Current economic and financial news
Nurbank announced its operational results for 2014 based on consolidated financial statements prepared in accordance with IFRS, as reported by Etoday.kz citing the Bank's press service.
Main results of operations in 2014:
— Loan portfolio volume (excluding provisions) amounted to 233.9 billion tenge.
— Bank assets totaled 369.5 billion tenge, an increase of 46.2%.
— The deposit portfolio grew by 24% to 189.2 billion tenge;
— Bank's commission income increased by 13%, mainly from cash and transfer operations;
— Net interest income before provisions increased by 84%.
— The Bank's net income amounted to 2.6 billion tenge.
For the current 2015 year, Standard & Poor’s reaffirmed Nurbank's long-term and short-term credit ratings at the level of “B/B” and the national scale rating at “kzBB+”. According to analysts, reaffirmation of Nurbank's ratings reflects the bank's effective handling of problem assets and reduced exposure to risks associated with lending to construction and real estate companies, leading to an improved risk profile.
“At the same time, we expect that Nurbank's capitalization indicators will remain 'adequate' in 2015–2016. The 'stable' forecast reflects that Nurbank will continue to increase business volumes and gradually reduce problem loans, while maintaining 'adequate' capitalization and liquidity indicators”, noted Standard & Poor’s analysts.
According to state financial supervision, by the end of 2014, we ranked 14th among 38 Kazakhstani banks by asset size.
As of 31.12.2014, the Bank has 16 branches and 75 outlets. The number of ATMs and POS-terminals was 347 and 1250, respectively.
It should be noted that the Bank is currently present in all major regions of the Republic of Kazakhstan. In addition, it has a developed network of branches and ATMs in all major regional centers, a high level of card issuance, absence of foreign debt, and a high level of capitalization (as of 01.02.2015, the Bank ranked 15th by equity size). In the near future, the Bank intends to carry out strategic tasks for further business development, namely:
— Increase the volume of loans to individuals;
— Increase market share in retail, small and medium business services;
— Improve the quality of the loan portfolio and deposit base;
— Enhance the quality and speed of customer service.
Capital Adequacy
Currently, the Bank's risk-adjusted capital (RAC) ratio, calculated by the National Bank of Kazakhstan's methodology, was approximately 14.2% on 01.01.2014. Thus, the current level of capital allows the Bank to double its assets without reducing the RAC ratio below 10%, even with aggressive growth in the coming years.
Business Segment Results
In 2013, the Bank decided to develop its retail business as an essential attribute of a universal commercial bank.
“We intend to increase our market share in serving retail, small, and medium-sized businesses. By the end of 2014, the loan portfolio structure was: corporate business (CB) - 57%, SMB - 24%, retail business (RB) - 19%. Plans for 2016 include reducing the CB share in the loan portfolio to 48% by increasing the share of SMB and RB”, said Kantar Orynbayev, Chairman of Nurbank JSC.
Corporate Sector and SMB
The loan portfolio for the corporate sector and SMB as of 31.12.2014 amounted to 188.7 billion tenge. Growth compared to 31.12.2013 was 5.5%. The share of the corporate sector and SMB portfolio in total client loans was 80.7%.
The volume of funds from corporate sector clients as of 31.12.2014 stood at around 83 billion tenge compared to 77 billion tenge on 31.12.2013.
The SMB deposit portfolio was 30,908 thousand tenge, an increase of 12,109 thousand tenge or 64.4% for 2014.
Currently, the Bank operates under the following ADFP “Damu” loan programs:
— Stabilization program - 2nd, 3rd tranches;
— Damu regions;
— Damu regions 2;
— Damu regions 3;
— Program “Damu-Өnіrє ІІ” to support SME entities engaged in processing industries;
— Program for lending to SME entities in processing industries and services.
In addition, the Bank actively implements the “Business Roadmap 2020” program, participates in the development program of single-industry towns for 2012–2020, the interest rate subsidy program for loans to private business entities operating in Zhanaozen, as well as the interest rate subsidy program for agricultural support loans, implemented jointly with the Ministry of Agriculture.
“The social effect of the projects funded within state programs lies in the fact that the companies we supported along with the state managed to develop their business, create additional jobs, increase their own income, wages, revenue to the state budget, etc.— 113 projects were financed by us under state programs for a total amount of about 12 billion tenge. According to approximate estimates, programs created almost 800 new jobs. We believe that programs significantly contribute to SME development, and the state, offering such business support programs, demonstrates the success of its investments”
Retail Sector
The loan portfolio for the retail sector as of 31.12.2014 amounted to 45.2 billion tenge, mainly due to consumer and unsecured lending. The share of retail sector loans in total client loans was 19.3%. The share of mortgage loans in the retail sector loan volume was 45.18%.
The volume of retail clients' funds on 31.12.2014 was 70.5 billion tenge. Growth compared to 31.12.2013 was 27.5% or 15.2 billion tenge.