Almaty, Kazakhstan
BTA Bank's JSC (unaudited) IFRS financial statements show that in the first half of 2008, BTA's consolidated assets grew by 9.5% to $27.8 billion and the bank reported a net profit of $231 million. At the end of H12008, the market share of BTA Bank increased by 1.25% to 26.7% further strengthening its status of the country's largest bank.
Highlights:
-- Over H12008, assets have grown by 9.5% to 3,356 billion tenge($27.8 billion).
-- The bank's loan portfolio grew to 2,465 billion tenge ($20.4 billion) over H12008, an increase of 3.6%.
-- Total debt grew by 10.3% in H12008 to 2,882 billion tenge ($23.9 billion).
-- The bank repaid $560.9 million and accrued interest of $15 million of its foreign debts.
-- Subordinated bonds worth $513 million were placed in the domestic market.
-- Deposits grew by 14.6% to 747.7 billion tenge ($6.2 billion).
-- Net profit in H12008 amounted to 27.8 billion tenge ($231 million).
-- Basel Tier I and II capital adequacy ratios comprised 16.57%and 19.8%, respectively.
"BTA continued the timely service of its foreign debt in the first half of the year with more than $560 million repaid. But we are not standing still. The growth of our market share and operations is supported with funding from the domestic market as well. Case in point: in the second quarter, we successfully placed $513 million's worth of subordinated bonds and BTA's share in the growth of deposits held with Kazakhstan's commercial banks exceeded 90%," commented Chairman of the Board Roman Solodchenko.
Net profit in H12008 amounted to 27.8 billion tenge ($231 million), a 31% drop as opposed to H12007. The reduction in profit was due to greater allowance for loan impairment.
Net interest income in H12008 amounted to 44.5 billion tenge ($369 million), 2% more than in H12007. Still, net interest income before impairment increased by 49% from 57.3 billion tenge ($465 million) to 85.4 billion tenge ($709 million). The increase was primarily due to the higher (44%) interest income generated from the loan portfolio, which was in turn due to the growth of the share of the bank's assets committed to loans and higher interest rates. Also, the bank has seen a reduction in the growth rate of its interest expense (33%) on foreign debt represented by bonds and syndicated loans, which was due to the reduction of their share in total liabilities.
Non-interest expense amounted to 35.6 billion tenge ($295 million), a 34% increase over H12007. Thus, given that operational costs increased at more or less the same rate (29%), the cost-to-income ratio (before impairment) remained virtually unchanged, at 32% (31% in H12007).
Profitability ratios RoAA and RoAE amounted to 1.8% and 12%, versus 3.3% and 33% in H12007. Again, these drops were due to the formation of reserves for possible loan impairment. However, the H12008 RoAA (before impairment) would have been 4.3%, exactly where it was a year before. As for return on capital, it was affected by higher capital adequacy, which is to provide an extra layer of financial stability to the bank in today's conditions in the global market. Net interest margin rose from 5.3% in the same period last year to 6.0%, spread rose from 4.6% to 5.2%.
Assets in H12008 grew by 9.5% to 3,356 billion tenge ($27.8 billion).
The loan portfolio at H12008's end amounted to 2,465 billion tenge ($20.4 billion). As at July 1, 2008, BTA had a 27.7% share in all of Kazakhstan's lending market, with a 19.3% share in retail lending and 31% in corporate lending.
Allowance for impairment amounted to 6.5%, and increased from 5.4% at the end of 2007 and from 3.6% at July 1, 2007, very much in line with general trends in the market and the economy. In other words, as opposed to the same time last year, their total amount has doubled.
Liabilities in H12008 grew by 10.3% to 2,882 billion tenge ($23.9 billion). One of the main drivers of asset growth has been a 14.6% growth in deposits in the domestic market, to 747.7 billion tenge ($6.2 billion). Retail deposits grew by 10%, corporate deposits, by 18%. In the meantime, BTA's share in the total growth of retail deposits in Kazakhstan exceeded 90%, attesting to the bank's stability and demonstrating confidence in BTA as a systemic financial institution of the nation. Domestic placements of subordinated bonds worth more than $513 million proved another important source of funding to the bank.
As the perennial leader in trade and structured finance, BTA has been a reliable partner fostering the growth of the real economy. In H12008, trade finance accounted for more than $1 billion in raised funds.
