ATFBank JSC 2015 Performance Consolidated

Review

Сontents• General information on ATFBank

• ATFBank – financial review

• Appendices

2

Changes in main indicators of ATFBank JSC during 2015

2014 2015

Net income, KZT bn

Net interest income, KZT bn

Net commission income, KZT bn

Cost to income, %

ROE, %

+110,5%

+4,2 р.р.

+21,4%

+5,3%

-19,2 р.р.

Source: IFRS consolidated financial statements of the Bank

3,5

7,3

4,6% 8,8%

22,8

27,6

8,0

54,2%

35,0%

7,6

3

+2,0 р.р.

+73,5%

+21,6%

+27,9%

-21,0 р.р.

Changes in main indicators of ATFBank JSC during 2015

2014 2015

Assets, KZT bn

Share(1) of loans 90+overdue, %

Regulatory capital(2), KZT bn

Total capital adequacy ratio(2), %

Note: (1) based on NB RK data; (2) Calculations on the basis of Basel II requirements.Source: IFRS consolidated financial statements of the Bank

Net loans, KZT bn

984

1 259

650790

31,3%

10,3%

96

166

12,7% 14,7%

4

About BankKey moments

5

ShareholderKNG Finance LLP (99,8%)

Market positionATFBank is among top 10 largest banks of Kazakhstan

by assets, loans and deposits

• 6th place by assets with 5.4% share

• Key participant of state-sponsored programs extended

by Damu Entrepreneurship Development Fund

(5th by activity in Business Road Map-2020)

History • Established in 1995

• In 2007 ATFBank was purchased

by Bank Austria Creditanstalt AG / UniCredit

• In 2013 ATFBank was purchased

by KNG Finance LLP

Clients • 1,2 mn of individuals;

• 55,0 thousand SME clients

• 2,3 thousand of corporate clients

Branch networkKazakhstan: 17 Branches, 71 points of sales,

662 ATMs, 2271 employees

Kyrgyzstan: 18 Branches, 50 points of sales,

93 ATMs, 915 employees

Subsidiaries• Subsidiary Optima Bank Kyrgyzstan (stake: 97,1%),

which is top leader by assets, credit portfolio

and deposits.

• Subsidiary Tobet Group (stake: 100%) rendering

encashment services

Source: data of the Bank, rating agency, NB RK, Damu

About Bank

Sector indicators Rating

B- (long-term IDR in foreign currency) FitchRatings (confirmed on January 20, 2016)

Assets:

KZT 23,706bn

Loans:

KZT 15 620bn

Deposits:

KZT 15 721 bn

Total assets

Total loans

Loans to legal entities

Loans to individuals

Total deposits

Deposits of legal entities

Deposits of individuals

Income

#6

#7

#7

#10

#6

#5

#7

#8

Market share as of 01.03.2016

5,4%

4,4%

6,2%

3,8%

5,8%

6,1%

5,4%

3,3%

Source: data of the Bank, rating agency, NB RK. 6

ATFBank: Bank Group represented in three segments

Source: data of the Bank

7

ATFBank JSCMain services

Corporate Business

Loans and other credit instruments

Operational service

Payroll projectsCurrent accounts

DepositsFX transactions

Documentary transactions

Consumer loans and mortgages

Current accounts

Deposits

Safe storage

Credit and debit cards

FX transactions

Payments and transfers

Internet-Banking

Loans and other credit

instruments

Current accounts

Deposits

Operational service

Payroll projects

Exchange operations

Documentary operations

Private Banking

Custodial services

Treasury

Cash collection

Optima Bank (Kyrgyzstan)

Retail Business

SME Other segments

Loans by segments

2015201420132012

59% 24%

17%

61% 23%

16%

63% 20%

17%

69% 15%

16%

RetailCorporate SME

8

ATFBank: Bank Group represented in three segments

Source: data of the Bank

ATFBank consistently implements the concept of business social responsibility which is based on care, eternal human values, responsible future outlook.

In 2015 held its regular policy of supporting disadvantaged social groups, encouraging healthy and sports life, honoring of World War II veterans. In particular, the Bank has held the following events:

Support of non-governmental organization “ARDI – association of handicapped children’s parents”.

Support of IV Almaty Marathon (2014-2015).

Support of Ayala Fund’s projects: “Live” and “Children playgrounds”.

Arrangement of free-of-charge metro pass in Almaty on December 16, (2014-2015)

Bank’s achievements

Social projects realized by ATFBank

Best debut in guarantee program: in February 2015 ATFBank JSC was awarded by Damu Fund as Best debut in guarantee program. This was Damu Fund’s high appreciation of the Bank’s 2014 performance for guarantees.

