Kazkommertsbank AO : reports its nine months results ended 30 September 2016

29.12.2016

29 December 2016, Almaty, Kazakhstan - JSC Kazkommertsbank, one of the largest banks in Kazakhstan and Central Asia, today announces its audited consolidated IFRS financial results for the nine months ended 30 September 2016.

Highlights of 9 months 2016 results:
• Net income before taxation amounted to KZT 64.5 billion for the first 9 months of 2016 compared to net loss of KZT5.8 billion for the first nine months of 2015.
• Total assets increased by 0.9% to KZT 5,139 billion compared to KZT 5,094 as at year end 2015.
• Customer deposits increased by 4.4% to KZT 3,472 billion from KZT 3,325 billion as at year end 2015.
• Capital Adequacy ratio based on NBK methodology at 13.1% compared to 11.5% as at year end 2015.
• Non-performing loans in accordance with NBK methodology decreased to 7.99% as at 1 October 2016 from 8.9% as at year end 2015.

'We believe that new business strategy of the Bank resulted in net income for the period as we see increased profitability of our core business combined with increase in KKB market share in retail and SME segments. We have significantly improved quality of service in our branch network, and confirmed our technological leadership', commented Mr. Abay Iskandirov, the First Deputy CEO of the Bank

Net interest income
Net interest income before provisions increased by 4.7% to KZT 141.4 billion for the nine months ended 30 September 2016 compared to KZT 135.1 billion for the first nine months of 2015.

Non-interest income
Net non-interest income amounted to KZT 3.9 billion for the first 9 months of 2016 compared to KZT 38.3 billion for the first 9 months of 2015. Net non-interest income decreased as in the 3Q15 the Bank had positive currency revaluation resulted from fluctuations in exchange rate in August 2015, while in the 3Q16 the Bank realized expenses on revaluation of equity securities.

Net fees and commission income decreased by 13.4% to KZT 19.2 billion from KZT 22.2 billion for the same period of 2015. Such decrease was attributable to increase in contribution to JSC 'Kazakhstani Deposit Insurance Fund' resulted from the growth of the Bank's average deposit base compared to the same period of the previous year.

Impairment losses
Provisions on loans to customers represented 12.6% of gross loans as at 30 September 2016.

Allowance for provisions amounted to KZT 23.2 billion for 9 months of 2015 compared to KZT 118.8 billion for the 9 months period of 2015.

Non-performing loans according to NBK methodology as of 01 October 2016 were down to 7.99% vs. 8.9% as of the end of 2015.

Taxation
For 9 months of 2016 the Bank recorded income tax expense of KZT 20.6 billion compared to KZT 14.5 billion for the same period of 2015.

Capital Adequacy
Total capital adequacy ratio subject to the NBK methodology stood at 13.1% as of 01 October 2016 against 11.5% as at the YE 2015.

Business line performance

Corporate and SME banking
Corporate loans, net (including SME) increased by 2.3% and amounted to KZT 3,557 billion compared to KZT 3,476 billion as of 31 December 2015.
Corporate deposits as of 30 September 2016 amounted to KZT 2,006 billion compared to KZT 1,855 billion as at 31 December 2015. The share of corporate deposits in the Bank's total customer accounts was 57.8% compared to 55.8% as at the end of 2015.

Retail banking
Retail loans (net) decreased by 13.9% to KZT 304.6 billion compared to KZT 353.7 billion as at 31 December 2015. The Bank experienced a low pace of growth in in retail loans during the first 6 months of 2016 resulted predominantly from the macroeconomic developments in Kazakhstan and shortfall in KZT liquidity in the banking sector.

In the 3rd quarter 2016 the Bank boosted retail lending and extended KZT 24 billion of new retail loans compared to KZT 9 billion disbursements during the 1st half of 2016.

Retail deposits decreased by 0.3% to KZT 1,466 billion compared to KZT 1,470 billion as at 31 December 2015. The share of retail deposits in total customer accounts was 42.2% compared to 44.2% as at 31 December 2015.

As of 30 September 2016 the Bank had an extensive alternative distribution network. The number of ATMs and POS terminals was 2,430 and 44,292 accordingly compared to 2,160 and 35,005 as at the end of 2015.

About Kazkommertsbank

Kazkommertsbank (KKB) is one of the largest banks in Kazakhstan and Central Asia with total assets of KZT 5,139 billion at 30 September 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 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]