Kazkommertsbank AO : reports 1st half 2016 financial results

29.09.2016

29 September 2016, Almaty, Kazakhstan - JSC Kazkommertsbank ('KKB' or the 'Bank') (LSE: KKB; KASE: KKGB), one of the largest banks in Kazakhstan and Central Asia, today announces its consolidated IFRS financial results for the six months ended 30 June 2016.

1st half 2016 highlights:

• Net profit for the 1st half of 2016 amounted to KZT 43.2 billion compared to net loss of KZT 54.8 billion for the 1st half of 2015.
• Total assets amounted to KZT 4,893 billion as at 30 June 2016 compared to KZT 5,094 billion at the year-end of 2015.
• Customer deposits amounted to KZT 3,116 billion as at 30 June 2016 compared to KZT 3,325 billion at the year-end of 2015.
• Capital adequacy ratio (NBK methodology) improved to 12.7% compared to 11.5% at the year-end of 2015.
• Share of non-performing loans in accordance with NBK methodology decreased to 8.6% as at 1 July 2016 compared to 8.9% at the year-end of 2015.

'Bank was profitable in the first half of 2016, and it is a major result for our management team. Slight decrease in assets and customer accounts was caused by seasonal factors and general macroeconomic situation' commented Mr. Abay Iskandirov, First Deputy CEO of the Bank.

Net interest income
Net interest income before provisions increased by 13.9% to KZT 98.7 billion compared to KZT 86.6 billion for the 1st half of 2015.

Non-interest income
Net non-interest income for the 1st half of 2016 increased to KZT 11 billion compared to KZT 4.7 billion for the first 6 months of 2015 as a result of changes in the structure of investment portfolio and more efficient portfolio management in the given period.
Net fee and commission income decreased by 11.6% for the 1st half of 2016 to KZT 12.3 billion compared to KZT 13.9 billion for the same period in 2015 mainly due to increased fee and commission expenses on allowances to JSC Kazakhstan Deposit Insurance Fund resulted from growth in average deposit portfolio of the Bank compared to the 1st half of 2015.

Impairment losses
Provisions on loans to customers represented 12.5% of gross loans as at 30 June 2016.
Allowance for provisions amounted to KZT 15.5 billion for the 1st half of 2016 compared to KZT 98.1 billion for the 1st half of 2015.
Non-performing loans according to NBK methodology decreased to 8.6% as at 1 July 2016 from 8.9% as at the year-end of 2015.

Taxation
For the first 6 months of 2016 the Bank recorded income tax expense of KZT 15.9 billion compared to KZT 3.3 billion for the same period in 2015.

Capital ratios
The Bank's total capital ratio in accordance with NBK methodology represented 12.7% as at 30 June 2016 compared to 11.5% at the year-end of 2015.

Business line performance

Corporate and SME banking
Corporate loans (net) increased by 2.5% and amounted to KZT 3,562 billion compared to KZT 3,476 billion as of 31 December 2015.
Corporate deposits amounted to KZT 1,673 billion as at 30 June 2016 compared to KZT 1,855 billion as at 31 December 2015. Temporary outflow of corporate deposits was fully recovered in July 2016. The share of corporate deposits in the Bank's total customer accounts was 53.7% compared to 55.8% as at the end of 2015.

Retail banking
Retail loans (net) decreased by 12.7% to KZT 308,8 billion compared to KZT 353,7 billion as at 31 December 2015. Slowdown in retail lending in the 1st half of 2016 mainly resulted from general macroeconomic situation in the country and lack of liquidity in tenge. Since the beginning of the 2nd half of the year, the Bank boosted retail lending.
Retail deposits decreased by 1.8% to KZT 1,443 billion compared to KZT 1,470 billion as at 31 December 2015 due to traditional seasonal outflows in the second quarter of the year. The share of retail deposits in total customer accounts was 46.3% compared to 44.2% as at 31 December 2015.
As of 30 June 2016 the Bank had an extensive alternative distribution network. The number of ATMs and POS terminals was 2,400 and 39,974 accordingly.

About Kazkommertsbank
Kazkommertsbank (KKB) is one of the largest banks in Kazakhstan and Central Asia with total assets of KZT 4,893 billion at 30 June 2016.
In addition to its core banking business (retail and corporate) KKB has subsidiaries active in asset management, insurance and brokerage. KKB also has foreign subsidiaries in the Russian Federation and Tajikistan.
Major shareholders of Kazkommertsbank include Mr. Kenges Rakishev, Qazaq Financial Group, Central Asian Investment Company, Mr. Nurzhan Subkhanberdin and the Kazakh Government through the Samruk-Kazyna National Welfare Fund. KKB's predecessor, Medeu Bank, was founded in July 1990, and re-registered as Kazkommertsbank in October 1991. KKB completed an IPO in GDR form on the London Stock Exchange in November 2006, the first CIS bank to do so, in a deal totalling US$845 million. The Bank's shares are listed on the Kazakhstan Stock Exchange.

Contact details:
Kazkommertsbank
Alma Buirakulova, Investor Relations
Tel.: [phone]
E-mail: [e-mail]
Larissa Kokovinets, Director, Public Relations
Tel.: [phone]
E-mail: [e-mail]