as at the year end 2007.

The customer accounts included repos in the amount of KZT 509 million as at 30 September 2008, compared to KZT 201 million as at 31 December 2007.

On 4 of September, 2008 Kazkommertsbank in due order repaid a USD 600 million syndicated loan facility. The syndicated loan was raised in August 2007 and its proceeds were used to finance export-import transactions of the Bank’s clients. The facility was arranged by the Bank of Tokyo-Mitsubishi UFJ, LTD., Сitibank, N.A., Standard bank plc and Mizuho Corporate Bank Ltd.