Eurasian Bank JSC announced the consolidated results of the Bank and its subsidiaries (hereinafter – the Bank) for 12 months of 2020.

“COVID created the main threat of 2020. However, we managed to deal with unforeseen risks for the Bank business and customers faster than expected. Our key financial indicators improved: we increased our assets and capitalization, and maintained a balanced solvent customer base. The results of 2020 were a breakthrough for the development of digital banking. The quarantine restrictions forced the shareholders’ decision made before the pandemic to transform the business model and create a separate digital block in the Bank. The Bank stable profit generation in 2020 allowed us to make additional provisions ahead of schedule under the financial sustainability enhancement state program to accelerate our exit from the program. We are satisfied with the results and are planning positive technological changes in all areas of our business. Access to the Eurasian Bank services will become easier, more convenient and faster through remote communication channels, digital identification, as well as through a network of outlets,” said Valentin Morozov, the Chairman of the Bank Management Board.

The total number of the Bank customers exceeded 4.0 million, which is the third largest financial customer base in Kazakhstan.

Key indicators for 2020 (consolidated financial statements):

The assets of the Eurasian Bank Group in 2020 increased by 13% to 1.2 trillion tenge from 1.057 trillion tenge in 2019.

The total loan portfolio for 12 months of 2020 decreased to 562.433 billion tenge from 644.788 billion tenge. The drop in lending was caused by severe quarantine restrictions due to COVID-19 and the decline in economic activity.

Funds on customer deposits and accounts increased by 19.2%, which confirms the high degree of customer confidence in the Bank. The population and businesses significantly reduced their spending during the pandemic, preferring to keep cash reserves in bank accounts and deposits.

At the same time, the Bank was again chosen by the Kazakhstan Deposit Insurance Fund as an agent for payments to depositors of Tengri Bank and Bank of Astana in 2020.

Consolidated net income increased one and a half times to 6.8 billion tenge. The main sources of income, in addition to lending, are the income received from conversion operations and the card business. Measures to optimize the Bank administrative and economic expenses in the context of the pandemic also had an impact.

Excluding the loss received from the sale of the Russian subsidiary bank, the Group profit doubled in 2020, which allowed allocating resources for the forced early closure of obligations under the state rehabilitation program.

In 2020, the Bank equity increased by 10% to 109.050 billion tenge due to contributions from the Bank shareholders and the refusal to pay dividends for 2019. The Bank complies with all capital adequacy requirements.

Operational efficiency increased. The cost to income ratio decreased from 38.7% to 36.8%.

RETAIL BUSINESS

The retail business was able to increase its share in the portfolio by expanding the digital product line, offering new services and solutions for individuals.

• By the scale of the retail business, the Bank ranked 5^th among Kazakhstan banks.
• The Bank share in the consumer lending market of Kazakhstan was 12.5%.

* The Bank retained its leadership in the auto loan market, taking the 1^st place in this segment.

In connection with the pandemic, the retail loan portfolio in 2020 decreased by 17.5% to 434.9 billion tenge, including loans to individual entrepreneurs (IE), without taking them into account, the loan portfolio amounted to 430.8 billion tenge. Unsecured consumer loans and auto loans account for the vast majority of loans issued to retail customers. Therefore, the Bank continued to focus on improving the efficiency of the business model and risk control.

The second largest area in the retail business is auto lending. In 2020, auto loans decreased by 37.1%, their volume reached 88.7 billion tenge against 108.1 billion tenge a year earlier, which was due to quarantine restrictions and temporary unavailability of lending through the partner network.

In a difficult period for the country in 2020, the Bank assisted customers who lost their sources of income during the quarantine period in providing deferred payments on loans and installment cards.

Credit deferral was granted to 10% of borrowers — 183 thousand people, and 94% of applications were submitted through a mobile bank or the Eurasian Bank website. 15, 000 customers were granted credit card deferral.

In 2020, the Bank issued about 290 thousand new cards, the card portfolio at the end of the year amounted to 1,140 million units. Demand for the Bank debit payment cards was high, despite the quarantine measures. This was facilitated by the simplified process of ordering the Bank card with delivery by courier to the customer’s home, favorable terms on the cards and the availability of the loyalty program. The Bank issued and delivered more than 23 thousand cards to customers who got into a difficult financial situation in the pandemic, to receive the state support payment of 42,500 tenge. The volume of debit card balances increased by 4.6 billion tenge in 2020.

The main result of the accelerated development of digital sales channels was a positive increase in the main indicators of retail service in the Smartbank mobile app.

The number of remote card transactions (transfers, purchases) is increasing — last year alone, the average card receipt increased by 10% compared to 2019, the number of transactions increased by 16%, and the total amount of purchases and transfers increased by 27% compared to 2019.

Eurasian Bank, having made the digital transformation of its retail business the basis of its strategic development, intends to increase the share of its digital presence in the market, continuing to launch new technological products and services that meet the needs of customers.

CORPORATE BUSINESS

The Bank corporate customer base is 17.2 thousand legal entities. The SME segment equalizes the risks balance in other lines of business, provides an opportunity to create a platform for future relationships with corporate customer s and contributes to the development of retail business. The SME segment is the most difficult to manage in Kazakhstan, as entrepreneurship has a weaker degree of development compared to major corporations, a higher risk of losses and limited profitability.

In 2020, the Bank financed at the expense of DBK JSC – 598 borrowers for the total amount of 4,989,589 thousand tenge, DAMU JSC – 241 borrowers for the total amount of 10,124,568 thousand tenge, KSF JSC – 2 borrowers for the total amount of 2,180,153 thousand tenge (in 2019: DBK JSC – 964 borrowers for the total amount of 6,372,467 thousand tenge).

Through DAMU JSC, the Bank financed 138 borrowers for the total amount of 7,910,541 thousand tenge, MFRK – 1 borrower for the amount of 18,750 thousand tenge). These amounts of financing include the disbursed funds within the open limits, including on a revolving basis.

Due to the pandemics that involved all regions of our country, the SME segment was significantly affected by the introduction of the state of emergency and quarantine in 2020, which manifested itself in:

• the risk of NPLs arising on existing loans, mass debt restructuring;
• decrease in non-interest income (in some industries, activities ceased or revenue did not reach the previous volumes).

The Bank showed a high level of preparedness for all manifestations of the pandemic:

– asset structure quality – more than 90% of the standard loan portfolio is outside the direct risk zone of the state of emergency. Risk areas ~ 1% of the standard loan portfolio of corporate customers (CB+SME);

– prompt response and maintaining the loan portfolio quality – within a few days, the procedure for simplified consideration of restructuring issues was worked out, about 30% of the standard loan portfolio of SME was restructured;

– minimized impact on customer funds — improved diversification in 2020 by increasing the SME share in the structure of corporate customer deposits.

To promote non-cash payments among entrepreneurs, the Bank expanded the number of mobile terminals. By the end of 2020, the number of active mobile POS-terminals amounted to 2,132 devices. The total amount of transactions through the terminals amounted to 1,370 billion tenge, which is 30% more than in 2019.

In addition to the Bank, the Eurasian Bank Group includes subsidiaries – Eurasian Bank PJSC (Moscow), Eurasian Project 1 LLP and Eurasian Project 2 LLP. As of 31 March 2020, Eurasian Financial Company JSC is the parent company of the Bank and owns 100% of the Bank shares.

Eurasian Bank PR-Service

+7 (727) 259-95-99, Ext.: 4401.

press@eubank.kz