1Q`2017 Results Eurobonds: - PowerPoint Presentation

Slide1

1Q`2017 Results

Eurobonds:

ISIN: XS1153772725/ XS1154028200 (ALLIBK 11 ¾ 24)

ISIN: US87971SAA87/ USY8584LAA18 (TEBNKZ 14 06/22)

Credit Ratings:

“B/B/

kzBB

” Stable by

Standard&Poor's

“B3/Caa1” Stable by Moody’s

Slide2

THIS PRESENTATION HAS BEEN PREPARED BY FORTEBANK JSC (THE "BANK“) SOLELY FOR INFORMATIONAL PURPOSES. WHILE THE BANK HAS USED ALL REASONABLE EFFORTS TO ENSURE THAT THE INFORMATION CONTAINED HEREIN IS CORRECT, ACCURATE AND COMPLETE AT THE DATE OF PUBLICATION, NO REPRESENTATION OR WARRANTY IS MADE (EXPRESS OR IMPLIED) AS TO THE RELIABILITY, ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND NO RELIANCE SHOULD BE PLACED ON SUCH INFORMATION.

THIS PRESENTATION MAY INCLUDE FORWARD-LOOKING STATEMENTS. YOU ARE CAUTIONED NOT TO PLACE ANY RELIANCE ON FORWARD-LOOKING STATEMENTS. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS PRESENTATION, INCLUDING, WITHOUT LIMITATION, THOSE REGARDING THE BANK'S FINANCIAL POSITION, PROSPECTS, BUSINESS STRATEGY, MANAGEMENT PLANS AND OBJECTIVES FOR FUTURE OPERATIONS ARE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE, OR ACHIEVEMENTS OF THE BANK OR ITS INDUSTRY’S RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE BANK'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE BANK EXPECTS TO OPERATE IN THE FUTURE.

IN ADDITION, CERTAIN FINANCIAL INFORMATION IN THIS PRESENTATION MAY BE UNAUDITED OR PRELIMINARY IN NATURE AND THUS SUBJECT TO POTENTIAL FURTHER ADJUSTMENT. THE PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER TO SELL OR ISSUE, OR THE SOLICITATION OF AN OFFER TO PURCHASE, SUBSCRIBE TO OR ACQUIRE ANY OF THE BANK’S SECURITIES, OR AN INDUCEMENT TO ENTER INTO INVESTMENT ACTIVITY IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION, INDUCEMENT OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION, EXEMPTION FROM REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH JURISDICTION. NO PART OF THIS PRESENTATION, NOR THE FACT OF ITS DISTRIBUTION, SHOULD FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT OR INVESTMENT DECISION WHATSOEVER. THIS PRESENTATION IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION IN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION NOR SHOULD IT BE TAKEN OR TRANSMITTED INTO SUCH JURISDICTION.

2

1Q`2017 Results

DISCLAIMER

Slide3

OVERVIEW AND STRATEGY

FINANCIAL PERFORMANCE

RISK MANAGEMENTFORTEBANK HERITAGE3

Slide4

4

THE FIRST FULL YEAR OF FORTEBANK'S WORK AFTER IT-SYSTEMS MERGER

:Net Profit (IFRS) in 2016: KZT 11,7 bn (USD 34,1 mln), + 57% in comparison to 2015, + 11% in comparison to the budgetINNOVATIVE DEVELOPMENT OF RETAIL BANKING

:Loans issuance + 47%. Deposit portfolio + 34%Cards turnover + 96%. Remainders on the card accounts + 136%Introduction of New generation Mobile and Internet Banking (58 thousands clients in 7 months)Implementation of operational CRM

FOCUS ON OPERATIONAL SERVICE OF LEGAL ENTITIES

:

Commissions income + 32,9%Development of POS infrastructure.

Growth of turnover on POS terminals + 242%

HEADQUARTERS’ MOVEMENT TO ASTANA

:

Around 575 employees moved to Astana in 2016

EXECUTIVE

SUMMARY FOR 2016

1Q`2017 Results

Slide5

5

RECOVERY OF HERITAGE CONTINUES

:Recovery of KZT 55,1 bn (USD 161,2 mln)INCOME FROM TREASURY AND INTERNATIONAL RELATIONS:Interest income from securities + 121%. Income from the trade by Eurobonds KZT 8,7 bn (USD 26,2 mln)Ratings upgrade from Moody’s to «В3»EBRD loans for the amount of USD 60 mln

IT AND AUTOMATION:

Significant automation of internal systems and management reporting Integration of document management systems with Kaspi and Eurasian banks

Implementation of AXAPTA (April – December 2016)

RENOVATION OF THE BRANCH NETWORK

:

Completion of buildings’ construction in Astana and

Shymkent

, renovation of 4 branches and 7 outlets

10 outlets are in the process of renovation

EXECUTIVE SUMMARY (cont.)

1Q`2017 Results

Slide6

COMPETITIVE LANDSCAPE AS OF

April

01, 2017 68

No. 6 by Total AssetsBanking sector: KZT 25.04 bn.No. 7 by Total DepositsBanking sector: KZT 16,93 bn.

Note: In accordance with KAS

Source: NBK

No. 10 by Total Loans

Banking sector: KZT 15.04 bn.

No. 3 by Total Equity

Banking sector: KZT

2.95

bn.

1Q`2017 Results

Slide7

7

COMPETITIVE LANDSCAPE AS OF

APRIL 01, 2017ForteBank is 1 of only two banks in the country recognized by European Bank for Reconstruction and DevelopmentIn November 2016, the Bank signed two Loan Facilities for total amount of USD60m (in KZT equivalent) under SME and “Woman in Business” lending programs in KazakhstanCommerzbank, Deutsche, RZB, Bank of New York and JP Morgan are long term partners in Corresponding Banking and Trade Finance businesses of the BankThe Bank has a wide network of bank partners in Turkey, Nordic countries, Europe, CIS, Asia and the US

1Q`2017 Results

Slide8

AMONG TOP 3 BANKS BY REGULATORY RATIOS AS OF APRIL 01, 2017

Ratio

Limit

ForteBank

KKB

Halykbank

ForteBank

position, #

Capitalisation

k1

min

5

,5

%

20,20%

10,20%

21,30%

2

k1-2

min

6

,5

%

20,20%

10,70%

21,30%

2

k2

min

8

%

22,70%

13,70%

21,30%

1

Liquidity

k4

min 30%

234,70%

40,30%

212,20%

1

k4-1

min 100%

1797,80%

254,10%

485,20%

1

k4-2

min 90%

539,80%

199,90%

267,50%

1

k4-3

min 80%

393,10%

88,10%

196,40%

1

Other

k7

max 1

0,030

0,042

0,030

1

k8

max 2

0,046

0,073

0,057

1

k9

max 3

0,468

0,640

0,590

1

8

1Q`2017 Results

Slide9

FORTEBANK SPLITS ITS BUSINESS INTO THREE KEY BUSINESS LINES, PLUS A COMPLETELY SEPARATE TEAM WORKING ON RECOVERY OF HISTORICAL PROBLEM LOAN PORTFOLIO

