AFS about condition of financial market and financial organizations as of June 1, 2006

/IRBIS, Assel Omarova, June 26, 06/ - Agency of the Republic of Kazakhstan for regulation and supervision of financial market and financial organizations (AFS) spread press-release of condition of financial market and financial organizations as of June 1, 2006, in which the following is said: Quotation start Bank sector As of June 1 of 2006 banking sector of the republic is represented by 34 banks of the second tier, 14 banks of which are with foreign funds (including 9 subsidiary banks - non-residents of the Republic of Kazakhstan). As of June 1 of 2006 aggregate settlement shareholders' equity of the banking sector made KZT731,1 bn., having increased by KZT24.1 bn. for a month or by 3.4%. Aggregate assets of banks have increased for a month by KZT243.9 bn. (4.8%) till KZT5,345.1 bn. The indicators of adequacy of equity for reporting date made k1 - 0.9; k2 - 0.15 (as of May 1, 2006: k1 - 0.10; k2 - 0.15). Banks' loan holding (taking into account of interbank loans) has increased for a month by KZT183.0 bn. (5.4%) till KZT3,575.8 bn. In the structure of credit holding of banks as of June 1 of 2006 the stake of standard credits made 58.2%, doubtful - 39.1%, hopeless - 2.6%. Total sum of deposits borrowed by banks from juridical and physical persons (excluding banks and international financial organizations) made KZT2,998.2 bn. having increased by 6.7%for a month. Including the sum of deposits of juridical persons - KZT2,286.6 bn. having increased by 6.8%, the sum of deposits of physical persons - KZT711.5 bn. with augmentation by 6.5%. Deposits of subsidiary organizations of a special assignment made KZT976.5 bn., having decreased for a month by 0.8%. Aggregate sum of revenue of the banks of the second tier as of June 1 of 2006 made KZT319.2 bn., having increased by 87.2%. in comparison with analogical period of past year. The sum of expenditures made KZT270.2 bn., having increased by 84.3% in comparison with analogical period of past year. Unallocated net income (uncovered loss) of banks made KZT49.0 bn. that was higher than given indicator by 105.0% for analogical period of past year. For infringement of bank legislation for May of 2006 the banks have been pronounced 12 compulsory mandates for performance, 3 letter-obligations, to 3 banks sanctions have been taken. As of June 1 of 2006 in the process of compulsory liquidation on court decision there are 13 banks. At a regular meeting of Agency's Board in May 2006 the range of enactments was considered and adopted targeting at further improvement of regulatory and supervisory functions for activity of STBs, including: " Of forms and terms approval of report presenting by STBs of "REPO", "reverse REPO" operations", "Of additions and changes insertion into enactment of Board of Agency of the Republic of Kazakhstan for regulation and supervision of financial market and financial organizations dated September 30, 2005 #358 "Of approval of Guidelines for standard values and the method of calculations for prudential norms for the banks of the second tier". Insurance market As of June 1 of 2006 on financial market of the republic in compliance with given licenses by Agency 39 insurance organizations act, under this, licenses on activity realization on insurance of life have 4 organizations, on compulsory insurance. Civil responsibility of owners of vehicles represents 29 organizations. Also, on the market of insurance services 12 insurance brokers realize their activity, 30 actuators, 36 audit companies and 70 auditors having licenses for the right of realizing insurance audit. For four months of current year aggregate assets of insurance organizations have increased by 16.2%, having made KZT85.2 bn. as of May 1. Aggregate shareholders' equity increased by 18.3% and made KZT53.6 bn. The sum of insurance reserves made KZT43.1 bn. The volume of insurance bonuses as of May 1 of 2006 made KZT30.7 bn., that was higher by 37.7% than indicator for analogical period of past year. Including volume of insurance bonuses on compulsory insurance that increased by 43.5% and made KZT3.3 bn., on voluntary personal insurance - KZT3.3 bn.(increase by 37.5%) and on voluntary property insurance - KZT24.1 bn. (augmentation by 36.9%). In comparison with analogical period of 2005, the volume of insurance bonuses gathered for four months of 2006 in the sector лlife insurance¬ increased 2.7 times or up to KZT0.896 bn., and the stake of life insurance in aggregate insurance bonuses reached 2.9% against 1.3% as of May 1 of 2005. The sum of insurance bonuses passed for re-insurance made KZT15.3 bn. or 49.8% from the total volume of insurance bonuses, at that, non-residents have been passed 45.6% from total volume of insurance bonuses for re- insurance (as of May 1 of 2005 the stake of insurance bonuses passed for re-insurance to non-residents made 36.1%). The volume of insurance payments made for four months of 2006 made KZT3.75 bn. that was higher than indicator of past year by 17.9%. Including the volume of insurance payments on compulsory insurance made KZT1.67 bn. (56.1%), on voluntary personal insurance - KZT0.45 bn. (augmentation by 2.3%) and on voluntary property insurance - KZT1.63 bn. (decrease by 2.4%). As of May 1, 2006 3,097.4 thousand contracts on insurance are valid, 60.0% of which made contracts on