REFERENCE: TexaKaBank OJSC (Kazakhstan) - income and expenses, assets and equity, financing sources

/IRBIS, information of the KASE Listing commission, Sept 26, 01/ - The following information is published since the first issue inscribed subordinated coupon bonds of TexaKaBank OJSC (Almaty) passed the listing of the Kazakhstan Stock Exchange (KASE) under category "A". INCOME AND EXPENSES Operating income of TexaKaBank OJSC was tend to grow during the last 3 years: in 1998 - KZT401.2m, in 1999 - KZT449.7m, or 12.1% to 1998, in 2000 - KZT637.1m, or 41.7% to 1999. In I half of 2001 general expenses amounted to KZT343.6m, or KZT43.7m (14.5%) more than in similar period of 2000. Interest income equaled KZT186.9m (54.4% of total income) in I half of 2001, commission income - KZT110.8m (32.3%), income from financial transactions - KZT37.4m (10.9%), other income - KZT8.3m (2.4%). In 1999 insignificant decline in general interest income by KZT13.8m (6.3% to 1998) was observed as a result of a decrease in income from securities transactions. In 2000 interest income rose by KZT106.7m or 52.3% on loans granted to legal entities. Non-interest income are formed mainly from commissions and income from financial transactions, whose proportions are constantly increasing within total non-interest income. In late 1999 commission income equaled KZT172.1m (38.4% to 1998), income from financial transactions - KZT34.4m (at the level of 1998). In late 2000 commissions totaled KZT208.7m (32.8% to 1999), income from financial transactions - KZT64.3m (10.1% to 1999). Net operating income of the bank reached KZT144.3m in 1998, and KZT115.1m in 1999, in 2000 - KZT135.4m (17.7% to 1999). As of July 1, 2001 this figure was at KZT83.6m, or KZT4.0m less than in similar period of 2000. General expenses of TexaKaBank OJSC were estimated at KZT265.8m in 1998, and KZT367.7m in 1999, and KZT530.7m in 2000. Increase in expenses in 1999 and 2000 was caused first of all by the growth of bank personnel expenses and office maintenance expenses as a result of opening of branch office in Astana and settlement center. In 2000 a total of 3 settlement centers were opened, and in 2001 - 5. The expense of TexaKaBank OJSC equaled KZT312.1m as of July 1, 2001, of which 40.3% is personnel and office maintenance expenses, 21.6% interest expenses on deposits, and 26.3% is other expenses. In 1998 capital expenditures for the building construction, purchasing the equipment and vehicles amounted to KZT102.8m, in 1999 - KZT102.5m, upgrade of computers required $50,400 in 1999. In early 2000 new software was bought Automated Banking Software Complex (ABSC) Pragma for KZT34,569m. ASSETS By the data of TexaKaBank OJSC balance sheet, from 1998 through July 1, 2001 profitable assets increased from KZT1,328.3m to KZT3,706.1m, which is KZT2,377.8m or 179% increase. In 1999 significant changes took place in all assets items. Amounts of TexaKaBank OJSC in deposits of other banks increased 3 times (from KZT134.8m in 1998 to KZT432.4m in 1999). Also, the amounts of loans granted by the bank increased noticeably (by KZT696.7m). The volume of securities portfolio fell by 45%. Meanwhile, the structure of investments changed: short-term securities were removed and the bank is buying securities with more than 3 year circulation term. In 2000 profitable assets increased by KZT936.0 th. relative to 1999, at KZT2,964.7m. Increase was mostly attributable to following articles. The securities in the bank's portfolio increased by 125.9% relative to 1999, loans - by 32.9%, others - by 153.5%. In 2000 TexaKaBank OJSC reviewed its portfolio structure by creating a big reserve of highly liquid assets. The bank has increased the volume of financing from KZT1,140.6m in 1999 to KZT1,516.0m in 2000 (32.9%). In late 2000 most of the assets was occupied by the loan portfolio of the bank - 40.8%. About 70% of granted loans are backed by property collateral. By the data of TexaKaBank OJSC, in I half of 2001 following changes took place in profitable assets structure of the bank. Amounts in correspondent accounts of other banks increased from 10% in 2000 to 20% in 2001. In I half of 2001 the proportion of securities portfolio fell from 17.3% to 9.4%. Loan portfolio Loan portfolio of TexaKaBank OJSC was mainly distributed among