Investor Call Presentation 17 May 2011
Disclaimer WHILE JSC BTA BANK ( “ BTA BANK ” OR THE “ BANK ” ) HAS TAKEN ALL REASONABLE MEASURES TO ENSURE THAT THE INFORMATION CONTAINED HEREIN IS CORRECT, ACCURATE AND COMPLETE AT THE DATE OF PUBLICATION, NO REPRESENTATION OR WARRANTY IS MADE (EXPRESS OR IMPLIED) AS TO THE RELIABILITY, ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND NO RELIANCE SHOULD BE PLACED ON SUCH INFORMATION. THIS DOCUMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF THE BANK. THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS. YOU ARE CAUTIONED NOT TO PLACE RELIANCE ON FORWARD-LOOKING STATEMENTS. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS PRESENTATION, INCLUDING, WITHOUT LIMITATION, THOSE REGARDING THE BANK ’ S FINANCIAL POSITION, PROSPECTS, BUSINESS STRATEGY, MANAGEMENT PLANS AND OBJECTIVES FOR FUTURE OPERATIONS ARE FORWARD- LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, BANK ’ S UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE, ACHIEVEMENTS OR INDUSTRY RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE BANK ’ S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE BANK EXPECTS TO OPERATE IN THE FUTURE 2
Table of Contents III. New BTA Bank I. Kazakhstan Economy Overview a. Introduction a. Back to Growth b. New Governance Structure b. Foreign Debt Structure c. Members of the Board of Directors c. International Commodities Player d. Loan Portfolio Structure d. On Path to Diversification e. Funding f. New Debt Profile II. Banking Sector Landscape g. Financial Position h. Financial Performance i. IFRS vs. Regulatory Report j. Strategy Update 3
I. Kazakhstan Economy Overview a. Back to Growth b. Foreign Debt Structure c. International Commodities Player d. On Path to Diversification 4
Back to Growth Key Economic Indicators Key Comments 2006 2007 2008 2009 2010 Nominal GDP ($bln) 81.0 104.9 133.4 115.3 146.0 The spike of a global financial crisis has passed, and today GDP per capita ($ths) 5.3 6.7 8.5 7.3 9.0 Kazakhstan economy is on a stage of recovery with the GDP Real GDP Growth Rate (%) 10.7 8.9 3.3 1.2 7.0 growth exceeding 7% in 2010 Annual Inflation Rate (%) 8.6 10.8 17.1 7.3 7.1 Government of Kazakhstan reported GDP growth of 6.9% in Net FDI (% of GDP) 7.8 10.6 11.8 11.8 6.7 1Q ’ 2011 and targets average 7% growth within next 5 years, Unemployment Rate (%) 7.8 7.3 6.6 6.6 5.8 GDP per capita growing from current US$9,000 to US$15,000 by Population (mln)* 15.4 15.6 15.8 15.9 16.4 2016 *Significant population growth in 2010 associated with the national census of 2009 Relatively high commodity prices have allowed Kazakhstan to International Reserves ($bln) accumulate significant reserves over the past few years – 45% 70 growth since 2009 60 33.8 Standing of Kazakhstan in Doing Business rating of the World 50 Bank increased from 80th in 2007 to 51st in 2011 30.6 40 24.4 27.5 30 Newly created Customs Union (with Russia and Belarus) 21.0 14.1 expands market for Kazakhstani goods to 170 mln consumers 20 35.2 28.3 5.1 23.1 8.1 10 19.9 19.1 17.6 3.7 9.3 1.9 7.1 1.2 5.0 2.5 3.1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1Q2011 National Oil Fund Gold and currency reserves Source: Kazakhstan Statistic Agency (SARK) and National Bank of Kazakhstan (NBK) 5
Foreign Debt Structure Net Foreign Debt, GDP and International Reserves ($bln) Foreign Debt Dynamics ($bln) 45.9 50 160 41.2 39.2 140 40 163.5 33.0 120 30.1 29.7 100 30 26.9 146.0 80 20.0 19.3 99.4 79.9 94.4 20 15.3 60 12.6 36.5 30.6 115.3 40 7.7 7.3 10 24.4 5.9 4.3 3.5 3.2 4.8 20 3.2 37.3 30.1 1.4 2.6 19.4 1.6 1.7 20.0 28.3 1.6 23.1 2.5 3.1 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2009 2010 2011F ■ Sovereign FD ■ GDP Banks Non-bank (excluding inter-corporate debt) Sovereign debt ■ Banking sector FD ■ National Oil Fund ■ Non-bank FD ■ Gold and currency reserves Source: NBK Source: NBK Key Comments Banking sector went through a large-scale deleveraging process with the net foreign debt of banks decreasing from US$46 bln in 2007 to US$20 bln in 2010 The biggest impact comes from debt restructuring of 3 banks with the total haircut of US$15.6 bln (US$11.2 bln for BTA, US$3.6 bln for Alliance and US$0.8 bln for Temirbank) Kazakhstani corporates and national companies attracted significant amounts of investments from debt capital markets in 2008-10, thus securing cheap financing at a period of historically low interest rates 6