Appreciation for business support: in July 2015 Almaty chamber of entrepreneurs issued ATFBank JSC a letter of appreciation for support of entrepreneurs whose assets were damaged in fire in Adem-1 Trade House in part of granting beneficial conditions for loan maintenance.

Successful implementation of VbV Dynamic Authentication project: in December 2015 ATFBank JSC was awarded by VISA for successful implementation of VbV Dynamic Authentication. This is the project of secure payment in Internet via 3D-Secure technology with dynamic (one-off) password (OTP SMS).

Letter of commendation by Ayala Fund: In December 2015 the Bank received Letter of commendation by Ayala Fund for “Breathe in life” project. During first 3 months after launch of project for realization of charity needs of VIP customers of ATFBank, KZT 3,3 mn has been collected which was used for purchase of medical equipment for Almaty regional children clinical hospital (Ili district, Otegen Batyr PGT).

9

Source: Bank data

10

Source: Bank data

Strategic lines of activity of ATFBank JSC

BECOME A LEADER

Aimedincrease+ profitability

growth

Increase of risk

management efficiency

Improvement of work with

overdue debts

Improvement of processes

Development of customer attraction

and cross-sales

potential

Development of the network

of outlets and

functionality of remote channels

Improvement of IT system

Implemented initiatives towards the execution of the strategy

Aimed growth + profitability growth

• Simplifying the procedures for the adoption of decisions on granting loans

• Diversification of product range including implementation of new package offers • Diversification of consulting services to Private Banking, including investments in the funding market

• Active participation in implementation of state-sponsored programs

• Implementation and development of ATFOnline Internet Banking for legal entities

1

11

Source: Bank data

New credit risks appraisal models for all business segments have been developed and implemented.

Credit pricing models with regard to risk for all business segmentshave been developed and implemented.

Process of approving the limits on revolving credit cards based on screening has been automated.

Discount policy in sale of collateral with forgiving remaining debt. The Bank is the leader on implementation of state-sponsored program of mortgage refinancing. Additional recovery tool has been implemented: assignment of claim rights to the third persons.

“Light” program for restructuring of loans with overdue debt up to 60 days. Automatic SMS notification of clients

Implemented initiatives towards the execution of the strategy

2

3

Increase of risk management effectiveness

Improvement of work with overdue debt

12

Source: Bank data

The double acceleration of making lending decisions in SME segment.

Simplification of decision-making procedures for issuing tender bank guarantees for SMEs.

Launch of new procedure regulating segmentation conditions and service of Private Banking clients.

Launch of new execution of credit cards American Express (London)Reduced time for receipt of the decision and execution of unsecured retail loan from 1 week to 1 day.

Implementation of functional (E PIN) on paperless delivery of Pin-code to the customer and establishment of own PIN. There was activated the procedure on SMS-notification of customers on delivery of card to Bank outlet.

3D-Secure Dinamyc password Project with delivery of onetime password via SMSwhen making online payments.

Implemented initiatives towards the execution of the strategy4

5

Improvement of processes

Development of the capacity to attract customers and cross sales

Introduction of new SME credit and operational rates, special offers and complex packages for state-owned entities, promo actions on products and services of the Bank for SMEs. Advancement of Private Banking services through participation at Private Banking Club (seminars and business meetingsTFH, charitable golf-tournament of Ayala Fund, New Year party by World Class, LUXEXPO, Birthday of Graziella).

13

Source: Bank data

In July 2015 the Bank opened 2 new Banking services centers in Almaty.

Implementation of new service model of transaction banking in the branches.

New Internet-banking for individuals АТF24 with mobile application: simplified registration, possibility to manage all accounts, enhanced functional on payments and transfers.

Payment self-service terminals were activated.

Outlets have been transformed from RC to BSC throughout the regional network.

Implemented initiatives towards the execution of the strategy 6

Development of the network of outlets and functionality of remote channels

14

Source: Bank data

IT system for soft collection was created.

IT tools for risk assessment in SME and Corporate Segment.

Standard – implementation of industrial ESB data tire (two-times growth of service upload rate).

Global (RK) modernization and extension of branch network communication channels.

Modernization of server equipment and infrastructure.

7Improvement of IT system

• General information on ATFBank

• ATFBank – financial review

• Appendices

15

Dynamics of key indicators

Assets and loan portfolio

KZT bnKZT bn

KZT bn

Capital and RoAE

Loans to customers (net) by segments

ATF Bank demonstrates the balanced growth of its assets and the loan portfolio, which is supported by the growth of the balanced capital and increased ability of the Bank to generate revenue.

