OREANDA-NEWS. July 01, 2009. First quarter 2009 financial highlights:

Revenue of KZT 51.4 billion (USD 370 mn), up 13.6% from the first quarter of 2008

Net interest margin before provisions for impairment losses increased to 8.2% from 8.0%

Cost-to-income ratio decreased to 9.6% as a result of tight cost controls

Net profit of KZT 5 billion (USD 33 mn), down 69.5% from Q1 08

 Total Bank assets increased 15.9% in KZT terms and decreased 7.3% in USD terms compared to Q4 08

Deposits increased 32.7% in KZT terms and 6.1% in USD terms compared to Q4 08

Core Tier 1 ratio of 12.0%

Total capital ratio increased to 16.4%

Provisioning rate of 13.2% of gross loans

Net interest income
Net interest income before provisions for impairment losses increased by 13.6% to KZT 51.4 billion for the period ended 31 March 2009, compared to KZT 45.3 billion for the period ended 31 March 2008.

The net interest margin before provisions for impairment losses as a percentage of average interest-earning assets was 8.2% for the period ended 31 March 2009, an improvement on the figure of 8.0% for full-year 2008.

The increase resulted from the growth in the average yield on interest-earning assets from 15.2% in full-year 2008 to 15.7%, in the first quarter of 2009 and the decrease in average cost of interest-bearing liabilities from 7.6% in full-year 2008 to 7.5% in the first quarter of 2009.

Non-interest income
Net non-interest income amounted to KZT 22.9 billion in the first quarter of 2009 compared to a Net non-interest loss of KZT 0.7 billion in the first quarter of 2008. This substantial improvement was primarily due to  income resulting from the purchase of the bank’s own debt securities of KZT 14.4 billion, and income from operations with financial assets of KZT 6.2 billion.

Net fee and commission income decreased by 6.1% in the first quarter of 2009 compared to the first quarter of 2008, and amounted to KZT 4.6 billion.

Operating expenses
Operating expenses decreased by 14.9% to KZT 7.1 billion during the period ended 31 March 2009 compared to KZT 8.4 billion in the period ended 31 March 2008. Within this total, Personnel expenses decreased by 15.7% to KZT 3.6 billion in the first quarter of 2009 from KZT 4.3 billion in the first quarter of 2008.   

As a result of our strategy of network optimisation, the number of branches decreased from 186 to 166 during the first quarter of 2009.

Provisions and NPLs
Provisions for credit impairment losses increased to KZT 371.9 billion at 31 March 2009, compared with KZT 289.3 billion at the end of 2008.

Non-performing loans (NPLs) represented 12.2% of gross loans by the end of the first quarter of 2009, up from 8.1% at the end of 2008. KKB defines NPLs as total exposure to clients with overdue payments (30 days and more for corporates, 60 days and more for retail customers).

The Bank continues with its conservative policy of building sufficient provisions for expected credit losses. The effective rate of provisioning amounted to 13.2% of gross loans at the end of the first quarter of 2009 compared to 11.9% at the end of 2008.  As of 31 March 2009, the provision-to-NPL ratio was 110%. Provision coverage of loans more than 90 days delinquent was 176%.

Profit
Profit before tax for the period ended 31 March 2009 decreased 65.1%, to KZT 8.2 billion compared to KZT 23.6 billion for the period ended 31 March 2008.

Net profit after tax for the first quarter of 2009 decreased 69.5%, to KZT 5.0 billion compared to KZT 16.5 billion for the first quarter of 2008.

Capital ratios
Risk-weighted assets increased to KZT 2,800 billion at 31 March 2009, or by 12.7% compared to the situation at the end of 2008.

On a consolidated basis, the Bank’s Core Tier 1 ratio at 31 March 2008 was 12.0% compared with 13.53% at 31 December 2008, and the total capital ratio was 16.4% (17.7% at 31 December 2008).

Business line performance
Corporate and SME banking
The share of corporate loans in the Bank’s total net loan portfolio increased from 83.6% in 2008 to 85.5% in the first quarter of 2009.

As of 31 March 2009 corporate deposits (excluding deposits received under the Kazakh Government’s stabilisation programmes) had increased by 21.3%, or KZT 144.8 billion, to KZT 825.3 billion from KZT 680.6 billion at 31 December 2008.

Retail banking
The share of retail loans within the total net loan portfolio was 14.5% in the first quarter of 2009, with mortgages constituting 64.1% of the retail loan portfolio.

As at 31 March 2008, the Bank had 166 branches in Kazakhstan. In addition, it has an extensive alternative distribution network consisting of 919 ATMs and more than 9,000 point-of-sale terminals and it offers customers internet banking and a call centre.

Retail deposits increased by 10.2%, from KZT 263.8 billion at 31 December 2008 to KZT 290.7 billion as at 31 March 2009.