Foreign debt. BTA continues the timely service of its foreign debt, having repaid a total of $560.9 million in the first half of 2008. The amount to still be repaid in the remaining half of the year is $637.4 million, or less than 2.3% of the bank's consolidated assets.
Capital grew, thanks to profit capitalisation, in H12008 by 4.9% to 474 billion tenge ($3.9 billion). The bank's Basel Tier I and overall capital ratios equalled 16.57% and 19.8%, respectively. BTA remains Kazakhstan's best-capitalised bank.
Acquisitions. In July 2008, BTA completed its purchase of an interest in LLS BTA Bank (Russia), formerly Slavinvestbank. As a result, the bank's share in BTA Bank (Russia) rose to 52.8% handing the bank effective control and parent status in BTA Bank (Russia) from July 2008.
For BTA, the move was another step toward asset consolidation, well underway and a result of stiffening competition in the banking and financial markets of Kazakhstan and the CIS, and in line with its 2015 strategy envisioning the capturing of key positions in the CIS market, particularly, no less than 2% of the Russian banking services market.
The bank will place its IFRS reports on the Web at http://bta.kz/en/about/investor/reports on Thursday September 18th after holding investor conference call.
BTA Bank is Kazakhstan's largest by capital and its CIS presence leader. In Kazakhstan, BTA has 22 branches and 274 service outlets, the largest ATM (with cash deposit capability) network (160) and serves more than 1.2 million retail and 100,000 corporate customers. Group BTA's associated banks operate in Russia, Ukraine, Belarus, Georgia, Armenia and Turkey.
In 2008, BTA was included among the world's 200 best banks according to influential financial monthly The Banker.
BTA Chairman of the Board Mr. Roman Solodchenko is set to talk about the bank's performance in the first half of 2008 as well as the upcoming IX Almaty Interbank Conference at a press conference on September 16. Invitations to the press conference will be sent separately.
The conference call with BTA Senior Management will be held on September 18, 2008 at 20:00 (Almaty)/ 15:00 (London)/ 18:00 (Moscow), 10:00 (New York). The Conference call details are as follows.
The conference call can be accessed by dialing: +44 (0)20 71380840
Participants should register for the call at least ten minutes before the start of the presentation.
The call and presentation will be also broadcast live over Internet:
http://www.thomson-webcast.net/de/dispatching/?event_id=fe138dc2aa 5d65e1340dbe82e6e94b34&portal_id=70718af7715c8da678375d4e1efa04f7 (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
The replay services will be available until 24th September 2008 at midnight.
Replay pass code: 4616124#
Replay access number: +44 (0)20 7806 1970
BTA Financials in 2008
mln. USD 2Q 2008 2007
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Assets 27 794.98 25 474.80
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Loans to customers, net 20 413.52 19 782.30
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Liabilities 23 866.52 21 717.30
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Customer accounts 6 192.17 5 424.00
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Due to banks 7 456.64 6 943.50
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Debt securities 9 778.74 9 014.50
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Liabilities with maturity over 1 year 15 461.60 14 915.90
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Equity 3 928.50 3 757.50
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Ratios
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BIS Tier 1 CAR 16.57 16.93
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BIS Total CAR 19.8 17.57
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mln. USD 2Q 2008 2Q 2007
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Operating income 924.70 703.00
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Net interest income 369.10 353.10
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Provision 339.89 112.30
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Net commission income 129.51 107.8
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Non-interest income 86.24 129.8
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Operating expenses 296.17 215.7
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Cost to Income ratio (pre provision),% 31.8 30.4
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Net operating income 288.67 375.06
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Net income 230.93 327.8
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RoAA, % 1.8 3.3
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RoAE, % 12.0 33.5
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Note: Assets and liabilities were translated into US dollars at the NBK exchange rate, which was 120.75 tenge/US dollar on July 1, 2008; 120.3 tenge/US dollar on January 1, 2008; 121.66 tenge/US dollar on July 1, 2007.
The ratio in statement of income translated into US Dollars at weighted average rate of NBK which as of July 1, 2008 comprised 120.51 tenge/ US Dollar, as of July 1, 2008 123.17 tenge/ US Dollar.
Source: Business Wire (Business Wire India)