compulsory insurance. At that, for four months of current year 1,113.1 thousand contracts have been made. Total volume of liabilities (insurance sum) on acting contracts of insurance made KZT8,888.3 bn. At present, 31 insurance (re-insurance) organizations take part in the system of insurance payments securing. In May 2006 in the aim of eliminating infringements of legislation regulating activity of insurance market, 4 letters-directions were forwarded by Agency in the address of insurance organizations. As of June 1 of 2006 in the process of compulsory liquidation on court decision there are 5 insurance companies. In May of current year the liquidation process of 1 insurance company was registered by order #2612-5 dated May 4, 2006. In May 2006 by Board of Agency with the aim of further improving of insurance legislation the enactment was adopted: "Of insertion of changes and additions into enactment of Board of the National Bank of the Republic of Kazakhstan dated June 14, 2001 #224 "Of confirmation of Instruction on documentation, management of documentation and storage of documents in insurance (re-insurance) organizations. Accumulative pension system As of June 1 of 2006 there are 14 accumulative pension funds in the republic, which have 77 affiliates and 77 representation offices in the regions of the republic. 10 organizations fulfill Investment management in pension assets of accumulative pension funds, at that, 3 accumulative pension funds among them have license for pension assets self-management: Accumulative pension fund SAPF JSC, APF of Halyk Bank of Kazakhstan JSC and APF BTA Kazakhstan JSC. The quantity of personal pension accounts (hereinafter-the account) of depositors (recipients) on liabilities of pension dues as of June 1 of 2006 made KZT7,929,418. For May of current year the quantity of depositors' accounts (recipients) transferring compulsory pension dues, has increased by 59,243 (0.71%). The quantity of depositors' accounts (recipients) on voluntary pension dues having increased for May by 114 (0.35%) and made 32,840 as of June 1, 2006 with total sum of pension accumulation at KZT547.5 m. The quantity of depositors' accounts on voluntary professional pension dues has grown for May by 28 (0.77%) and as of June 1, 2006 made 3,686 with total sum of pension accumulation at KZT23.4 m. As of June 1, 2006 the sum of pension accumulation of depositors (recipients) made KZT757.4 bn. or with augmentation by 2.53% in comparison with May 1, 2006. At that, total receipt of pension dues has increased for May by KZT13.8 bn. or by 2.45% and made KZT576.5 bn. as of June1, 2006. The sum of net investment income from pension assets investing (minus commission remuneration), allocated on individual pension accounts of depositors (recipients), having increased for May, 2006 by KZT5.7 bn. (2.85%) and as of June 1, 2006 made KZT205.0 bn. In total sum of pension accumulation of depositors (recipients) the stake of net investment income makes 27.07% or increased by 0.09% for May of current year. Pension payments and transfers into insurance organizations out of accumulative pension funds as of June 1, 2006 made KZT41.2 bn. or as of May of current year increased by KZT0.91 bn. (2.26%). In Insurance organizations pursuant to contract of pension annuity the transfers of pension accumulation for January-May of current year made KZT27.7 m., including May- KZT12.6 m. or 45.5% from total sum of transfers in insurance companies. Dues of pension accumulation of depositors (recipients) from one fund into another one having increased for April by KZT3.1 bn. and as of May 1 of 2006 made KZT105.9 bn. Weighted average ratio of nominal income of pension assets of accumulative pension funds made 23.43% for the period of April 2003 till April 2006, accumulated inflation rate for specified period made 24.44%. Securities market On the market of corporate securities the number of JSCs with actual issues as of June 1, 2006 made 2,181 societies that was by 57 lower in comparison with analogical indicator as of May 1, 2006. Also, there are 57 brokers- dealers, 17 registrars, 11 banks-custodians, 11 organizations fulfilling investment management by pension assets (OOIUPA) and 30 managers of investments holdings and 2 transfer agents. In May 2006 24 share issues were registered (taking into account shares issues in the specifications of which changes have been made and substitution of certificate of state registration has been made), 70 share issues were annulled. As of June 1, 2006 2,339 actual share issues were in circulation. Also, in May of current year 7 bond issues were registered with total face value of KZT143.7 bn., including 5 bond issues to the sum of KZT140.0 bn., having been registered within the frameworks of bond programs. As of June 1, 2006 188 actual corporate bond issues were in circulation, total face value of which made KZT801.4 bn. In May 2006 7 shares investments funds have been registered in connection with it the quantity of actual securities of shares investments funds on the market increased up to 65 (51 - closed, 8 - opened and 6 - interval) as of May 1, 2006. 