Fortebank JSC (Formerly Alliance Bank JSC) : Consolidated Financial Statements For The Year Ended 31 December 2014

ForteBank JSC
(formerly Alliance Bank JSC)
Consolidated Financial Statements

for the year ended 31 December 2014
ForteBank JSC (formerly Alliance Bank JSC)
Contents
Independent Auditors’ Report

Consolidated Statement of Profit or Loss and Other
Comprehensive Income 5
Consolidated Statement of Financial Position 6
Consolidated Statement of Cash Flows 7

Consolidated Statement of Changes in Equity 8-9
Notes to the Consolidated Financial Statements 10-81

Consolidated Statement of Financial Position as at 31 December 2014
2014 2013
Note In million tenge In million tenge
ASSETS
Cash and cash equivalents 12 88,632 16,077
Due from financial institutions 13 12,150 197
Financial instruments at fair value through profit or
loss 14 28,572 4,700
Loans to customers 15 561,327 307,818
Available-for-sale financial assets 16 129,068 118,811
Property, equipment and intangible assets 17 25,063 19,618
Deferred tax assets 11 33,524 -
Other assets 18 30,910 8,547
Total assets 909,246 475,768
LIABILITIES
Current accounts and deposits from customers 19 513,559 307,544
Deposits and balances from banks and other financial
institutions 20 33,365 24,342
Debt securities issued 21 63,037 108,909
Subordinated debt 22 27,807 27,806
Amounts payable under repurchase agreements 23 98,291 80,084
Deferred tax liabilities 11 7,663 -
Other liabilities 24 10,818 2,168
Total liabilities 754,540 550,853
EQUITY
Share capital 25 332,873 273,090
Restructuring reserve - (25,981)
Additional paid-in-capital 19,070 19,070
Revaluation surplus for property 1,926 2,025
Revaluation reserve for available-for-sale financial
assets (10,718) (8,815)
Accumulated losses (189,154) (334,474)
Total equity/(deficit) attributable to equity
holders of the Bank 153,997 (75,085)
Non-controlling interests 709 -
Total equity/(deficit) 154,706 (75,085)
Total liabilities and equity 909,246 475,768
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming
part of, the consolidated financial statements.
6
Consolidated Statement of Cash Flows for the year ended 31 December 2014
2014 2013
In million tenge In million tenge
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts 41,776 50,375
Interest payments (28,368) (42,013)
Fee and commission receipts 4,649 9,725
Fee and commission payments (1,077) (753)
Net receipts/(payments) from financial instruments at fair value
through profit or loss 239 (255)
Net receipts from foreign exchange 1,296 1,037
Other (payments)/receipts (32) 226
General administrative payments (17,419) (15,513)
(Increase)/decrease in operating assets
Due from financial institutions 4 138
Financial instruments at fair value through profit or loss (9,740) 9,798
Loans to customers 65,120 20,166
Other assets (67) (62)
(Decrease)/increase in operating liabilities
Current accounts and deposits from customers (140,036) (30,715)
Deposits and balances from banks and other financial institutions (11,842) 3,972
Amounts payable under repurchase agreements 18,175 (5,039)
Other liabilities 76 (207)
Net cash (used in)/from operating activities before income tax
paid (77,246) 880
Income tax paid (24) (226)
Cash flows (used in)/from operations (77,270) 654
CASH FLOWS FROM INVESTING ACTIVITIES

Cash and cash equivalents acquired through business
combination (Note 37) 39,832 -
Proceeds from disposal of available-for-sale financial assets 517 1,115
Purchases of available-for-sale financial assets (12,743) -
Purchases of property, equipment and intangible assets (3,391) (853)
Sales of property, equipment and intangible assets 167 593
Cash flows from investing activities 24,382 855
CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of debt securities issued - (2,341)
Repurchase of debt securities issued (23) (551)
Repurchase of subordinated debt (15) (9)
Cash paid to creditors on restructuring (Note 8 (a)) (25,019) -
Deposit from Samruk-Kazyna on restructuring (Note 8(d)) 149,303 -
Cash flows from/(used in) financing activities 124,246 (2,901)
Net increase/(decrease) in cash and cash equivalents 71,358 (1,392)
Effect of changes in exchange rates on cash and cash equivalents 1,197 326
Cash and cash equivalents as at the beginning of the year 16,077 17,143
Cash and cash equivalents as at the end of the year
(Note 12) 88,632 16,077
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements.
7
Consolidated Statement of Changes in Equity for the year ended 31 December 2014
Attributable to equity holders of the Bank

Revaluation
reserve for
Additional Revaluation available-for- Non-
Share Restructuring paid-in- surplus for sale financial Accumulated controlling
capital reserve capital property assets losses Total interests Total equity
In million In million In million In million In million In million In million In million In million
tenge tenge tenge tenge tenge tenge tenge tenge tenge
Balance as at 1 January 2014 273,090 (25,981) 19,070 2,025 (8,815) (334,474) (75,085) - (75,085)
Total comprehensive income
Profit for the year - - - - - 171,202 171,202 - 171,202
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets, net of income tax - - - - (1,903) - (1,903) - (1,903)
Total other comprehensive loss - - - - (1,903) - (1,903) - (1,903)
Total comprehensive income for the year - - - - (1,903) 171,202 169,299 - 169,299
Transfer of revaluation surplus as a result of
depreciation and write-off - - - (99) - 99 - - -
Transfer of restructuring reserve - 25,981 - - - (25,981) - - -
Acquired through business combination - - - - - - - 709 709
Transactions with owners, recorded directly
in equity
Shares issued to settle the debt (Note 8(c)) 9,986 - - - - - 9,986 - 9,986
Shares issued in exchange for shares of other
entities (Note 37) 49,797 - - - - - 49,797 - 49,797
Balance as at 31 December 2014 332,873 - 19,070 1,926 (10,718) (189,154) 153,997 709 154,706
The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements.
8
Consolidated Statement of Changes in Equity for the year ended 31 December 2014
Revaluation
reserve for
Revaluation available-for-
Share Restructuring Additional surplus for sale financial Accumulated
capital reserve paid-in-capital property assets losses Total deficit
In million tenge In million tenge In million tenge In million tenge In million tenge In million tenge In million tenge
Balance as at 1 January 2013 273,090 (25,981) 19,070 1,739 (7,028) (249,743) 11,147
Total comprehensive income
Loss for the year - - - - - (84,848) (84,848)
Other comprehensive income
Items that are or may be reclassified subsequently to
profit or loss:
Net change in fair value of available-for-sale
financial assets, net of income tax - - - - (1,787) - (1,787)
Items that will not be reclassified to profit or loss:
Revaluation of property, net of income tax - - - 403 - - 403
Total other comprehensive loss - - - 403 (1,787) - (1,384)
Total comprehensive loss for the year - - - 403 (1,787) (84,848) (86,232)
Transfer of revaluation surplus as a result of
depreciation and disposals - - - (117) - 117 -
Balance as at 31 December 2013 273,090 (25,981) 19,070 2,025 (8,815) (334,474) (75,085)
The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements.
9
Notes to the Consolidated Financial Statements for the year ended 31 December 2014
1 Background
(a) Principal aсtivities
These consolidated financial statements comprise the financial statements of ForteBank JSC
(formerly Alliance Bank JSC) (the “Bank”) and its subsidiaries, Temirbank JSC, ABC Bank JSC
(formerly ForteBank JSC), OUSA Alliance LLP and Alliance Finance LLC (together referred to as
“the Group”).
The Bank was incorporated in the Republic of Kazakhstan in 1999 under the name of Open Joint
Stock Company (“OJSC”) IrtyshBusinessBank as a result of a merger of OJSC Semipalatinsk
Municipal Joint Stock Bank and OJSC Irtyshbusinessbank. In accordance with a decision made by
the shareholders, the name of the Bank was changed from IrtyshBusinessBank to Alliance Bank on
30 November 2001 with subsequent registration on 13 March 2002 as Open Joint Stock Company
Alliance Bank. On 13 March 2004 Alliance Bank was re-registered as Alliance Bank JSC. On
10 February 2015 the Bank was re-registered as ForteBank JSC.
The registered address of the Bank’s Head Office is 50, Furmanov Str., 050004, Almaty, the
Republic of Kazakhstan. The Bank’s activity is regulated by the National Bank of the Republic of
Kazakhstan (the “NBRK”) and the Committee of the Republic of Kazakhstan on regulation and
supervision of financial market and financial organisations of the NBRK (the “FMSC”). The Bank
conducts its business under the licence No. 250 issued by the FMSC on 26 December 2007 for
performing banking and other operations and activity on the security market stipulated by the
banking legislation. As at 31 December 2014, the Bank’s subsidiaries Temirbank JSC and ABC
Bank JSC also held general banking licences No. 107 and 1.1.256, respectively.
The Group’s primary business is related to commercial banking activities, granting of loans and
guarantees, accepting deposits, exchanging foreign currencies, dealing with securities, transferring
cash payments, as well as providing other banking services.
The Bank and its subsidiaries, Temirbank JSC and ABC Bank JSC, are members of the Kazakhstan
Deposit Insurance Fund (the “KDIF”). The primary goal of the KDIF is to protect interests of
depositors in the event of forcible liquidation of a member-bank. Depositors can receive limited
insurance coverage for deposits up to a maximum of KZT 5 million per deposit, depending on the
amount of the deposit.
As at 31 December 2014, the Group includes:
Ownership %
Country of
Name incorporation Principal activities 2014 2013
Temirbank JSC Republic of Kazakhstan Banking 100.0 -
ABC Bank JSC
(formerly
ForteBank JSC) Republic of Kazakhstan Banking 100.0 -
ForteLeasing LLC
(formerly TemirLeasing
LLC) Republic of Kazakhstan Leasing operations 75.6 -
Raising funds in Russian
Alliance Finance LLC Russian Federation capital markets 100.0 100.0
Managing of doubtful and
bad assets of the parent
OUSA Alliance LLP Republic of Kazakhstan company 100.0 100.0
On 12 December 2014, the Bank started process of voluntary reorganisation in the form of joining
thereto Temirbank JSC and ABC Bank JSC (formerly ForteBank JSC) (Note 37).
10
1 Background, continued
(b) Shareholders
As at 31 December 2014 Mr. Bulat Utemuratov owns 74.84% of the shares of the Bank
(31 December 2013: nil). The rest of the shares are held by other shareholders, none of which owns
more than 5% of the shares. During 2014 Mr. Bulat Utemuratov acquired part of the share of
Sovereign Wealth Fund “Samruk-Kazyna” JSC (“Samruk-Kazyna”) in the Bank (31 December
2013: Samruk-Kazyna owned 67%).
The Group is ultimately controlled by a single individual, Mr. Bulat Utemuratov, who has the power
to direct the transactions of the Group at his own discretion and for his own benefit. In addition, he
has a number of other business interests outside the Group.
(c) Kazakhstan business environment
The Group’s operations are primarily located in Kazakhstan. Consequently, the Group is exposed
to the economic and financial markets of Kazakhstan, which display emerging-market
characteristics. Legal, tax and regulatory frameworks continue to develop, but are subject to
varying interpretations and frequent changes that, together with other legal and fiscal impediments,
contribute to the challenges faced by entities operating in Kazakhstan. The consolidated financial
statements reflect management’s assessment of the impact of the Kazakhstan business environment
on the operations and financial position of the Group. The future business environment may differ
from management’s assessment.
2 Basis of preparation
(a) Statement of compliance
The accompanying consolidated financial statements are prepared in accordance with International
Financial Reporting Standards (“IFRS”).
(b) Basis of measurement

The consolidated financial statements are prepared on the historical cost basis except that financial
instruments at fair value through profit or loss and available-for-sale financial assets are stated at
fair value and land and buildings are stated at revalued amounts.
(c) Functional and presentation currency

The functional currency of the Bank and the majority of its subsidiaries is the Kazakhstan tenge
(“KZT”) as, being the national currency of the Republic of Kazakhstan, it reflects the economic
substance of the majority of underlying events and circumstances relevant to them.
The KZT is also the presentation currency for the purposes of these consolidated financial
statements.
Financial information presented in KZT is rounded to the nearest million.
(d) Use of estimates and judgments

The preparation of consolidated financial statements in conformity with IFRS requires management
to make judgments, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses. Actual results could differ from
those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.
11
2 Basis of preparation, continued

(d) Use of estimates and judgments, continued
Information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies is described in the following notes:
- Note 8 – Restructuring plan
- Note 11 – income tax benefit/(expense)
- Note 15 – loans to customers
- Note 16 – available-for-sale financial assets
- Note 17 – property and equipment
- Note 35 – fair values of financial instruments.
(e) Changes in accounting policies and presentation