Retail products

Business products

Retail:Simple products and fast serviceNetwork focused in large population centers

High level of automation and standardization

Automated risk management (scoring)Premier:

Personal consultantIndividual/flexible conditionsPrivate banking partnerships

Internet and mobile banking

Customer loans (secured/unsecured)

ForteCards

Payroll projects

Deposits (term/sight)

Money transfers

ATM’s and POS-terminals

Standardized simple products

Government programs

Loans for investment/turnover financing

Overdrafts

Deposits

Documentary operations

Government programs/Export financing

Promissory notes/Factoring

Treasury/FX products

High level of service

Focus on less capital intensive and non-cyclical industries

Focus on cash management banking, w/c financing, documentary business

Target customers with payroll projects for retail cross-selling

Recovery of problem loans of the bank

Heritage portfolio fixed as of 01 October 2014 year, with constant monitoring of court cases and recovery processes

9

1Q`2017 Results

Slide10

Cards turnover (KZT, bn)

1H’2016

2H’2015

1H’2015

Retail network

103

outlets, all going through remodeling/rebranding process

800+ ATMs and

200

+

payment terminals

Upgraded Call-Centre with telemarketing functions and 24/7 customer service

Updated internet and mobile banking

Source: NBK, as of

March

31,

2017

2H’2016

Retail loans granted and market position at the end of 2015 - 4,4%, #7

Retail loans granted and market position at the end of 2016 - 6,7%, #4

FORTEBANK (RETAIL BANKING): STRONG BUSINESS

FRANCHISE…

10

1Q`2017 Results

1Q’2017

7,0%

2H’2015

5,8%

1H’2015

2,9%

# 4

# 9

# 3

Market share: Retail deposits

1H’2015

# 8

# 9

# 9

YE’2016

2H’2016

1H’2016

YE’2016

1H’2016

# 7

# 6

4,7%

4,4%

4,4%

6,3%

#

8

1Q’2017

#

8

1Q’2017

Market share: Retail loans granted and market position

Slide11

Branch and personnel reduction

Efficiency per manager

New CRM systemNew internet and mobile bankingMicrosoft Dynamics CRM providing full customer profile

Ongoing roll-out at branch network levelDeveloper: Monetise (UK), one of leading mobile & internet banking developers in the worldReleased in May 2016 and updates were successfully implemented by December 2016

New unique services for RK are planned to be implemented in 2017

201

52016

127

outlets

103

1 281

empl

. retail

1 135

2015

2016

22

Number of loans issued per month

17

27

44

Volume of loans,

mln

KZT

… GOING THROUGH EFFICIENCY OPTIMIZATION AND TECHNOLOGICAL IMPROVEMENTS

11

1Q`2017 Results

Slide12

12

Total volume of transfers

: KZT 48 bnNon-interest income from transfers in MIB has already reached 7%From the mid-December 2016 (Online opening start): ≈ 700 accounts (cards and deposits) ≈ 600 loans

RESULTS OF MOBILE AND INTERNET BANKING IMPLEMENTATIONS

1Q`2017 Results

TOTAL USERS

TRANSFERS (KZT,

mln

)

Slide13

13

NEW FORMAT OUTLETS

Opened: 12Finishing renovation: 10INCREASE IN EFFICIENCY

AMOUNT OF OUTLETS

2016

103

2015

127

2014

241

LOANS ISSUES PER 1 MANAGER

IN A MONTH

12

17

2014

22

2016

2015

56

65

2014

113

2016

2015

AMOUNT OF DEPOSITS

PER 1 MANAGER IN A MONTH

CREDIT MANAGERS

OPERATONAL SERVICE

MANAGERS

NON-INTEREST INCOME

PER 1 MANAGER

IN A MONTH [

KZT, MLN

]

2,7

4,3

6,4

353

263

241

~1 550

600

543

NETWORK

1Q`2017 Results

Slide14

14

OPERATIONAL

CRMOperation Deposit opening

3,5 min29%Card issuance1,33 min

31%

Account opening

1,33 min38%

“

Zolotaya

Korona

” transfer

5

min

40%

Time BEFORE

%

of efficiency increase

Time AFTER

2,5

min

0,9

min

0,9

min

3

min

CRM

1Q`2017 Results

Slide15

KEY AIMS OF RETAIL BANKING SEGMENT:

Evolved risk management procedures and systems

Analytical CRM, including AI and machine learning to better target customer offering

Develop full omni-channel offering

Maintain branch network, but convert from product sale to customer service

Move all standard products, including lending, into non-branch channels

15

1Q`2017 Results

Slide16

Loans granted (KZT,

bn

)Number of sme borrowersSME NetworkPOS network32 SME only specific branches7 145

POS terminalsInternet Banking

FORTEBUSINESS (SME BANKING): NEW, YET DEVELOPING BUSINESS

LINE

16

1Q`2017 Results

Slide17

FORTEBUSINESS: FORTEBANK IS THE ONE OF ONLY TWO BANKS IN KAZAKSHTAN WORKING WITH EBRD

17

Key parameters of the loan programs:USD 50 mln (KZT equivalent) under SME financing program, for 3 years, under guarantee of JSC “Damu

” Entrepreneurship Development Fund”USD 10 mln (KZT equivalent) under “Women in Business” program, for 3 years, under guarantee of JSC “Damu” Entrepreneurship Development Fund” Training programs for the credit managers of the BankImplementation of Environmental and Social Policy

1Q`2017 Results

Slide18

LEGAL ENTITIES deposits (kzt,

bn)

Key servicesFocus on work with large corporates, with cash management productsIntroduction of innovative products:“No limits” - number of clients increased to 272 in 2016 from 9 in 2015Implementation of issuance of “Bank guaranties” in electronic format

As of 1Q 2017 share of legal entities deposits represents 53% of total deposit portfolioThis share was 49,2%, 53,2% as of 1YE2016, 1Q2017 respectively.