construction, trade, transportation companies and individuals. In I half of 2001 the loans were distributed among the sectors as follows: construction - 31.9%; wholesale trade - 27.2%; production - 11.5%; transportation - 9.4%, other sectors of the economy - 20% of total granted loans. One of the high priority directions of the bank's credit policy is the financing of individuals. Thus, in 2000 total amount of loans granted to individuals was KZT5.2m, in I half of 2001 it rose by KZT29.5m, at KZT34.6m (572.4% growth). As of January 1, 2001, the proportion of standard loans was 81.1% in loan portfolio, which is by 12% more than on similar date of 2000. As of July 1, 2001 it fell to 69.5%. The proportion of standard and substandard loans was 99.98% in loan portfolio and 0.02% is bad debt. The size of the loan portfolio (less provisions) was at KZT1,516.2m as of January 1, 2001, or 40.8% of all assets. As of July 1, 2001 this figure was at KZT2,714.6m or 56.4% of assets. Weighted average rates of loans depend on the collateral, term and currency. In 2000 volume of loans granted in tenge, not backed by collateral, ranged from 17% to 35% of the portfolio (short-term), and as of July 1, 2001 - from 18% to 23.4% (short-term). Corresponding parameters for the US dollar loans are: in 2000 - from 14% to 20% (short-term) and 18-19% (mid-term), as of July 1, 2001 - from 16.9% to 18.4% (short-term) and 9.4-18% (mid- term). The proportion of loans in tenge, backed by collateral, was 26% short-term and 10% mid-term in 2000; as of July 1, 2001 - 9.3% (mid-term). In US dollars: in 2000 - 16% (short-term), 16-17% (mid-term); as of July 1, 2001 - from 8.2% to 17.7% (short-term) and 14-15.8% (mid-term). Quality of TexaKaBank OJSC loan portfolio ------------------------------------------------------------------------ as of 1998 1999 2000 July 1.01 Type of loan ------------ -------------- -------------- -------------- th. KZT % th. KZT % th. KZT % th. KZT % -------------- ------- ---- --------- ---- --------- ---- --------- ---- Standard 380,507 83.7 807,400 69.2 1,246,495 81.1 1,914,942 69.5 Substandard 73,248 16.1 314,823 26.9 283,858 18.5 841,722 30.5 Unsatisfactory 851 0.2 45,914 3.9 - - - - Doubtful with high risk - - - - - - - - Bad debt - - - - 5,805 0.4 677 0.02 -------------- ------- ---- --------- ---- --------- ---- --------- ---- Total 454,606 100 1,168,137 100 1,536,158 100 2,757,341 100 ------------------------------------------------------------------------ Loan provisions of TexaKaBank OJSC --------------------------------------------------------------------------- as of 1998 1999 2000 July 1.01 Type of loan ------------ ------------ ------------ ------------ th. KZT % th. KZT % th. KZT % th. KZT % ----------------------- ------- ---- ------- ---- ------- ---- ------- ---- Standard - - - - - - - - Substandard 6,477 96.8 16,094 58.4 14,193 71.0 42,086 98.4 Unsatisfactory 213 3.2 11,479 41.6 - - - - Doubtful with high risk - - - - - - - - Bad debt - - - - 5,805 29.0 677 1.6 ----------------------- ------- ---- ------- ---- ------- ---- ------- ---- Total 6,690 100 27,573 100 19,998 100 42,763 100 --------------------------------------------------------------------------- The provisions created on substandard, unsatisfactory and bad debt were as follows: 1.5% (1998), 2.4% (1999), 1.3% and 1.6% (I half of 2001). The financing policy of the bank is aimed at reduction of risk of assets loss and creation of adequate provisions to cover losses from financing activities. In late 2000 total of created provisions amounted to KZT19.9m against KZT27.6m in late 1999 (27.5% decline). However, during the I half of 2001 this amount rose to KZT42.8m as a result of an increase in substandard loans by KZT557.9m (195.6%), which accounted for 30.5% of loan portfolio. By the results of an analysis of the terms of financing in I half of 2001 long- and mid-term loans amounted to KZT2,067.6m, or 74.9% of loan portfolio, including loans granted for more than 3 years - KZT1,173.8m or 42.5% of total loans granted in 6 months; amount of mid-term loans (from 1 to 3 years) - KZT893.8m or 32.4%. The most of the loan portfolio, 25.1%, is made of short-term loans, and only 3.8% of cash is invested into short-term securities (up to 30 days). LIABILITIES AND EQUITY Liabilities of