Kazakh Bank CenterCredit aims to boost 2013 profit
Feb 21. Reuters. ALMATY
By Mariya Gordeyeva
* CenterCredit plans to expand 2013 loan portfolio by 8 pct
* Won’t pay out dividend, to use cash to build up capital
Bank CenterCredit, Kazakhstan’s fourth-largest lender, aims to almost triple its net profit and boost its net interest margin this year, Chief Executive Vladislav Lee told Reuters.
The bank, part-owned by South Korea’s Kookmin Bank, earned a net profit of 350 million tenge ($2.33 million) last year and plans to boost that to around 1 billion tenge in 2013, Lee said in an interview that took place on Wednesday.
Lee said the bank’s results were modest last year, because in that period CenterCredit focused primarily on “cleaning up” its loan portfolio.
“We had to create additional provisions, but even despite this our loan portfoilo grew by 6.5 percent (in 2012),” he said.
“In 2013 we expect our assets to grow by 8 percent and our loan portfolio to increase by 8 percent.”
“Large-scale and laborious work is underway to boost our efficiency. As a result, all this will have an impact on net interest margin,” Lee said. “Our target is to achieve a medium-term net interest margin of 2.5 to 3.0 percent in 2015.”
Last year its net interest margin stood at 1.8 percent.
In May 2012 CenterCredit partially repurchased its 2014 Eurobond, buying back $144.679 million of the $400 million issue, and Lee said the bank had no plans to redeem the outstanding debt early.
“We have no other external debt,” he said. “We do not plan and will not resort to external borrowing not only this year, but probably next year as well.”
Kazakhstan’s banking sector, growing fast on international borrowing and lending to real estate projects, was among the first and hardest hit by the global financial crisis, leading several Kazakh banks, but not CenterCredit, to default in 2009.
Lee said CenterCredit was now focused on the internal market of Kazakhstan, Central Asia’s largest economy.
CenterCredit has not been paying out dividends for the past 10 years, and Lee said this would probably continue this year. He said the cash would be used to build up the bank’s capital.
Kookmin Bank holds a 41.93 percent stake in the bank and Kazakh businessman Bakhtybek Baiseitov has 24.84 percent. The International Finance Corporation owns 10 percent and Lee has less than 5 percent. ($1 = 150.4500 Kazakhstan tenges)