9 joint-stock investment funds also are functioning. As of June 1 of 2006 the quantity of issues CS of issuers of the Republic of Kazakhstan included in KASE's official "А" listing category made 209 issues and in "В" category - 56 issues. In May 2006 for violation of legislation of the Republic of Kazakhstan on securities market by Agency: 3 directions were forwarded to the address of professional participants of securities market and accumulative pension funds, and also penalty provisions were applied with respect to four professional participants of the securities market. In May 2006 on matters of improving prudential activity regulation of professional participants of securities market by Board of Agency the several standard legal acts were taken. Also with a view of further improvement of access procedures of issuers to stock exchanges and development of infrastructure of securities market following enactments were taken: "About insertion of additions and changes in the enactment of the Board of Agency of the Republic of Kazakhstan for regulation and supervision of financial market and financial organizations dated March 15, 2004 #63 "About claims to issuers and their securities, which are admissible (admitted) to the circulation on the stock exchange, and also separate categories of the list of the stock exchange" and "About approval of Rules of accomplishment of activities by the central depositary on the securities market". Sector of organizations that fulfill separate bank operations As of June 1, 2006 there are 7 mortgage companies, which implement separate types of bank operations on the basis of actual licenses on financial market of the republic. For reporting month a decrease of the main indicators, which characterize the activity of mortgage companies, occurred. As of June 1 of 2006 the total of aggregate assets made KZT96.2 bn., having decreased by 0.7% for a month, aggregate liabilities reached KZT72.9 bn., augmentation by 1.1%, the size of shareholders' equity makes KZT23.3 bn., having increased by 0.4% during month. The size of credit holding of mortgage companies as of June 1 of 2006 totaled KZT78.9 bn. that by KZT0.3 bn. or by 0.4% was less than that of May 1, 2006. In the structure of aggregate credit holding of mortgage companies as of June 1, 2006 the stake of standard credits makes 96.6%, doubtful - 3.1% and hopeless - 0.3%. As of May 1, 2006 the stake of standard credits made 98.8%, doubtful - 0.9%, hopeless - 0.3%. With a view of further improvement of regulator and supervision functions of activities of organizations, which accomplish separate types of bank operations, in May 2006 by the Board of the Agency this enactment was taken: "About insertion of additions and changes in the enactment of the Board of Agency of the Republic of Kazakhstan for regulation and supervision of financial market and financial organizations dated February 25, 2006 #34 "About approval of Rules of creation, licensing, regulation, termination of activities of organizations that fulfill separate types of bank operations". Protection of interests of consumers of financial services In May 2006 47 addresses (complaints) of physical and juridical persons, and also 2 requests from subjects of financial market came to the Agency. Corresponding explanations up to 17 have been presented, and 46 are under consideration. Out of total number of application 38% of letters touched matters of activity of second tier banks, 32% of letter are on matters of activity of insurance organizations, 11% -of accumulative pension funds, 2% - of activity of the subjects of securities market and 17% are of other matters of financial market. Also in April explanations were presented and disputable matters were regulated up to 52 earlier incoming appeals. 7 check-ups of financial organizations, which accomplish insurance, banking activity and activity on attraction of pension fees and making pension payments, in 1 case of which a fact of violation of rights of consumers of financial services was elicited, were conducted by the Agency. In this connection, one of insurance companies was called to administrative account in accordance with paragraph 2 of 174th article of Code of administrative violations, and also on paragraph 7 of 173d article of CoAV. Besides, by results of consideration of complaints of respondents to four insurance organizations and two joint-stock companies letter-instructions were directed for failure to execute norms of acting legislation of the Republic of Kazakhstan, measures of administrative punishment in the form of forfeit was taken to one insurance company on part 2 of 174th article of CoAV for untimely insurance payments. In an effort to strengthen the institute of protection of rights of consumers of financial services and investors the Agency developed a bill "About compulsory guaranteeing of deposits in second-tier banks of the Republic of Kazakhstan", which was submitted to consideration of Senate of the Parliament of the republic of Kazakhstan. With a view to increase the level of protection of investors' rights in the Republic of Kazakhstan the National Bank of Kazakhstan together with the Agency developed a draft of legislation "About insertion of additions and changes in some legislative acts of the Republic of Kazakhstan on the matters of protection of minorite investors' rights", which is under concordance in the Government of the Republic of Kazakhstan. In the context of conducted informational and explanatory activity explanations on securities market and bank activity are available on the web- site of the Agency in the rubric "question - answer". Quotation end [2006-06-26]