The Group has adopted the following new standards and amendments to standards, including any
consequential amendments to other standards, with a date of initial application of 1 January 2014:
 Investment Entities (Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12
Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements) (see (i))
 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32 Financial
Instruments: Presentation) (see (ii))
 Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36
Impairment of Assets) (see (iii))
The nature and the effect of the changes are explained below.
(i) Investment entities
These amendments provide an exception to the consolidation requirement for entities that meet the
definition of an investment entity under IFRS 10. The exception to consolidation requires
investment entities to account for subsidiaries at fair value through profit or loss. The Group
determined that it does not meet the definition of an investment entity under IFRS 10, and as a
result, the consolidated financial statements are unaffected.
(ii) Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 32 Financial Instruments: Disclosure and Presentation - Offsetting Financial
Assets and Financial Liabilities do not introduce new rules for offsetting financial assets and
liabilities; rather they clarify the offsetting criteria to address inconsistencies in their application.
The Amendments specify that an entity currently has a legally enforceable right to set-off if that
right is not contingent on a future event; and enforceable both in the normal course of business and
in the event of default, insolvency or bankruptcy of the entity and all counterparties. The Group
does not expect that these amendments will have an impact on its financial statements as the Group
does not present financial assets and financial liabilities on net basis in the consolidated statement
of financial position.
(iii) Recoverable Amount Disclosures for Non-Financial Assets
The amendments remove the requirement to disclose the recoverable amount when a CGU contains
goodwill or indefinite lived intangible assets but there has been no impairment.
12
3 Significant accounting policies

The accounting policies set out below are applied consistently to all periods presented in these
consolidated financial statements, and are applied consistently by Group entities, except as
explained in Note 2(e), which addresses changes in accounting policies.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are investees controlled by the Group. The Group controls an investee when it is
exposed to, or has rights to, variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. In particular, the Group
consolidates investees that it controls on the basis of de facto circumstances. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases.
(ii) Acquisitions of entities under common control

Acquisitions of controlling interests in entities that are under the control of the same controlling
shareholder of the Bank are accounted prospectively from the date that common control was
established. The assets and liabilities acquired are recognised at their previous book values as
recorded in the individual financial statements of the acquiree. The components of equity of the
acquired entities are added to the same components within the Bank equity.
(iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised gains arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses
are eliminated in the same way as unrealised gains except that they are only eliminated to the extent
that there is no evidence of impairment.
(b) Foreign currency

Transactions in foreign currencies are translated to the respective functional currencies of the Group
entities at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional currency
at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at the beginning of the period, adjusted
for effective interest and payments during the period, and the amortised cost in foreign currency
translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value is determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Foreign currency differences arising on retranslation are recognised
in profit or loss, except for differences arising on the retranslation of available-for-sale equity
instruments unless the difference is due to impairment in which case foreign currency differences
that have been recognised in other comprehensive income are reclassified to profit or loss; a
financial liability designated as a hedge of the net investment in a foreign operation to the extent
that the hedge is effective; or qualifying cash flow hedges to the extent that the hedge is effective,
which are recognised in other comprehensive income.
13
3 Significant accounting policies, continued

(c) Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances (nostro accounts)
held with the NBRK and other banks, and highly liquid financial assets with original maturities of
less than three months, which are subject to insignificant risk of changes in their fair value, and are
used by the Group in the management of short-term commitments. Cash and cash equivalents are
carried at amortised cost in the consolidated statement of financial position.
(d) Financial instruments
(i) Classification
Financial instruments at fair value through profit or loss are financial assets or liabilities that are:
- acquired or incurred principally for the purpose of selling or repurchasing in the near term
- part of a portfolio of identified financial instruments that are managed together and for which there
is evidence of a recent actual pattern of short-term profit-taking
- derivative financial instruments (except for a derivative that is a financial guarantee contract or a
designated and effective hedging instruments) or,
- upon initial recognition, designated as at fair value through profit or loss.
The Group may designate financial assets and liabilities at fair value through profit or loss where
either:
- the assets or liabilities are managed, evaluated and reported internally on a fair value basis
- the designation eliminates or significantly reduces an accounting mismatch which would
otherwise arise or,
- the asset or liability contains an embedded derivative that significantly modifies the cash flows
that would otherwise be required under the contract.
All trading derivatives in a net receivable position (positive fair value), as well as options purchased,
are reported as assets. All trading derivatives in a net payable position (negative fair value), as well
as options written, are reported as liabilities.
Management determines the appropriate classification of financial instruments in this category at
the time of the initial recognition. Derivative financial instruments and financial instruments
designated as at fair value through profit or loss upon initial recognition are not reclassified out of
at fair value through profit or loss category. Financial assets that would have met the definition of
loans and receivables may be reclassified out of the fair value through profit or loss or available-
for-sale category if the Group has an intention and ability to hold them for the foreseeable future or
until maturity. Other financial instruments may be reclassified out of at fair value through profit or
loss category only in rare circumstances. Rare circumstances arise from a single event that is
unusual and highly unlikely to recur in the near term.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market, other than those that the Group:
- intends to sell immediately or in the near term
- upon initial recognition designates as at fair value through profit or loss
- upon initial recognition designates as available-for-sale or,
- may not recover substantially all of its initial investment, other than because of credit
deterioration.
14

(d) Financial instruments, continued
(i) Classification, continued

Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity that the Group has the positive intention and ability to hold to maturity,
other than those that:
- the Group upon initial recognition designates as at fair value through profit or loss
- the Group designates as available-for-sale or,
- meet the definition of loans and receivables.
Available-for-sale financial assets are those non-derivative financial assets that are designated as
available-for-sale or are not classified as loans and receivables, held-to-maturity investments or
financial instruments at fair value through profit or loss.
(ii) Recognition
Financial assets and liabilities are recognised in the consolidated statement of financial position
when the Group becomes a party to the contractual provisions of the instrument. All regular way
purchases of financial assets are accounted for at the settlement date.
(iii) Measurement
A financial asset or liability is initially measured at its fair value plus, in the case of a financial asset
or liability not at fair value through profit or loss, transaction costs that are directly attributable to
the acquisition or issue of the financial asset or liability.
Subsequent to initial recognition, financial assets, including derivatives that are assets, are measured
at their fair values, without any deduction for transaction costs that may be incurred on their sale or
other disposal, except for:
- loans and receivables which are measured at amortised cost using the effective interest method
- held-to-maturity investments that are measured at amortised cost using the effective interest
method
- investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be reliably measured which are measured at cost.
All financial liabilities, other than those designated at fair value through profit or loss and financial
liabilities that arise when a transfer of a financial asset carried at fair value does not qualify for
derecognition, are measured at amortised cost.
(iv) Amortised cost

The amortised cost of a financial asset or liability is the amount at which the financial asset or
liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initial amount
recognised and the maturity amount, minus any reduction for impairment. Premiums and discounts,
including initial transaction costs, are included in the carrying amount of the related instrument and
amortised based on the effective interest rate of the instrument.
(v) Fair value measurement principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date in the principal, or in its
absence, the most advantageous market to which the Group has access at that date. The fair value
of a liability reflects its non-performance risk.
15

(v) Fair value measurement principles, continued

When available, the Group measures the fair value of an instrument using quoted prices in an active
market for that instrument. A market is regarded as active if transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
When there is no quoted price in an active market, the Group uses valuation techniques that
maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The
chosen valuation technique incorporates all the factors that market participants would take into
account in these circumstances.
The best evidence of the fair value of a financial instrument at initial recognition is normally the
transaction price, i.e., the fair value of the consideration given or received. If the Group determines
that the fair value at initial recognition differs from the transaction price and the fair value is
evidenced neither by a quoted price in an active market for an identical asset or liability nor based
on a valuation technique that uses only data from observable markets, the financial instrument is
initially measured at fair value, adjusted to defer the difference between the fair value at initial
recognition and the transaction price. Subsequently, that difference is recognised in profit or loss
on an appropriate basis over the life of the instrument but no later than when the valuation is
supported wholly by observable market data or the transaction is closed out.
If an asset or a liability measured at fair value has a bid price and an ask price, the Group measures
assets and long positions at the bid price and liabilities and short positions at the ask price.
Portfolios of financial assets and financial liabilities that are exposed to market risk and credit risk
that are managed by the Group on the basis of the net exposure to either market or credit risk, are
measured on the basis of a price that would be received to sell the net long position (or paid to
transfer the net short position) for a particular risk exposure. Those portfolio-level adjustments are
allocated to the individual assets and liabilities on the basis of the relative risk adjustment of each
of the individual instruments in the portfolio.
The Group recognises transfers between levels of the fair value hierarchy as of the end of the
reporting period during which the change has occurred.
(vi) Gains and losses on subsequent measurement

A gain or loss arising from a change in the fair value of a financial asset or liability is recognised
as follows:
- a gain or loss on a financial instrument classified as at fair value through profit or loss is recognised
in profit or loss
- a gain or loss on an available-for-sale financial asset is recognised as other comprehensive income
in equity (except for impairment losses and foreign exchange gains and losses on debt financial
instruments available-for-sale) until the asset is derecognised, at which time the cumulative gain or
loss previously recognised in equity is recognised in profit or loss. Interest in relation to an
available-for-sale financial asset is recognised in profit or loss using the effective interest method.
For financial assets and liabilities carried at amortised cost, a gain or loss is recognised in profit or
loss when the financial asset or liability is derecognised or impaired, and through the amortisation
process.
16

(vii) Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or when it transfers the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred or in which the Group
neither transfers nor retains substantially all the risks and rewards of ownership and it does not
retain control of the financial asset. Any interest in transferred financial assets that qualify for
derecognition that is created or retained by the Group is recognised as a separate asset or liability
in the consolidated statement of financial position. The Group derecognises a financial liability
when its contractual obligations are discharged or cancelled or expire.
The Group enters into transactions whereby it transfers assets recognised on its consolidated
statement of financial position, but retains either all risks and rewards of the transferred assets or a
portion of them. If all or substantially all risks and rewards are retained, then the transferred assets
are not derecognised.
In transactions where the Group neither retains nor transfers substantially all the risks and rewards
of ownership of a financial asset, it derecognises the asset if control over the asset is lost.
In transfers where control over the asset is retained, the Group continues to recognise the asset to
the extent of its continuing involvement, determined by the extent to which it is exposed to changes
in the value of the transferred assets.
If the Group purchases its own debt, it is removed from the consolidated statement of financial
position and the difference between the carrying amount of the liability and the consideration paid
is included in gains or losses arising from early retirement of debt.
The Group writes off assets deemed to be uncollectible.
(viii) Repurchase and reverse repurchase agreements

Securities sold under sale and repurchase (repo) agreements are accounted for as secured financing
transactions, with the securities retained in the consolidated statement of financial position and the
counterparty liability included in amounts payable under repo transactions. The difference between
the sale and repurchase prices represents interest expense and is recognised in profit or loss over
the term of the repo agreement using the effective interest method.
Securities purchased under agreements to resell (reverse repo) are recorded as amounts receivable
under reverse repo transactions within loans and advances to banks or loans to customers, as
appropriate. The difference between the purchase and resale prices represents interest income and
is recognised in profit or loss over the term of the repo agreement using the effective interest
method.
If assets purchased under an agreement to resell are sold to third parties, the obligation to return
securities is recorded as a trading liability and measured at fair value.
(ix) Derivative financial instruments

Derivative financial instruments include swaps, forwards, futures, spot transactions and options in
interest rates, foreign exchanges, precious metals and stock markets, and any combinations of these
instruments.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at fair value. All derivatives are carried as assets when their
fair value is positive and as liabilities when their fair value is negative.
Changes in the fair value of derivatives are recognised immediately in profit or loss.
17
(ix) Derivative financial instruments, continued

Derivatives may be embedded in another contractual arrangement (a host contract). An embedded
derivative is separated from the host contract and is accounted for as a derivative if, and only if the
economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract, a separate instrument with the same terms
as the embedded derivative would meet the definition of a derivative; and the combined instrument
is not measured at fair value with changes in fair value recognised in profit or loss. Derivatives
embedded in financial assets or financial liabilities at fair value through profit or loss are not
separated.
(x) Due from financial institutions
In the normal course of business, the Group maintains advances and deposits for various periods of
time with other banks. Due from financial institutions with a fixed maturity term are subsequently
measured at amortised cost using the effective interest method. Those that do not have fixed maturities
are carried at amortised cost based on expected maturities. Due from financial institutions are carried
net of any allowance for impairment losses, if any.
(xi) Offsetting
Financial assets and liabilities are offset and the net amount reported in the consolidated statement
of financial position when there is a legally enforceable right to set off the recognised amounts and
there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
(e) Property and equipment
(i) Owned assets

Items of property and equipment are stated at cost less accumulated depreciation and impairment
losses, except for land and buildings which are stated at revalued amounts as described below.
Where an item of property and equipment comprises major components having different useful
lives, they are accounted for as separate items of property and equipment.
(ii) Revaluation
Land and buildings are subject to revaluation on a regular basis. The frequency of revaluation
depends on the movements in the fair values of the land and buildings being revalued. A revaluation
increase on an item of land and buildings is recognised as other comprehensive income except to
the extent that it reverses a previous revaluation decrease recognised in profit or loss, in which case
it is recognised in profit or loss. A revaluation decrease on an item of land and buildings is
recognised in profit or loss except to the extent that it reverses a previous revaluation increase
recognised as other comprehensive income directly in equity, in which case it is recognised in other
comprehensive income.
18
(e) Property and equipment, continued
(iii) Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of
the individual assets. Depreciation commences on the date of acquisition or, in respect of internally
constructed assets, from the time an asset is completed and ready for use. Land is not depreciated.
The estimated useful lives are as follows:
 Buildings 30 to 40 years;
 Computers 3 to 4 years;
 Vehicles 5 to 7 years;
 Other 2 to 15 years.
(f) Intangible assets

