BTA demonstrates growth of key financial indexes01.06.2007
From the period January 1, 2007 to April 1, 2007 the assetsof Bank TuranAlem have grown 18.5% to US$19.4 bln. As a result,the Bank’s market share by assets comprised 24.6%. The maindriver of asset growth was the loan portfolio, which grew to66.5% of total assets as of end 1Q. Loans to SME and retailcomprised 40% of the loan portfolio.
Net Income as at the end of 1Q 2007 was US$1 103 mln, whichis 1.9 times more than for the same period of last year. It wasmade up by interest income (65%), fees & commissions (15%),trade operations (20%). ROAA was 2.17%, ROE was 24% andcost/income ratio was 27.6%.
Volume of deposits has increased by 23.1%. Depositsprovided 26.4% of assets growth. At the end of Q1, retaildeposits made up 21.1% and corporate deposits make up 15.5% ofthe Bank’s liabilities. At the same time BTA’s deposit base hasgrown for 3% faster than the industry’s average.
International capital markets still remain one of the majorfunding sources for the Bank. BTA intends to follow the clearlydefined funding plan announced at the beginning of the year,when we highlighted that our intention was to raise a total ofUS$3 bln through bond issuance and syndicated loans in 2007.Year to date, the Bank has already successfully raised US$1.5bln of this funding target, of which US$500 mln was raisedthrough the syndicated loan market. BTA continues to lookclosely at the market for windows of favorable conditions sincecost of borrowing remains crucial factor for the Bank.
Maintenance of adequate capital is strategically importantfor the Bank. Total capital of the Bank has risen to US$1.966bln, Tier 1 capital adequacy ratio was 12.22%, Tier 2 – 13.99%(Tier 1 – 6% and Tier 2 – 12% as required by Kazakh regulation).As of 1st May 2007, the Bank had a k8 and k9 ratio of 2.01 and3.84 respectively.
In February 2007, at the general shareholders meeting,shareholders approved 11th share issuance for the amount of US$1.5 bln among existing shareholders, the bulk of which (US$1 planned share issue will double the Bank’s capitalization by theend of 2007. This will maintain adequate capitalization of theBank in the light of envisaged assets growth and will allow theBank to realize our consolidation strategy.
In the beginning of 2007 the Bank purchased a 34% share inTurkish Sekerbank T.A.S. During the course of 2007, the Bankintends to consolidate its partner banks in CIS countries and toestablish a presence in China (Western China, Urumchi).After the acquisition of Temir Bank, the consolidatedassets of BTA exceeded KKB’s assets by 2.6%, thus making theBank the largest private bank in CIS.
With the second largest branch network (22 regional branchesand 229 outlets) and clientele base in the country, BTA is auniversal bank with a significant (17.5%) market share of clientdeposits and the second largest loan portfolio. Bank intends toenhance its position by increasing its market shares acrossdifferent segments.
In April 2007, BTA was named by Euromoney as the leadinginstitution in the emerging Europe. The Bank was acknowledgedas the best "Corporate Governance 2006" and named amongst the"Best Managed Companies 2007" in Central and Eastern Europe.Economic and credit fundamentals of the Bank remain robust,which is reflected in Bank’s credit ratings.
May 17, 2007 Fitch Ratings reconfirmed the Bank’s ratings(BB+, Positive). The Bank’s rating reflects the probability ofreceiving state support in case of necessity. The Positiveoutlook in foreign currency reflects the sovereign ratingsoutlook and might be upgraded in case of an upgrade of thesovereign rating. Individual credit ratings take intoconsideration the Bank’s significant clientele base inKazakhstan, good financial performance and adequate liquiditylevel.
On May 4, 2007, Moody’s announced a possible review ofsenior and subordinated obligations ratings of severalKazakhstani banks, including BTA. Such review was driven only bythe Agency’s new methodology employed for assessing statesupport. At the same time, Moody’s maintained the individualcredit rating of the Bank unchanged (Ba1, Stable).Excellent financials and efficiently working infrastructurepositions BTA in a strong position to capitalize from existingpositive economic trends and offers an opportunity for furthergrowth in the market. The Bank adapts to the fast changingnature of Kazakhstani banking sector through increasing thenumber and quality of banking products and improvingprofitability.