912 984 1 259

558 650

790

2013 2014 2015 2015

2015

289 347

518

153 161 130116 142 142

92% 92%

87%

2013 2014

74

77

882,4% 4,6%

8,8%

2013 2014

Source: consolidated IFRS financial statements of the Bank

6% 8% 16% 28% 22%-5%

16

Corporate loans SME loansRetail loans Loans (net) / depositsAssets Loans (net) Assets, % YTD Loans (net), % YTD

Capital RoAE

Quality of loan portfolio

Performing loan portfolio(1)

Non-performing loan portfolio(2)

The loan portfolio of ATFBank faced significant positive changes that are expressed in a significant increase in performing portfolio (mainly due to corporate and retail loans) and reduction of non-performing portfolio.

During 2015 ATFBank continued to work activelywith non-performing loans, as a result of which the total amount of repayments amounted to KZT 24,9 bn. Projects for KZT 2.2 bn. have been rehabilitated and transferred to the business units.

Owing to the work carried out since 2014, the portfolio of loans overdue 90+decreased rapidly, as a result of which their share(3) in the total loan portfolio decreased to 10.3% as of December 31, 2015 from 42.3% yoy.

2015

2015

Note: (1) Gross loans (principal) net of loans overdue more than 90 days, (2) Loans overdue 90+ days, (3) NB RK data.Source: consolidated IFRS financial statements of the Bank

273 346 530

109 108 9693 114 117 475 568 744

2013 2014

239 182

126

87

60

43

42

32

31

367

273

200

2013 2014

KZT bn

KZT bn

17

Corporate loans Retail loansSME loans

Corporate loansRetail loans

SME loans

Commitments and contributions

Structure of commitments

Structure of customers’ funds

The dynamics of customer funds

ATF Bank is seeking to diversify its commitments, in order to issue loans to its customers on the basis of stable funding base. For said purpose, in June-August 2015 ATFBank placed its bonds with a total nominal value of KZT 118.4 bn., including:

• bonds in KZT for KZT 36.9 bn for the period of 8 years;• bonds in KZT for KZT 19.7 bn for the period of 10 years;• subordinated bonds in KZT for KZT 61.8 bn for the period of 10 years.

Placement of bonds certifies high investment attractiveness of ATFBank which helped to improve funding stability and growthof regulatory capital.

Source: consolidated IFRS financial statements of the Bank

20152015

2015

361 441 501

243 264 407

2013 2014 12,7% 13,3% 1,0%

72,1% 77,8% 77,5%

11,1% 6,6% 13,1% 3,7% 2,0% 8,1%

838 907 1 172

0

200

400

600

800

1 000

2013 2014

27% 24% 25% 4% 4% 3%

32% 39% 30%

36% 33% 411% 604 705

908

2013 2014

24% 8% 22% 8% 13% 54%

KZT bn

KZT bnKZT bn/%

18

Funds of financial institutions Funds of customersRaised funds Subordinated borrowings

Total liabilitiesOther liabilities

Current accounts of legal entities Current accounts of individualsTerm deposits of individualsTotal funds of customers

Term deposits of legal entities

Funds of legal entitiesFunds of legal entities, % YTD

Funds of individualsFunds of individuals, % YTD

21,8

Structure of financial performance

Dynamics of relative indicators

Dynamics of operational income by segments

Analysis of financial performance

During 2015 ATFBank has 2,1 times increased net income owing to preserved growth of operational income and control of operational expenses. ATFBank has considerably improved key indicators of financial efficiency:

• Stable growth of net interest margin from 2.5% in 2013 to 2.8% in 2015.

• Decrease of Cost to Income from 75% to 35% during relevant periods.

Growth of income despite considerable impairment lossesstands for increased capability of the Bank to absorb potential losses as well as growth of potential to increase capitalization through income accumulation in future.

Source: consolidated IFRS financial statements of the Bank

22,8

-10,4

7,6

1,7

0,1

-18,3

3,5

27,6

-23,6

8,0

18,0

-4,1

-18,7

7,3

2014 2015

2,5%

2,8% 2,8%

2013 2014 2015

75%

35%

54%

4,1 9,7 16,05,5

7,7 10,1

6,3

5,6 5,49,0

10,9

2013 2014 2015

KZT bn KZT bn

%

+35%

+58%

19

Net interest income

Impairment losses

Net commission income

Net income on operations with foreign currency and derivatives

Other income/expenses

Operational expenses

Net profit

Net interest margin

Cost to income

Corporate segmentSME segment

Retail segmentOther segments

Regulatory capital and adequacy ratios(1)

Stock of capital adequacy(1)

Liquid assets(2)

Liquidity and capital adequacy

High level of liquid assets in aggregate assets certify that ATFBank has enough liquidity to perform its current liabilities and financial support of credit operations.

