On the eve of the Nauryz holiday, Nurbank gave a kind of spring gift to its clients and partners by announcing the results of its activities for the past year 2014. Contrary to rather difficult global trends and the decline in ratings of several financial players, Nurbank managed not only to maintain its rating, restructure its portfolio, but also to increase its assets by 46.2 percent. At the beginning of the year, they amounted to 369.5 billion tenge.
The loan portfolio volume (excluding provisions) amounted to 233.9 billion tenge. The deposit portfolio grew by 24 percent and amounted to 189.2 billion tenge. The bank's commission income increased by 13 percent, mainly from cash and transfer operations. The bank's net income amounted to 2.6 billion tenge. The bank's own assessments were consistent with the long-term and short-term credit ratings of Nurbank, assigned by the international rating agency Standard & Poor's. They are confirmed at the level of 'B/B'. The rating on the national scale is at 'kzBB+'. The confirmation of these ratings reflects not only Nurbank's effective work with problematic assets but also indicates a reduced exposure to risks associated with lending to construction and real estate companies, which improved the bank's risk profile. Standard & Poor's analysts expect Nurbank's capitalization indicators to remain 'adequate' this year and next. The 'stable' outlook reflects that Nurbank will continue to increase its business volume and gradually reduce the volume of problematic loans, as well as maintain 'adequate' capitalization and liquidity indicators.
Among 38 Kazakhstani banks, Nurbank ranked 14th by assets as of the end of 2014. The bank is present in all major regions of Kazakhstan, has a developed network of branches and ATMs, demonstrates a high level of plastic card issuance, has no external debt, and has a high level of capitalization (as of February 1, 2015, Nurbank ranked 15th by the size of its own capital).
Nurbank's upcoming plans and strategic tasks for further business development are based on the aim to increase lending to individuals, increase the share in retail service and SMEs, and improve the quality of the loan portfolio and deposit base. The decision to develop the retail business direction as an integral attribute of a universal commercial bank was made in 2013. By the end of 2014, the loan portfolio was structured as follows: corporate business — 57 percent, SMEs — 24 percent, and retail business — 19 percent. Plans for 2016 are to reduce the corporate business share in the loan portfolio to 48 percent by increasing the share of SMEs and retail.
Nevertheless, the bank is actively implementing the 'Business Roadmap 2020' program, participating in the Monotowns Development Program for 2012–2020, subsidizing remuneration rates on loans to private entrepreneurship subjects, and reimbursing remuneration rates on loans to support agriculture within the program jointly implemented with the Ministry of Agriculture.
The social effect of the projects financed under state programs resulted in production development, creation of additional jobs, increases in income, salaries, and budget revenues.
— Our branches effectively supported representatives of the food industry. In turn, they used the opportunity to optimize production, expand the range, and reach a qualitatively higher level, — shared with the readers of 'NP' the Chairman of the Management Board of JSC 'Nurbank', Kantar Orynbayev. He also answered our questions.
— How do you perceive the criticism from deputies for the refusal of second-tier banks to lend in tenge?
— I perceive this criticism normally because banks, including ours, exist to lend to the population and enterprises; this is our business and source of income. However, as long as the problem of the lack of long-term funds persists, we cannot extensively implement these tasks. We do not refuse to issue tenge loans. As soon as long-term funds appear, we are happy to use this opportunity and issue loans. Due to the state's active support of SMEs last year, this direction suffered the least. Currently, the share of foreign currency loans in the working portfolio of SMEs is less than one percent, and 99.6 percent of the working portfolio consists of loans issued in tenge.
— What tools could be proposed to stimulate business and retail to transition into the tenge space?
— Certain steps have already been taken by the National Bank. They increased the difference between tenge and dollar rates. The attractiveness of any currency is regulated by the differential between the rates. For example, conventionally speaking, tenge deposit rates could be made 12–15 percent, while dollar rates — only one percent. The attractiveness of a deposit in the national currency over a dollar deposit is obvious.
Secondly, one could propose tax benefits. Today, deposit income is not taxed. And this can certainly be viewed as a benefit. But, agree, it's quite strange to provide this benefit to someone holding money not in the national currency. One could introduce something like income tax for dollar deposit holders. Although such a measure, as a de facto abolition of the benefit, should be approached very cautiously. Such a step is perceived as demotivating.
Also, one could significantly increase the amount of guarantees on tenge deposits within the framework of the DGF ("Kazakhstan Deposit Insurance Fund") programs. And leave the previous amount for dollar deposits.
Finally, one needs to get rid of the mental attachment to the dollar. As is known, even a tiler-plasterer quotes the cost of their services in the 'dollar per square meter' system. Why not in tenge? Two citizens of Kazakhstan make a deal on the territory of the RK and settle accounts in dollars. I find the proposal to switch large transactions to the tenge in a non-cash form rational and useful. Yes, not everyone liked it. Yes, we are used to bringing bags of cash to a deal. But how safe is it? Where is the guarantee that the banknotes are not counterfeit? There are other risks. Non-cash settlements offer many more advantages.
— How to balance the interests of citizens and the state in the process of dedollarization?
— There is no model that would satisfy everyone indiscriminately. Any progress is inevitably accompanied by painful moments. To balance the interests of the majority of citizens and the state, it is first necessary to determine the priority goal. For example, the goal to increase GDP per capita by a specific percentage or carry out dedollarization — it doesn't matter. What matters is seeing the goal, the achievement of which positively reflects on the country's economy. And to align decisions with how they bring us closer to that goal. Then any potential losses of individual citizens or even an economic sector will be perceived as costs. And these temporary costs can be compensated by social programs or other bonuses. The main thing is not to adjust the overriding priorities.
— Does the bank plan to adapt payment cards for online payments?
— This opportunity is opened by the client themselves by personally contacting one of the bank's branches or the contact center. This may seem inconvenient, but in this, we see an element of care for our clients and the desire to preserve their savings. We open the card for internet transactions for a specific period upon the client's request. When the card is constantly open, the risk of funds being withdrawn through cyberattacks is higher. Such cases are known, especially abroad. There are generally no claims to the bank in such cases. But the client may have a question: why wasn't I advised or warned? Therefore, we chose this scheme.
— What bonus and other client programs exist for payment cardholders when paying for goods and services?
— The bank has recently started developing the 'Nur Club' discount club, which will significantly save on the purchase of goods and services in the bank's partner network. At the same time, the discount is provided immediately to the payment cardholder. The bank also actively cooperates with the international payment systems Visa International and MasterCard, with which it conducted 21 promotions in 2014.