Nurbank: Results and Plans Nurbank reports over 115% increase in net profit and 65% increase in equity capital in 2007. The new top management aims at further qualitative development.
Throughout 2007, the bank underwent a number of positive changes. First of all, there was progress in the transparency of Nurbank's shareholder structure - in June last year, the Agency of the Republic of Kazakhstan for Regulation and Supervision of the Financial Market and Financial Organizations approved the acquisition of a significant shareholding in JSC "Nurbank" by Dariga Nazarbayeva together with Nurali Aliyev. Now they directly control up to 50% of the bank's shares.
In June 2007, the bank's authorized capital was increased by KZT 11.6 billion, indicating a 90% growth compared to 2006. While in December 2006 the capitalization ratio was 16%, after a year it reached 20.9%—one of the highest in the domestic banking sector. Furthermore, the bank's current investors are interested in its long-term development and are ready to support its further growth by ensuring the necessary level of capitalization.
Additionally, there has been a substantial strengthening of the management team: managers and professionals with extensive experience in the financial and banking sector both domestically and internationally have joined the Bank's top management.
Overall, when discussing the positive dynamics of the bank's development, it should be noted the improvements in key financial indicators. This is primarily about doubling net income while keeping the loan portfolio and asset size unchanged, with a 1.5 times increase in returns on assets. The bank's net profit according to audited consolidated IFRS statements rose by 115% (from KZT 1,417,254 thousand in 2006 to KZT 3,042,057 thousand in 2007).
Secondly, the relatively small volume of external borrowings—less than 40% of all liabilities compared to the sector average of 50-55%. The bank successfully repaid a syndicated loan of USD 135 million in October 2007 without resorting to refinancing and by the end of Q1 2008 had accumulated highly liquid assets more than twice the volume of external obligations maturing in 2008.
Finally, the bank managed to restore its deposit base, which noted a decline in the first half of 2007. By the end of the year, the deposit base (customer funds) increased by 47% reaching KZT 52 billion. Moreover, by the end of the first quarter of 2008, customer funds exceeded KZT 100 billion and the loans to customer funds ratio—a key indicator of the bank's stability—was 153%, currently one of the best ratios in the sector.
According to Nurbank's CEO Nurmukhamed Bektemissov: "The bank is tasked with improving internal procedures and business processes to achieve sustainable growth on a long-term basis. Therefore, we are refining the product line, focusing on the development of information technology and improving customer service quality."
In Mr. Bektemissov's opinion, today's market correction allows the bank to work on business processes without the risk of losing market positions. Efforts are being made to strengthen the branch network, which consists of 16 branches and 34 cash settlement centers. "We are now laying the foundation for future successful development of the bank," Mr. Bektemissov emphasizes, "We are becoming more active in the retail and SME segments to balance the bank's business. We expect that up to 50% of Nurbank's loan portfolio will be in SMEs and retail. Nonetheless, corporate clients remain a priority for the new management and shareholders—for them, new services such as investment banking products will be developed and offered."
Following the modernization of the deposit product line for individuals, Nurbank began to actively increase its deposit base: the growth from September 1st to the end of 2007 was 28%.
Regarding the SME sector, there was a significant improvement in the quality of the loan portfolio, resulting in increased loan profitability and a reduced level of overdue debt. The bank plans to double the SME loan portfolio in 2008.
Nurbank, always having strong positions in the card business, will continue to actively develop this direction. As of today, the bank has issued more than 150,000 VISA International cards. There are 184 ATMs installed across the republic. It is planned to increase this number to 250 by the end of 2008. Additional services are planned to be launched.
Also, projects have been initiated to transition to a service-oriented architecture that enables dynamic adaptation to new business development directions, allowing for the rapid and cost-effective market introduction of new products and services.
In conclusion, Nurmukhamed Bektemissov stated: "Transparency, client-orientedness, and technological efficiency of business processes are our main business priorities. And we believe in the foresight of the strategy we have adopted, and the entire bank team is working towards its successful implementation."
JSC "Nurbank" ranks among the top ten largest banks in Kazakhstan. According to the audited consolidated financial statements of the Bank according to IFRS as of December 31, 2007, the bank's assets amounted to KZT 198,694,564 thousand; bank liabilities—KZT 161,544,418 thousand; equity—KZT 37,150,146 thousand; net profit—KZT 3,042,057 thousand. As of March 1, 2008, the bank's assets amounted to KZT 217,795,628 thousand.