Press Release, Almaty, 17 September 2019

Moody’s Investors Service international credit rating agency assigned long-term local and foreign currency bank deposits of B2, analogous to B rating from S&P and B from Fitch. Moreover, the agency has assigned independent credit rating of b3, long-term Counterparty Risk Ratings of B1, short-term bank deposit ratings and Counterparty Risk Ratings of Not Prime. The outlook assigned to the Bank by the agency is stable.

The Moody’s experts’ opinion is based on a thorough analysis of the Bank financial statements, as well as the conclusions of a series of in-depth interviews with its top managers. The agency analysts assessed the Bank competitiveness in various business segments, studied its customer base, products, tariffs and transactions concluded. In addition, Moody’s reviewed the Eurasian Bank risk assessment policy and its strategy.

«For us, assignment of the Moody’s rating is an important event that confirms the positive trend in the Eurasian Bank development and serves as evidence of its reliability as a business partner,” commented Valentin Morozov, CEO of Eurasian Bank. “We are satisfied with the rating assessment, which reflects the Moody’s analysts’ opinion that Eurasian Bank generates stable income and has a large liquidity reserve, which in turn allows the Bank to grow steadily, working on implementing a new strategy and improving the range and quality of services for customers».

Eurasian Bank’s long-term ratings carry a stable outlook, which, as can be seen from the agency press release, reflects Moody’s expectations of relative stability of the key credit metrics like asset quality, capital and liquidity in the next 12-18 months.

According to the results of the first six months of 2019, Eurasian Bank net operating income increased by 32% compared to the same period in 2018 and amounted to 41 billion tenge. This was facilitated by active growth in retail business. As a result, the Bank operational efficiency (Cost / Income) improved from 45.4% to 39.1%.

The Bank’s retail loan portfolio, which occupies more than 60% of the total portfolio, has grown by 8% since the year start to 383.9 billion tenge. The Bank continues to maintain a leading position in the consumer lending market and takes the 1st place in new car loans, 1st place in life insurance, 3rd place in POS lending.

Eurasian Bank increased the volume of corporate deposits within the period from 1 July 2018 to 1 July 2019 immediately by 60.5%, up to 355.9 billion tenge. First half-year liquidity provision expenses reduced by 55% compared to the same period in 2018.

The high level of Eurasian Bank liquidity allows the formation of reserves for non-performing loans at an adequate level. Thus, the coverage for loans over 90 days overdue (NPL90 +) increased from 152% at the year start to 181% as of 1 July 2019. The NPL90 + level is 8.3%, which is 1.1 percentage points lower than the market average. The return of distressed assets for the first half of 2019 amounted to 3.8 billion tenge.

Eurasian Bank is one of the corporate banks of ERG, the largest taxpayer and employer in Kazakhstan; more than 60,000 people work in the Group. The ERG contribution to the Kazakhstan economy is about 4% (share in GDP). Today, ERG represents 30% of the Kazakhstan metallurgical mining industry, and is the main supplier of electricity in the country as well. It should be noted that a 40% share in ERG belongs to the Government of the Republic of Kazakhstan.

Eurasian Bank takes part in a number of government programs, including the 7–20–25 and Baspana Hit mortgage programs, the Home Mortgage Refinancing Program, the Damu Fund Program, and preferential car loan program, implemented jointly with the Development Bank of Kazakhstan in order to support domestic automakers. The total amount of public funds allocated to the Bank for participation in these government programs is more than 30 billion tenge.

In 2019 Eurasian Bank as the agent bank for payment of guaranteed compensation to 275 thousand Bank of Astana depositors already paid 98.4% of KFID liabilities in the amount of about 37 billion tenge. The regulator’s choice is due to reliability of the Bank, its compliance with prudential standards, and availability of a wide network of outlets.

A full text of the release is available at the website of the credit rating agency.

Eurasian Bank PR Service

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

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