2H’2016

1H’2016

1H’2015

2H’2015

COMMISSION INCOME (kzt,

bn)

FORTECORPORATE (CORPORATE BANKING): MAIN FOCUS ON CASH MANAGEMENT FOR CORPORATE

CLIENTS

18

660

726

803

1Q`2017 Results

1

Q’2017

Slide19

KEY AIMS OF SME & CORPORATE BANKING SEGMENT:

Lending to SME segment, supported by Government and Development Banks (EBRD, ADB) programs

Limited exposure to large Corporate

customers

Fee and commission generation from additional products

System improvements (CRM) and customer service quality

19

1Q`2017 Results

Slide20

KZT 799

bn

Problem loans

recovered*

KZT 96 bn

Recovered by

Cash*

Off-balance

/

OUSA

/

Balance

NPL

291

employees

Staff of Bad

Bank*

-

50

%

/

28

8

employees

FORTEBANK HERITAGE: SEPARATE BUSINESS LINE FOCUSED ON RECOVERIES AS OF APRIL 01, 2017

20

* Starting from/compared to 01/01/2014

667/ 56

/

76

7,4

%

KZ

27% IFRS

1Q`2017 Results

Bad loan portfolio

KZT 162 bn

Slide21

OVERVIEW AND STRATEGY

FINANCIAL PERFORMANCE

RISK MANAGEMENTFORTEBANK HERITAGE21

Slide22

22

Fortebank overview

Universal Bank offering full range of banking products and innovative services “B/B/

kzBB” Stable by Standard&Poor's “B3” Stable by Moody’s Investors Service Highly experienced Management team 12.73% of shares are free-float, 87.27% belongs to major shareholder - Mr. B. Utemuratov Eurobonds traded on Bloomberg:

ISIN: XS1153772725/ XS1154028200 (ALLIBK 11 ¾ 24)ISIN: US87971SAA87/ USY8584LAA18 (TEBNKZ 14 06/22)

Key Financial Indicators

* adjusted** according to management accounts

FORTEBANK AT A GLANCE

 

 

1Q2017

YE2016

YE2015

 

YE2014

Number of employees

3 516

3 458

3 626

4 196

Head office

851

832

898

1090

Branches

2 665

2 626

2 728

3 106

Cash offices

121

121

144

148

ATMs

833

815

775

802

POS-terminals

7 145

6 251

2 020

1 403

 

 

1Q2017

YE2016

1H2016

YE2015

1H2015*

Total assets (KZT,

mln

)

1 269 795

1 215 177

1 134 823

1 069 135

844 884

Loans to customers

616 934

623 923

608 592

629 906

544 901

Current accounts and deposits from customers

858 995

802 835

725 729

660 057

499 124

Equity (KZT,

mln

)

179 944

177 922

171 333

167 030

166 266

Net income (KZT,

mln

)

2 366

11 654

4 392

7 427

5 707

ROA

0,8%

1,1%

0,8%

0,8%

1,3%

ROE

5,3%

6,8%

5,2%

4,5%

7,1%

Cost to Income

64,1%

61,7%

57,3%

54,0%

68,4%

Loans to deposits

71,8%

77,7%

83,9%

95,4%

109,2%

NIM**

5,2%

5,3%

4,6%

4,7%

4,6%

Spread**

6,8%

6,6%

5,8%

5,6%

5,2%

K1 (>=5,5%)**

20,2%

20,1%

19,7%

18,7%

21,3%

K2 (>=8,0%)**

22,7%

22,6%

22,5%

21,6%

24,7%

24

1Q`2017 Results

Slide23

23

NET INTEREST AND F&C

INCOME

NII, KZT, bn

Net F&C, KZT,

bn

NIM, %

5,3%

4,7%

3,5%

Net F&C/NII, %

14,9%

12,8%

20,4%

COMMENTS:

NII increased by 28,3% in 2016 mainly due to interest income from Loans to customers and Trading securities

In 2015 double increase was also mainly caused by the increase of interest income on Loans to customers

Comments:

Comments:

COMMENTS:

Growth in F&C due to growth of business, new Clients attraction and revision of tariffs in 2016

1Q`2017 Results

1Q’2017

YE’

2014

YE’2015

YE’2016

5,2%

1Q’2017

YE’

2014

YE’2015

YE’2016

1Q’2017

YE’

2014

YE’2015

YE’2016

1Q’2017

YE’

2014

YE’2015

YE’2016

Slide24

24

NET

INCOME

Net Income, KZT, bn

171,2

ROA, %

1,1%

0,8%

18,8%

ROE, %

6,8%

4,5%

110,7%

Comments:

*

2014 –

including revenues from restructuring in amount of KZT 176,2

bn

Net income for 2016 increased by 58% mainly due to increase in interest income on loan portfolio

1Q`2017 Results

1Q’2017

YE’

2014

*

YE’2015

YE’2016

1Q’2017

YE’

2014

*

YE’2015

YE’2016

1Q’2017

YE’

2014

*

YE’2015

YE’2016

5,3%

Slide25

25

ASSETS

Asset structure, KZT, bn

1 215

21%

51%

4%

8%

1 069

10%

59%

4%

7%

909

17%

62%

2%

7%

11%

20%

15%

Comments:

Assets of the Bank increased by

4%

for the

1Q ended

31

March 2017

Loan portfolio slightly decreased from KZT

624

bn

as of

YE’2016

to KZT

617

bn

as of

1Q’2017

mainly due to aging of the loan portfolio

Securities portfolio of the Bank increased by KZT

30

bn

from KZT

257

bn

as of

YE’2016

to KZT

287

bn

as of

1Q’2017

Cash and cash equivalents including amounts due from financial institutions

increased

by 16%

from KZT

188

bn

as of

YE’2016

to KZT

217

bn

as of

1Q’2017

Securities

Loans

Fixed assets

Other

Cash and equivalents

1Q`2017 Results

Fixed assets

23%

49%

4%

8%

17%

1Q’2017

YE’

2014

YE’2015

YE’2016

Slide26

26

LIABILITIES AND

EQUITY

Liabilities and Equity structure, bn KZT

1 069

1 215

13%

2%

11%

1%

15%

2%

1%

16%

909

7%

3%

13%

17%

4%

56%

6%

62%

6%

66%

Comments:

Equity of the Bank as of

1Q’2017

increased by

1%

to KZT

180

bn

in comparison to

YE’2016

Liabilities of the Bank as of

1Q’2017

for one

quarter period

increased by

5%

Deposits portfolio increased by

7%

from KZT

803bn

to KZT

859

bn

Debt securities issued decreased due to Eurobonds buy-back during 2016

Owner’s equity

Bonds issued

Subordinated debt

Other (incl. REPO)

Bank’s deposits

Client’s deposits

1Q`2017 Results

1 270

1Q’2017

YE’

2014

YE’2015

YE’2016

14%

5%

68%

Slide27

OVERVIEW AND STRATEGY

FINANCIAL PERFORMANCE

RISK MANAGEMENTFORTEBANK HERITAGE27

Slide28

Prudential norms of National Bank of Kazakhstan Republic

Assets for collateral

mln KZTRatio01.04.17

01.03.1701.02.1701.01.17

01.12

.16

Regulator's normApproved limit

Reserve

(

mln

KZT

)

