Knowledge-based economy

Development Bank of Kazakhstan’s loan portfolio more than doubled in 5 years

Kazakhstan’s Development Bank, which is a subsidiary of “Baiterek” National Managing Holding, saw an 8.7% increase in its loan portfolio and stood at KZT1.7tln in 2018, with projects in manufacturing representing 77%. Between 2014 and 2018, the Bank’s loan portfolio rose 2-fold.
Nur-Sultan11 April , 17:36

“The Bank funded 30 projects for KZT443bn in the reporting period, plus 9 projects for KZT225bn in energy, metallurgy, transport and logistics, telecommunications”, the Bank informed.

Particularly a plant for ferrosilicon production in Karaganda, the 20 MW “Zhylga” solar power plant in Turkestan region, modernization of the joint-stock company Eurasian Energy Corporation’s energy assets in Pavlodar region (17% of electricity and 20% of coal production in Kazakhstan), the K-5 emission standard diesel fuel plant under “Condensat” JSC in Western Kazakhstan.

Being key to the State Program of Industrial and Innovative Development for 2015-2019 as of the end of last year, the Development Bank of Kazakhstan financed 20 large investment projects in an amount of KZT338.4bn, considering to support another 8 projects for a total requested loan amount of up to KZT452.14bn, including up to KZT220.58bn as part of the SPIID.

6 projects involving the Bank’s funds were commissioned in 2018, including: a complex for railway wheels production in the city of Ekibastuz, a transport and logistics center in Shymkent, the first stage of a factory for growing broilers in Akmola region, a plant for diesel fuel production under “Condensat” JSC in Western Kazakhstan.

Last April witnessed the second tenge-dominated Eurobonds issue for KZT100bn. Since the previous December 2017 issue, the Bank has extended periods of borrowing to 5 years from 3 years, the coupon rate has fallen to 8.95% from 9.5% per annum. Budget funds totaled 16% out of the KZT291bn funding raised by the Development Bank of Kazakhstan last year in various sources, the remaining came from the extra-budgetary sources, including borrowings on market terms.

According to the Bank’s information, in December 2018 the DBK for the first time encouraged Kazakh services exports by issuing a guarantee to AAEngineering Group LLP in excess of US $37.8mln to construct a gold-processing plant at “Dzheruy”, which is the largest gold field in Kyrgyzstan.

As Chairman of the Bank’s Management Board Bolat Zhamishev said the year 2018 “tested the strengthen of the whole banking system of Kazakhstan”.

“Exchange rate volatility, the situation in the commercial partner banks in "Nurly Zhol" Program, the new international financial reporting standard IFRS 9’s introduction, all the factors experienced the effectiveness of the Bank’s risk management system. As a result, we managed to finish last year with a positive financial result despite the difficult conditions”, Mr Zhamishev said.

The Bank’s consolidated net profit amounted to KZT3.2bln in 2018, with the loan portfolio quality retaining a good level: the gross loan portfolio provisions did not exceed 4%, non-performing loans amounted to 0.5% by the end of 2018.

 

For reference: established in 2001, the Development Bank of Kazakhstan is a national institute aimed at modernizing and developing non-resource-based and infrastructure sectors of the Kazakh economy. Its main activities cover areas such as development of industrial infrastructure and manufacturing, promotion and attraction of foreign and domestic investments in the country's economy.




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