Almaty
In June 2008, JSC Nurbank increased its authorized capital by an additional 22%, amounting to 6.5 billion tenge. Simultaneously, in order to further increase reserves for covering potential credit risks, provisions for the loan portfolio were increased by 6 billion tenge.
The decision to increase the bank's capitalization and the parallel increase in provisions is the implementation of best international practices for proactive credit risk management during periods of correction in financial markets and the economy as a whole. As a result of these measures, the bank's capitalization ratio will reach a high level of 22.1% with a minimum requirement of 12.0%. This step is part of the bank's strategy to improve the risk management system and fully reflects the key principles of transparency in the activities of JSC Nurbank.
According to Nurbank Chairman Nurmukhammed Bektemisov, current shareholders fully support the issue of additionally increasing the bank's capitalization and the desire to follow the best international practice of managing financial institutions. "Moreover, once again, the willingness of shareholders to support the bank's qualitative and stable development is confirmed," – emphasized Mr. Bektemisov.
According to the management of JSC Nurbank, this step will be positively perceived by rating agencies and capital markets. This event will also mark the beginning of a new stage of sustainable development, which this year will be reflected in internal qualitative changes, and from next year – in the financial indicators of the Bank's activities.
It should be noted that at the end of the first half of the year, JSC Nurbank completed all major repayments on international syndicated loans and the debut issuance of Eurobonds. The only outstanding Eurobond issue matures in 2011. As of July 1, 2008, the volume of provisions formed by JSC Nurbank in relation to the loan portfolio will amount to 10%, and the authorized capital will increase to 33.6 billion tenge.