Current liquidity ratio

К4

2,347

2,805

2,665

2,380

2,250

0,30

0,45

377 495

Term liquidity ratios

К4-1

17,978

17,602

19,079

15,390

14,074

1,00

1,50

408 732

К4-2

5,398

5,292

4,401

4,281

4,693

0,90

1,35

389 639

К4-3

3,931

3,632

3,424

2,855

2,532

0,80

1,20

417 480

FX term liquidity ratios

(

on foreign currency with rating over

«А» ,

EUR

)

К4-4

47,262

54,809

13,188

19,644

29,770

1,00

1,50

169 166

К4-5

13,868

15,229

4,326

5,088

7,680

0,90

1,35

173 374

К4-6

6,870

6,843

3,694

2,890

2,536

0,80

1,20

177 176

Liquidity coverage ratio

(

high-quality liquid assets

/

net outflow

till 1 month

)

LCR

1,304

2,321

2,448

2,239

1,992

0,60

0,70

214 309

Assets

01.04.17

01.03.17

01.02.17

01.01.17

01.12.16

Correspondent accounts in

banks

32 066

32 154

25 333

49 693

39 826

Securities

258 455

268 938

252 838

225 619

198 560

Loans to clients

(

net

)

23 767

40 074

28 469

31 554

28 291

Fixed assets

45 329

45 128

43 279

43 139

40 951

Total

359 617

386 293

349 918

350 006

307 628

LIQUIDITY CUSHION AS OF RECENT REPORTING DATES (1/2)

28

* all data is in accordance with 700H

1Q`2017 Results

Slide29

Liquidity GAP

Liquidity gap by currencies

Limit

MaturityKZT

USD

EUR

RUB

CUMULATIVE GAP

/

ASSETS

01.0

4

.17

01.

01

.1

7

APPROVED LIMIT

01.0

4

.17

01.

01

.1

7

APPROVED LIMIT

01.0

4

.17

01.

01

.1

7

APPROVED LIMIT

01.0

4

.17

01.

01

.1

7

APPROVED LIMIT

01.0

4

.17

01.

01

.1

7

APPROVED LIMIT

< 7 days

10,9 %

5,2 %

< = -

15 %

9,7 %

10,9 %

< = -

5 %

0,5 %

0,6 %

< = -

5 %

0,11

%

0,01 %

< = -

5 %

21,2 %

16,84 %

< =

-15 %

< 1 month

7,8 %

2,5 %

< = -

15 %

8,9 %

7,4 %

< = -

5 %

0,4 %

0,5 %

< = -

5 %

-0,01 %

0,01 %

< = -

5 %

17,1 %

10,42 %

< =

-15 %

<

3

months

9,0 %

3,0 %

< = -

10 %

7,1 %

6,7 %

< =

-10 %

0,3 %

0,4 %

< = -

5 %

-0,01 %

0,01 %

< = -

5 %

16,5 %

10,15 %

< =

-10 %

<

6

months

7,7 %

6,

0

%

< = -

10 %

5,0 %

4,3 %

< =

-10 %

0,3 %

0,3 %

< = -

5 %

-0,02 %

0,004%

< = -

5 %

12,9 %

1

0

,6

1

%

< =

-10 %

<

1

year

9,2 %

10,7 %

< = -

10 %

-8,5 %

-7,2 %

< = -20 %-0,01 %0,02 %< = -5 %-0,02 %0,002 %< = -5 %0,7 %3,50 %< = -15 %< 3 years17,7 %19,8 %< = -10 %-6,6 %-8,8 %< = -20 %-0,01 %-0,03 %< = -5 %-0,02 %0,002 %< = -5 %11,1 %11,00 %< = -15 %> 3 years11,2 %12,5 %< = -10 %-9,5 %-10,8 %< = -20 %-0,01 %-0,02 %< = -5 %-0,02 %0,002 %< = -5 %1,7 %1,71 %< = -15 %LIQUIDITY CUSHION AS OF RECENT REPORTING DATES (2/2)29* all data is in accordance with 700H1Q`2017 Results

Slide30

SECURITIES PORTFOLIO

30

4.

STRUCTURE OF SECURITIES PORTFOLIO BY IFRS CATEGORIES

(

by aims

)

CATEGORIES

FACT

APPROVED LIMIT

mln

KZT

in

%

of securities portfolio

Other

debt instruments

(

loans and debtors)

0

0,00

<

5

Securities available sales

41 326

15,

9

<

100

Trading securities

219 024

84,

1

<

10

0

Securities hold till maturity

0

0,00

<

30

5.

OWN

ISSUES

STRUCTURE OF SECURITIES PORTFOLIO

FACT

mln

KZT

Issued

securities

15

3 183

Subordinated bonds

23 070

Term bonds

1

30

113

6.

PLEDGED SECURITIES

(

REPO TRANSACTIONS

)

STRUCTURE OF SECURITIES PORTFOLIO

FACT

Approved limit

mln

KZT

in

%

from total assets

Pledged securities

0

0,00

max

15

*

Limit on Total securities portfolio is approved in % of Bank Assets

STRUCTURE OF SECURITIES PORTFOLIO BY SECURITIES

TYPE

FACT

APPROVED

LIMIT

mln

KZT

in

%

of securities

portfolio

GOVERNMENT SECURITIES

,

including

:

224 576

8

6

,

3

>

20

Government securities of MFKR

,

NBKR

205 803

7

9

,

1

-

Government securities of foreign states

18 772

7

,2

NON-GOVERNMENT

SECURITIES

,

including

:

34 492

1

3,3

<

80

Bonds of Kazakhstan issuers

30 824

1

1

,

8

-

Bonds

of foreign

issuers

61

4

0

,2

Bonds of “Samruk-Кazyna NWF” JSC2 9861,2 Shares67,60,03< 5 SECURITIES OF IFO1 2820,5 < 20 TOTAL SECURITIES PORTFOLIO*260 35020,5< 35 2. STRUCTURE OF SECURITIES PORTFOLIO BY CURRENCIESCURRENCIESFACTAPPROVED LIMITmln KZTin % of securities portfoliomln USD KZT 184 90571,0589- USD75 44529,0240< 600Other000< экв. 53. MODIFIED DURATIONSTRUCTURE OF SECURITIES PORTFOLIO FACTAPPROVED LIMITTotal securities portfolio, including: 1,49 %< 12 %Government securities1,25 %< 12 %Non-government bonds, including: 2,99 %< 10 %Bonds of “Samruk-Кazyna NWF” JSC0,04 %

-

Bonds

of foreign

issuers

0,1

4

%

-

Bonds of Kazakhstan issuers

2

,

81

%

-

Securities

of IFO

3

,83

%

<

6

%

The volume of total securities portfolio for analyzed quarter is decreased by KZT 33,4

bln

(

14

,7 %)