Acquired intangible assets are stated at cost less accumulated amortisation and impairment losses.
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire
and bring to use the specific software.
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of
intangible assets. The estimated useful lives range from 1 to 8 years.
(g) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for
both, but not for sale in normal course of business, or for the use in production or supply of goods
or services or for administrative purposes. Investment property is measured at fair value with any
change recognised in profit or loss.
When the use of a property changes such that it is reclassified as property and equipment, its fair
value at the date of reclassification becomes its cost for subsequent accounting.
(h) Impairment
The Group assesses at the end of each reporting period whether there is any objective evidence that
a financial asset or group of financial assets is impaired. If any such evidence exists, the Group
determines the amount of any impairment loss.
A financial asset or a group of financial assets is impaired and impairment losses are incurred if,
and only if, there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the financial asset (a loss event) and that event (or events) has had an
impact on the estimated future cash flows of the financial asset or group of financial assets that can
be reliably estimated.
Objective evidence that financial assets are impaired can include default or delinquency by a
borrower, breach of loan covenants or conditions, restructuring of financial asset or group of
financial assets that the Group would not otherwise consider, indications that a borrower or issuer
will enter bankruptcy, the disappearance of an active market for a security, deterioration in the value
of collateral, or other observable data related to a group of assets such as adverse changes in the
payment status of borrowers in the group, or economic conditions that correlate with defaults in the
group.
19
(h) Impairment, continued

In addition, for an investment in an equity security available-for-sale a significant or prolonged
decline in its fair value below its cost is objective evidence of impairment.
(i) Financial assets carried at amortised cost

Financial assets carried at amortised cost consist principally of loans and other receivables (loans
and receivables). The Group reviews its loans and receivables to assess impairment on a regular
basis.
The Group first assesses whether objective evidence of impairment exists individually for loans and
receivables that are individually significant, and individually or collectively for loans and
receivables that are not individually significant. If the Group determines that no objective evidence
of impairment exists for an individually assessed loan or receivable, whether significant or not, it
includes the loan or receivable in a group of loans and receivables with similar credit risk
characteristics and collectively assesses them for impairment. Loans and receivables that are
individually assessed for impairment and for which an impairment loss is or continues to be
recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on a loan or receivable has been incurred, the
amount of the loss is measured as the difference between the carrying amount of the loan or
receivable and the present value of estimated future cash flows including amounts recoverable from
guarantees and collateral discounted at the loan or receivable’s original effective interest rate.
Contractual cash flows and historical loss experience adjusted on the basis of relevant observable
data that reflect current economic conditions provide the basis for estimating expected cash flows.
In some cases the observable data required to estimate the amount of an impairment loss on a loan
or receivable may be limited or no longer fully relevant to current circumstances. This may be the
case when a borrower is in financial difficulties and there is little available historical data related to
similar borrowers. In such cases, the Group uses its experience and judgment to estimate the amount
of any impairment loss.
All impairment losses in respect of loans and receivables are recognised in profit or loss and are
only reversed if a subsequent increase in recoverable amount can be related objectively to an event
occurring after the impairment loss was recognised.
When a loan is uncollectable, it is written off against the related allowance for loan impairment.
The Group writes off a loan balance (and any related allowances for loan losses) when management
determines that the loans are uncollectible and when all necessary steps to collect the loan are
completed.
(ii) Financial assets carried at cost

Financial assets carried at cost include unquoted equity instruments included in available-for-sale
financial assets that are not carried at fair value because their fair value cannot be reliably measured.
If there is objective evidence that such investments are impaired, the impairment loss is calculated
as the difference between the carrying amount of the investment and the present value of the
estimated future cash flows discounted at the current market rate of return for a similar financial
asset.
All impairment losses in respect of these investments are recognised in profit or loss and cannot be
reversed.
20

(h) Impairment, continued
(iii) Available-for-sale financial assets

Impairment losses on available-for-sale financial assets are recognised by transferring the
cumulative loss that is recognised in other comprehensive income to profit or loss as a
reclassification adjustment. The cumulative loss that is reclassified from other comprehensive
income to profit or loss is the difference between the acquisition cost, net of any principal repayment
and amortisation, and the current fair value, less any impairment loss previously recognised in profit
or loss. Changes in impairment provisions attributable to time value are reflected as a component
of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases
and the increase can be objectively related to an event occurring after the impairment loss was
recognised in profit or loss, the impairment loss is reversed, with the amount of the reversal
recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired
available-for-sale equity security is recognised in other comprehensive income.
(iv) Non financial assets

Non financial assets, other than deferred taxes, are assessed at each reporting date for any
indications of impairment. The recoverable amount of non financial assets is the greater of their fair
value less costs to sell and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate cash inflows largely independent of those from other assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. An impairment loss is
recognised when the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount.
All impairment losses in respect of non financial assets are recognised in profit or loss and reversed
only if there has been a change in the estimates used to determine the recoverable amount. Any
impairment loss reversed is only reversed to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
(i) Provisions
A provision is recognised in the consolidated statement of financial position when the Group has a
legal or constructive obligation as a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where appropriate, the risks specific to the
liability.
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced publicly.
Future operating costs are not provided for.
21

(j) Credit related commitments
In the normal course of business, the Group enters into credit related commitments, comprising
undrawn loan commitments, letters of credit and guarantees, and provides other forms of credit
insurance.
Financial guarantees are contracts that require the Group to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the terms of a debt instrument.
A financial guarantee liability is recognised initially at fair value net of associated transaction costs,
and is measured subsequently at the higher of the amount initially recognised less cumulative
amortisation or the amount of provision for losses under the guarantee. Provisions for losses under
financial guarantees and other credit related commitments are recognised when losses are
considered probable and can be measured reliably.
Financial guarantee liabilities and provisions for other credit related commitment are included in
other liabilities.
Loan commitments are not recognised, except in the following cases:
- loan commitments that the Group designates as financial liabilities at fair value through profit or
loss
- if the Group has a past practice of selling the assets resulting from its loan commitments shortly
after origination, then the loan commitments in the same class are treated as derivative instruments
- loan commitments that can be settled net in cash or by delivering or issuing another financial
instrument
- commitments to provide a loan at a below-market interest rate.
(k) Share capital
(i) Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.
(ii) Preference share capital

Preference share capital that is non-redeemable and carries no mandatory dividends is classified as
equity.
(iii) Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the consideration paid,
including directly attributable costs, is recognised as a decrease in equity.
(l) Taxation
Income tax comprises current and deferred tax. Income tax is recognised in profit or loss except to
the extent that it relates to items of other comprehensive income or transactions with shareholders
recognised directly in equity, in which case it is recognised within other comprehensive income or
directly within equity.
22

(l) Taxation, continued
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect
of previous years.
Deferred tax assets and liabilities are recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax assets and liabilities are not recognised for the following temporary
differences: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities
that affect neither accounting nor taxable profit and temporary differences related to investments in
subsidiaries, where the parent is able to control the timing of the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future.
The measurement of deferred tax assets and liabilities reflects the tax consequences that would
follow the manner in which the Group expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities. For investment property that is measured at fair
value, the presumption is that the carrying amount of investment property will be recovered through
sale.
Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits
will be available against which the temporary differences, unused tax losses and credits can be
utilised. Deferred tax assets are reduced to the extent that taxable profit will be available against
which the deductible temporary differences can be utilised.
(m) Income and expense recognition

Interest income and expense are recognised in profit or loss using the effective interest method.
Loan origination fees, loan servicing fees and other fees that are considered to be integral to the
overall profitability of a loan, together with the related transaction costs, are deferred and amortised
to interest income over the estimated life of the financial instrument using the effective interest
method.
Other fees, commissions and other income and expense items are recognised in profit or loss when
the corresponding service is provided.
Dividend income is recognised in profit or loss on the date that the dividend is declared.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over
the term of the lease. Lease incentives received are recognised as an integral part of the total lease
expense, over the term of the lease.
(n) Segment reporting

An operating segment is a component of a Group that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses related to transactions with
other components of the same Group); whose operating results are regularly reviewed by the chief
operating decision maker to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is available.
23

(o) Comparative information
Prior period reclassifications
Comparative information was reclassified to conform to changes in presentation in consolidated
statement of profit or loss and other comprehensive income for the year ended 31 December 2014.
Management of the Group decided to reclassify the penalty income on loans to customers from
“Other operating expense” to “Interest income”. As a result, in the consolidated statement of profit
or loss and other comprehensive income for the year ended 31 December 2013 “Interest income”
increased by KZT 935 million and “Other operating expense” decreased by KZT 935 million.
In the consolidated statement of profit or loss and other comprehensive income for the year ended
31 December 2013 “General administrative expenses” were reclassified to “Fee and commission
expense” in the amount of KZT 731 million. This amount represents commission expenses accrued
for collecting services on loans. The management of the Group decided to reclassify this amount
from “General administrative expenses” to “Fee and commission expense” as this presentation
better reflects the substance of these expenses.
As previously
In million tenge reported Reclassification As reclassified
Consolidated statement of profit or loss and
other comprehensive income for the year
ended 31 December 2013
Interest income 65,104 935 66,039
Fee and commission expense (772) (731) (1,503)
Other operating expense (204) (935) (1,139)
General administrative expenses (17,397) 731 (16,666)
(p) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective as at
31 December 2014, and are not applied in preparing these consolidated financial statements. Of
these pronouncements, potentially the following will have an impact on the financial position and
performance. The Group plans to adopt these pronouncements when they become effective.
The Group has not yet analysed the likely impact of these standards and pronouncements on its
consolidated financial statements.
 IFRS 9 Financial Instruments has been issued in phases and is intended ultimately to replace
International Financial Reporting Standard IAS 39 Financial Instruments: Recognition and
Measurement. The first phase of IFRS 9 was issued in November 2009 and relates to the
classification and measurement of financial assets. The second phase regarding the
classification and measurement of financial liabilities was published in October 2010. The third
phase of IFRS 9 was issued in November 2013 and relates to general hedge accounting. The
standard was finalized and published in July 2014. The final phase relates to a new expected
credit loss model for calculating impairment. The Group recognises that the new standard
introduces many changes to accounting for financial instruments and is likely to have a
significant impact on the consolidated financial statements. The Group has not analysed the
impact of these changes yet. The Group does not intend to adopt this standard early. The
standard will be effective for annual periods beginning on or after 1 January 2018 and will be
applied retrospectively with some exemptions.
 Various Improvements to IFRS are dealt with on a standard-by-standard basis. All amendments,
which result in accounting changes for presentation, recognition or measurement purposes, will
come into effect not earlier than 1 January 2014. The Group has not yet analysed the likely
impact of the improvements on its financial position or performance.
24
4 Net interest income

2014 2013
Interest income
Available-for-sale financial assets 7,015 7,015
Financial instruments at fair value through profit or loss 293 505
Amounts receivable under reverse repurchase agreements 23 16
Due from financial institutions 11 19
56,015 66,039
Interest expense
Current accounts and deposits from customers (21,058) (26,460)
Debt securities issued (10,773) (12,994)
Amounts payable under repurchase agreements (4,262) (4,180)
Deposits and balances from banks and other financial
institutions (2,584) (1,766)
Subordinated debt (1,995) (7,364)
(40,672) (52,764)
Net interest income 15,343 13,275
Included within various line items under interest income for the year ended 31 December 2014 is
KZT 8,062 million (2013: KZT 8,186 million) accrued on impaired financial assets.
5 Fee and commission income

2014 2013
Settlement 3,681 9,569
Foreign exchange and securities operations 279 302
Guarantee and letter of credit issuance 191 293
Trust, custodian and other fiduciary services 44 53
Other 288 459
4,483 10,676
6 Fee and commission expense

2014 2013
Collecting services on loans 814 731
Maintenance of card accounts 254 237
Settlement 137 142
Customer accounts services by financial agents 49 49
Foreign currency and security operations 41 37
Other 63 307
1,358 1,503
25
7 Net foreign exchange loss

