Address by Nurdaulet Aidossov, CEO at Jusan Bank, Following 2021

Dear Clients, Partners and Shareholders!

I am pleased to present you the 2021 Annual Report of Jusan Bank JSC. It was a challenging year: the coronavirus pandemic consequences, reforms and a complicated macroeconomic situation are just some of the challenges that the financial institutions in Kazakhstan had to face. Our bank has first-hand knowledge of these challenges. Nevertheless, 2021 was a year of breakthrough for us — the year of growth in quantitative indicators that set the stage for qualitative transformation of the bank and our entire group as a whole.

The most important achievement in 2021 is the loan portfolio recovery. First of all, we are talking about loans taken over from the troubled Tsesnabank. At the same time, a complex work was done in the shortest possible time to consolidate ATF Bank. Jusan increased the capitals of these two banks by KZT 167 bln. Meeting the two challenges of that scale was done by no one in the history of the country banking system. I am sincerely proud of our team that managed well all operational and strategic issues.

Jusan Bank proceeded developing its products, service quality and financial ecosystem alongside the structural evolutions associated with the consolidation of two major financial institutions. Following these processes, we managed to move up multiple positions among the largest banks in the country. We started the year as the ninth largest bank in terms of assets and ended it as the fourth. In yearly dynamics, the bank assets increased by KZT 923.8 bln. to KZT 2.6 tln., showing an increase by 55%. Consequently, our market share approached 7%, while the National Bank of the Republic of Kazakhstan recognised us as a potentially systemically important STB. This is the recognition of Jusan Bank’s role in maintaining sound and smooth operation of the country financial system as a whole, which the bank management and team are scrupulous about.

Please note that the loan portfolio grew up by 200% or by KZT 487 bln. in monetary terms up to KZT 731 bln. following 12 months. Despite the rapid increments of assets, we shall maintain a markedly conservative approach to lending that is consistent with the macroeconomic situation and the need to ensure safety of our depositors and lenders. Keeping a balance between risks and profitability is our top priority. Nevertheless, the bank's share on the lending market increased to 5.3%.

At the same time, the NPL 90+ amount in just a year was reduced from 44.09% to 9.47% of the total loan portfolio. The troubled portfolio reduction by 70.3% in 2021 was the best indicator among the top ten Kazakhstan banks and positively affected both the Bank and rehabilitation of the entire banking sector in the country.

At the same time, setting aside the migrated loans of Tsesnabank and ATF Bank and factoring in the loans directly granted by Jusan Bank since 2019 with a total amount exceeding KZT 500 bln., then NPL shall be less than 0.79%. This is one of the best figures on the market.

In addition, the overdue debt shall be balanced by a high level of provisions: by the beginning of 2022, the same amounted to KZT 239.7 bln. covering the 90+ overdue loans by 237.6%. This shall ensure a high level of the bank's financial resilience.

Sensitive risk management enabled Jusan Bank to dramatically exceed the minimum regulator requirements in terms of prudential ratios. The capital adequacy ratio (k1) was 28%, while the current liquidity ratio (k4) was 211%. The bank was ranked second and third, respectively, among the Kazakhstan banks in terms of equity and liquidity. In aggregate, these indicators allowed Moody's Investors Service rating agency to assign the Bank high long-term ratings on deposits in national and foreign currencies at B1 with a ‘stable’ outlook. Our ecosystem has also received a number of international and local awards for products and services.

International agencies' scores and awards are certainly important. But it is the fact that people and business put trust in us that is of much more value for us. The volume of deposits with our bank increased by 56% within a year and exceeded the mark of KZT 1.51 tln.

The Bank's magnetism shall be strongly ensured by development of new Jusan Retail and Jusan Business digital products. There is a marked organic increase in the client base due to keen demand for the Bank products in general. Completing integration with ATF Bank in a rapid and efficient manner also enabled to keep its clients. As a result, the retail segment client portfolio more than quadrupled and exceeded 2.5 mln. clients at the beginning of this year. The number of monthly active users of digital services in our ecosystem has exceeded 1 million.

The SME segment client base doubled to 145 thous. business entities in 2021. The Bank products are of interest for micro, small and medium enterprises: the number of active Jusan Business application users increased by 3.7 times in a year, while the POS terminal network expanded by 5 times. The contactless payment services and corporate cards are actively developing. We shall move beyond and proceed polishing the innovative digital services and products. A special emphasis shall be placed on new forms of partnership, for example, a room for developing an online business based on the Jusan Mart marketplace.

We strongly believe that in less than three years Jusan Bank has become one of the largest financial institutions with a sound financial position and an active client base.

I am well-assured that the 2021 experience and achievements provided a good blueprint for success we intend to achieve this year. I would like to appreciate well-coordinated work of the entire bank team. We shall remember 2021 as a challenging yet very productive year. Its outcomes shall be an excellent basis for new breakthroughs this year. The Q1 2022 results demonstrate that we are on the right path. The key task shall be making our dialogue with clients even more fruitful and expanding the variety of handsome offers for partners from both corporate and retail sectors. The guiding principle of our strategy shall be: ‘Believing in Everyone, Believing in You.’ We sincerely believe in the capacity of every Kazakhstani and are ready to help them achieving their own big and small victories.

Three business platforms shall continue to be strategic and fundamental areas for 2022: Jusan Retail, Jusan Business and Jusan Private Banking. They proved to be in demand on the market. The ecosystem that combine them shall allow for creating convenient technological solutions for the benefit of Kazakhstanis in everyday life, doing business and effectively managing personal finances.

We shall also keep reshaping the internal processes. This shall be aimed at increasing the bank performance, improving the product quality, saturating the Jusan ecosystem with useful digital services and creating an omni-channel approach to client communications. An important strand in this direction is to establish a favourable internal climate at the bank and strengthen the ESG corporate governance standards. We shall perceive the day-to-day mood of employees as the basis for future success: clients and partners can only be happy if they are served by truly happy and motivated staff.

We shall hew to responsibility principle in whatever we do. As the history and figures show, not only we have prevented bankruptcy of two major financial institutions that had previously received multiple support measures that unfortunately failed, but we have also prevented loss of depositors’ funds and ensured that their savings are safe by creating and then optimising a cutting-edge digital financial ecosystem. As a social enterprise, we ensured the group’s stable development and achieved successful financial performance, that, along with the ecosystem development, allowed significant funds to be allocated to support schools of the NIS system and Nazarbayev University, as well as to develop the education and science in Kazakhstan in general.

Today, our business model is helping to maintain a high net profit momentum, which is sufficient to both continue to fund education and support the Jana Qazaqstan government strategy. To this end, the bank is currently discussing any possible options to help the government, including gradually refunding a portion of the state support rendered at some point to Tsesnabank and ATF Bank prematurely, which shall be historically unparalleled in Kazakhstan. Ultimately, this shall allow the country for implementing social, humanitarian and other projects improving the quality of life for our citizens and clients.

Summing up the past year outcomes, I would like to express my gratitude to the whole bank team for their coordinated work, shareholders for supporting projects and initiatives, and clients and partners for their trust and choice of Jusan Bank. You are helping us to get better. We believe in every one of you, we believe in the future of Kazakhstan.

Yours Faithfully,
Nurdaulet Aidossov,
CEO at Jusan Bank