Modified duration of total securities portfolio for a quarter is not changed and is equaled to 1

,

49

%

, at the same time modified duration of coupon bonds for a quarter is decreased from

4

,

43

%

up to 3

,

96

%

1Q`2017 Results

Slide31

DATE

NET-POSITION

VaR

APPROVED LIMIT

01.04.17

149,5

59,5

4 500

01.01.17

1 041,5

184,6

4 500

As of April 01, 2017 there was a long net position in the size of 0,08 % (0,55 % as of January 01, 2016) from an equity (further – OC) at the internal Bank limit as no more than 15,0 % and at National Bank of the Kazakhstan Republic limit as no more than 25,0 % of OC

The open FX position is provided, generally by US dollars (KZT -0,15

bln

)

,

Russian rubles (KZT

0,23

bln

)

FX revaluation income since the beginning of year constituted KZT 13,7

mln

, for March, 2017 the result from FX revaluation developed negative and made KZT -352,4

mln

As of April 01, 2017

:

the size of FX position on US dollar constituted -0,1 % of OC at internal limit as no more than 11,50 % of OC and at National bank of Kazakhstan Republic as no more than 12,5 % of OC

the size of FX position on USD derivatives constituted

1

7

,

5

%

of OC

at internal limit as no more than

27,00 %

of OC

and at National bank of Kazakhstan Republic as no more than 30,0 % of OC

The limit breaks wasn't fixed for the analyzed period

FX position

Maximum probable losses

(

for a week with 99,9 % of a probability

)

is KZT 17,3

mln

,

that is a lower than the 10

th

worst financial result in sum of KZT 59

,

5

mln

.

At FX VaR calculation in the result of a comparison is chosen a bigger value of these figures according to the Instruction of market risks estimation "ForteBank" JSC. So FX VaR is decreased by KZT 125

,

1

mln

in comparison with last quarter

FX

VaR

mln

KZT

ASSETS & LIABILITIES MANAGEMENT, FX POSITION, OPEN CCY POSTION AND HEDGING

31

1Q`2017 Results

Slide32

*

For the IR margin calculation is used internal calculation methodology (for management aims)01.04.17

01.03.1701.02.17

APPROVED LIMIT

FACT

DELTA

FACT

DELTA

FACT

DELTA

5,20 %

+0,47 %

4,73 %

-0,20 %

4,94 %

-0,35 %

мах -1,0 %

IR gap

IR margin*

Limit

INTEREST RATE RISK

32

1Q`2017 Results

Slide33

Head Office Credit Committees

Branch Credit Committees

Considers credit applications with exposure from 5% up to 25% of Bank Equity and with related partiesConsiders credit applications which exceeds limits of Head office SME and Retail Credit Committees and all Corporate applications, and with exposure up to 5% of Bank Equity

CREDIT COMMITTEES

33

1Q`2017 Results

Slide34

№

Branches

Branch SME Small Credit Committees

Branch SME Credit Committees1Almaty

30 000 000

100 000 000

2

Astana

3

Atyrau

75 000 000

4

Karaganda

5

Pavlodar

6

Shymkent

7

Aktau

8

Aktobe

9

Kokshetau

10

Kostanai

11

Semey

12

Ekibastuz

50 000 000

13

Kaskelen

14

Kyzylorda

15

Uralsk

16

Ust-Kamenogorsk

17

Petropavl

18

Taldykorgan

19

Taraz

Head office

SME Small

Credit Committee

200 000 000

Head office

SME

Credit Committee

2

0

00

000 000

SME CREDIT COMMITTEES LIMITS

34

1Q`2017 Results

Slide35

Head office

Retail

Credit Committee200 000 000

№BranchesBranch Retail Small Credit Committees

Branch Retail Credit Committees

1

Almaty

25 000 000

50 000 000

2

Astana

3

Atyrau

4

Aktau

5

Karaganda

10 000 000

25 000 000

6

Pavlodar

7

Shymkent

8

Aktobe

9

Kokshetau

10

Kostanai

11

Semey

12

Ekibastuz

13

Kaskelen

14

Kyzylorda

15

Uralsk

16

Ust-Kamenogorsk

17

Petropavl

18

Taldykorgan

19

Taraz

Head office

Credit Committee

From 200 000 000

RETAIL CREDIT COMMITTEES LIMITS

35

1Q`2017 Results

Slide36

Data

Loan amount

Principal debt Overdue 90 +

Overdue 90+/ loan amountOverdue 90 days/Principal debt01.04.2017

109 985

65 112

2 998

2,7%

4,6%

01.07.2016

80 162

60 733

1 821

2,3%

3,0%

Overdue

90+,

in

mln

KZT

Scoring

m

ln

KZT

Loans disbursed by scoring

Overdue 90+ equals 2,7% in unsecured loans portfolio disbursed by Scoring

Overdue

90+

before scoring

(2012-

sept

2014

y)

equal to

51,

2

billion

tg

and forming

96%

of provision

As generations have lived 2 years (from September 2014) 90+ does not exceed 9% - within the limits set of target risk

Forte Express

(

total

:

by scoring and credit committee

)

FORTEEXPRESS QUALITY POST SCORING CARD LAUNCHING

36

Period

Loan amount

Principal

dept

Overdue, 90+

Overdue 90+

Overdue 90+/Principal dept

/Loan amount

Before scoring

 

 

 

 

 

2012

106 613

17 532

16 730

15,7%

95,4%

2013

99 120

34 218

29 151

29,4%

85,2%

2014

34 241

11 574

5 827

17,0%

50,3%

2014 I-qr

10 915

4 400

3 088

28,3%

70,2%

2014 II-qr

8 695

2 787

1 277

14,7%

45,8%

2014 III-qr

8 220

2 582

934

11,4%

36,2%

After scoring

 

 

 

 

 

2014 IV-qr

6 410

1 806

528

8,2%

29,2%

2015

46 598

21 348

1 795

3,9%

8,4%

2015 I-qr

6 915

2 507

403

5,8%

16,1%

2015 II-qr

14 414

6 275

647

4,5%

10,3%

2015 III-qr

14 864

7 112

448

3,0%

6,3%

2015 IV-qr

10 404

5 455

296

2,8%

5,4%

2016

48 736

34 125

675

1,4%

2,0%

2017

8 241

7 833

00,0%0,0%Total343 548126 63054 17815,8%42,8%1Q`2017 Results

Slide37

90+ after 30 months

:

Jan. 2014 – Soft» Underwriting, NPL=31,4%May 2014 – «Strong» Underwriting, NPL=13,3%

Sep. 2014 –Scoring, NPL=6,9%

After implementation of the scoring overdue decreased 3,5 times

Vintage

ForteExpress

Jan’14-Sept’2016

Portfolio quality in

31

months after disbursement

FORTEEXPRESS

:

