One of the world's most reputable rating agencies, Standard & Poor’s, recently announced that the ratings of several Kazakh banks will be downgraded in the near future.
Two other agencies from the 'Big Three' - Moody’s and Fitch - have already downgraded the ratings. However, just a few days ago, the rating agency S&P confirmed Nurbank JSC's long-term and short-term credit ratings at the level of 'B/B'. This fact indicates that, despite the difficult situation in Kazakhstan's financial market, Nurbank JSC maintains stable financial growth and the trust of Kazakhstanians.
The NUR.kz editorial team decided to meet the newly elected Chairman of the Board of Nurbank JSC, Eldar Sarsenov, to learn about the bank's plans, its financial performance, products, and various programs aimed at retail consumers.
- Eldar Rashitovich, tell us a little about yourself, where are you from, what was your childhood like, where did you study?
I was born and spent my entire childhood in the city of Almaty. I love this city for its extraordinary nature. I consider myself lucky to have experienced the times of the USSR and to have had a regular and adventurous childhood like a Soviet child.
After school, I enrolled at Suffolk University in Boston, Massachusetts, majoring in marketing and management, obtaining a Bachelor of Science degree in Business Administration. Then I studied for two years at Northeastern University, also in Boston, where I earned a Master of Business Administration degree with a concentration in corporate finance.
- We know you worked in one of the largest divisions of the Louis Vuitton corporation, is that right?
Yes, I managed to gain tremendous international work experience in one of the largest divisions of LV – the watch company TAG Heuer, in Springfield. We roughly worked with 300 stores across the USA and Canada, with headquarters in New Jersey. In this company, I supervised e-commerce and sales incentive programs. In fact, thanks to the incentive projects, sales increased by 8%-10%. As a result, we became number 2 in women's watches across North America and number 3 in men's watches.
- How long have you been working at Nurbank?
About three years now. Previously, I held the position of Managing Director and supervised card business, internet banking, marketing, personnel, advertising, and service quality.
- How has the bank changed during this time, and what is it like now?
Nurbank has become more technologically advanced, stronger, and more competitive. This is evidenced by the fact that, despite the difficult situation in Kazakhstan's financial market, just a few days ago, the rating agency S&P confirmed our credit ratings. Additionally, according to unaudited consolidated financial statements, Nurbank's net profit in 2015 increased by 6.3% compared to 2014, amounting to 1,898 billion tenge. Assets increased by 9.2% to 323.823 billion tenge. The bank's liabilities grew by 10.2% to 281.2 billion tenge, and its equity by 3.4% to 42.072 billion tenge. According to the National Bank, Nurbank ranked 14th among 35 Kazakh banks in terms of assets as of January-September 2015.
- What products and services is the bank focusing on? What are the bank's plans for the current year?
The bank plans to pay more attention to retail products. We recently procured new equipment that will allow us to expand our retail gateway. Now we can assess customer opportunities in consumer lending even more accurately and precisely. We have already actively started developing remote banking services and retail business. For example, today in Internet banking for individuals Nurbank24, you can perform 90% of banking services, pay for mobile communications, taxes, fines, airline tickets, utilities, etc. In the near future, Nurbank24 will be updated, providing more opportunities for our users.
Additionally, a new interesting card product - IPCard, intended for individual entrepreneurs, will soon be available to clients, and already now available is the WebCard - for making secure online payments. By the way, Nurkbank cardholders automatically become members of the discount club 'Nur Club'. For instance, when purchasing in the French house, our client is guaranteed a 5% discount, and when buying fuel at Helios - 3%.
We also plan to focus on our deposit terms. Today, we offer an annual effective deposit rate of 14.9%. And with state-supported GES educational - savings deposit - 21.9%! A simple example, if you start saving 10,000 tenge monthly from fifth grade, in 7 years you will save 840,000 tenge! The bank's remuneration will amount to 674,378 tenge, and the state bonus - 279,235 tenge. In total, you will accumulate 1,793,613 tenge!
- What is the average NPL (non-performing loans) level in the bank's loan portfolio?
Our NPL at the end of the year is 9.3%. We have been working towards this for several years, reducing it from 30% to less than 10%, as required by the National Bank of the Republic of Kazakhstan. Now, Nurbank JSC fully complies with the regulator's requirements.
- Do you participate in state programs?
- We participate in almost all state programs supporting small and medium businesses. For example, in 2014-2015, 10 billion tenge were allocated to us for the subsequent lending of small and medium businesses. To date, 98% of the state funds aimed at SMEs have been utilized, with full utilization expected soon. One bright example of real state support for small businesses is individual entrepreneur Mazurok, who acquired transport for business development, Farangiz Akhmetova, the owner of a bakery in the city of Astana, who expanded production volumes and product range thanks to credit funds, and the owners of the confectionery 'Shodo' in Karaganda, who opened a confectionery branch in Astana thanks to a loan, etc. There are many such examples. We are currently negotiating with the Asian Development Bank to participate in the micro, small and medium enterprise development program.
- In which state programs for individuals do you participate?
- Last year, the 'Problem Loan Fund' JSC allocated 1.6 billion tenge to us for refinancing mortgage loans. The program allows reducing the interest rate to 3% per annum and converting a loan taken in foreign currency to tenge. As of today, around 200 mortgage loans have been refinanced under this program.
- What social projects of the bank can you talk about?
- Generally, we do not vocalize our charity efforts. In our opinion, good deeds should not be done for publicity but should be an internal need of every successful company to support those in need. As for our projects, we have long supported the 'Road Home' program, which helped over 400 children find parents. We also have a large project 'Ticket to Life', thanks to which 27 children from orphanages across Kazakhstan are currently studying at Caspian University. The project's goal is to support orphans and ensure they receive education and employment after graduation. Under the project, we pay students' tuition, monthly stipends, and travel. For students from the regions, we rent an apartment and provide additional financial assistance for buying clothes and other necessary items.
- What is the 'Applied Arts Exhibition' project, its goal, and implementation?
- In 2014, we opened an applied arts exhibition of the 18th-20th centuries in the building of the French house. Overall, this project is entirely non-commercial. Entry to the exhibition is free, and anyone can enjoy the beauty of the exhibits during store hours. The main idea of the exhibition is to preserve applied arts items that showcase the traditions, everyday life, and culture of different peoples of the world, including Kazakhstan and Central Asia. The collection of applied art was collected over many years by the Bank, and now the residents and guests of Almaty can see its historical legacy with their own eyes. The collection includes jewelry of the 18th-20th centuries, handmade carpets from the early 20th century, household items - jugs, kumgans, samovars made of copper and brass from the 19th-20th centuries, cold steel, horse gear, and more. The oldest exhibit is a measuring mug from 1748, and the most unusual is a silver toothpick-ear cleaner with a ruby insert that belonged to Abylai Khan.
- We recently had a report on the reconstruction of Kok Tobe. To our knowledge, the project is funded by Nurbank, is that true?
- Yes, that's right. Mount Kok Tobe is one of the most beautiful and amazing places in Almaty. For the convenience of residents and guests, the management of the Kok Tobe park decided to completely renew the cable car and Ferris wheel, which we were happy to support. According to the plan, by 2016, Almaty residents and visitors will be transported to Koktobe in comfortable eight-seat cabins of a new type.
- Well, thank you, Eldar Rashitovich, for an interesting interview, and we wish you and Nurkbank JSC success in the financial field.