Development bank of Kazakhstan JSC made preliminary results of its activity for 2005

/KASE, January 31, 06/ - Development bank of Kazakhstan JSC (Astana) today spread press release of the following content: Start of quotation January 31. - Today at press conference in Astana Development bank of Kazakhstan JSC made preliminary results of its work for 2005. Established with 100-% participation of the government, Development bank of Kazakhstan JSC actively participates in realization of Strategy "Kazakhstan-2030", stated in the message of the country's President to the people of Kazakhstan, Strategic plan of Kazakhstan development for the period up to 2010, Strategy of industrial-innovation development of Kazakhstan for 2003-2015 (SIID), state programs, approved by the Head of the state. From the beginning of activity the Bank provides dynamic growth of economy crediting taking into account investment demand of private sector of government. From the beginning of activity the Bank approved 75 investment projects and export operations for the amount USD1,757.2 m. with participation of the Bank for the amount USD748.2 m. The Bank's crediting volume of economy in 2005 increased almost twice (by 96.4%), and the Bank's participation in realization of investment projects and export operations - over, than 1,5 times (by 56.5%). The Bank's loan portfolio by the end of 2005 is USD353.7 m., having increased in 2005 by USD130.3 m. or by 58.3%. In structure of loan portfolio stake of credits for realization of investment projects (79.5%) prevails, this reflects investment character of the Bank's activity. Crediting of investment projects From the beginning of activity the Bank approved to financing 37 investment projects for the amount USD1,396.8 m. with participation of the Bank USD548.8 m., including in 2005 - 12 invest projects, for the amount USD906.8 m. with participation of the Bank USD217.3 m. Investment projects approved to financing are practical realization of SIID and state programs and comply with investment priority, determined by Memorandum about the Bank's credit policy. Sector structure of the Bank's participation in investment projects approved to financing includes: transport and communication (18% from total volume), production and electrical energy, gas and water distribution (18%), textile and clothing industry (13%), production of other nonmetallic mineral products, production of construction materials (12%), chemical industry (11%) , production of machines and equipment (8%), food industry (7%) and other sectors of economy (13%). Out of seven prospective clusters, approved by the decree of the Government of the Republic of Kazakhstan, the Bank actually since 2002 in series realizes projects in six of them (24 projects). Tourism in compliance with Memorandum is not related to the Bank's investment priorities. From projects, approved within SIID: - 10 are related to category of export-oriented; - 4 projects are directed for development of production and transport infrastructure; - 4 projects are directed for creation of competitive production in other sectors of industry; - within realization of State program of house building development program in the Republic of Kazakhstan for 2005-2007 regarding expansion of production of construction materials 5 investment projects are approved, - within State program to master Kazakhstan sector of Caspian sea - regarding construction of infrastructure objects - 3 projects. With annual growth of crediting volumes, there is growth of average weighted terms of investment projects crediting and duration of favorable period on payment of debt on them, on this projects average weighted crediting rate is decreasing. Influence of realized investment projects upon economy As of December 31, 2005 total 15 investment projects were realized and put into operation on creation of new and modernization of existing productions, including 7 projects - in 2005 (for the amount nearly USD117 m., with participation of the Bank in volume USD92 m.). Projects put into operation may be grouped in directions: creation of new objects of infrastructure (3); renewal, reconstruction and expansion of production (6); creation of new productions (6). According to poll survey, conducted by the Bank, by the results of 2005 total volume of production and services in put into operation enterprises, financed with the Bank's participation was over KZT33 bn., out of it industrial production - for the amount over KZT18.3 bn. Competitiveness of this production is characterized with considerable stake of it is supplied for export (over 40 %, for the amount nearly KZT7.5 bn.). At that loading of capacities in enterprises - borrowers is from 57 to 100%, i.e. there is additional potential of production growth. Tax and other