International Commodities Player Kazakhstan Commodity Rankings Key Comments Reserves Global Position Crude oil (bln tons) 4.8 9 Kazakhstan is considered as one of the key suppliers of natural Copper (mln tons) 35.0 4 resources globally, and benefits from both rising commodity prices Zinc (mln tons) 30.0 4 and steadily increasing output Lead (mln tons) 5.0 4 Gold (tons) 1,700.0 7 Development of new oil fields such as Kashagan will make Molybdenum (ths tons) 130.0 4 Kazakhstan one of the world's top 10 oil producing nations Uranium (% globally) 15.0 1 Territory (ths.sq.m) 2,724.9 9 The mining industry accounts for 30% of the GDP, about 90% of all commodity products are exported to more than 30 countries * Kazakhstan is one of the largest uranium producers globally, №1 in 2010 with output of 17,803 tons Source: World Nuclear Association, MINT (Committee of Geology & Resource Exploitation), US Kazakhstan has 15% of the world's uranium resources, projecting Geology Survey almost 18,000 tons of production in 2010, 25,000 tons in 2011, and 30,000 tons per year till 2018 Commodity Export Profile ($bln) 2006 2007 2008 2009 2010 Kazakhstan will grow in importance as a major commodities supplier Oil 23.6 28.1 43.5 26.2 37.0 to neighboring China supporting its large-scale modernization and Copper 2.4 2.5 2.5 1.4 1.9 urbanization efforts Ferrous Metals 0.9 1.4 3.0 1.2 1.8 Flat rolled iron 0.9 1.6 2.0 1.4 1.2 Zinc 0.8 1.0 0.6 0.4 0.6 Aluminium 0.02 0.02 0.3 0.2 0.4 Wheat 0.5 1.2 1.5 0.6 0.9 Source:SARK 7
On Path to Diversification State Industrialization Program 2010-2014 Key Comments Kazakhstan has undertaken major plans to diversify its economy Metals & Mining 17% from dependence on commodity prices and to achieve a sustainable 26% and balanced growth of the economy based on competitive and Construction dynamic industries Chemical and Industrialization Program envisages development of new industries Pharmaceuticals and advancement of existing ones from extracting only to refining Energy 17% and reprocessing ones Engineering Total estimated budget of 294 investment projects included in the 9% Program comes at Total of US$55 bln Infrastructure 152 projects already launched in 2010, and the amount of utilized 7% Agriculture 13% investments reached US$5,5 bln, US$10,3 bln is planned to be 10% directed to finance new projects in 2011 Note: as a percentage of total number of projects launched Source: Ministry of Industry and New Technologies (MINT) Impact on banking sector Significant part of these investments will be channeled through commercial banks The implementation of such sizable investments should create a new cluster of customer base for banks – SMEs, Services, Non-commodity manufacturing and Infrastructure Government ’ s increasing local content requirements should cherish new local businesses servicing large projects – Satellite Effect The Industrialization program creates significant export-import flows – base for growth in Trade finance revenues for commercial banks 8
II. Banking Sector Landscape 9
Banking Sector Landscape Ranking by Total Assets Ranking by Total Gross Loans Ranking by Total Deposits 21.1% 20.2% 25.9% 16.8% 20.4% 18.1% 16.6% 13.5% 11.5% 10.1% 9.4% 9.7% 8.2% 7.9% 7.0% 4.1% 6.0% 3.0% Source: NBK, regulatory data, as at December 31, 2010 Key Comments Total banking sector assets as of 2010 amounted to US$81bln or 61.9% of GDP Despite severe financial crisis the list of TOP 6 largest banks out of 39 commercial banks did not change and account for 76% of the total banking sector assets Loan portfolio of the banking sector makes 46.5% of GDP Total deposits of the banking sector amount to US$46 bln and make 35.2% of the GDP (corporate: 23.6%, retail: 11.6%) 10
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