VALUT-TRANSIT BANK OJSC: comments and conclusion of the Listing commission

/KASE, Oct 23, 00/ - Following is the brief reference to the conclusion of the KASE Listing Commission. The reference is published in connection with inclusion of the bank's shares into category "A" of the officials list of KASE securities. Previously, shares were in "B" category of the list. COMMENTS OF THE LISTING COMMISSION General situation of the banking sector in Kazakhstan. During last five years banking sector of Kazakhstan has concentrated much of economy's capital. At the same time, number of commercial banks decreased. For instance, the data of the National Bank of Kazakhstan shows decrease in banks' number from 130 (end year 1995) to 47 (July 01, 2000). Only first six months saw suspension of 15 banks. At the same time, total capital of the banks increased from KZT14.9 bln to KZT79.3 bln, total assets - from KZT163.0 bln to KZT410.4 bln. If by the end of 1995, only 53.1% of banks had authorized paid-up capital of less than KZT20 mln and 0.8% were banks with the capital less than KZT1.3 bln, than in a mid year 2000 composition looked as follow: 21.3% - capital exceeding KZT1.3 bln, 51.1% - less than KZT1.3 bln, and 2.3% - less than KZT80 mln. The bank's participation in "Valut-Transit" Financial-industrial Association. The managers of the Valut-Transit Bank deny any affiliated relations with members of the Association. However, most titles of the Association's members include "Valut-Transit" abbreviation (Valut-Transit Lombard, Valut-Transit non-state accumulative pension fund, Valut-Transit Hotel, Valut-Transit Oil ALS). Besides these facts, the auditors noted that in 1999, the bank concluded several financial leasing contracts with low interest rates and deferred principal repayments. These contracts (KZT989,133 th) were signed with members of "Valut-Transit" Financial-industrial Association. The share of these contracts took 96.6% of total leasing contracts. The share of financial leasing in total volume of loan portfolio as of Dec 31, 1999 consists of 41.7%, as of Oct 01, 2000 - 69.2%. Participation in Kazakhstan Personal Deposits Insurance Fund CJSC (KPDIF). At present bank intends to join the deposit insurance system presented by Kazakhstan Personal Deposits Insurance Fund CJSC. The time and probability of these intentions is not yet properly defined. Increase in shareholders' equity of the bank. Growth of the shareholders equity for the first 9 months amounted KZT488.3 mln or 45.7%. The major growth (84.5%) falls on additional capital (premium on shares). The bank informed that during this time it has been conducted repurchase-sale operations with own shares. COMPLIANCE WITH CATEGORY "A" KASE LISTING REQUIREMENTS As of Oct 01, 2000, the shareholders equity of Valut-Transit Bank OJSC totaled KZT1,557,876 thousands or $10,921 mln (at the official exchange rate as of Oct 01, 2000 - KZT142.65). The company, as an independent legal entity was founded 9 years ago. Valut-Transit Bank OJSC has independent auditor's conclusion made by the KPMG Janat for 1998-1999 - over the balance, result of economic and financial activity and cash flow statement for 1999. According to the financial statements of the company compiled in compliance with Kazakhstan accounting standards the bank has been profitable during last three years. The income for 1998-99 is confirmed by the KPMG Janat conclusion. The bank issued - 6,500,000 shares. As of Oct 10, 2000, there were 857 shareholders. KBS Securities LLP (Almaty) takes market-makers responsibilities for quotations the bank's shares. The register is maintained by independent registrar - Securities Registering System CJSC. The terms of the issue do not contain norms restraining and limiting transferring rights (alienation). The bank does not currently participates in the collective personal deposits insurance system. Whereas this requirement was included into "Securities Listing Regulation" by the decision of KASE members (categories "K", "P", "H") dated Sep 25, 2000 (minutes #6). This requirement was submitted to the National Securities Commission of the Republic of Kazakhstan (NSC) on approval (approved by the resolution of Directorate of the NSC #684 dated Oct 13, 2000 after conclusion of the Listing Commission - IRBIS comments). KASE LISTING COMMISSION CONCLUSION After consideration of submitted documents, the Listing Commission of KASE confirms that Valut-Transit Bank OJSC complies with requirements set by "Securities Listing Regulation" on inclusion of securities into official list of KASE securities, category "A", except for requirements stipulating participation in the collective personal deposits insurance system.