TexaKaBank OJSC increased by 28.7% in 1999 against 1998, and 75.5% in 2000 (against 1999), and in I half of 2001 - by 40.0% (in late 2000). Weighted average rate of the deposits depend on the term and currency. Rates for time deposits in tenge were: in 2000 - 5.5%, as of July 1, 2001 - 6.7% (from 1 to 30 days); in US dollars: in 2000 - from 6.4% to 10.3% (short- term), 8.8% (mid-term), as of July 1, 2001 - from 4.3% to 8.9% (short-term), 8.2% (mid-term). Weighted average rates on savings deposits in 2000 in US dollars were 10.3%, and in I half of 2001 - 10.1%. Weighted average rates on call deposits in US dollars were as of July 1, 2001 at 7.0% (short-term). Structure of assets and equity of TexaKaBank OJSC based on terms as of July 1, 2001 --------------------------------------------------------------------------- more 1-30 31-60 61-90 91-180 181-365 1-3 than days days days days days years 3 years TOTAL ------------- ------- ------ ------ ------- ------- ------- ------- ------- Assets 958,979 14,152 6,548 408,280 253,033 893,787 1430127 3964906 Currency 216,047 - - - - - - 216,047 Deposit account in 178,767 - - - - - - 178,767 National Bank Deposit account in other banks 400,469 - - - - - - 400,469 Securities in bank's portfolio 117,200 - - - - - 256,375 373,575 Loans 26,529 6,895 4,039 399,306 253,033 893,787 1173752 2757341 Others 19,967 7,257 2,509 8,974 - - - 38,707 ------------- ------- ------ ------ ------- ------- ------- ------- ------- Liabilities 1982311 78,621 43,235 338,580 543,176 162,353 430,203 3578479 Deposits 1849003 78,621 43,235 338,580 543,176 162,353 - 3014968 Others 133,308 - - - - - 430,203 563,511 --------------------------------------------------------------------------- FINANCING SOURCES Main source of financing for the bank clients in 1998-2000 were deposits of the clients and funds attracted from other banks and financial organizations. As of January 1, 2001, total volume of deposits was at KZT2,582.8m, or 17% more than in early 2000. As of July 1, 2001, total volume of deposits increased by 60% compared to similar period of last year, at KZT3,014.9m, where the legal entities had 50.7%, and individuals - 49.3% of total deposits. Call deposits were at 53.8% of all deposits of TexaKaBank OJSC as of July 1, 2001. Structure of financing sources of TexaKaBank OJSC ----------------------------------------------------------------------------- as of Jan 1.99 as of Jan 1.00 as of Jan 1.01 as of July 1.01 as of Jan 1.99 as of Jan 1.00 as of Jan 1.01 as of July 1.01 -------------- -------------- -------------- --------------- Sources th. KZT % th. KZT % th. KZT % th. KZT % ---------------- --------- ---- --------- ---- --------- ---- ---------- ---- Call deposits 876,039 77.9 1,101,349 73.7 1,731,147 67.1 1,623,177 53.8 Time deposits 248,252 22.1 391,715 26.2 744,917 28.8 1,205,468 40.0 Savings deposits 0 0 2,045 0.1 106,742 4.1 186,323 6.2 ---------------- --------- ---- --------- ---- --------- ---- ---------- ---- Total 1,124,291 100 1,495,109 100 2,582,806 100 3,014,968 100 ----------------------------------------------------------------------------- A subordinated loan agreement was signed between TexaKaBank OJSC and Petroleum International Inc. (Texas, USA) on June 1, 2001 to grant $2,936,538.0 for 7 years at fixed 10% APR for general corporate goals. Shareholders' equity Shareholders' equity of TexaKaBank OJSC, which is calculated based on the methodology of the National Bank, increased from KZT430.0m to KZT1,514.9m, or 246% from 1998 to July 1, 2001. Increase in shareholders' equity in 1999 by KZT471.1m or 51.8% relative to 1998 was due to an increase in supplementary capital as a result of an increase in re-evaluation fund of shares denominated in foreign currency, by KZT331.8m, as well as due to an increase in income of reporting period by KZT82m. Growth of shareholders' equity in 2000 by KZT113.5m or 11% was caused by an increase in core capital (increase in paid part of authorized capital by KZT28.8m and undistributed income of previous years by KZT65.9m) and supplementary capital as a result of a growth in income of reporting year. In I half of 2001 shareholders' equity grew by KZT492.6m (48.2%) mainly as a result of an increase in supplementary capital caused by attraction of KZT403.2m subordinated time loan.