2014 2013
Translation differences, net (13,947) (1,197)
Dealing, net 1,296 1,037
(12,651) (160)
8 Restructuring plan
(a) Liabilities subject to Restructuring Plan and gain from restructuring
During the year ended 31 December 2014 the Group performed restructuring of its certain debt
instruments.
The approval from the NBRK was received on 3 February 2014 and was then submitted to the
Almaty district financial court for approval on 24 February 2014. The Court published its decision
approving the restructuring on 3 March 2014. After negotiations, the Credit Committee agreed with
Restructuring Plan that became effective on 15 December 2014. On this date, cash, new notes and
common shares were allocated to claimants in consideration for the cancellation of their claims
pursuant to the Restructuring Plan. Settlement of cash and distribution of new notes and shares was
made on 15 December 2014.
The difference between the total carrying value of extinguished liabilities and the fair value of new
instruments issued is recognised as a gain from restructuring as shown below:
In million
tenge
Liabilities subject to the Restructuring Plan as at 31 December 2013 136,715
Movements on liabilities subject to the Restructuring Plan between 1 January and
15 December 2014
Repurchase of debt securities issued (208)
Change in valuation of recovery notes (4,539)
Interest accrual 12,575
Foreign currency translation loss 16,879
Liabilities subject to the Restructuring Plan as at 15 December 2014 before
excluding liabilities not restructured 161,422
Liabilities not restructured
Liability component of preference shares (2,042)
Liabilities restructured as at 15 December 2014 159,380
Fair value of debt securities issued as at 15 December 2014 (Note 8 (b)) (47,412)
Fair value of shares allocated to creditors as at 15 December 2014 (Note 8 (c)) (9,986)
Cash paid to creditors under the Restructuring Plan (25,019)
Total consideration given (82,417)
Discount on deposit from Samruk-Kazyna (Note 8 (d)) 99,211
Gain from restructuring 176,174
26
8 Restructuring plan, continued

(b) Debt securities issued
As a result of the restructuring process the Bank issued debt securities. New instruments were
allocated to creditors in various proportions depending on restructuring options selected by each
creditor for each old instrument. New debt securities are denominated in USD, have a maturity of
10 years and a coupon of 11.75% per annum, paid semiannually. The bonds are redeemed in sixteen
equal semi-annual instalments beginning after 2 years of grace period.
The securities were recognised at fair value at initial recognition. As the securities are not traded in
active markets the Bank used valuation techniques based on estimated discounted cash flows.
Discount rate was set as equal to the prevailing rates of return for financial instruments having
substantially the same terms and characteristics as the new instrument, including considering the
credit quality of the instrument, the fixed contractual interest rate and the remaining term to
repayment of the principal and the currency in which payments are to be made. The estimated
discount rate is 9.68% per annum. The total fair value of the debt securities issued was estimated to
be KZT 47,412 million as at 15 December 2014.
On 29 January 2015 the securities were admitted to the official list on the regulated market of the
Kazakhstan Stock Exchange (“KASE”).
The carrying value of debt securities issued as at 31 December 2014 is KZT 47,775 million.
(c) Equity
New common shares in the amount of 5,979,770,898 shares were solely issued to restructure debts.
The Bank applied IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments to initially
measure equity instruments issued to extinguish its financial liabilities. The fair value of common
shares issued as part of the consideration paid to extinguish the pre-restructured liabilities was
determined to be KZT 9,986 million. In calculating the fair value of common shares, the Bank
considered its post-restructuring financial position.
(d) Deposit from Samruk-Kazyna
Following one of the conditions of the Restructuring Plan Samruk-Kazyna placed with the Bank a
deposit in the amount of KZT 220,000 million denominated in KZT that has a maturity of 10 years
and a coupon of 4% per annum, paid monthly and with redemption at maturity.
The deposit was recognised at fair value at initial recognition. The Bank used valuation techniques
based on estimated discounted cash flows. The discount rate was set based on the rate determined
for new debt securities issued (Note 8 (b)) representing the credit risk of the Bank and adjusted for
currency premium and liquidity premium estimated based on the market the Bank operates in. The
estimated discount rate is 12.29% per annum. The total fair value of the deposit was estimated to
be KZT 120,789 million as at 15 December 2014 resulting in a discount of KZT 99,211 million
being recognised within gain from restructuring as Samruk-Kazyna acted in the capacity of a
government agent rather than in the capacity of a shareholder as it did not control the Bank as at the
date of the transaction.
The carrying value of the deposit as at 31 December 2014 is KZT 121,013 million.
9 Impairment losses
2014 2013
Loans to customers (21,912) (77,299)
Property and equipment (1,726) 404
Provisions for guarantee and letter of credit 2 (8)
Other assets 240 (1,502)
(23,396) (78,405)
27
10 General administrative expenses

2014 2013
Payroll and related taxes 7,698 8,087
Professional services 7,593 528
Depreciation and amortisation 1,954 2,021
Taxes other than on income tax 1,420 1,046
Legal services 1,112 655
Advertising and marketing 762 558
Rent 647 495
Buildings maintenance 463 379
Security 460 395
Communications and information services 433 453
Repairs and maintenance 429 537
Cash collection services 270 313
Travel expenses 121 112
Transportation services 109 90
Insurance 97 137
Office supplies 63 78
Representative expenses 8 6
Charity and sponsorship 2 20
Other 923 756
24,564 16,666
11 Income tax benefit/(expense)

2014 2013
Current year tax expense
Current tax expense underprovided in prior periods - (236)
- (236)
Deferred tax expense
Reversal of deferred tax assets due to changes in the Tax Code 1,244 -
Deferred taxation movement due to origination and reversal of
temporary differences and derecognition of deferred tax asset 32,280 (17,954)
33,524 (17,954)
33,524 (18,190)
In 2014, the Tax Code of the Republic of Kazakhstan has been amended in terms of the accrued
interest expenses deductible for tax purposes. This change shall be applied retrospectively,
therefore, the Bank has filed an additional return for 2013 for decrease of the corporate income tax
expense by KZT 1,244 million.
In 2014 the applicable tax rate for current and deferred tax is 20% (2013: 20%).
28
11 Income tax benefit/(expense), continued

Reconciliation of effective tax rate:
2014 2013
In million tenge % In million tenge %
Profit/(loss) before income tax 137,678 100 (66,658) 100
Income tax at the applicable tax rate (27,536) (20) 13,332 (20)
Non-taxable interest income 1,473 1 1,801 (3)
Other non-deductible expenses (1,018) (1) (3,839) 6
Income tax over/(under)provided in
prior periods 1,244 1 (236) 0
Change in unrecognised deferred tax
asset 59,361 43 (29,248) 44
33,524 24 (18,190) 27
Deferred tax assets and liabilities

Temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes give rise to net deferred tax assets as at
31 December 2014 and 31 December 2013. The future tax benefits will only be realised if profits
will be available against which unused tax losses can be utilised and there are no changes to the law
and regulations that adversely affect the Group’s ability to claim the deductions in future periods.
The deductible temporary differences do not expire under current tax legislation. The tax loss carry-
forwards expire in 2019 - 2023.
Movements in temporary differences during the years ended 31 December 2014 and
31 December 2013 are presented as follows:
Recognised
Balance in profit Balance 31
In million tenge 1 January 2014 or loss December 2014
Loans to customers 1,100 (84) 1,016
Accrued interest on loans to
customers, written-off 1,844 - 1,844
Property, equipment and intangible
assets (836) 141 (695)
Other assets 212 80 292
Interest payable 934 (934) -
Debt securities issued - 875 875
Current accounts and deposits from
customers - (19,793) (19,793)
Other liabilities 8 29 37
Loss on derivatives 8,267 - 8,267
Tax loss carry-forwards 66,370 (6,151) 60,219
77,899 (25,837) 52,062
Unrecognised deferred tax assets (77,899) 59,361 (18,538)
Recognised deferred tax assets - 33,524 33,524
Loans to customers – dynamic reserve - - (7,601)
Other - - (62)
Recognised deferred tax liability - - (7,663)
29
11 Income tax benefit/(expense), continued

Deferred tax assets and liabilities
Recognised Adjustment due Balance
Balance in profit to change in the 31 December
In million tenge 1 January 2013 or loss Tax Code* 2013
Loans to customers 7,942 1,100 (7,942)* 1,100
Accrued interest on loans to
customers, written-off 1,844 - - 1,844
Property, equipment and
intangible assets (880) 44 - (836)
Other assets - 212 - 212
Interest payable - 934 - 934
Other liabilities 11 (3) - 8
Loss on derivatives 8,267 - - 8,267
Tax loss carry-forwards 57,363 9,007 - 66,370
74,547 11,294 (7,942) 77,899
Unrecognised deferred tax
asset (56,593) (29,248) 7,942 (77,899)
Recognised deferred tax asset 17,954 (17,954) - -
The deferred tax liability was recognised as a result of business combination (Note 37).
* In 2013 there were changes introduced to the Tax Code that had an adverse impact on commercial
banks’ ability to deduct for tax purposes an excess of IFRS impairment allowance over statutory
impairment allowance that arose in prior years.
Management assessed the recoverability of deferred tax assets as at 31 December 2014 upon
completion of restructuring process and commencement of implementation of new business plan.
Based on the business plans prepared, management concluded that it is appropriate to recognise a
deferred tax asset amounting to KZT 33,524 million.
The significant assumptions used by management in estimating the amount of deferred tax asset to
be recognised include the following:
 growth in loans between 7.5% and 13.2% per annum;
 growth in customer deposits between 6.0% and 9.7% per annum.
Changes in the assumptions used could affect the deferred tax asset, as follows:
 a decrease in deposits growth rate by 0.5% over the forecast period increases the amount of
deferred tax asset to KZT 1,293 million;
 a decrease in average lending rate of 0.5% over the forecast period decreases the amount of
deferred tax asset to KZT 4,903 million.
30
12 Cash and cash equivalents
2014 2013
Cash at current bank accounts
National Bank of the Republic of Kazakhstan 60,558 1,510
Other banks
Rated from A- to A+ 10,640 3,689
Rated from BBB- to BBB+ 1,151 106
Rated from BB- to BB+ 462 2
Rated below B+ 183 360
Not rated 21 183
Total cash at current bank accounts 73,015 5,850
Cash on hand 15,617 10,227
88,632 16,077
The credit ratings are presented by reference to the credit ratings of Standard and Poor’s credit
rating agency or analogues of similar international agencies.
No cash and cash equivalents are impaired or past due.
Minimum reserve requirements
In accordance with regulations issued by the NBRK, minimum reserve requirements are calculated
as a total of specified proportions of different groups of banks liabilities. Banks are required to
comply with these requirements by maintaining average reserve assets (local currency cash and
NBRK balances) equal or in excess of the average minimum requirements. As at
31 December 2014, combined minimum reserve of the Bank and its banking subsidiaries is
KZT 6,542 million (31 December 2013: KZT 6,725 million).
Concentration of cash and cash equivalents
As at 31 December 2014 the Group has current bank accounts with one bank (31 December 2013:
one bank) whose balances exceed 10% of total cash and cash equivalents. The gross value of these
balances as at 31 December 2014 and 31 December 2013 are KZT 60,558 million and KZT 1,630
million, respectively.
13 Due from financial institutions
2014 2013
Loans and deposits
Rated from A- to A+ 689 193
Rated from BBB- to BBB+ 5,584 -
Rated from BB- to BB+ 207 -
Rated below B+ 3,944 -
Not rated 1,726 4
Total loans and deposits 12,150 197
31
13 Due from financial institutions, continued

No balances due from financial institutions are impaired or past due.
Concentration of due from financial institutions

As at 31 December 2014 the Group has balances with three financial institutions
(31 December 2013: none) whose balances exceed 10% of total due from financial institutions. The
gross value of these balances as at 31 December 2014 are KZT 8,538 million (31 December 2013:
nil).
14 Financial instruments at fair value through profit or loss

2014 2013
ASSETS
Debt and other fixed-income instruments
Government bonds
Treasury bills of the Ministry of Finance of the Republic of
Kazakhstan - rated BBB+ 19,395 4,498
Total government bonds 19,395 4,498
Corporate bonds
Rated from BBB- to BBB+ 2,964 1
Rated from BB- to BB+ 3,144 -
Not rated 1 -
Total corporate bonds 6,109 1
Bank bonds
Rated from BBB- to BBB+ 300 170
Rated from BB- to BB+ 1,104 -
Rated from B- to B+ 410 -
Total bank bonds 1,814 170
Equity investments 1,254 31
28,572 4,700
None of the financial assets at fair value through profit or loss are past due or impaired.
As at 31 December 2014 none of the financial assets at fair value through profit or loss were pledged
as collateral under repurchase agreements (31 December 2013: carrying amount of KZT 3,841
million, carrying amount of associated liabilities, presented in Note 23, of KZT 3,571 million).
32
15 Loans to customers
2014 2013
Corporate loans that are individually significant
Loans to large corporates 158,159 266,256
Total corporate loans that are individually significant 158,159 266,256
Corporate loans that are not individually significant and

loans to individuals
Corporate loans that are not individually significant 112,687 73,956
Mortgage loans 106,250 78,082
Consumer loans 111,220 161,632
Auto loans 2,412 3,179
Credit card loans 3,669 3,400
Other loans to customers 148,825 85,065
Total corporate loans that are not individually significant
and loans to individuals 485,063 405,314
Gross loans to customers 643,222 671,570

Impairment allowance (81,895) (363,752)
Net loans to customers 561,327 307,818
In 2014 the Group increased the threshold from KZT 200 million to KZT 600 million of the gross
loan amount to be treated as individually significant loan. For this purpose comparatives are
restated.
Movements in the loan impairment allowance for the years ended 31 December are as follows:
2014 2013
Balance at the beginning of the year (363,752) (283,306)
Acquired through business combination (17,639) -
Net charge (21,912) (77,299)
Net write-offs 360,865 863
Effect of foreign currency translation (39,457) (4,010)
Balance at the end of the year (81,895) (363,752)
33
15 Loans to customers, continued