The Bank has a high level of capital adequacy and significant volumes of capital stock and opportunities for further expansion of its assets.

Placement of subordinated bonds has significantly strengthened positions of ATFBank on regulatory capital adequacy.

206 185336

558 650 790

148150

133912 984 1 259

2013 2014 2015

41 3675

511444

941

2013 2014 2015

75,9 77,4 88,4

16,1 18,2

77,4

14,4%

12,7%

14,7%

7,8%

2013 2014 2015

11,9%

10,3%

KZT bn

KZT bn

(1) Calculations are based on Basel II requirements.(2) Liquid assets include cash funds and their equivalents, financial instruments assessed at fair value through profit or loss (w/o account of derivatives), and financial assets held for sale

Source: consolidated IFRS financial statements of the Bank.

23% 27%

19%

200

400

600

800

1000

0

1 200

1 400

5%

10%

15%

20%

25%

0%

30%

20

Other assets

Loans netLiquid assets

Total assetsshare of liquid assets, %

2nd tier capital1st tier capital adequacy, %1st tier capitalTotal capital adequacy, %

Stock of capital Stock of risky assets

• General information on ATFBank

• ATFBank – financial review

• Appendices

21

ASSETSCash and cash equivalents 149,707,679 307,512,683Financial instruments at fair value through profit or loss

– Held by the Group 26,759,782Available-for-sale financial assets – Held by the Group 1,863,355

Loans and advances to banksInvestments held to maturity

11,481,874Loans to customers 790,282,556Assets held for sale 71,385,592Current tax asset 1,144,393Property, equipment and intangible assets 18,991,086Deferred tax asset 2,670,266Receivable from UniCredit Bank Austria AG under guarantee agreement —Other assets 11,673,704

Total assets 1,259,237,116

451,143

27,019,938

8,062,25415,471,825—

649,756,690—

1,138,25518,366,6345,103,025

115,753,1338,867,282

984,226,033

22

Attachment 1Consolidated statement on financial standing

2014 2015

KZT’000 KZT’000

2014 2015

LIABILITIES

Financial instruments at fair value through profit or loss 657

Deposits and balances from banks and other financial institutions 11,977,802Current accounts and deposits from customers 907,824,271Other borrowed funds 153,013,623Subordinated borrowings 95,057,199Deferred tax liability 35,031Other liabilities 3,625,894

Total liabilities 1,171,534,477

272,156

120,705,578705,026,33159,827,535

18,431,31034,808

2,472,414

906,770,132

EQUITYShare capital 167,878,470 167,878,470Additional paid-in capital 1,461,271 1,461,271General reserve 15,181,181 15,181,181Revaluation reserve for available-for-sale financial assets 36,033 -728,086Cumulative translation reserve -322,175 3,314,696Accumulated losses -107,036,498 -99,806,356

Total equity attributable to equity holders of the Bank 77,198,282 87,301,176Non-controlling interests 257,619 401,163

Total equity

Total liabilities and equity

KZT’000 KZT’000

23

77,455,901 87,702,639

984,226,033 1,259,237,116

Attachment 1Consolidated statement on financial standing

KZT’000 KZT’000

Interest income 64,811,350 77,923,462

Interest expense -42,050,069 -50,299,769

Net interest income 22,761,281 27,623,693

Fee and commission income 12,573,619 11,708,349

Fee and commission expense -4,983,524 -3,713,743

Net fee and commission income 7,590,095 7,994,606

Net loss on financial instruments at fair value through profit or loss -1,408 -6,257

Net income/(loss) on derivative financial instruments -3,268,861 30,299,037

Net foreign exchange (loss)/gain 4,979,847 -12,309,916

Net (loss)/income on available-for-sale financial assets13,592 -65,027

Net income on sale of foreclosed assets 1,065,955 78,352

Loss from repurchased own debt instruments -50,631 0

Other operating (loss)/income 725,992 -253,356

Operating income 33,815,862 53,361,132

Impairment losses -10,380,085 -23,559,629

General and administrative expenses -18,321,147 -18,690,304

Taxes other than income tax -1,051,912 -892,566

Profit before income tax 4,062,718 10,218,633

Income tax expense -594,825 -2,918,368

Profit for the year 3,467,893 7,300,265

Attributable to:

Equity holders of the Bank 3,381,237 7,230,142

Non-controlling interests 86,656 70,123

3,467,893 7,300,265

24

2014 2015

Attachment 2Consolidated P&L report