OREANDA-NEWS. June 01, 2007. From the period January 1, 2007 to April 1, 2007 the assets of Bank TuranAlem have grown 18,5% to US$19,4 bln. As a result, the Bank’s market share by assets comprised 24,6%. The main driver of asset growth was the loan portfolio, which grew to 66,5% of total assets as of end 1Q. Loans to SME and retail comprised 40% of the loan portfolio, reported the press-centre of  BTA.

Net Income as at the end of 1Q 2007 was US$1 103 mln, which is 1,9 times more than for the same period of last year. It was made up by interest income (65%), fees & commissions (15%), trade operations (20%). ROAA was 2,17%, ROE was 24% and cost/income ratio was 27,6%.

Volume of deposits has increased by 23,1%. Deposits provided 26,4% of assets growth. At the end of Q1, retail deposits made up 21,1% and corporate deposits make up 15,5% of the Bank’s liabilities. At the same time BTA’s deposit base has grown for 3% faster than the industry’s average.

International capital markets still remain one of the major funding sources for the Bank. BTA intends to follow the clearly defined funding plan announced at the beginning of the year, when we highlighted that our intention was to raise a total of US$3 bln through bond issuance and syndicated loans in 2007. Year to date, the Bank has already successfully raised US$1,5 bln of this funding target, of which US$500 mln was raised through the syndicated loan market. BTA continues to look closely at the market for windows of favorable conditions since cost of borrowing remains crucial factor for the Bank.

Maintenance of adequate capital is strategically important for the Bank. Total capital of the Bank has risen to US$1,966 bln, Tier 1 capital adequacy ratio was 12,22%, Tier 2 – 13,99% (Tier 1 – 6% and Tier 2 – 12% as required by Kazakh regulation). As of 1st May 2007, the Bank had a k8 and k9 ratio of 2,01 and 3,84 respectively.

In February 2007, at the general shareholders meeting, shareholders approved 11th share issuance for the amount of US$1,5 bln among existing shareholders, the bulk of which (US$1 planned share issue will double the Bank’s capitalization by the end of 2007. This will maintain adequate capitalization of the Bank in the light of envisaged assets growth and will allow the Bank to realize our consolidation strategy.

In the beginning of 2007 the Bank purchased a 34% share in Turkish Sekerbank T.A.S. During the course of 2007, the Bank intends to consolidate its partner banks in CIS countries and to establish a presence in China (Western China, Urumchi). After the acquisition of Temir Bank, the consolidated assets of BTA exceeded KKB’s assets by 2,6%, thus making the Bank the largest private bank in CIS.

With the second largest branch network (22 regional branches and 229 outlets) and clientele base in the country, BTA is a universal bank with a significant (17,5%) market share of client deposits and the second largest loan portfolio. Bank intends to enhance its position by increasing its market shares across different segments.

In April 2007, BTA was named by Euromoney as the leading institution in the emerging Europe. The Bank was acknowledged as the best "Corporate Governance 2006" and named amongst the "Best Managed Companies 2007" in Central and Eastern Europe. Economic and credit fundamentals of the Bank remain robust, which is reflected in Bank’s credit ratings.

May 17, 2007 Fitch Ratings reconfirmed the Bank’s ratings (BB+, Positive). The Bank’s rating reflects the probability of receiving state support in case of necessity. The Positive outlook in foreign currency reflects the sovereign ratings outlook and might be upgraded in case of an upgrade of the sovereign rating. Individual credit ratings take into consideration the Bank’s significant clientele base in Kazakhstan, good financial performance and adequate liquidity level.

On May 4, 2007, Moody’s announced a possible review of senior and subordinated obligations ratings of several Kazakhstani banks, including BTA. Such review was driven only by the Agency’s new methodology employed for assessing state support. At the same time, Moody’s maintained the individual credit rating of the Bank unchanged (Ba1, Stable). Excellent financials and efficiently working infrastructure positions BTA in a strong position to capitalize from existing positive economic trends and offers an opportunity for further growth in the market. The Bank adapts to the fast changing nature of Kazakhstani banking sector through increasing the number and quality of banking products and improving profitability.

BTA is the largest banking institution with a leading position in the creation of CIS network. Further consolidation of CIS assets has been envisaged for 2007. Projected assets for 2015 are US$50 bln.