(a) Credit quality of corporate loans that are individually significant
The following table provides information on the credit quality of corporate loans that are
individually significant as at 31 December 2014:
Impairment
Gross Impairment to gross
loans allowance Net loans loans
In million In million In million
tenge tenge tenge %
Corporate loans that are individually
significant
Loans without individual signs of impairment 81,743 (278) 81,465 0.34

Impaired loans:
- not overdue 31,426 (13,669) 17,757 43.50
- overdue less than 90 days 10,331 (2,449) 7,882 23.71
- overdue more than 90 days and less than
1 year 8,036 (4,451) 3,585 55.39
- overdue more than 1 year 26,623 (9,191) 17,432 34.52
Total impaired loans 76,416 (29,760) 46,656 38.94
Total corporate loans that are individually
significant 158,159 (30,038) 128,121 18.99
The following table provides information on the credit quality of the corporate loans that are
individually significant as at 31 December 2013:
Gross Impairment Impairment

loans allowance Net loans to gross
In million In million In million loans
tenge tenge tenge %
Corporate loans that are individually
significant
Loans without individual signs of
impairment 25,137 (503) 24,634 2.00
Impaired loans:
- not overdue 44,335 (28,107) 16,228 63.40
- overdue less than 90 days 6,326 (4,381) 1,945 69.25
- overdue more than 90 days and less than 1
year 673 (358) 315 53.19
- overdue more than 1 year 189,785 (179,281) 10,504 94.47
Total impaired loans 241,119 (212,127) 28,992 87.98
significant 266,256 (212,630) 53,626 79.86
Loan impairment results from one or more events that occurred after the initial recognition of the
loan and that have an impact on the estimated future cash flows associated with the loan, and which
can be reliably estimated. Loans without individual signs of impairment do not have objective
evidence of impairment that can be directly attributed to them.
34

(a) Credit quality of corporate loans that are individually significant, continued
The Group estimates loan impairment for loans to corporate customers based on an analysis of the
future cash flows for loans with individual signs of impairment and based on its past loss experience
for portfolios of loans for which no individual signs of impairment has been identified.
In determining the impairment allowance for corporate loans that are individually significant,
management makes the following key assumptions:
- annual loss rate of 0.34% determined based on historical loss experience adjusted for current
economic developments (31 December 2013: 2.00%);
- a discount of between 20% and 30% to the appraised value of collateral (31 December 2013: a
discount of between 20% and 30% to the appraised value of collateral) in cases where liquidity
discounts are deemed necessary;
- a delay of 12 to 36 months in obtaining proceeds from the foreclosure of collateral
(31 December 2013: a delay of 24 to 36 months).
Changes in these estimates could affect the loan impairment allowance. For example, to the extent
that the net present value of the estimated cash flows differs by ten percent, the loan impairment
allowance for corporate loans that are individually significant as at 31 December 2014 would be
KZT 12,812 million lower/higher (31 December 2013: by ten percent, KZT 5,363 million).
(i) Analysis of movements in the impairment allowance

Movements in the loan impairment allowance for corporate loans that are individually significant
for the years ended 31 December are as follows:
2014 2013
Acquired through business combination (5,219) -
Net recovery/(charge) 10,755 (29,230)
Net write-offs/(recovery) 204,083 (596)
Effect of foreign currency translation (27,027) (2,851)
Balance at the end of the year (30,038) (212,630)
35

(b) Credit quality of corporate loans that are not individually significant and loans to individuals
The following table provides information on the credit quality of corporate loans that are not
individually significant and loans to individuals collectively assessed for impairment as at
31 December 2014:
Impairmen
Gross Impairment Net t to gross
loans allowance loans loans
tenge tenge tenge %
Corporate loans that are not
individually significant
- Not past due 75,415 (1,650) 73,765 2.19
- Overdue less than 30 days 3,856 (133) 3,723 3.45
- Overdue 30-89 days 1,118 (41) 1,077 3.67
- Overdue 90-179 days 810 (197) 613 24.32
- Overdue 180-360 days 1,492 (267) 1,225 17.90
- Overdue more than 360 days 29,996 (9,613) 20,383 32.05
Total corporate loans that are not
individually significant 112,687 (11,901) 100,786 10.56
Mortgage loans
- Not past due 63,232 (1,473) 61,759 2.33
- Overdue 30-89 days 2,693 (439) 2,254 16.30
- Overdue 90-179 days 3,041 (1,485) 1,556 48.83
- Overdue 180-360 days 4,777 (1,703) 3,074 35.65
Total mortgage loans 106,250 (8,717) 97,533 8.20
Consumer loans
- Not past due 84,541 (2,674) 81,867 3.16
- Overdue less than 30 days 8,265 (1,373) 6,892 16.61
- Overdue 30-89 days 4,832 (2,234) 2,598 46.23
- Overdue 90-179 days 3,680 (2,544) 1,136 69.13
- Overdue 180-360 days 5,869 (5,240) 629 89.28
- Overdue more than 360 days 4,033 (3,590) 443 89.02
Total consumer loans 111,220 (17,655) 93,565 15.87
Auto loans
- Not past due 347 - 347 -
- Overdue less than 30 days 10 - 10 -
- Overdue 30-89 days 5 - 5 -
- Overdue 90-179 days 15 (1) 14 6.67
- Overdue 180-360 days 31 (3) 28 9.68
- Overdue more than 360 days 2,004 (44) 1,960 2.20
Total auto loans 2,412 (48) 2,364 1.99
36

(b) Credit quality of corporate loans that are not individually significant and loans to individuals,
continued
Impairment
Gross Impairment Net to gross
tenge tenge tenge %
Credit card loans
- Not past due 484 (55) 429 11.36
- Overdue less than 30 days 70 (17) 53 24.29
- Overdue 30-89 days 61 (41) 20 67.21
- Overdue 90-179 days 156 (138) 18 88.46
- Overdue 180-360 days 439 (434) 5 98.86
Total credit card loans 3,669 (3,122) 547 85.09
Other loans to individuals
- Not past due 78,288 (1,523) 76,765 1.95
- Overdue 30-89 days 5,019 (703) 4,316 14.01
- Overdue 90-179 days 4,916 (1,988) 2,928 40.44
- Overdue 180 - 360 days 6,314 (1,727) 4,587 27.35
Total other loans to individuals 148,825 (10,414) 138,411 7.00
individually significant and loans to
individuals 485,063 (51,857) 433,206 10.69
37

continued
The following table provides information on the credit quality of corporate loans that are not
individually significant and loans to individuals collectively assessed for impairment as at
31 December 2013:
Gross Impairment Net Impairment
loans allowance loans to gross loans
tenge tenge tenge %
Corporate loans that are not
individually significant
- Not past due 25,188 (2,933) 22,255 11.64
- Overdue 30-89 days 1,639 (868) 771 52.96
- Overdue 90-179 days 20,701 (15,699) 5,002 75.84
- Overdue 180-360 days 726 (585) 141 80.58
individually significant 73,956 (40,358) 33,598 54.57
Mortgage loans
- Not past due 24,545 (2,924) 21,621 11.91
- Overdue 30-89 days 2,071 (751) 1,320 36.26
- Overdue 90-179 days 4,776 (2,546) 2,230 53.31
- Overdue 180-360 days 3,362 (2,461) 901 73.20
Total mortgage loans 78,082 (40,279) 37,803 51.59
Consumer loans
- Not past due 116,450 (5,780) 110,670 4.96
- Overdue less than 30 days 12,442 (2,123) 10,319 17.06
- Overdue 30-89 days 8,276 (3,971) 4,305 47.98
- Overdue 90-179 days 4,329 (3,429) 900 79.21
- Overdue 180-360 days 6,226 (5,607) 619 90.06
Total consumer loans 161,632 (33,248) 128,384 20.57
Auto loans
- Not past due 74 - 74 -
- Overdue less than 30 days 8 - 8 -
- Overdue 30-89 days 1 - 1 -
- Overdue 90-179 days 16 (9) 7 56.25
- Overdue 180-360 days 20 (20) - 100.00
- Overdue more than 360 days 3,060 (3,060) - 100.00
Total auto loans 3,179 (3,089) 90 97.17
38

continued
Impairment
Gross Impairment Net to gross
tenge tenge tenge %
Credit card loans
- Not past due 1,263 (7) 1,256 0.55
- Overdue less than 30 days 149 (4) 145 2.68
- Overdue 30-89 days 296 (27) 269 9.12
- Overdue 90-179 days 315 (117) 198 37.14
- Overdue 180-360 days 163 (161) 2 98.77
Total credit card loans 3,400 (1,518) 1,882 44.65
Other loans to individuals
- Not past due 31,345 (1,868) 29,477 5.96
- Overdue 30-89 days 2,784 (689) 2,095 24.75
- Overdue 90-179 days 2,487 (883) 1,604 35.50
- Overdue 180 - 360 days 3,408 (1,954) 1,454 57.34
Total other loans to individuals 85,065 (32,630) 52,435 38.36
individually significant and loans to
individuals 405,314 (151,122) 254,192 37.29
As at 31 December 2014 there are certain loans that were restructured and are presented in
accordance with their modified terms but continue to be assessed for impairment as if no
modification of payment schedules has been done until certain probation period is successfully
passed.
The Group estimates loan impairment based on its past historical loss experience on each type of
loans. The significant assumptions used by management in determining the impairment losses for
corporate loans that are not individually significant and loans to individuals include:
- loss migration rates are constant and can be estimated based on the historic loss migration
pattern for the past 12 months.
- restructured loans have a probation period of 6 months (31 December 2013: 6 months). During
this period restructured loans continue to be classified as overdue loans. If during the probation
period the loan is being serviced in accordance with amended contractual terms the loan is
considered to be “cured”. Subsequent impairment assessment of “cured” loans is adjusted to
reflect actual historic experience of the long-term effectiveness of restructuring that ranges from
49% to 79% depending on product (31 December 2013: 37% to 81%).
- in respect of auto loans, a delay of 24 months in obtaining proceeds from the foreclosure of
collateral (31 December 2013: 24 months).
39

continued
- in respect of mortgage loans and other loans to individuals, a delay of 36 months in obtaining
proceeds from the foreclosure of collateral (31 December 2013: 36 months).
Changes in these estimates could affect the loan impairment provision. For example, to the extent
that the net present value of the estimated cash flows differs by plus/minus ten percent, the loan
impairment on corporate loans that are not individually significant and loans to individuals as at
31 December 2014 would be KZT 43,321 million lower/higher (31 December 2013: ten percent,
KZT 25,419 million).
(i) Analysis of movements in the impairment allowance

Movements in the loan impairment allowance by classes of corporate loans that are not individually
significant and loans to individuals for the year ended 31 December 2014 are as follows:
Corporate
loans that
are not
individually Mortgage Consumer Auto Credit Other
In million tenge significant loans loans loans cards loans Total
Balance at the
beginning of the
year (40,358) (40,279) (33,248) (3,089) (1,518) (32,630) (151,122)
Acquired through
business
combination (3,385) (3,099) (504) (48) (4) (5,380) (12,420)
Net
recovery/(charge) 594 (4,939) (21,710) 347 (1,526) (5,433) (32,667)
Net write-offs 32,891 45,051 37,807 2,346 4 38,683 156,782
Effect of foreign
currency
translation (1,643) (5,451) - 396 (78) (5,654) (12,430)
Balance at the
end of the year (11,901) (8,717) (17,655) (48) (3,122) (10,414) (51,857)
40

continued
(i) Analysis of movements in the impairment allowance, continued
Movements in the loan impairment allowance by classes of corporate loans that are not individually
significant and loans to individuals for the year ended 31 December 2013 are as follows:
Corporate
loans that
are not
individually Mortgage Consumer Auto Credit Other
In million tenge significant loans loans loans cards loans Total
Balance at the
beginning of the
year (31,854) (31,672) (14,247) (715) (1,326) (23,539) (103,353)
Net charge (8,813) (8,532) (19,052) (2,370) (175) (9,127) (48,069)
Net write-offs 488 427 53 8 - 483 1,459
Effect of foreign
currency
translation (179) (502) (2) (12) (17) (447) (1,159)
Balance at the
end of the year (40,358) (40,279) (33,248) (3,089) (1,518) (32,630) (151,122)
(c) Analysis of collateral and other credit enhancements
(i) Corporate loans that are individually significant
Corporate loans that are individually significant are subject to individual credit appraisal and
impairment testing. The general creditworthiness of an individually significant corporate customer
tends to be the most relevant indicator of credit quality of the loan extended to it. However,
collateral provides additional security and the Group generally requests corporate borrowers to
provide it.
The following tables provides information on collateral and other credit enhancements securing
corporate loans that are individually significant, net of impairment, by types of collateral:
Fair value of Fair value of
Loans to collateral - for collateral – for
customers, collateral collateral
31 December 2014 carrying assessed as of assessed as of loan
In million tenge amount reporting date inception date
Loans without individual signs of
impairment
Mixed 29,102 - 29,102
Real estate 12,280 - 12,280
Deposit 2,736 - 2,736
Vehicles 1,658 - 1,658
Equipment 1,700 - 1,700
No collateral 33,989 - -
Total loans without individual signs of
impairment 81,465 - 47,476
Impaired loans
Mixed 16,990 16,990 -
Real estate 21,718 21,718 -
Equipment 435 435 -
Land 255 255 -
Vehicles 13 13 -
Total impaired loans 46,656 39,411 -
(i) Total corporate loans that are individually
significant 128,121 39,411 47,476
41

