2.3 Analysis of non-deposits sources of funding in Kazkommertsbank rk

As at 31 December 2012, accrued interest expense included in loans and advances from banks and other financial institutions amounted to KZT 213 million (2011: KZT 236 million, 2010: KZT 492 million).

As at 31 December 2012, loans from other banks and financial institutions of KZT 23,546 million (97.35% of total loans from other banks and financial institutions) (2011: KZT 42,890 million or 97% of total loans with other banks and financial institutions, 2010: KZT 116,985 million or 96% of total loans from other banks and financial institutions) consisted of 7 (2011: 6, 2010: 9) banks and financial institutions of such countries as Great Britain, Latvia, Kazakhstan, Russian Federation, United States of America, the Netherlands and China. Maturities of these loans range from 12 months to 97 months (2011: 7 days to 97 months, 2010: 48 days to 52 months). Interest rates on loans with other banks and financial establishments varied from 0.86% to 7.00% (2011: from 0.25% to 9%, 2010: from 1.33% to 9.75%).

In diagram we can see that Kazkommertsbank took out most of loans under repurchase agreements (65%). Loans from other banks and financial institutions take second place (22,1%). The percentage of loan with maturity of June 2014 is 7,6 %.

Note - Compiled by the author according to the data of website www.kkb.kz

Figure 12. Percentage share of loans and advances from banks and other financial institutions

In 2012 the volume of non-deposit resources was 109,974 mln, 2011 - 91,877 mln, 2010-147,138 mln. In comparison with 2011, we can see the tendency to the increase in volume of non-deposit resources, but we want to notice that the volume of non-deposit resources in 2010 was higher than in 2012.

Note - Compiled by the author according to the data of website www.kkb.kz

Figure 13. The volume of non-deposit sources from 2010-2012

As at 31 December 2012, included in loans and advances from banks and other financial institutions are loans under repurchase agreements of KZT 71,486 million (2011: KZT 27,937 million, 2010: KZT 26 million).

The fair value of collateral and carrying value of loans under repurchase agreements as at 31 December 2012, 2011 and 2010 are presented as follows:

Table 11

Fair value of collateral and Carrying value of loans

	31 December 2012 (KZT million)		31 December 2011 (KZT million)		31 December 2010 (KZT million)
	Fair value of collateral	Carrying value of loans	Fair value of collateral	Carrying value of loans	Fair value of collateral	Carrying value of loans
Bonds of the Ministry of Finance of the Republic of Kazakhstan	65,186	60,222	-	-	-	-
Bonds of foreign companies	8,964	7,857	-	-	-	-
Municipal bonds of RF	1,993	1,895	-	-	-	-
The continuation of Table 11.
Bonds of foreign banks	1,793	1,512	-	-	-	-
Notes of the NBRK	-		29,404	27,937	-	-
Shares of Kazakhstan companies	-	-	-	-	37	26
In total	77,936	71,486	29,404	27,937	37	26
Note – source website www.kkb.kz

Note - Compiled by the author according to the data of website www.kkb.kz

Figure 14 Carrying value of loans

As at 31 December 2012, reverse repurchase agreements were concluded through KASE. The Bank believes that counterparties of these agreements are banks and other financial institutions.

Details of transferred financial assets that are not derecognized in their entirety as at 31 December 2012 are disclosed below:

Securities lending and repurchase agreements

The Group has a plan to borrow and lend securities and to sell securities under agreements to repurchase (repos) and to purchase securities under agreements to resell (reverse repos). The securities lent or sold under agreements to repurchase are transferred to a third party and the Group receives cash in exchange, or other financial assets.

The Group has determined that it retains substantially all the risks and rewards of these securities, which include credit risk and market risk, and therefore it has not derecognized them. In addition, it recognizes a financial liability for cash received as collateral.

Similarly, the Group may sell or re-pledge any securities borrowed or purchased under agreements to resell, but has an obligation to return the securities and the counterparty retains substantially all the risks and rewards of ownership. Consequently, the securities are not recognized by the Group, which instead record a separate asset for any possible cash collateral provided.

Table 12

Financial assets at fair value through profit or loss

Total carrying amount of the original assets before the transfer	77,936
As at 31 December 2012:
Carrying amount of assets	77,936
Carrying amount of associated liabilities (loans under repurchase agreements)	71,486
Note – source website www.kkb.kz

In accordance with the contractual terms of the loans from certain OECD based banks and EBRD, the Group is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. In accordance with the terms of certain of those loans, the Group is also required to obtain the approval of the lender before distributing any dividends to the common shareholders except for dividends to be reinvested for ordinary shares. Furthermore, certain of the Group’s outstanding financing agreements include covenants restricting the capability of the Group to create the right of pledge on its assets. The Group’s failure to observe obligations on these covenants can lead to cross-accelerations and cross-defaults under the terms of the other financial agreements of the Group.

As at 31 December 2012, 2011 and 2010, the Group was in compliance with the covenants of the various debt agreements the Group has with other banks and financial institutions.

Table 13

Characteristics of the KKGB instrument of JSC Kazkommertsbank

Characteristicsoftheinstrument
Tradingcode	KKGB
Listofsecurities	official, category "first"
Quotationcurrency	KZT
Quotationaccuracy	2 characters
The continuation of Table 13.
Listingdate	10/16/97
Tradesopeningdate	10/28/97
Market-makers	Kazkommerts Securities JSC (Subsidiary of Kazkommertsbank JSC)
Included in the representative list of KASE index	10.01.2007
Characteristicsofthesecurities
Issuer	Kazkommertsbank JSC
Sharetype	common
NIN	KZ1C00400016
ISIN	KZ000A0JC858
BBGID	BBG000CBRQD0
Issueregistrationdate	03.10.2009
Registrar	JSC "Single registrar of securities" (Almaty)
Numberofsharesoutstanding	778,625,062
Issuecurrency	KZT
Facevalue	absent
Dividendpaymentperiod	annual
Referencestodocuments	Offering of Global Depositary Receipts (submitted on 01/17/07)
Note – source website www.kase.kz

Note – source website www.kase.kz