Last year was quite turbulent for the banking sector. Despite this, according to Nurbank's Chairman of the Management Board Gulnara Musataeva, the bank "has sufficient reserves of capital and liquidity." Over the year, it managed to increase not only assets but also profit. The head of the financial institution explained how the bank's strategy will be developed, and which services and products it plans to bring to the market.
- Gulnara, with what financial results did Nurbank close the year 2022?
- Last year was quite successful for the bank. According to audited consolidated financial statements, in 2022, net profit reached 5.7 billion tenge, almost three times more than in 2021. Our loan portfolio increased by 12.6% to 242.2 billion tenge. Last year, we issued 24% more loans than in 2021. Consequently, in 2022, we provided loans worth 150 billion tenge.
Our bank moves in line with the overall growth of the banking market; in 2022, we demonstrated confident growth in assets, the loan portfolio, and own capital.
As of January 1, 2023, the bank's assets reached 465.2 billion tenge. Net interest income for last year increased by 44%. Nurbank's non-interest income in 12 months grew 1.8 times. This was facilitated by the growth of regular banking income, particularly commission income, which increased by 23% over the year, and income from dealing operations.
Also, note that the bank has sufficient reserves of capital and liquidity. At the beginning of 2023, the bank's capital adequacy ratio was 22.8% with a norm of 10%, and current liquidity with a norm of 30% reached 186.9%.
- In 2020, Nurbank participated in the financial stability enhancement program and placed subordinated bonds worth 46.8 billion tenge, for 15 years. Does the bank plan to redeem the bonds early due to the new restrictions on dividend payments by banks holding state funds?
- To increase the transparency of the financial system for investors and depositors, the National Bank of Kazakhstan conducted an asset quality review (AQR) of banks in 2019. Following the AQR results, Nurbank joined the Financial Stability Enhancement Program, which allowed it to place subordinated bonds worth 46.8 billion tenge in April 2020. These funds were directed towards lending and supporting the real sector of the economy. In May 2020, a major Nurbank shareholder completed a capital increase of 20.038 billion tenge. This measure strengthened the financial institution. As you rightly pointed out, according to the bond prospectus, the redemption term is 15 years. We intend to redeem the bonds as per the prospectus conditions.
- Will you adjust the bank's strategy?
- We try to apply flexible approaches in building our business processes, promptly responding to changes in the external environment. We believe our team handles this task quite successfully.
Within our strategy up to 2025, we remain a universal classic bank. Our traditional, somewhat conservative approach in client interaction yields positive results in establishing long-term relationships. Simultaneously, we are dynamically developing digital channels, planning to transfer 70% of cash management transactions online. We aim to strengthen positions in the retail and SME segments, including through digital business transformation.
- What about the credit policy?
- We adhere to a balanced, conservative risk assessment approach, so we do not plan to undercut the market in terms of interest rates. We are focused on building long-term, mutually beneficial relationships with our clients. Therefore, we have implemented a loyalty program for retail clients. It allows us to reduce rates and fees on loans for borrowers who have already taken loans with us and repaid them on time.
Regarding SMEs, in 2022, we changed existing business processes, including automation. This measure allowed us to expand branch authority, speeding up the loan application review process. Considering market trends and client requests, we are ready to assume risks associated with unsecured lending under certain conditions. However, it cannot be stated that the bank significantly changes its SME crediting approach.
We actively lend to SMEs through government programs of the "Damu" Fund, thereby helping the state effectively deliver credit resources to entrepreneurs. Typically, part of the interest rate is subsidized through the "Damu" fund. As a result, the final borrowers get loans at 7-8% annual (effective annual interest rate from 7.2%, from 8.2%). The "Damu" Fund also guarantees SME loans up to 85% of their loan amount. The volume of such loans is growing annually: according to our statistics, every second project is financed under state programs through subsidization or guarantees.
- In 2021, Eldar Sarsenov became a major Nurbank shareholder. Are there any plans to sell the bank currently discussed?
- Nurbank's majority shareholder, Eldar Sarsenov, does not consider selling his stake. On the contrary, all his efforts are now directed towards business development, IT solution enhancement, and creating new banking services. The shareholder plans to direct the bank's net profit towards its development over the next three years.
- What are the bank's development plans for 2023?
- There are many. Speaking of financial indicators, by the end of 2023, we plan to increase the loan portfolio by 9%. We also want to grow the client base for the deposit portfolio and commission income.
Within the bank's strategy for SME development in 2023, we plan to increase the loan portfolio by 15%, the deposit portfolio by 25%, and commission income by 20%.
The bank is actively involved in process optimization and automation, implementing new technologies, and improving client service. Through internet banking for individuals, we plan to issue not only online loans but also launch merchandise sales through a marketplace. Payment for goods acquired through this platform can be made using any bank card. We already have a service for transferring money from card to card via phone number; in the future, we plan for transfers to be possible internationally.
We are currently launching online lending through a mobile app. The first phase will allow arranging unsecured loans, followed by secured ones.
We continue developing card products, self-service systems, and expanding non-cash payment acceptance capabilities.
The bank is focused on improving IT and enhancing internal operational efficiency. Strategically, 2023 is declared the year of IT for the bank. We need to establish a strong base for the business's digital development. We adopt a classic approach in three directions: people, processes, and technology.
As for the nearest important projects, we plan to update internet banking for legal entities - Nurbank24, launch new processes in the BPM system (online processes for SMEs, retail sector - Ed.), and so on.
Our bank is a participant in a pilot project for interaction with AIFC crypto exchanges. In 2023, we plan, together with crypto exchanges, to launch new services and increase the number of services for electronic money system operators.
* JSC "Nurbank" holds license No. 1.2.15/193 dated February 3, 2020, issued by the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market.