Analysis of balance sheet of Eurasian Bank JSC

THE MINISTRY OF EDUCATION AND SCIENCES OF THE REPUBLIC OF KAZAKHSTAN

 

INTERNATIONAL ACADEMY OF BUSINESS

 

 

CHAIR OF “FINANCE”

 

 

 

 

 

 

 

 

 

Analysis of balance sheet of Eurasian Bank JSC

 

 

 

 

 

Student:

F-1001

Utebayeva K.

 

Professor:

Serikbayeva ZH.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Almaty 2012

Financial statement of Eurasian Bank during 2009, 2010, 2011

 

	2009 KZT,000	2010 KZT,000	growth in 2010 to 2009,%	2011 KZT,000	growth in 2011 to 2010,%	share to 2011
ASSETS
Cash and cash equivalents	81712586	35455233	-56,61%	40525925	14,30%	11%
Financial instruments at fair value through profit or loss	-	2825311		1657652	-41,33%	0%
Available-for-sale financial assets	36340492	33662372	-7,37%	986008	-97,07%	0%
Loans and advances to banks	9871325	6878016	-30,32%	9294907	35,14%	3%
Amounts receivable under reverse repurchase agreements	21392315	273271	-98,72%	2500090	814,88%	1%
Loans to customers	148996935	213327260	43,18%	256009936	20,01%	69%
Held-to-maturity investments	-	41030336		38493730	-6,18%	10%
Current tax asset	543492	684845	26,01%	597640	-12,73%	0%
Property, equipment and intangible assets	11972012	12563367	4,94%	14279043	13,66%	4%
Deffered tax asset	4296247	3488356	-18,80%	1485024	-57,43%	0%
Other assets	6455213	6701216	3,81%	3531438	-47,30%	1%
Total assets	321580617	356889583	10,98%	369361393	3,49%	100%
LIABILITIES
Financial instruments at fair value through profit or loss	-	33500		38913	16,16%	0%
Deposits and balances from banks	697456	1293743	85,49%	3221652	149,02%	1%
Amounts payable under repurchase agreements	2200271	15283435	594,62%	6755574	-55,80%	2%
Current accounts and deposits from customers	240618500	245795513	2,15%	245611140	-0,08%	73%
Debt securities issued	10177668	23190282	127,85%	33584501	44,82%	10%
Subordinated debt securities issued	16569016	19365588	16,88%	23925557	23,55%	7%
Other borrowed funds	25597725	24434497	-4,54%	20764469	-15,02%	6%
Other liabilities	1189747	1902367	59,90%	3577946	88,08%	1%
Total liabilities	297050383	331298925	11,53%	337479752	1,87%	100%
EQUITY
Share capital	24210204	24210204	0,00%	24210204	0,00%	76%
Share premium	25632	25632	0,00%	25632	0,00%	0%
Reserve for general banking risks	5304320	5304320	0,00%	5381456	1,45%	17%
Revaluation reserve for available-for-sale financial assets	-1342993	-451707	-66,37%	-82787	-81,67%	0%
Cumulative translation reserve	-	-85057		-209732	146,58%	-1%
Retained earnings (accumulated losses)	-3966929	-3412734	-13,97%	2556868	-174,92%	8%
Total equity	24230234	25590658	5,61%	31881641	24,58%	100%
Total liabilities	321280617	356889583	11,08%	369361393	3,49%

 

Eurasian Bank ended 2011 as the 10th largest bank in Kazakhstan by assets, with almost 3% of banking sector assets. Eurasian Bank reported Net Profit of KZT 6,047 million in 2011, after two years of either losses or negligible profits. In 2010 Eurasian Bank acquired a bank in Russia, which represents a very modest portion of the business. In 2011 the Bank acquired ProstoKredit, giving the Bank a larger consumer finance operation in Kazakhstan.

The return on average assets reached 1.7%, while the return on average equity reached 21%. The drivers for this improvement were the continued growth of the loan book, the positive contribution of the newly acquired ProstoKredit consumer lending activity, the reduction in negative carry costs, and the continued quality improvement of the loan portfolio.

In 2011 total assets grew only by 3.5%. This was the result of net loans growing by 20%, and liquid assets shrinking by 22%. Provisions for loan impairment grew less than net loans, and other long term assets declined. Assuming that the current positive economic environment and loan growth levels continue, Management does see space for faster asset growth in future years.

The biggest source of improvement was on the loans to customers side, where the net loan book grew by 43% in the year. Interest income grew less than the loan book, as the loan book growth was concentrated in lower yielding large corporate loans. Loans to customers accounts for over 90% of all interest income. Net interest income accounts for just under 50% of pre-impairment charges operating income.

Total assets grew by 11% in 2010, in line with 2009 growth, but far slower than loan growth. Net loans grew 43% in 2010, as liquid assets declined by 21%. In 2010 management focused on more profitable deployment of the asset base, essentially issuing loans to large corporates.

For the last two years Bank was unwinding low yielding liquid assets by liquidating and returning retail deposits or converting into a higher-yielding loan portfolio and avoid the losses from negative carry effect.

As a reflection of that strategy, share of loans to customers grew steadily in the assets structure from 46.4% as at YE2009 to 71.4% at 30.06.2012.