(c) Analysis of collateral and other credit enhancements, continued
(i) Corporate loans that are individually significant, continued
Loans without individual signs of impairment
Mixed 23,535 - 23,535
Real estate 39 - 39
Total loans without individual signs of
impairment 24,634 - 23,574
Impaired loans
Mixed 16,285 16,285 -
Real estate 11,508 11,508 -
Land 1,167 1,167 -
Equipment 32 32 -
Total impaired loans 28,992 28,992 -
significant 53,626 28,992 23,574
The tables above exclude overcollateralisation. Mixed types of collateral represent pledges over
combinations of assets including mainly real estate and land, and also equipment, deposits, vehicles
and other.
The Group has loans, for which fair value of collateral was assessed at the loan inception date and
it was not updated for further changes, and loans for which fair value of collateral is not determined.
For certain loans the fair value of collateral is updated as at the reporting date. Information on
valuation of collateral is based on when this estimate was made, if any.
Guarantees and sureties received from individuals, such as shareholders of SME borrowers, are not
considered for impairment assessment purposes. Accordingly, such loans and unsecured portions
of partially secured exposures are presented as loans without collateral or other credit enhancement.
The recoverability of loans which are neither past due nor impaired is primarily dependent on the
creditworthiness of the borrowers rather than the value of collateral, and the Group does not
necessarily update the valuation of collateral as at each reporting date.
42

(ii) Corporate loans that are not individually significant and loans to individuals
The following tables provides information on collateral and other credit enhancements securing
corporate loans that are not individually significant and loans to individuals, net of impairment, by
types of collateral:
Not overdue loans
Real estate 153,919 - 153,919
Mixed 32,034 - 32,034
Land 1,130 - 1,130
Deposits 3,593 - 3,593
Equipment 677 - 677
Vehicles 3,766 - 3,766
Total not overdue loans 294,932 - 195,119
Overdue loans
Real estate 107,575 107,575 -
Mixed 11,048 11,048 -
Land 2,080 2,080 -
Vehicles 2,479 2,479 -
Equipment 120 120 -
Deposits 1 1 -
Total overdue loans 138,274 123,303 -
Total corporate loans that are not individually
significant and loans to individuals 433,206 123,303 195,119
43

(ii) Corporate loans that are not individually significant and loans to individuals, continued
Not overdue loans
Real estate 51,270 - 51,270
Mixed 18,979 - 18,979
Land 1,168 - 1,168
Deposits 651 - 651
Vehicles 76 - 76
Equipment 53 - 53
Total not overdue loans 185,353 - 72,197
Overdue loans
Real estate 39,528 39,528 -
Mixed 8,019 8,019 -
Vehicles 1,574 1,574 -
Equipment 521 521 -
Land 417 417 -
Deposits 4 4 -
Total overdue loans 68,839 50,063 -
Total corporate loans that are not individually
significant and loans to individuals 254,192 50,063 72,197
The tables above exclude overcollateralisation. Mixed types of collateral represent pledges over
combinations of assets including mainly real estate and land, and also equipment, deposits, vehicles
and other.
For certain mortgage loans, and other loans to individuals the Group updates the appraised values
of collateral obtained at inception of the loan to the current values considering the approximate
changes in property values. The Group may also obtain a specific individual valuation of collateral
at each reporting date where there are indications of impairment.
(iii) Repossessed collateral

During the year ended 31 December 2014, the Group obtained real estate by taking possession of
collateral for loans to customers with a net carrying amount of KZT 6,169 million
(31 December 2013: KZT 1,433 million). The Group’s policy is to sell these assets as soon as it is
practicable.
44

(d) Industry and geographical analysis of loans
Loans were issued primarily to customers located within the Republic of Kazakhstan operating in
the following economic sectors:
2014 2013
Loans to individuals 372,376 331,358
Services provided by small and medium entities 56,256 49,000
Construction 36,703 76,972
Wholesale 36,097 51,651
Real estate operations 34,240 40,072
Machinery production 27,354 3,623
Financial services 17,593 5,404
Retail services 14,408 11,270
Food 9,538 3,231
Transportation 7,941 9,910
Metallurgy industry 6,574 676
Agriculture 5,152 15,609
Chemical industry 4,147 3,126
Production of metal goods 3,501 3,120
Manufacturing 2,728 4,540
Production of crude oil and natural gas 2,167 40,491
Textile production 1,130 1,066
Post and communications 770 781
Finance lease 170 1,168
Other 4,377 18,502
643,222 671,570
561,327 307,818
(e) Significant credit exposures

As at 31 December 2014 and 31 December 2013 the Group has no borrowers or groups of connected
borrowers, respectively, whose loan balances exceed 10% of loans to customers.
(f) Loan maturities
The maturity of the loan portfolio is presented in Note 27 (e), which shows the remaining period
from the reporting date to the contractual maturity of the loans.
16 Available-for-sale financial assets

2014 2013
Debt instruments
Bonds of Samruk-Kazyna - rated BBB+ 104,112 106,038
Kazakhstan - rated BBB+ 24,907 12,712
Total debt investments 129,019 118,750
Equity investments
Corporate shares 2,303 2,315
Total equity investments 49 61
129,068 118,811
45
16 Available-for-sale financial assets, continued

As at 31 December 2014 and 31 December 2013 the Group pledged as collateral under repurchase
agreements (refer to Note 23) the following available-for-sale financial assets:
2014 2013
Bonds of Samruk-Kazyna 99,452 75,338

Kazakhstan 3,147 6,091
102,599 81,429
As at 31 December 2014 and 31 December 2013 the carrying amount of the associated liabilities,
presented in Note 23, is KZT 98,291 million and KZT 76,513 million, respectively.
Unquoted debt securities
Included in available-for-sale financial assets are unquoted debt securities as follows:
2014 2013
Debt and other fixed-income instruments
The fair value of the bonds of Samruk-Kazyna as at 31 December 2014 was determined using a
market rate of 6.36% (31 December 2013: 6.10%) determined with reference to government
securities having similar terms and credit risk.
Analysis of movements in the impairment allowance

Movements in the impairment allowance are as follows:
2014 2013
Balance at the beginning of the year 2,254 2,254
Balance as at the end of the year 2,254 2,254
46
17 Property, equipment and intangible assets

Land and Construction in Intangible
In million tenge buildings Computers Vehicles progress Other assets Total
Cost/revalued amount
At 1 January 2013 14,545 3,051 431 2,026 11,806 3,222 35,081
Additions 11 56 26 55 252 218 618
Revaluation/(impairment) 341 - - (995) - - (654)
Transfers 32 17 3 (96) 47 (3) -
Disposals (937) (43) (34) (89) (202) - (1,305)
At 31 December 2013 13,992 3,081 426 901 11,903 3,437 33,740
Additions 689 294 136 353 1,080 839 3,391
Acquisitions through business combinations 3,422 3,135 190 14 3,596 1,705 12,062
Impairment - (50) - (652) (3,897) - (4,599)
Transfers - 4 - (20) 16 - -
Disposals (70) (1,945) (119) (90) (1,930) - (4,154)
As at 31 December 2014 18,033 4,519 633 506 10,768 5,981 40,440
Depreciation, amortisation and impairment

At 1 January 2013 1,217 2,595 269 - 8,036 1,814 13,931
Depreciation and amortisation for the year 356 173 32 - 1,023 437 2,021
Reversal of depreciation on revaluation (1,508) - - - - - (1,508)
Disposals (64) (41) (28) - (189) - (322)
At 31 December 2013 1 2,727 273 - 8,870 2,251 14,122
Depreciation and amortisation for the year 485 133 25 - 993 318 1,954
Acquisitions through business combinations 485 2,857 84 - 1,787 892 6,105
Reversal of depreciation on impairment - (48) - - (2,825) - (2,873)
Disposals (3) (1,944) (96) - (1,888) - (3,931)
At 31 December 2014 968 3,725 286 - 6,937 3,461 15,377
Net book value

At 31 December 2013 13,991 354 153 901 3,033 1,186 19,618
At 31 December 2014 17,065 794 347 506 3,831 2,520 25,063
47
17 Property, equipment and intangible assets, continued

Revalued assets
The last independent appraisal of land and buildings was performed by Bata Group in
December 2013. The basis used for the appraisal is the market approach. The market approach is
based on an analysis of the results of comparable sales of similar buildings.
Management has assessed the changes in real estate prices between 31 December 2013 and
31 December 2014 and concluded that the carrying amount of land and buildings does not differ
materially that would have been determined using fair value at the end of the reporting date.
As the Group acquired other property, equipment and intangible assets from third parties in 2014 at
fair values, no revaluation was performed as at 31 December 2014 for these assets as well.
The carrying value of land and buildings as at 31 December 2014, if land and buildings would not
have been revalued, would be KZT 17,836 million (31 December 2013: KZT 14,732 million).
18 Other assets
2014 2013
Inventory 22,125 6,316
Prepayments and other debtors 6,358 4,699
Debtors for capital investments 1,206 117
Investment property 1,129 -
Tax settlements, other than income tax 643 127
Other transit accounts 390 111
Other services provided 211 781
Current tax asset 95 71
Receivables from collection agencies - 20,077
Other 1,818 1,114
Total other assets 33,975 33,413
30,910 8,547
Included in inventory is foreclosed collateral on loans to customers. As a result of business

combination (Note 37) the Group acquired foreclosed assets in amount of KZT 11,519 million. The
fair values of the Group’s foreclosed assets are categorised into Level 2 of the fair value hierarchy,
as the basis used for the appraisal was an analysis of the results of comparable sales of similar
objects.
Included in other category are the derivative financial assets represent the fair value of the cross-
currency swaps contracted with the NBRK to deliver KZT 53,697 million in exchange for
USD 295 million (“swaps”). The Group made a 3% per annum interest prepayment of KZT 1,310
million in relation to these contracts. Swaps mature in January 2015 to October 2017. NBRK has a
right to terminate the contract at any time prior to the maturity.
48
18 Other assets, continued

Analysis of movements in the impairment allowance:
Movements in the impairment allowance for the year ended 31 December are as follows:
2014 2013
Acquired through business combination (20) -
Net recovery/(charge) 240 (1,502)
Write-offs, net 21,624 226
Effect of foreign currency translation (43) (15)
Balance as at the end of the year (3,065) (24,866)
As at 31 December 2014 no other assets are overdue (31 December 2013: KZT 20,077 million were
overdue for more than one year and were fully provided).
19 Current accounts and deposits from customers
2014 2013
Current accounts and demand deposits
- Retail 18,785 12,276
- Corporate 56,122 28,180
Term deposits
- Retail 177,687 147,273
- Corporate 239,352 117,003
Guarantee deposits
- Retail 4,734 1,554
- Corporate 16,879 1,258
513,559 307,544
Concentrations of current accounts and deposits from customers

As at 31 December 2014 the Group had one customer whose balances exceeded 10% of total
customer accounts (31 December 2013: one). These balances as at 31 December 2014 were
KZT 137,086 million (31 December 2013: KZT 68,139 million).
20 Deposits and balances from banks and other financial institutions
As at 31 December 2014 and 31 December 2013 deposits and balances from banks and other
financial institutions comprised the following:
2014 2013
Loans from government-owned organisations 30,955 15,599
Current accounts of banks 150 520
Loans from other financial institutions 2,260 8,223
33,365 24,342
As at 31 December 2014 loans from government-owned organisations included KZT 24,489 million
(31 December 2013: KZT 15,599 million) received from the Entrepreneurship Development Fund
“Damu” JSC under the government program for support of small and medium enterprises by the
banking sector. The loans are denominated in KZT, bear interest rates of 2.00 - 9.65% per annum
and mature in 2015-2034.
49
20 Deposits and balances from banks and other financial institutions,

continued
During 2014, the Group has received a number of loans from government-owned organisations
under development programs implemented to support SME and manufacturing sectors.
21 Debt securities issued
The carrying value of debt securities issued as at 31 December 2014 and 31 December 2013 is as
follows:
2014 2013
Eurobonds denominated in USD 59,045 -
Bonds denominated in KZT 3,992 -
Discount bonds denominated in USD - 69,058
Discount bonds denominated in KZT - 526
Par notes denominated in USD - 22,833
Par notes denominated in KZT - 1,296
Recovery notes - 15,196
63,037 108,909
During 2014, the Group restructured discount bonds denominated in USD and KZT, par notes
denominated in USD and KZT, recovery notes, and subordinated debt notes (Notes 8 and 22).
Eurobonds denominated in USD include two types of instruments: Eurobonds in the amount of
KZT 47,775 million, maturing in 2024 and bearing a coupon of 11.75% per annum, paid
semiannually and redeemed in sixteen equal semi-annual instalments beginning from 2016 that
were issued in exchange for restructured debt (Note 8(b)) and Eurobonds in the amount of
KZT 11,270 million maturing in 2022 bearing a coupon of 14% per annum, paid semiannually, that
were assumed as a result of business combination with Temirbank JSC.
Bonds denominated in KZT mature in 2020 and have a coupon of 1% + floating inflation index per
annum (capped at 12% per annum), paid semiannually.
22 Subordinated debt
The carrying value of subordinated debt as at 31 December 2014 and 31 December 2013 is as
follows:
2014 2013
Subordinated debt notes denominated in KZT 22,753 25,502
Long-term loans denominated in KZT 3,012 -
Liability component of preference shares 2,042 2,304
27,807 27,806
The liability component of preference shares was recognised at fair value at initial recognition and
arose due to preference shares having a minimum guaranteed dividend of KZT 100 per share.
Subordinated debt notes denominated in KZT mature in 2020 - 2031 and have a fixed rate coupon
of 8.0% per annum, paid semiannually.
Long-term loans comprise of subordinated loans denominated in KZT from Verny Investments
Holding LLP and Maglink Limited bearing an interest rate of 8% per annum and maturing in 2021.
50
23 Amounts payable under repurchase agreements

