OREANDA-NEWS. The first-quarter financial statements have not been audited by an external auditor nor have they been approved by the Board of Directors or the General Shareholders Meeting of the Bank. The Bank does not intend to obtain the opinion of external auditors nor approval from the Board of Directors or the General Shareholders Meeting on these financial statements, reported the press-centre of JSC Halyk Bank.

STRONG EARNINGS GROWTH MOMENTUM FROM 2006 CONTINUES INTO Q1 2007 PROVIDING SOLID BASIS FOR SUSTAINABLE AND BALANCED GROWTH IN 2007
Financial Highlights
- Net income after tax increased by 107% compared with Q1 2006, to KZT 10,849 million
- Operating income increased by 82% compared with Q1 2006, to KZT 23,174 million
- Net interest income increased by 96% compared with Q1 2006, to KZT 14,556 million
- Cost to income ratio remains strong at 37,2%
- Net loan portfolio increased by 8% compared with 31 December 2006, to KZT 643,786 million
- Capital adequacy remains strong at 18% with Tier 1 at 15%

Financial Overview
The Bank's consolidated net income after tax increased by 107 percent to KZT 10,849 million in the first quarter of 2007 from KZT 5,234 million in the equivalent period in 2006. This increase was mainly attributable to an increase in net interest income of 96 percent and a significant increase in other non-interest income.
Operating income, which includes net interest income, net fee and commission income and other non-interest income, increased by 82 percent to KZT 23,174 million in the first quarter from KZT 12,757 million in 2006.
Net interest income, representing 59 percent of operating income, increased by 96 percent to KZT 14,556 from KZT 7,438 million in the first quarter of 2006, mainly due to increases in the average loan portfolio and our share of retail loans which typically earn higher interest. Lower impairment charges as at 31 March 2007 resulted from general improvement in the overall quality of the loan portfolio.
Other non-interest income increased to KZT 3,459 million in the first quarter of 2007, up from KZT 195 million in 2006, primarily as a result of increases in volumes of foreign currency dealing operations, full consolidation of JSC Kazakhinstrakh (the non-life insurance subsidiary of the Bank) starting from November 2006 and increased earnings from leasing operations.
The net loan portfolio increased by 8 percent to KZT 643,786 million as at 31 March 2007 from KZT 596,216 million at the end of 2006 as a result of an overall increase in lending activity of the Bank across all three of the Bank’s core business lines - retail, SME and corporate banking. Despite increase in the loan portfolio, the Bank’s total assets decreased by 1 percent to KZT 979,951 million as at 31 March 2007 from KZT 991,359 million as at 31 December 2006 due to decreases in cash and cash equivalents and in the investment securities portfolio.

Halyk Bank is one of Kazakhstan’s leading financial services groups and its leading retail bank with the largest customer base and distribution network of any bank in Kazakhstan. The Bank is developing as a universal financial group offering a broad range of services (banking, pensions, insurance, leasing, brokerage and asset management) to its retail, small and medium enterprise (“SME”) and corporate customers. The Bank is rated by the three main rating agencies: Moody’s Investor Service (Ba1), Fitch Ratings (BB+) and Standard&Poor’s (BB+).