deductions of these enterprises to the budget within the reporting period was nearly KZT2.4 bn., i.e. there are additional payments to the budget owing to putting into operation of new productions. As a result of this investment projects as of January 1, 2006 more than 11.2 th. working places were created. Average monthly salary in enterprises- borrowers is nearly KZT44.9 th. (according to data of Statistics Agency average monthly salary in January - October 2005 in Kazakhstan was KZT32568). Export operations crediting From the beginning of activity the Bank approved 38 export operations for the amount USD360.4 m. with the Bank's participation in size USD199.4 m., including in 2005 - 13 export operations for the amount USD170.3 m. the Bank's crediting volume USD66.3 m. Servicing of investment projects on agent's basis As of January 1, 2006 the Bank fulfills servicing of 13 investment projects on agent's basis, realized owing to funds of 3 state and 10 loans guaranteed by the government, for the amount, equivalent to USD721.7 m. Borrowings of the Bank In May 2005 the Bank made successful floatation of the third trench of eurobonds in size USD100 m. within EMTN program on issuance of eurobonds of Development Bank for he amount USD400 m., which was approved by General meeting of shareholders of Development Bank in 2002. in flotation of eurobonds of DBK demand from investors exceeded 3.7 times ($377.5 m.) emission volumes. On November 30, 2005 the Bank signed Memorandum about mutual understanding on conclusion of Credit agreements on Export banking loan and Non-connected two-stage loan between DBK and Japanese Bank of International Collaboration (JBIC). For the first time JBIC opened credit line to the bank from countries of CIS at low interest rate. From the beginning of activity the Bank, using various borrowings instruments (issue of indexed securities, floatation of eurobonds, attraction of syndicated loans and budget credits, opening of credit lines by foreign banks), made borrowing for total amount over half million US dollars (USD557.4 m.). Creation of subsidiary company DBK - Leasing For expansion of investment opportunities the Bank in autumn 2005 created the Bank's subsidiary company DBK - Leasing with 100% participation of the Bank, which executes leasing financing of investment projects in processing industry, production and transport infrastructure. On October 31, 2005 company DBK - Leasing concluded the first share agreements of financial leasing with cotton enterprise Ketebai, on which tractors DT-75 with total amount of KZT3,800 th. International activity On October 26, 2005 in the course of meeting of Council of heads of governments states-participants of Shanghai collaboration organization (ShCO) in Moscow the Bank's management signed Agreement about interbank unit ShCO. Agreement also stipulates for organization of banking interaction in the field of financing and servicing of investment projects. On January 12, 2006 in the course of meeting of presidents Kazakhstan and Russia Agreements about collaboration between the Bank and Vnesheconombank RF. In 2005 DBK became "The most dynamic development bank in the world", awarded by analytical financial edition Еuromoney. In the course of award in the days of Annual meeting of European bank of reconstruction and development magazines staff stressed that they awarded for "stability of market positions, high quality of management and potential growth of DBK ". The Bank's ratings: The Bank got high (at the level of sovereign) credit ratings from leading world rating agencies. In April and July 2005 earlier ratings were confirmed: Moody's Investors Service - investment rating of borrower Ваа3 at the level of sovereign with positive prognosis; Standard & Poor's- long term rating ВВB- and short term А-3 with stable prognosis. On September 9, 2005 Fitch Ratings assigned the Bank long-term credit rating in national currency at the level BBB, prognosis - stable. On December 21, 2005 international rating agency Fitch Ratings raised long term rating in foreign currency from BBB- to BBB, long term rating in national currency - from BBB to BBB+. Long term rating of all non-redeemed priority unsecured debt liabilities in foreign currency also raised from BBB- to BBB. The Bank for the first time was assigned short term rating in national - F2, and also assigned short term rating in foreign currency - F3 and support rating at the level 2. Prognosis of long-term ratings - stable. Authorized, equity and net capital The Bank equity capital as of January 1, 2006 was KZT71.5 bn., having increased from the beginning of 2005 by KZT16.1 bn. or 29%, this is connected with increase of authorized capital by KZT11.5 bn. and net income by the results of 2005 in KZT2.7 bn. End of quotation [2006-01-31]