Default Curve before and after implementation of the scoring

VINTAGE ANALYSIS 90+: FORTEEXPRESS 2014-2016

37

1Q`2017 Results

Slide38

QUALITY OF “FORTEEXPRESS” AFTER DEVALUATION

38

1Q`2017 Results

Slide39

Loan date

Loan amount (mln.) CC

Delay in payment over 90 days (mln) CC %Loan amount (mln.) Sc

Delay in payment over 90 days (mln) Sc %

Scoring/All Proportion

January-14

403 KZT

51,3%

3 040 KZT

30,8%

88,3%

February-14

353 KZT

47,4%

3 199 KZT

29,1%

90,1%

March-14

321 KZT

39,0%

2 472 KZT

24,3%

88,5%

April-14

166 KZT

24,7%

1 800 KZT

20,2%

91,5%

May-14

174 KZT

26,6%

1 703 KZT

15,6%

90,8%

June-14

206 KZT

23,7%

2 061 KZT

14,2%

90,9%

July-14

192 KZT

16,6%

2 381 KZT

14,1%

92,5%

August-14

165 KZT

17,5%

2 194 KZT

12,9%

93,0%

September-14

146 KZT

7,5%

1 882 KZT

7,0%

92,8%

October-14

146 KZT

11,7%

1 784 KZT

7,9%

92,4%

November-14

139 KZT

8,3%

1 371 KZT

7,6%

90,8%

December-14

168 KZT

11,5%

2 137 KZT

6,6%

92,7%

January-15

7 KZT

0,0%

366 KZT

5,7%

98,1%

February-15

264 KZT

4,0%

2 725 KZT

5,3%

91,2%

March-15

391 KZT

7,2%

3 162 KZT

6,3%

89,0%

April-15

766 KZT

6,3%

4 754 KZT

4,5%

86,1%

May-15

437 KZT

3,8%

3 773 KZT

4,4%

89,6%

June-15

448 KZT

2,1%

4 237 KZT

4,5%

90,4%

July-15

636 KZT

2,9%

4 825 KZT

3,3%

88,3%

August-15

656 KZT

2,9%

4 312 KZT

3,0%

86,8%

September-15

718 KZT

5,0%

3 714 KZT

2,3%

83,8%

October-15

577 KZT

4,6%

3 317 KZT

2,6%

85,2%

November-15

115 KZT

3,6%

3 484 KZT

2,9%

96,8%

December-15

495 KZT

2,5%

2 416 KZT

2,6%

83,0%

January-16

30 KZT

2,9%

2 149 KZT

2,2%

98,6%

February-16

38 KZT

0,0% 2 907 KZT 1,7%98,7%March-16 43 KZT 0,0% 3 635 KZT 2,1%98,8%April-16 148 KZT 1,3% 5 194 KZT 1,6%97,2%May-16 96 KZT 3,7% 6 298 KZT 1,8%98,5%June-16 146 KZT 4,2% 6 470 KZT 1,4%97,8%July-16 48 KZT 0,0% 4 467 KZT 1,2%98,9%August-16 73 KZT 1,1% 4 498 KZT 1,0%98,4%September-16 109 KZT 0,0% 4 251 KZT 0,6%97,5%October-16 74 KZT 0,0% 3 294 KZT 0,9%97,8%November-16 64 KZT 0,0% 2 772 KZT 1,7%97,8%Loan portfolio placed/approved by Credit Committee in 2016 is less than 1,9% Improvement in quality of loans approved by CC after implementation of Scoring and centralization of underwriting in Head Office in 2015.90+ Scoring90+ Credit ComitteeQUALITY OF “FORTEEXPRESS” GENERATIONS DISBURSED BY CREDIT COMMITTEES391Q`2017 Results

Slide40

Month of issue

The Number of loans

Loan amount (mln.)P1D

P2DP3D

Fdef

Loss (Straight Rollers)

N

%

N

%

N

%

N

%

N

%

Sep-15

4 072

4 433 KZT

104

2,2%

11

0,2%

9

0,1%

8

0,1%

8

0,1%

Oct-15

3 776

3 894 KZT

162

4,5%

28

0,7%

20

0,6%

19

0,6%

14

0,3%

Nov-15

3 531

3 599 KZT

88

2,1%

10

0,2%

7

0,1%

4

0,1%

3

0,1%

Dec-15

3 051

2 911 KZT

123

3,2%

22

0,4%

15

0,3%

14

0,3%

11

0,3%

Jan-16

2 214

2 178 KZT

66

2,4%

14

0,4%

6

0,2%

4

0,2%

3

0,1%

Feb-16

2 832

2 945 KZT

98

2,9%

16

0,3%

10

0,2%

7

0,2%

4

0,2%

Mar-16

3 467

3 678 KZT

146

3,6%

20

0,4%

15

0,4%

10

0,2%

9

0,2%

Apr-16

4 748

5 342 KZT

212

3,6%

22

0,3%

17

0,2%

15

0,2%

11

0,2%

May-16

5 632

6 395 KZT

199

3,3%

34

0,5%

26

0,3%

25

0,3%

21

0,3%

Jun-16

5 869

6 616 KZT

102

1,3%

37

0,5%

27

0,4%

23

0,3%

17

0,2%

Jul-16

4 709

4 515 KZT

171

2,5%

42

0,3%

34

0,2%

32

0,2%

270,1%Aug-165 087 4 571 KZT 2784,9%280,3%180,2%150,2%80,1%Sep-164 522 4 360 KZT 1051,7%160,3%150,2%110,1%  Oct-163 733 3 368 KZT 791,9%160,7%130,6%80,4%  Nov-163 086 2 836 KZT 723,4%312,0%120,9%110,9%  Dec-162 130 1 933 KZT 431,7%90,4%40,1%    Jan-172 134 2 161 KZT 572,4%160,6%      Feb-172 522 2 752 KZT 872,9%        Mar-173 106 3 328 KZT           Degradation of FPD index during the period December 2014 – april 2015 happened because of disconnection of Soft Collection instruments in february.Clients who didn’t pay for loan in first month, become normal in P2D report (Default of second payment).Limit SPD<3% - executed-Report shows indicators, which connected with fraud actions - % of loan sum, which has: - P1D – First payment default P2D - Default of first two payments P3D - Default of first three paymentsFRAUD: P1D, P2D, P3D, FDEF, LOSS(STRAIGHT ROLLERS)401Q`2017 Results

