Eurasian Bank: The New Paradigm
21.10.2015, Almaty. Eurasian Bank is pleased to announce a number of important measures enacted to ensure that the Bank is protected against the expected difficult environment ahead, namely:
Shareholders of the Bank made a decision to inject KZT6 bln of new capital by the end of October. The Minutes of the Supervisory Board meeting was signed on October 12. After the increase, the total capital of Eurasian Bank will exceed KZT92 billion with K1-1 ratio going up to 9.3%, solidifying the Bank’s position on the market and its Tier 1 capital ratios as a further buffer against delays in payments from customers.
“We appreciate the full and continued support from our shareholders which is available not only when we need to withstand challenges but to continue the growth process started over five years ago. In addition to the capital increase, we consider issuing KZT30 bln of subordinated debt by the end of the year to increase our total (or K2) capital adequacy ratio as well. The new liquidity will be used both as a buffer to further volatility and to enhance our lending programs. Despite the increase in overdue loans in the first half of the year due to non-repayment crisis in the corporate sector, the indicator has decreased substantially by the end of the third quarter, after the announcement of tenge devaluation and its free float. We fully expect to have the ratio of Tier 1 Capital plus provisions to be a 100% of overdue loans by the year end”, said Michael Eggleton, Eurasian Bank’s CEO and Supervisory Board member.
In addition to the above, the Bank is pleased to announce the acquisition of BankPozitiv Kazakhstan. According to the terms of SPA signed in Istanbul, on October 20, Eurasian Bank acquires 100% of shares of BankPozitiv Kazakhstan from Turkish BankPozitif Kredi ve Kalkinma Bankasi Anonim Sirketi. The deal will be finalized by the end of the year subject to the approval of the National Bank and relevant regulatory bodies. After the merger the Bank will continue operating under Eurasian Bank brand name, S&P will be the rating agency of the Bank.
According to Michael Eggleton, Eurasian Bank’s CEO and Supervisory Board member, “the acquisition of BankPositiv with have an immediate accretive effect to Eurasian Bank’s capital (between KZT2.5bln and KZT3.0bln) and earnings.
Eurasian Bank has over 99% of loans to retail and SME clients in the national currency and there are no loans in currency to corporate clients without currency revenues. In addition, only 16% of the Bank’s loans are unsecured.
With the above positive developments we expect to see capital adequacy ratios (K1-1 and K1-2) of approximately 10%, a level well in access of regulatory requirements (6%) and a record high in the history of the Bank. This is critical in a time of needing to manage liquidity, balance sheet and indicators that will ultimately be correlated to the growth rates of the Kazakh economy.”
About Eurasian Bank:
Eurasian Bank is a universal commercial Kazakhstan bank catering products and services to clients in all segments. The Bank was founded in 1994. It covers all regions of Kazakhstan and has a subsidiary in Russia (Moscow) with branches in Omsk and Novosibirsk. It is rated “B+” by S&P. Eurasian Bank is a member of KASE and a party to KazPrime.
The Bank’s accomplishments were acknowledged by the following awards: Best Bank – Kazakhstan in 2014 (IAIR), Best Bank – Kazakhstan in 2013 and 2014 (EMEA Finance), Domestic Retail Bank of the Year, Kazakhstan in 2012, 2013 and 2015 (Asian Banking & Finance), Best Bank in Kazakhstan, 2012 (Euromoney), and Bank of the Year 2012 and 2014 in Kazakhstan (The Banker).
Eurasian Bank JSC
tel. +7 (727) 2 599 599 (ext. 3288)