Sources of financing of Bank TuranAlem OJSC: information published regarding TuranAlem Finance B.V.

/IRBIS, July 18, 01, using documents of the Listing Commission/ - The main sources of the Bank's financing in 1998-2000 were clients' deposits and funds attracted from other banks and financial organizations. In February 2001, the Bank realized emission of domestic subordinated coupon bonds with 8 years to maturity in order to diversify sources of financing. Source of financing of Bank TuranAlem OJSC ------------------------------------------------------------------------------ As of 1998 1999 2000 Apr.01, 2001 ----------- ----------- ----------- ------------ Sources KZT m % KZT m % KZT m % KZT m % ----------------------------- ------ ---- ------ ---- ------ ---- ------- ---- Deposits 9,651 65.7 28,224 70.1 46,933 67.4 62,728 70.0 Loans of banks and financial organizations 4,308 29.3 9,723 24.2 16,984 24.4 18,414 20.5 Other liabilities 497 5.0 2,297 5.7 3,484 5.0 3,341 3.7 Securities (repo-operations) - - - - 2,256 3.2 1,259 1.4 Subordinated debt obligations - - - - - - 3,930 4.4 ----------------------------- ------ ---- ------ ---- ------ ---- ------- ---- Total 14,456 100 40,244 100 69,657 100 89,672 100 ------------------------------------------------------------------------------ DEPOSIT OF CLIENTS Deposits of clients are the main source of the Bank's financing. The source is relatively stable to short-term fluctuations of interest rates and largely depends from the Bank's ability to provide high-level of servicing as well as from set of services and products. As of Dec.31, 2000 deposits reached KZT46.9bn or 15.7% of total deposit market in Kazakhstan. The share of corporate deposits takes 57.5%, private deposits - 42.5% or 25% of the total private deposits market. The Bank's deposits mainly consist of current accounts and time deposits. As of Dec.31, 2000 interest rate on time deposits of corporate clients equaled from 2% to 19%, US dollar deposits - 6%-14%. Interest rates on private deposits depends on type, terms (1 month - 3 years) and currency (tenge deposit - 4-21%, foreign exchange - 4-10%). CREDIT LINES OF THE BANK Beginning from 1997 Bank TuranAlem OJSC has started borrowing funds on international capital markets. Such operations included: joint financial operations with international banks and financial organizations. Some of operations were designed with a view to assist business development programs and were executed by various multilateral agencies (including subsidies by export-credit agencies). The bank appeared as intermediary and was a guarantor of clients. In other deals, the Bank represented its own interest. Such deals included $30m loan from syndicate of banks created by Dresden Bank Luxembourg S.A. and ING Barings. The loan to be paid off in July 2001. The next operation is $3.9m loan from Komercni Bank (Prague) and $2.1m from Czechoslovenska Obchodni Bank, which are due in 2003. The loans of International Financial Corporation ($15.0m) and DG Bank DM2.8m are to be due in 2005. The loan of the Netherlands Financial Development Company for $5.0m and subordinated loan (EUR10m) from German Investment and Development Company will mature in 2006 and 2007 correspondingly. Besides EBRD granted non-regressive loan to the Bank's subsidiary, Samal Properties for $9.8m secured by collateral (head office of the Bank). The Bank, along with group of other Kazakhstan banks, is also a member of small and mid-sized businesses support program initiated under the intergovernmental financial cooperation between Kazakhstan and Germany signed in 2000. The agreement between Kreditanstalt Fuer Wiederaufbau (KfW, Germany) and the Ministry of Finance of Kazakhstan was signed in 1998. Total limit amount reaches $27m for 10 years. The first stage was implemented by late 2000 when the Bank received DM2m (the amount was granted to each of Kazakhstan member banks). At present, the Bank has spent DM1.1m. Maturity terms of major foreign exchange loans of Bank TuranAlem as of Apr.01, 2001 (thousands of corresponding currency units) --------------------------------------------------------------- Due amount 2001 2002 2003 2004 2005 2006 2007 2010 ---------- ------ ------ ----- ------ ------ ----- ------ ----- USD 43,682 13,044 7,769 13,804 15,000 5,000 0 0 EUR 165 0 0 0 5,591 0 10,000 0 DEM 2,099 0 0 0 2,784 0 0 1,066 --------------------------------------------------------------- SHAREHOLDERS EQUITY Bank TuranAlem take second place in Kazakhstan by size of the equity capital. As of Apr. 01, 2001 the Bank took 13.5% of the banks total equity capital in Kazakhstan. In late 2000 the shareholders equity equaled KZT8.9bn (11% of all assets), in late 1999 - KZT5.1bn (11%), late 1998 - KZT3.7bn (20%). The increase of equity capital was mainly attributed to growth of the first level capital as a result of last two emissions: Capital adequacy ratios (million tenges unless otherwise indicated) ---------------------------------------------------------- 1999 2000 -------------------------------------------- ------ ------ Capital of the first level 5,083 8,935 Capital of the second level 415 856 Capital of the first and second levels 5,498 9,791 Net assets with estimated risk of weighted discount for loan loss risk 45,426 79,434 Risk estimation ratio of capital adequacy, % 12.1 12.3 ----------------------------------------------------------