The amounts payable under repurchase agreements are collateralised as follows:
2014 2013
Bonds of the Ministry of Finance of the Republic of Kazakhstan 2,835 9,075
98,291 80,084
24 Other liabilities
2014 2013
Professional services 5,544 -
Taxes payable, other than income tax 1,373 822
Due to employees 897 209
Creditors on deposits guarantee payments 598 -
Creditors on guarantees issued 502 -
Creditors on purchase of property and equipment 405 322
Other transit accounts 194 287
Other 1,305 528
10,818 2,168
25 Share capital
The number of authorised and issued and outstanding common and preference shares, their par
value and share capital as at 31 December 2014 are as follows:
Authorised Issued and In million
shares outstanding tenge
Common shares
Shares with a par value of KZT 10,000 15,000,000 9,637,563 96,375
Shares with no par value 149,980,000,000 90,760,307,902 59,783
Total 150,000,000,000 90,773,945,465 180,158
Preference shares
Shares with a par value of KZT 10,000 400,000 400,000 4,000
Total 3,000,000 2,619,626 152,715
Total share capital 332,873
51
25 Share capital, continued

The number of authorised and issued and outstanding common and preference shares, their par
value and share capital as at 31 December 2013 are as follows:
Authorised Issued and In million
shares outstanding tenge
Common shares
Total 20,000,000 13,637,563 120,375
Preference shares
Shares with a par value of KZT 10,000 400,000 400,000 4,000
Total 3,000,000 2,619,626 152,715
Total share capital 273,090
26 Earnings/(loss) per share

2014 2013
Basic earnings/(loss) per share, tenge 2 (1)
Diluted earnings/(loss) per share, tenge 2 (1)
Basic earnings/(loss) per share

Profit/(loss) attributable to common shareholders, million tenge 171,202 (84,848)
Issued common shares as at 1 January, shares 84,794,174,567 84,794,174,567

Effect of shares issued during the year 262,126,943 -
Weighted average number of common shares for the year
ended 31 December, shares 85,056,301,510 84,794,174,567
Diluted earnings/(loss) per share

Profit/(loss) attributable to common shareholders (basic and
diluted), million tenge 171,202 (84,848)
Weighted average number of common shares (basic and diluted) 85,056,301,510 84,794,174,567
Management considered the issue of shares to Temirbank JSC and ForteBank JSC shareholders in
return to Temirbank JSC and ForteBank JSC shares as a bonus issue since net assets value per share
after taking into account restructuring gain was significantly higher than net assets of
Temirbank JSC and ForteBank JSC received in return for Alliance bank JSC shares.
52
27 Risk management
(a) Risk management policies and procedures
Management of risk is fundamental to the business of banking and forms an essential element of
the Group’s operations. The major risks faced by the Group are those related to market risk, credit
risk, liquidity risk and operational risks.
The risk management policies aim to identify, analyse and manage the risks faced by the Group, to
set appropriate risk limits and controls, and to continuously monitor risk levels and adherence to
limits. Risk management policies and procedures are reviewed regularly to reflect changes in
market conditions, products and services offered and emerging best practice.
The Board of Directors has overall responsibility for the oversight of the risk management
framework, overseeing the management of key risks and reviewing its risk management policies
and procedures as well as approving significantly large exposures.
The Management Board is responsible for monitoring and implementing risk mitigation measures
and ensuring that the Group operates within established risk parameters. The Head of Risk Service
(Risk Department and Collateral Department) is responsible for the overall risk management and
compliance functions, ensuring the implementation of common principles and methods for
identifying, measuring, managing and reporting both financial and non-financial risks. He reports
directly to the Chairman of the Management Board and indirectly to the Board of Directors.
Credit, market and liquidity risks, both at the portfolio and transactional levels are managed and
controlled through a system of Credit Committees and an Asset and Liability Management
Committee (“ALCO”). In order to facilitate efficient and effective decision-making, the Group
established a hierarchy of credit committees depending on the type and amount of the exposure.
Both external and internal risk factors are identified and managed throughout the organisation.
Particular attention is given to identifying the full range of risk factors and determining the level of
assurance over current risk mitigation procedures. Apart from the standard credit and market risk
analysis, the Risk Department monitors financial and non-financial risks by holding regular
meetings with operational units in order to obtain expert judgments in their respective areas of
expertise.
(b) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises currency risk, interest rate risk and
other price risks. Market risk arises from open positions in interest rate, and equity financial
instruments, which are exposed to general and specific market movements and changes in the level
of volatility of market prices and foreign currency rates.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return on risk.
Overall authority for market risk is vested in the ALCO, which is chaired by the Chief Financial
Officer. Market risk limits are approved by the ALCO based on recommendations of the Risk
Department’s Market Risk Management Division and subsequently agreed by the Board of
Directors.
The Group manages its market risk by setting open position limits in relation to financial
instruments, interest rate maturity and currency positions and stop-loss limits. These are monitored
on a regular basis and reviewed and approved by the Management Board and Board of Directors.
In addition, the Group uses a wide range of stress tests to model the financial impact of a variety of
exceptional market scenarios on individual trading portfolios and the overall position. Stress tests
provide an indication of the potential size of losses that could arise in extreme conditions. The stress
tests carried out by the Group include risk factor stress testing, where stress movements are applied
to each risk category, and ad hoc stress testing, which includes applying possible stress events to
specific positions.
53
27 Risk management, continued

(b) Market risk, continued
Interest rate risk is also managed by monitoring the interest rate gap and is supplemented by
monitoring the sensitivity of net interest margin to various standard and non-standard interest rate
scenarios.
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Group is exposed to the effects of
fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.
Interest margins may increase as a result of such changes but may also reduce or create losses in
the event that unexpected movements occur.
Interest rate gap analysis
Interest rate risk is managed principally through monitoring interest rate gaps. As the majority of
the financial instruments bear fixed interest rates the interest gap analysis is similar to the maturity
analysis.
Average effective interest rates
The table below displays average effective interest rates for interest bearing assets and liabilities as
at 31 December 2014 and 2013. These interest rates are an approximation of the yields to maturity
of these assets and liabilities.
2014 2013
Average effective interest rate, % Average effective interest rate, %
Other Other
KZT USD currencies KZT USD currencies
Interest bearing assets
Financial instruments at fair
value through profit or loss 5.70 5.00 - 3.36 - -
Loans to customers 17.35 12.04 22.19 24.23 13.44 18.55
Available-for-sale financial
assets 6.18 - - 5.97 - -
Interest bearing liabilities
Current accounts and deposits
from customers 11.28 4.21 2.24 8.48 5.64 4.38
Deposits and balances from
banks and other financial
institutions 4.69 2.22 - 7.22 6.80 -
Debt securities issued 8.1 12.22 - 12.77 10.19 -
Subordinated debt 8.35 - - 12.97 - -
Amounts payable under
repurchase agreements 5.99 - - 5.23 - -
Interest rate sensitivity analysis

The management of interest rate risk, based on an interest rate gap analysis is supplemented by
monitoring the sensitivity of financial assets and liabilities. An analysis of the sensitivity of net
profit or loss and equity (net of taxes) to changes in interest rates (repricing risk), based on a
simplified scenario of a 100 basis point (bp) symmetrical fall or 300 bp rise in all yield curves and
positions of interest-bearing assets and liabilities existing as at 31 December 2014 and
31 December 2013 is as follows:
2014 2013
Profit Profit
or loss Equity or loss Equity
In million In million In million In million
tenge tenge tenge tenge
100 bp parallel fall (443) (443) 1,935 1,935
300 bp parallel rise 1,328 1,328 (5,805) (5,805)
54

(i) Interest rate risk, continued
Interest rate sensitivity analysis, continued
An analysis of the sensitivity of net profit or loss and equity as a result of changes in the fair value
of financial instruments at fair value though profit or loss and financial assets available-for-sale due
to changes in the interest rates based on positions existing as at 31 December 2014 and 2013 and a
simplified scenario of a 100 bp symmetrical fall or 300 bp rise in all yield curves is as follows:
2014 2013
Profit Profit
100 bp parallel fall 1,164 8,357 62 9,164
300 bp parallel rise (3,009) (21,044) (178) (22,698)
(ii) Currency risk

The Group has assets and liabilities denominated in several foreign currencies.
Currency risk is the risk that the fair value or the future cash flows of a financial instrument will
fluctuate because of changes in foreign currency exchange rates. Although the Group hedges its
exposure to currency risk, such activities do not qualify as hedging relationships in accordance with
IFRS. For further information on the exposure to currency risk at year end refer to Note 36.
A weakening of the KZT, as indicated below, against the following currencies at 31 December 2014
and 31 December 2013, would have increased (decreased) equity and profit or loss by the amounts
shown below. This analysis is on a net of tax basis and is based on foreign currency exchange rate
variances that the Group considered to be reasonably possible at the end of the reporting period.
The analysis assumes that all other variables, in particular interest rates, remain constant.
2014 2013
Profit Profit
20% appreciation of USD against KZT 1,609 1,609 (13,101) (13,101)
20% appreciation of Euro against KZT 17 17 (100) (100)
20% appreciation of other currencies
against KZT 24 24 73 73
A strengthening of the KZT against the above currencies at 31 December 2014 and
31 December 2013 would have had the equal but opposite effect on the above currencies to the
amounts shown above, on the basis that all other variables remained constant.
55

(iii) Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or
currency risk), whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
Other price risk arises when the Group takes a long or short position in a financial instrument.
An analysis of sensitivity of net profit or loss and equity to changes in securities prices based on
positions existing as at 31 December 2014 and 2013 and a simplified scenario of a 10 percent change
in all securities prices is as follows:
2014 2013
Profit Profit
10 percent increase in securities
prices - 5 - 6
(c) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The Group has policies and procedures in place
to manage credit exposures (both for recognised financial assets and unrecognised contractual
commitments), including guidelines to limit portfolio concentration and the establishment of a
Credit Committee to actively monitor credit risk. The credit policy is reviewed and approved by the
Management Board.
The credit policy establishes:
- procedures for reviewing and approving of loan credit applications
- methodology for the credit assessment of borrowers (corporate and individuals)
- methodology for the credit assessment of counterparties, issuers and insurance companies
- methodology for the evaluation of collateral
- credit documentation requirements
- procedures for the ongoing monitoring of loans and other credit exposures.
56

(c) Credit risk, continued
Corporate loan credit applications are originated by the relevant client managers and are then passed
on to the Corporate Financing Department, which is responsible for the corporate loan portfolio.
Analysis reports are based on a structured analysis focusing on the customer’s business and
financial performance. The loan credit application and the report are then independently reviewed
by the Risk Department’s Credit Risk Management Division and a second opinion is given
accompanied by a verification that credit policy requirements are met. The Credit Committee
reviews the loan credit application on the basis of submissions by the Loan Department and the
Risk Department. Individual transactions are also reviewed by the Legal, Accounting and Tax
departments, depending on the specific risks and pending final approval of the Credit Committee.
The Group continuously monitors the performance of individual credit exposures and regularly
reassesses the creditworthiness of its customers. The review is based on the customer’s most recent
financial statements and other information submitted by the borrower, or otherwise obtained by the
Group. Retail loan credit applications are reviewed by the Retail Lending Department through the
use of scoring models and application data verification procedures developed together with the Risk
Department.
Apart from individual customer analysis, the credit portfolio is assessed by the Risk Department
with regard to credit concentration and market risks.
The maximum exposure to credit risk is generally reflected in the carrying amounts of financial
assets in the consolidated statement of financial position and unrecognised contractual commitment
amounts. The impact of the possible netting of assets and liabilities to reduce potential credit
exposure is not significant.
The maximum exposure to credit risk from financial assets at the reporting date is as follows:
2014 2013
ASSETS
Cash and cash equivalents 73,015 5,850
Due from financial institutions 12,150 197
Financial instruments at fair value through profit or loss 27,318 4,669
Available-for-sale financial assets 129,019 118,750
Other financial assets 3,540 2,696
Total maximum exposure 806,369 439,980
Collateral generally is not held against claims under derivative financial instruments, investments
in securities, and loans to banks, except when securities are held as part of reverse repurchase and
securities borrowing activities.
For the analysis of collateral held against loans to customers and concentration of credit risk in
respect of loans to customers refer to Note 15.
The maximum exposure to credit risk from unrecognised contractual commitments at the reporting
date is presented in Note 29.
57