Slide41

Overdue of collateralized/secured loans disbursed in 2014-2017 is 1,8%

Urgent Needs

А

<1%В

>=1<3%

С

>=3%<5%

D

>=5%

Mortgage

BRANCHES RATING ACCORDING TO VINTAGE ANALYSIS OF COLLATERALISED LOANS

DISBURSED IN 2014-2017

41

1Q`2017 Results

Slide42

KZT

mln

  NPL

01.01.2017

01.04.2017

Outstanding portfolio

Provisions

Outstanding portfolio

Provisions

standard

stressful

heritage

standard

stressful

heritage

standard

stressful

heritage

standard

stressful

heritage

CORP

-

3 43

4

25

045

-

-

917

-

1

4

623

-

2 532

21 854

-

- 686

- 13 730

SME

778

5 043

23 116

- 28

- 429

- 5 103

614

5

704

22 105

- 75

- 274

- 5 115

Retail

-

18 190

35 115

-

- 6 958

- 6 182

11

20 175

35 480

- 0,08

- 7 582

- 6 761

OUSA

-

-

71 455

-

-

-

10 149

-

-

67 028

-

-

- 10 122

Total

778

26 667

154 731

- 28

- 8 304

- 36 057

625

28

411

146 467

- 75,08

- 8 542

- 35 728

All Receivables

-

-

16 025

-

-

- 6 436

-

-

14 799

-

-

- 6 029

*Without receivables & OUSA

KZT,

mln

42

NPLs BY SEGMENTS

1Q`2017 Results

Slide43

43

47%

Outstanding portfoliobefore 2014 01.

04.2017Loan Book

NPL

standard

97 670

309

stressful

30 029

18 125

heritage

104 150

79 425

Total

231 849

97 859

Outstanding portfolio

after

2014

0

1.

04

.2017

Loan Book

NPL

standard

348 909

305

stressful

10 816

9 624

Total

359 725

9 930

*Loan book without receivables & OUSA

Total NPL in

«

new portfolio

»

- KZT 9,9

bn

or 2,8%

NPL of standard portfolio + all stressful = KZT 11,1

bn

or 3,2%

LOAN BOOK QUALITY, BEFORE AND AFTER 01.04.2014,

in

mln

KZT

1Q`2017 Results

According to management accounts

Slide44

 

01.01.2017

01.04.2017local currency *Other CCY **Total

local currency *Other CCY **TotalRestructured loans

44

937

25

277

70 215

51 835

20 113

71 948

Overdue

30-90

days

6

142

45

8

6

600

16 889

539

17 428

Overdue 90+

90

25

5

98

125

188

3

80

96 833

84 510

181 343

Written off + sold during

period*

12

57

7

11

123

23

700

1 473

1 018

2 491

TOTAL IFRS provision**

-

27 273

-

28 66

1

-

55 934

-

2

9

566

- 27 684

- 57 250

* For the period

**Incl. OUSA and receivables

44

AGGREGATED LOAN PORTFOLIO STATISTICS, KZT,

mln

1Q`2017 Results

Slide45

Portfolio

NPL (

Gross loans)NPL ProvisionsCollateral under NPL (discounted)Collateral under NPL (discounted, equal and not more than

balance outstanding debt)Unprovisioned NPLComments12

3

4

5=1-2-4

Standar

d

/

Stressful

25

645

5 590

41

205

17

437

2 618

600+

3

512

291

5

006

3

245

- 24

600-

5

102

471

7

623

4

586

45

Retail

17

031

4 828

28

576

9

606

2

597

 

Recovery

rate

25%

Heritage

179

111

35 478

315

707

137

376

3 724

600+

34

547

13 287

24

846

20

939

321

600-

20

817

2 157

35

646

18

021

639

Allowances according provisioning methodology

(

lag between calculation and settlement dates of provisions to the banking system

(

25-31

of month

)

approx

3

%

from

NPL

Retail

43

083

5 968

158 765

34

351

2 764

 

Recovery

rate

25%

OUSA

73

561

6 963

114

075

64

065

-

Recievables

7

103

7 103

-

-

-

Total

204

756

41 068

356

912

154

813

6 342

45

NPLs VS.

COLLATERAL as

of

01.01.2016, in

mln

KZT

1Q`2017 Results

Slide46

Portfolio

NPL (

Gross loans)NPL ProvisionsCollateral under NPL (discounted)Collateral under NPL (discounted, equal and not more than

balance outstanding debt)Unprovisioned NPLComments12

3

4

5=1-2-4

Standar

d

/

Stressful

27 445

8 332

40 266

17 439

1 674

600+

3 434

917

2 517

2 517

-

600-

5 821

457

7 968

5 219

145

Retail

18 190

6

958

29 781

9 703

1 529

 

Recovery

rate

25%

Heritage

160 935

42 492

256 829

118 314

129

600+

25 045

14 623

11 120

10 424

-2

600-

23 116

5 103

35 559

17 946

67

Retail

35 126

6 424

111 912

28 638

64

 

Recovery

rate

25%

OUSA

71 455

10 149

98 238

61 306

-

Recievables

6 193

6 193

-

-

-

Total

188 380

50 824

297 095

135 753

1 803

NPLs VS.

COLLATERAL

as of

01.01.2017, in

mln

KZT

46

1Q`2017 Results

Slide47

Portfolio

NPL (

Gross loans)NPL ProvisionsCollateral under NPL (discounted)Collateral under NPL (discounted, equal and not more than

balance outstanding debt)Unprovisioned NPLComments12

3

4

5=1-2-4

Standar

d

/

Stressful

29 036

8 617

41 901

18 754

1 665

600+

2 532

686

1 846

1 846

-

600-

6 318

349

9 088

5 966

3

Retail

20 186

7 582

30 967

10 942

1 662

 

Recovery

rate

25%

Heritage

152 307

41 757

252 720

110 605

- 55

600+

21 854

13 730

8 404

8 126

- 11

600-

22 105

5 115

43 714

17 003

- 13

Retail

35 291

6 761

105 794

28 570

- 40

 

Recovery

rate

25%

OUSA

67 028

10 122

94 808

56 906

-

Recievables

6 029

6 029

-

-

-

Total

181 343

50 374

294 621

129 359

1 610

NPLs VS.

COLLATERAL

as of

01.04.2017, in

mln

KZT

47

1Q`2017 Results

Slide48

Currency name

Actual data

as of 01.01.2017 Actual data

as of 01.04.2017 Fixed Limit in % to the Bank loan portfolio

Pre-limit

approach in % to the Bank loan portfolio

Loan portfolio, in KZT millions

Share in % terms

to the Bank loan portfolio

Loan portfolio, in KZT millions

Share in % terms

to the Bank loan portfolio

1.

