Temirbank OJSC (Kazakhstan) shareholders cut preferred dividends from 25% to 1%

/KASE, July 3, 01/ - Temirbank OJSC (Almaty) provided the KASE with the minutes of annual general shareholders meeting, which was held on June 8, 2001. Based on approved agenda of the meeting, the shareholders of Temirbank OJSC approved the report of the Board of the bank on the bank's results in 2000, annual financial statements, report of the Supervision commission, regulation "On the Board of directors of the company", changes and amendments to the Charter of the bank, as well as made following decisions: - to cut dividends on preferred shares from 25% to 1% of the face value; - change the payment frequency of the dividends from quarterly to annual; - distribute a net income received in 2000 as follows: allocate KZT23,253 th. to establish a reserve for re-evaluation of affinated rare metals and credits fixed into a hard currency equivalent; KZT9,190 th. - to income capitalization and bank development; KZT2,500 th. - to pay dividends on preferred shares at 1% APR, setting July 1, 2001 as the payment date; not accrue dividends to common shares; - allocate KZT188,819 th. from net income of previous years to restore the bank's reserve capital; - set the order and norms for the distribution of net income to be received in 2001; - not the increase the bank's announced authorized capital; - conduct the third issue of subordinated coupon bonds with 7 year circulation term for $5.0m consisting of 50,000 securities at $100 each, coupon rate of 10.5% APR for the first circulation year, for the rest of circulation period at the discretion of the Board, but not less than 5-7% APR; - approve the assignment of PricewaterhouseCoopers (Almaty, Kazakhstan) as the bank's auditor for 2001; - approve the bank's intention to attract external funds at $30m. The acting chairman of the board, Kononenko O.A., made a speech on the bank's results in 2000, where it was said that authorized paid-up capital of the bank increased by KZT400m (due to a floatation of the 10th share issue), at KZT1.4bn, volume of loan portfolio increased 1.6 times, at KZT8.96bn, credits granted increased by 56.3%, at KZT22.3bn. Financing of construction, light and food, chemical and petrochemical industries, agriculture, wholesale and retail trade, and consumer financing of the individuals have increased. The bank granted 1.5 times more loans to the small and mid-sized businesses relative to 1999. In 2000 it financed 12 projects for a total of $7,938 th., including: - 3 projects under Domestic producers support program amounting to $1,130 th. (financing was through Eximbank Kazakhstan OJSC under Temirbank warranty); - 3 projects using the funds of Asian Development Bank for a total of $1,820 th.; - 4 projects under a post-privatization support of the agriculture program of the World Bank for a total of $299 th.; - 2 projects under the OND insurance company line using the funds of KBC Bank (Belgium) for a total of EUR4,689 th. In 2000 the volume of deposits increased by 40%, about at KZT9bn at the end of the year. The first issue of the bank's own bonds with 5 year circulation term amounting to $5m was conducted. It is also said that along with a positive development of the bank, the quality of the loan portfolio declined during the year. Unsatisfactory, doubtful and bad debts accounted for 14.5%. Provisions were created in 2000 on doubtful and bad debts for a total of KZT864.7m, or KZT570m more than in early 2000. Significant proportion of expenses incurred as a result of creation of provisions affected the financial results of Temirbank OJSC. Net income in 2000 equaled KZT34,943 th. against KZT98,687 th. in 1999, return on capital, as well as income per employee has declined (almost 10 times to 1999). In early 2001 the bank had 25 branches and 19 settlement centers, of which 11 were opened in 2000, and the number of employees was 1,014. Following securities of Temirbank OJSC have been admitted to the category "A" of the KASE official list: - from October 8, 1998 - common inscribed (KZ1C00260413, trade code - TEBN) and preferred inscribed (KZ1C00260418, trade code - TEBNp) shares; - from August 7, 2000 - first issue inscribed coupon bonds (KZ75KAMJ8A57, trade code - TEBNb).