What have been some of the major achievements at Altyn Bank since you took over from HSBC?
We have successfully navigated through the transition in 1Q2015 and jumped into implementing our new strategy. The strategy has three pillars. First, we will remain a universal bank with a presence in both corporate and retail banking. The universal banking franchise we inherited proved to be very resilient to the changes in the shareholders' structure as it continues to attract clients and service them in a first-class way. It would be silly on our part to re-invent the wheel and materially change a perfectly working business model of a universal bank. Second, on top of the existing retail offering, we will soon add a private banking and wealth management boutique service that will target only a few hundred wealthy families in the country. The bank has a truly working relationship banking model, and we would like to leverage this expertise to tap new market segments. Lastly, we are actively looking how to capitalize on the digital banking ideas that are floating around. Looking at financial results, the Bank produced a solid performance in the first nine months of 2015. All the key metrics are in green area and well beyond our initial targets for FY2015. As of October 1st, 2015, total assets of Altyn Bank are up by 111%, deposits 127%, corporate loans 68%, and equity 21%, while net income increased four fold. What makes the Altyn Bank team particularly proud is that these stellar results were achieved against a deteriorating macroeconomic backdrop, tenge liquidity shortage, and uncertainty about the USD/KZT exchange rate.
Out of the banking products that you offer to your customers, which do you think is showing the most potential in the current market?
Faced with an unprecedented shortage of tenge liquidity and uncertainly about the exchange rate, corporate banking clients rushed to secure tenge denominated loans. Our strong balance sheet allowed us to help quite a few clients with needed working capital facilities in tenge. This explains the 68% surge in corporate loans as of October 1st, 2015. In the retail space, all of our three flagship products had a good run. First, we offer one of the cheapest personal loans in the market. We are able to do it by maintaining the high quality of the loan book. Second, Altyn was among a handful of players that continued providing mortgages in tenge. Although yields on mortgage loans may not look attractive in the short term, we like the segment we are giving these loans as it provides an excellent opportunity for a cross-sell. And don't forget these are secured loans. Third, with the help and support of our partner—national carrier Air Astana—we re-launched the co-branded Altyn Bank Nomad Club credit card in late June 2015. The program was so successful that we decided to prolong it for another 3threemonths until December 31st, 2015.
What is the bank doing to attract foreign investments to Kazakhstan to continue to boost the local economy?
Historically the bank was very strong in the trade finance area. Altyn Bank is capitalizing on its trade finance legacy and limited appetite from foreign financial institutions for any bank risk apart from Halyk and Altyn. The strong credit rating of “BB“ assigned by Fitch Ratings in April 2015 is also helping us to secure trade finance lines from major international banks and thus help our corporate clients with trade facilitation.
What are your expectations for 2016? Are there any specific market indicators that you are looking for to help you achieve these goals?
We stay the course and continue implementing our strategy. We fully understand that we cannot be immune to the inevitable slowdown of the Kazakhstani economy, lower demand for financial services, and growing non-performing loans. Nonetheless, we would like to think of ourselves as a nimble player that can quickly adjust to the changing environment. We will remain focused and committed to our key client segments both in corporate and retail banking. Serving large multinational companies is a good example of the legacies we aim to keep n place. In retail banking, we will be working on cross-sell opportunities to further strengthen relationships with our clients.