Financial indicators of Bank TuranAlem OJSC: information published regarding TuranAlem Finance B.V.

/IRBIS, July 18, 01, using documents of the Listing Commission/ - Auditing of Bank TuranAlem for 1997-1998 was Arthur Andersen (Almaty, Kazakhstan), for 1999-2000 - Ernst & Young (Almaty, Kazakhstan). The financial indicators given below are compiled using financial statements audited by Ernst & Young (excluding statements for April 01, 2001, which have only been reviewed not examined). All statements have been prepared according to International Accounting Standards. ---------------------------------------------------------------------------- As of As of As of As of Index Jan.1'99 Jan.1'00 Jan.1'01 Apr.1 '01 --------------------------------------- -------- -------- -------- --------- Authorized capital (paid-up) 7,931 8,757 11,931 11,931 Shareholders' equity 3,676 5,083 8,935 9,072 Book value of assets 18,133 45,922 79,205 99,329 Liquid assets 4,629 11,640 17,261 24,022 Loans and advances to clients (net) 10,406 26,989 53,806 66,348 Obligations to clients 9,651 28,224 46,933 62,728 Obligations to banks and other entities 4,308 9,723 16,984 18,414 Operating income 4,158 5,422 9,725 3,155 Operating expenses 2,632 4,511 8,828 2,688 Net income after minority stake 1,526 911 897 467 --------------------------------------- -------- -------- -------- --------- Estimated by KASE --------------------------------------- -------- -------- -------- --------- Return on assets (ROA), % 8.42 1.98 1.13 - Return on equity (ROE), % 41.51 17.92 10.04 - ---------------------------------------------------------------------------- In the opinion Ernst & Young, consolidated financial statements of the bank give a reliable representation of financial situation of the bank in all necessary aspects as of December 31, 1998, 1999, and 2000 as well as consolidated income and cash flow statements for indicated periods. All statements have been compiled according to international Accounting Standards. The following table created by the KASE specialists was based on auditing reports (in KZT, millions unless otherwise specified). The amount of liquid assets is determined on the basis of the NBK's instructions. REVENUES Operational revenues of the Bank have caught growing trend for last three years (1998 - KZT4.7bn, 1999 - KZT7.0bn, 2000 - KZT13.1bn). This trend is also supported by results of first quarter 2001. Interest rate revenues for first quarter equaled KZT2.9bn or 64.7% of the total revenues. Commission revenues grew up due to increased amount of opened accounts and reached KZT611.0m or 13.8% of the total revenues. Revenues from financial operations were KZT777.0m or 17.6% other revenues - KZT174.0m or 3.9%. Total interest revenues in 2000 reached KZT7.9bn and increased by 117% to 1999 (KZT3.6bn) as a result of loan portfolio growth, which is in turn was caused by economic stabilization and expanding demand for the Bank's services. Interest revenues on loans granted to clients grew up 120% or from KZT3.5bn up to KZT7.8bn. Weighted average interest rates in foreign and domestic currencies equaled 14.7% and 17.5% correspondingly and decreased from 18.9% and 19.9% in 1999. EXPENSES As of Apr. 01, 2001 expenditures of the Bank equaled KZT3.9bn, of which the most part 33.2% is attributed to interest payment expenses (KZT1.3bn) accumulated because of expanding of deposit base and other attracted funds. In first quarter of 2001, the share of personnel and administrative expanses 29.4% (KZT1.2%) has undergone large increase because of expanding of branch network and moving of the head office in March 2001. The Bank's expenses recorded large year to year growth (1999 - 86.9%, 2000 - 101.2%) because of growth in wages, growth in number of personnel, and anchoring of wages to the US dollar. Such significant growth of expenditure led to lowering of net income figure in 1999 by 40.3% and 1.5% in 2000. ASSETS The Bank is the second biggest private bank in Kazakhstan in terms of assets. As of March 31, 2001 assets of Bank TuranAlem equaled KZT99.3bn or 18.4% of the total banking assets in Kazakhstan. Stable growth of the Bank's assets was conditioned by accumulation of profitable assets. The share of loan portfolio in profitable assets has grown during last three years from 69.3% to 75.7% (or from 57.5% to 67.9% in total assets). Assets growth in 1999-2000 and first quarter 2001 was caused by growth in cash and its equivalent (from 1998 to 2000 by 79.5%, first quarter 2001 - 113.3%). Commercial loans and advances grew up 417.1% from 1998 to 2000, and 23.3% for the first quarter. Securities portfolio increased 17 times (1999-2000). LOAN PORTFOLIO One of the major activity of Bank TuranAlem is trade financing and short- term crediting in tenge and US dollars including issue of letters of credits and guarantees. The Bank's share on the country's loan market equals 20.1%. Loans to clients total biggest part of assets: 57.5% (KZT10.4bn) from total net loans in 1998; 1999 - 58.8% (27.0bn); 2000 - 67.9% (KZT53.8bn), first quarter of 2001 - 66.8% (KZT66.3bn). Ninety six percents of credits granted to corporate clients. The most part of loans was distributed in wholesale trade - 37%, agriculture and foodstuff industry - 17%, oil and chemical industry - 10%. According to the Bank's information clients were mainly financed for the account of deposits base, fifth emission of shares, attracted funds (as of Apr. 01, 2001 - KZT18.4bn). During last three years major volume of crediting was made on short-term basis: 1998 - KZT10.0bn or 85.0% of loan portfolio, 1999 - KZT22.6bn - 77.1%, 2000 - KZT41.1bn or 72.4%. The share of mid to long term loans increased from 15.0 to 27.6%. Loans granted in US dollar take 51-55% of loan portfolio, in tenge - 32-34%, indexed to Us dollar - 17-11%. In late 2000 interest rates on tenge credits equaled 11%-28%, in US dollars - 12-25%. The Bank classifies its loan portfolio and forms loan loss provisions ins trict accordance to requirements of the National Bank of Kazakhstan. In 1998 loan loss provisions equaled 1.3bn or 11.3% of the portfolio, 1999 - 2.3bn or 7.8%, 2000 - KZT2.9bn or 5.1%. Absolute growth of provisions is only attributed to growth of loan portfolio itself as relative shares are falling. PRUDENTIAL STANDARDS According to the Banking Supervision Department of NBK, By December 01, 2000, the Bank maintained all prudential standards and other mandatory norms and limits. Сomparative characteristics of Bank TuranAlem OJSC with indicators of other commercial banks as of June 01, 2001 (thousand of tenge unless otherwise indicated) ------------------------------------------------------- Bank TuranAlem OJSC Average ratio Index of two banks -------------------- ------------------- -------------- Shareholders' equity 15,969,801 13,423,183 Assets 103,160,439 107,565,133 Net income 1,354,258 1,021,782 k1 (min 0,04) 0.098 0.080 k2 (min 0,08) 0.15 0.15 k4 (min 0,20) 0.76 0.61 ROА, % 1.31 0.88 ROE, % 8.48 6.32 ------------------------------------------------------- The comparison is made only with two other banks included into top-three banks (authorized capital).