Kazkommertsbank recorded 60% growth of credits to the economy

/IRBIS, May 6, 04/ - Kazakhstan Today news agency reported today that Kazkommertsbank had increased financing of Kazakhstan economy in 2003 by 60%. This is highest by volume and most long-term financing of the economy. In 2003 it totaled KZT302.1 bn compared to KZT189.3 bn in 2002. Bank's assets exceeded $3 bn (KZT434.2 bn) or a quarter of total banking system assets. Load portfolio was main contributor to the growth. In late 2002 bank's assets equaled $1.7 bn or KZT274.2 bn. Kazakhstan today also informed that Kazkommertsbank enjoyed positive appraisal of its work by international rating agencies. The bank was the first among CIS financial institution that managed to borrow fund for 10-year term by floating $500 m eurobonds issue. In April 2004 it floated another issue for $500 m. As a result, corporate financing interest rates fell in 2003 from 14.2% to 12.6% while volume of long-term loans (over 5 years) jumped 2.3 times. The bank's loan portfolio is sufficiently diversified. For 2003 it recorded growth of construction and hotel business share to 11.4 and 4.7% from 7.2 and 2.5% correspondingly. Share of retail financing grew from 23.5% in 2002 up to 26% in 2003. In absolute terms retail credits equaled $32 m against $12.2 m in 2002. In 2003 the bank also broadened small-scale business financing under EBRD program. Principal debt of this program reached $30.6 m against $16.8 m in 2002. In light of increasing balance sheets and loan portfolio the bank paid special attention to quality of assets. Thanks to established risk assessment system and high level of loan provisions (95%) weight of non-effective loans declined to 0.8 from 1.3%. During 2003 share of doubtful, bad and unprofitable loans fell from 24.3 to 18%. Reservation level decreased from 7.4 to 6.3%. According to international accounting standards and financial statements audited by Deloitte&Touche net consolidated profit of the bank increased to KZT8.8 bn ($59 m) from KZT7.9 bn ($52 m) in 2002. In last year the bank maintained highest level of equity capital among Kazakhstan banks. Capital grew up by 42.1% up to KZT45.6 bn. Despite significant growth of assets (58%) capital adequacy ratio was 16.4%. [2004-05-06]