Financial Statements Baku, Azerbaijan 30 June 2017 Results for the - PowerPoint PPT Presentation

Financial Statements Baku, Azerbaijan 30 June 2017

Results for the second quarter of 2017 ● From the end of 2016, assets have decreased by 2.4% or by 6,737K manats, totaling 280 million manats in the second quarter of 2017. • The main reasons of change: • As a result of several substantial loans repayments, by the end of 2017,Q2 loan portfolio compiled 168K manats. • Additionally, due to liquidity surplus and for more effective financial management bank retrieved deposits of banks and other FIs. Therefore, bank's liabilities decreased by 9,216K manats in the second quarter of 2017. • . ● The bank ended the second quarter with a profit of 1,780K manats. In addition, bank finished 2016 year with a profit of 439K manat. • It should be emphasized that the bank's capital increased by 1% or 1,649K manat since the beginning of the year reaching 143,681K manats by the end of the second quarter of 2017. With capital adequacy ratio of 41.9% (min. 10% requirement) Expressbank continued to be first in the market on this indicator. • Current liquidity ratio constituted 80.4% (min. 30% requirement). • Leverage ratio was 46.4% (min. 5% requirement). 2

Statement of Financial Position thousand manats Total Assets (thousand manats) ASSETS 31/12/2016 31/03/2017 30/06/2017 Cash and cash equivalents 42,905 72,210 65,508 290,626 Investment securities available-for-sale 1,022 4,484 2,919 Loans to customers 199,320 171,949 167,864 286,822 Specific reserves (5,082) (3,265) (3,942) Fixed assets less depreciation 12,471 11,382 10,463 280,085 Intangible assets less amortization 3,377 3,299 3,256 Other assets 32,808 30,565 34,016 TOTAL ASSETS 286,822 290,626 280,085 LIABILITIES 31/12/2016 31/03/2017 30/06/2017 Amounts due to customers 92,690 97,863 106,772 Amounts due to banks and other FIs 20,623 19,080 15,449 Total Liabilities (thousand manats) Loans from banks 15,936 15,520 - Loans from other FIs 7,198 7,838 9,036 145,620 Other liabilities 8,342 5,319 5,147 144,789 TOTAL LIABILITIES 144,789 145,620 136,404 EQUITY 136,404 Equity capital 138,350 140,986 140,129 Including, current year's profit 439 2,636 1,780 General reserves 3,683 4,021 3,552 TOTAL EQUITY 142,032 145,007 143,681 EQUITY AND LIABILITIES 286,822 290,626 280,085 31/12/2016 31/03/2017 30/06/2017 3

Statement of Profit or Loss thousand manats 31/12/2016 31/03/2017 30/06/2017 31/12/2016 31/03/2017 30/06/2017 Interest income 36,957 6,701 12,947 Interest expense (9,430) (1,732) (3,221) CIR 98.1% CIR 68.5% CIR 87.1% Net interest income before provision for impairment o 27,527 4,968 9,726 Provision for impairment on interest bearing assets (13,440) 465 (952) Net interest income 14,087 5,433 8,775 31/12/2016 31/03/2017 30/06/2017 Operating income 11,623 3,957 7,386 Operating expense (2,890) (1,101) (2,425) NPM 3.1% NPM 48.5% NPM 20.3% Net operating income 8,733 2,856 4,962 General and Administrative expenses (22,712) (5,731) (11,983) Net of foreign exchange translation 331 78 27 31/12/2016 31/03/2017 30/06/2017 Income before tax 439 2,636 1,780 Income tax - - - ROCE 0.3% ROCE 1.9% ROCE 1.2% Net income 439 2,636 1,780 CIR – cost-to-income ratio • NPM – net profit margin ratio • ROCE – return on capital employed • 4