KZT

469 301

79%

473 439

80%

not

more than

10

0 in total

90

2. USD

,

EURO

,

GBP

,

RUR

122 434

21%

119 201

20%

not

more than 50 in total

45

3. Other currencies

0

0%

0

0%

not

more than

10

9

Loan portfolio TOTAL

591

736

 

592 641

 

 

Х

Name

Actual level

as

of

01.01.2017

Actual level

as

of

01.0

4

.2017

Required level

(by National Bank )

Pre-limit approach

Equity

capital (EC)

,

in KZT

thousands

193 478

191 588

 

Coefficient of the maximum level of exposure per borrower, not related to the bank

with special relationships

11,05%

13,2%

not more than

25%

of the EC

22,5%

Coefficient of the maximum level of exposure per borrower

(

group of borrowers),

related to the bank with special relationships

2,6%

2,6%

not more

than

10%

of the EC

9%

Coefficient of the sum of risks of borrowers,

related to the bank with special relationships

3,4%

3,4%

not more

than the amount of the EC

90%

Coefficient

of the maximum level of unsecured loan

0%

0%

not more

than

10%

of the EC

9%

Coefficient of the sum total of risks per borrowers, the amount of each of which exceeds 10% of the EC

21,5

%

25,8%

not more

than

500%

of the EC

450%

Loan limits per borrower or per group of affiliated borrowers, related and not related to the Bank with special relationships in any kind of obligation due to the Bank

LOAN CURRENCY LIMITS

48

1Q`2017 Results

According to management accounts

Slide49

№

Sector of the economy

Actual data

as of

01.01.2017

Actual data

as

of

01.0

4

.2017

Prescribed limit in %

to the Bank loan portfolio

Pre-limit approach

in % to the Bank loan portfolio

Loan portfolio , in KZT

mln

Share

in %

to the Bank loan portfolio

Loan portfolio, in KZT

mln

Share

in % terms

to the Bank loan portfolio

1

Extraction and processing of mineral resources

,

metal and chemical industry

27 103

10

,9

41 324

16,9%

20%

18%

2

Manufacturing/light industry

18 112

7,3

7 784

3,2%

15%

13,5%

3

Medicine, science and education

6 881

2,8

7 141

2,9%

10%

9,0%

4

Oil and gas

3 553

1,4

559

0,2%

10%

9,0%

5

Real estate

20 783

8

24 001

9,8%

12%

10,8%

6

Production and realization of cars, machines and equipment

6 571

2,6

5 758

2,3%

7%

6,3%

7

Agriculture

4 706

1,

9

4 191

1,7%

10%

9,0%

8

Civil construction

17 571

7,1

13 767

5,6%

5%

4,5%

9

Industrial construction

13 756

5,5

17 505

7,1%

8%

7,2%

10

Telecommunication and mass-media

1 086

0,4

1 136

0,5%

10%

9,0%

11

FMCG

65 691

26,4

69 045

28,2%

30%

27,0%

12

Transport and logistic services

16 923

6,8

14 569

5,9%

8%

7,2%

13

Services

37 368

15,0

34 778

14,2%

25%

22,5%

14

Financial services

8 658

3,5

3 451

1,4%

5%

4,5%

15

Other

15

0

17

0,0%

1%

0,9%

TOTAL

248 779

100

245 026100%LOAN LIMITS BY SECTORS 491Q`2017 ResultsAccording to management accounts

Slide50

OVERVIEW AND STRATEGY

FINANCIAL PERFORMANCE

RISK MANAGEMENTFORTEBANK HERITAGE50

Slide51

KZT 799

bn

Problem loans

recovered*

KZT 96 bn

Recovered by

Cash*

Off-balance

/

OUSA

/

Balance

NPL

291

employees

Staff of Bad

Bank*

-

50

%

/

28

8

employees

FORTEBANK HERITAGE: SEPARATE BUSINESS LINE FOCUSED ON RECOVERIES AS OF APRIL 01, 2017

51

* Starting from/compared to 01/01/2014

667/ 56

/

76

7,4

%

KZ

27% IFRS

1Q`2017 Results

Bad loan portfolio

KZT 162 bn

Slide52

Problem loans

+

41%

58

232

Off-Balance

Balance

568

*

640

*

Incl.

devaluation

-

51

892

*

8

41*

KZT, bn

*

Problem portfolio includes NPLs, restructured loans without overdue, account receivables and guarantees (excluding NPLs)

PROBLEM PORTFOLIO DYNAMICS 2014-2017

52

799*

-

42

1Q`2017 Results

Slide53

RETAIL PORTFOLIO STRUCTURE

91

%SEGMENTATION BY CURRENCYPORTFOLIO SEGMENTATION

79968%32%72%

28%

799

KZT228Currency

572

PORTFOLIO STRUCTURE

56

%

44

%

799

2

53

9

0

%

4

%

6

%

KZT, bn

KZT, bn

KZT, bn

KZT, bn

PROBLEM PORTFOLIO STRUCTURE AS OF 1 APRIL 2017

53

1Q`2017 Results

Slide54

Pre-trial recovery

196

(

52 269)

Legal

64

6

(8 931)

7

7

%

2

3

%

Criminal case

-3

%

Bankruptcy

+

14

%

Enforcement

proceeding

-12

%

Worked out by Collector Companies

-48

%

Pre-trial

+1

%

Restructuring

+

5

%

Executory process -8

%

Pre-trial recovery

184

(52 134)

Legal

6

15

(9 498)

7

7

%

2

3

%

01.01.201

7

01.

04

.201

7

∆

KZT, bn

PROBLEM PORTFOLIO MANAGEMENT AS OF 1 APRIL 2017

54

144

1Q`2017 Results

Slide55

REPAYMENT

201

4-2017 NPL (KAZ) 2014-20172015

2014

42,8

50,9

60%

40%

68%

32%

Taking

Cash

55,1

2016

5

4

%

4

6

%

REPAYMENT

201

4

-201

7

Total repayment

1

62,3

KZT, bn

KZT, bn

KZT, bn

MAX

REPAYMENT AND DECREASE OF NPL 2014-2017

55

13,6

49

%

51

%

1Q`2017 Results

Slide56

LEGAL ENTITIES

UNSECURED INDIVIDUALS

Sold by Principal

Sold by PrincipalCostCost

KZT, bn

KZT, bn

Cash from sale

Cash from sale

PARTICIPATION IN STATE PROGRAMS

*

Approved

,

but not refunded loans

3,9

under consideration

KZT, bn

FPL’s dep.

Refunded

Approved*

HERITAGE PORTFOLIO SALE AND PARTICIPATION IN STATE PROGRAMS 2014-2017

56

1Q`2017 Results

Slide57

2016

BAD BANK GOALS FOR

2017

45

Holding NPL on the regulatory level

млрд

Problem loans recovery

2017

45

bn

10%

Head

Branches

57

1Q`2017 Results

Slide58

CONTACT DETAILS:

International Relations

tel: +7 (7172) 59-99-99 (ext.10249, 10248) e-mail: IR@fortebank.com58