Statement of Cash Flow thousand manats 31/12/2016 31/03/2017 30/06/2017 Cash flow from operating activities 4,020 2,138 363 Interest income 24,065 9,255 12,526 Interest expense (10,464) (5,401) (7,452) Realized gains less losses from dealing in foreign currencies 5,730 2,119 3,307 Fees and commisions received/(paid) 3,003 736 1,654 Wages and benefits (10,127) (2,640) (5,483) Administrative expenses (8,187) (1,931) (4,190) Deacrease/(increase) in operating assets 67,836 17,761 24,943 Deacrease/(increase) in operating liabilities (43,975) 4,982 (4,533) Changes in other assets and liabilities (673) 3,525 4,403 Net cash flows from operating activities 27,207 28,407 20,366 Cash flow from investing activities (3,601) (5,679) (4,326) Net of sale/(purchase) of securities - (3,463) (1,898) Sale/(purchase) of fixed assets (2,969) (1,876) (2,118) Sale/(purchase) of intangible assets (632) (341) (311) Cash flow from financing activities 298 - (15) Dividends paid - - - Changes in total equity 298 - (15) Net of foreign exchange traslation 331 78 27 Cash and cash equivalents, ending 42,905 72,210 65,508 5

Statement of Changes in Equity thousand manats 30/06/2017 Openning balance Changes during the period Closing balance Ordinary shares 137,257 - 137,257 Retained earnings 1,093 1,780 2,872 Net profit/(loss) of the previous years 1,093 - 1,093 Net profit/(loss) of the current year - 1,780 1,780 General reserves 2,266 1,285 3,552 general reserves on loans and interbank accounts 1,594 705 2,298 general reserves on other assets - 596 596 revaluation of fixed assets 673 (15) 657 Total equity 140,616 3,065 143,681 6

Capital Capital Structure (mln. manats) Capital adequacy ratio 48% 141 140 138 135 135 135 42% 39% 39% 36% 35% 31/12/2016 31/03/2017 30/06/2017 31/12/2016 31/03/2017 30/06/2017 Tier I capital Total capital Tier I Total CAR Risk-weighted Assets (mln. manats) 278 251 231 31/12/2016 31/03/2017 30/06/2017 7

Financial indicators Net Profit (thousand manats) 14,801 31/12/2016 31/03/2017 30/06/2017 ROA 0.15% ROA 0.91% ROA 0.64% ROE 0.32% ROE 1.87% ROE 1.27% Leverage 32% Leverage 33% Leverage 46% 2,636 1,780 653 439 2014 2015 2016 2017,Q1 2017,Q2 8

Currency structure Assets (thousand manats) Liabilities (thousand manats) 102,584 198,862 187,425 188,175 91,725 90,996 53,064 103,201 91,910 45,408 87,960 43,035 Dekabr 16 Mar 17 Jun 17 Dekabr 16 Mar 17 Jun 17 AZN FX AZN FX Loan portfolio (thousand manats) Deposit portfolio (thousand manats) 82,642 81,604 138,942 133,290 132,596 69,463 60,378 24,130 23,227 39,353 34,574 16,259 Dekabr 16 Mar 17 Jun 17 Dekabr 16 Mar 17 Jun 17 AZN FX AZN FX 9

Loan and deposit portfolios Loan portfolio December 16 % March 17 % June 17 % Individuals 84,694 42% 82,275 48% 72,132 43% Legal 114,626 58% 89,674 52% 95,732 57% Total 199,320 100% 171,949 100% 167,864 100% NPL 3,609 4,566 6,146 % 1.8% 2.7% 3.7% Deposit portfolio December 16 % March 17 % June 17 % Individuals - Term 60,368 65% 55,329 57% 50,107 47% Individuals - Demand 10,915 12% 8,208 8% 11,286 11% Legal - Term - 0% - 0% - 0% Legal - Demand 21,407 23% 34,326 35% 45,378 43% Total 92,690 100% 97,863 100% 106,772 100% 10

Loan portfolio Loan portfolio (thousand manats) By sectors (thousand manats) as of 30 June 2017 Agriculture and Trade and 116,468 food processing, 114,626 Services, 1,724, 112,055 1,527, 1% 1% Individuals, Construction, 96,063 95,732 72,132, 43% 44,835, 27% 90,804 89,674 85,083 84,694 81,398 82,275 74,396 72,516 72,132 Manufacturing, 47,628, 28% Dek 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Individual Legal 11

Deposit portfolio By sectors (thousand manats) Deposit portfolio (thousand manats) as of 30 June 2017 72,515 71,283 Transport, 67,746 Other, 857, 1% Trade, 1,767, 63,922 22, 0% 63,537 2% 61,393 60,330 Energy, 40,715, 39% 45,379 34,293 33,589 34,326 33,352 25,824 21,407 Individuals, 61,393, 58% Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Individuals Legal 12