Offsetting financial assets and financial liabilities

The disclosures set out in the tables below include financial assets and financial liabilities that:
 are offset in the Group’s statement of financial position or
 are subject to an enforceable master netting arrangement or similar agreement that covers
similar financial instruments, irrespective of whether they are offset in the statement of financial
position.
Similar financial instruments include derivatives, sales and repurchase agreements, reverse sale and
repurchase agreements and securities borrowing and lending agreements. Financial instruments
such as loans and deposits are not disclosed in the table below, unless they are offset in the statement
of financial position.
The Group receives and accepts collateral in the form of cash and marketable securities in respect
of the following transactions:
 sale and repurchase, and reverse sale and repurchase agreements.
Such collateral is subject to the standard industry terms of the ISDA Credit Support Annex. This
means that securities received/given as collateral can be pledged or sold during the term of the
transaction but must be returned on maturity of the transaction. The terms also give each
counterparty the right to terminate the related transactions upon the counterparty’s failure to post
collateral.
The table below shows financial assets and financial liabilities subject to offsetting, enforceable
master netting arrangements and similar arrangements as at 31 December 2014:
In million tenge
Gross amount Related amounts
of recognised Net amount of not offset in the
financial financial assets/ consolidated
liability/asset liabilities statement of
Gross offset in the presented in the financial position
Types of amounts of consolidated consolidated
financial recognised statement of statement of
assets/ financial financial financial Financial Net
liabilities asset/liability position position instruments amount
Available-for-
sale financial
assets 102,599 - 102,599 (98,291) 4,308
Amounts
payable under
repurchase
agreements (98,291) - (98,291) 98,291 -
4,308 - 4,308 - 4,308
58

Offsetting financial assets and financial liabilities, continued
The table below shows financial assets and financial liabilities subject to offsetting, enforceable
master netting arrangements and similar arrangements as at 31 December 2013:
In million tenge
Gross amount Related amounts
of recognised Net amount of not offset in the
financial financial assets/ consolidated
liability/asset liabilities statement of
Gross offset in the presented in the financial position
Types of amounts of consolidated consolidated
financial recognised statement of statement of
assets/ financial financial financial Financial Net
liabilities asset/liability position position instruments amount
Financial
instruments at
fair value
through profit or
loss 3,841 - 3,841 (3,571) 270
Available-for-
sale financial
assets 81,429 - 81,429 (76,513) 4,916
Total financial
assets 85,270 - 85,270 (80,084) 5,186
Amounts
payable under
repurchase
agreements (80,084) - (80,084) 80,084 -
5,186 - 5,186 - 5,186
The gross amounts of financial assets and financial liabilities and their net amounts as presented in
the consolidated statement of financial position that are disclosed in the above tables are measured
in the consolidated statement of financial position on the following basis:
 assets and liabilities resulting from sale and repurchase agreements, reverse sale and repurchase
agreements and securities lending and borrowing – amortised cost.
The table below reconciles the “Net amounts of financial assets and financial liabilities presented
in the consolidated statement of financial position”, as set out above, to the line items presented in
the consolidated statement of financial position as at 31 December 2014.
In million tenge Carrying Financial
Line item in the amount in the asset/liability
consolidated consolidated not in the
statement of statement of scope of
Types of financial financial financial offsetting
assets/liabilities Net amounts position position disclosure Note
Available-for-
Available-for-sale sale financial
financial assets 102,599 assets 129,068 26,469 16
Amounts
Amounts payable payable under
under repurchase repurchase
agreements (98,291) agreements (98,291) - 23
59

Offsetting financial assets and financial liabilities, continued
The table below reconciles the “Net amounts of financial assets and financial liabilities presented
in the consolidated statement of financial position”, as set out above, to the line items presented in
the consolidated statement of financial position as at 31 December 2013.
In million tenge Carrying
amount in Financial
the asset/liability
Line item in the consolidated not in the
consolidated statement of scope of
Types of financial Net statement of financial offsetting
assets/liabilities amounts financial position position disclosure Note
Financial
Financial instruments instruments at fair
at fair value through value through profit
profit or loss 3,841 or loss 4,700 859 14
Available-for-sale Available-for-sale
financial assets 81,429 financial assets 118,811 37,382 16
Amounts payable
Amounts payable under under repurchase
repurchase agreements (80,084) agreements (80,084) - 23
(d) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity
risk exists when the maturities of assets and liabilities do not match. The matching and or controlled
mismatching of the maturities and interest rates of assets and liabilities is fundamental to liquidity
management. It is unusual for financial institutions ever to be completely matched since business
transacted is often of an uncertain term and of different types. An unmatched position potentially
enhances profitability, but can also increase the risk of losses.
The Group maintains liquidity management with the objective of ensuring that funds will be
available at all times to honour all cash flow obligations as they become due. The liquidity policy
is reviewed and approved by the Management Board.
The Group seeks to actively support a diversified and stable funding base comprising debt securities
in issue, long and short-term loans from other banks, core corporate and retail customer deposits,
accompanied by diversified portfolios of highly liquid assets, in order to be able to respond quickly
and efficiently to unforeseen liquidity requirements.
The liquidity management policy requires:
 projecting cash flows by major currencies and taking in account the level of liquid assets
necessary in relation thereto
 maintaining a diverse range of funding sources
 managing the concentration and profile of debts
 maintaining debt financing plans
 maintaining a portfolio of highly marketable assets that can easily be liquidated as protection
against any interruption to cash flow
 maintaining liquidity and funding contingency plans
 monitoring liquidity ratios against regulatory requirements.
60

(d) Liquidity risk, continued
The Treasury Department receives information from business units regarding the liquidity profile
of their financial assets and liabilities and details of other projected cash flows arising from
projected future business. The Treasury Department then provides for an adequate portfolio of
short-term liquid assets to be maintained, largely made up of short-term liquid trading securities,
loans to banks and other inter-bank facilities, to ensure that sufficient liquidity is maintained within
the Group as a whole.
The daily liquidity position is monitored and regular liquidity stress testing under a variety of
scenarios covering both normal and more severe market conditions is performed by the Treasury
Department. Under normal market conditions, liquidity reports covering the liquidity position are
presented to senior management on a weekly basis. Decisions on liquidity management are made
by the ALCO and implemented by the Treasury Department.
The following tables show the undiscounted contractual cash flows on financial assets, liabilities
and credit-related commitments on the basis of their earliest possible contractual maturity. The total
gross inflow and outflow disclosed in the tables is the contractual, undiscounted cash flow on the
financial assets, liability or credit related commitment. For issued financial guarantee contracts, the
maximum amount of the guarantee is allocated to the earliest period in which the guarantee can be
called.
61

The maturity analysis for financial assets and liabilities based on undiscounted contractual cash flows as at 31 December 2014 is as follows:
Demand From More
and less than 1 to 3 From 3 From 1 than Carrying
In million tenge 1 month months to 12 months to 5 years 5 years No maturity Total amount
Non-derivative financial assets
Cash and cash equivalents 88,632 - - - - - 88,632 88,632
Due from financial institutions 245 921 7,048 3,276 765 - 12,255 12,150
Financial instruments at fair value through profit
or loss - 1,661 5,444 15,037 11,700 1,218 35,060 28,572
Loans to customers 100,472 60,731 155,288 438,336 244,655 - 999,482 561,327
Available-for-sale financial assets 6,489 4,925 4,044 42,329 138,563 49 196,399 129,068
Other financial assets 2,333 1 228 2,135 111 35 4,843 3,540
Total assets 198,171 68,239 172,052 501,113 395,794 1,302 1,336,671 823,289
Non-derivative financial liabilities
Current accounts and deposits from customers (93,349) (20,285) (144,730) (154,178) (262,824) - (675,366) (513,559)
Deposits and balances from banks and other
financial institutions (455) (2,109) (6,557) (18,329) (8,604) - (36,054) (33,365)
Debt securities issued - - (6,646) (40,384) (54,789) - (101,819) (63,037)
Subordinated debt (45) (198) (1,867) (9,398) (38,346) - (49,854) (27,807)
Amounts payable under repurchase agreements (98,953) - - - - - (98,953) (98,291)
Other financial liabilities (8,529) (34) (105) (219) (222) - (9,109) (9,104)
Total non-derivative financial liabilities (201,331) (22,626) (159,905) (222,508) (364,785) - (971,155) (745,163)
Net liquidity gap on recognised financial
assets and liabilities (3,160) 45,613 12,147 278,605 31,009 1,302 365,516 78,126
Commitments 111,177 111,177
In accordance with Kazakhstan legislation, depositors can withdraw their term deposits at any time, losing in most of the cases the accrued interest.
Management expects that the cash flows from certain financial assets and liabilities will be different from their contractual terms either because management has the
discretionary ability to manage the cash flows or because past experience indicates that cash flows will differ from contractual terms.
62

The maturity analysis for financial assets and liabilities based on undiscounted contractual cash flows as at 31 December 2013 is as follows:
Demand From More
and less than 1 to 3 From 3 From 1 than Carrying
In million tenge 1 month months to 12 months to 5 years 5 years No maturity Total amount
Non-derivative financial assets
Cash and cash equivalents 16,077 - - - - - 16,077 16,077
Due from financial institutions 4 - 39 154 - - 197 197
or loss 1 2,106 651 2,266 - 31 5,055 4,700
Available-for-sale financial assets 17 3,446 4,030 34,007 147,440 61 189,001 118,811
Other financial assets 2,192 2 19 474 9 - 2,696 2,696
Total assets 112,673 31,619 104,451 213,030 362,998 92 824,863 450,299
Non-derivative financial liabilities
Current accounts and deposits from customers (60,734) (46,971) (116,401) (71,124) (81,921) - (377,151) (307,544)
financial institutions (9,018) (1,604) (2,371) (13,243) - - (26,236) (24,342)
Debt securities issued (96,415) - (445) (15,424) (553) - (112,837) (108,909)
Subordinated debt (25,764) - - - - (2,042) (27,806) (27,806)
Amounts payable under repurchase agreements (80,251) - - - - - (80,251) (80,084)
Other financial liabilities (653) - - - - - (653) (653)
Total non-derivative financial liabilities (272,835) (48,575) (119,217) (99,791) (82,474) (2,042) (624,934) (549,338)
Net liquidity gap on recognised financial
assets and liabilities (160,162) (16,956) (14,766) 113,239 280,524 (1,950) 199,929 (99,039)
Commitments 45,357 - - - - - 45,357
63

(e) Maturity analysis
The following table shows financial assets and liabilities by remaining contractual maturity dates as at 31 December 2014:
Less than 1 to 3 3 to 12 1 to 5 More than
1 month months months years 5 years No maturity Overdue Total
In million In million In million In million In million In million In million In million
ASSETS tenge tenge tenge tenge tenge tenge tenge tenge
Cash and cash equivalents 88,632 - - - - - - 88,632
Due from financial institutions 218 872 7,019 3,276 765 - - 12,150
or loss - 1,533 4,355 11,650 9,780 1,254 - 28,572
Available-for-sale financial assets 6,022 4,053 353 15,091 103,500 49 - 129,068
Other financial assets 2,256 1 270 825 111 - 77 3,540
Total financial assets 152,384 55,207 117,421 240,908 214,349 1,303 41,717 823,289
LIABILITIES
Current accounts and deposits from customers (91,484) (16,499) (126,738) (91,788) (187,050) - - (513,559)
financial institutions (740) (1,836) (5,947) (16,928) (7,914) - - (33,365)
Debt securities issued - (92) (239) (16,177) (46,529) - - (63,037)
Subordinated debt (45) - (104) - (27,658) - - (27,807)
Amounts payable under repurchase agreements (98,291) - - - - - - (98,291)
Other financial liabilities (8,077) (34) (105) (215) (222) - (451) (9,104)
Total financial liabilities (198,637) (18,461) (133,133) (125,108) (269,373) - (451) (745,163)
Net position as at 31 December 2014 (46,253) 36,746 (15,712) 115,800 (55,024) 1,303 41,266 78,126
64

(e) Maturity analysis, continued
The following table shows financial assets and liabilities by remaining contractual maturity dates as at 31 December 2013:
Less than 1 to 3 3 to 12 1 to 5 More than
1 month months months years 5 years No maturity Overdue Total
In million In million In million In million In million In million In million In million
ASSETS tenge tenge tenge tenge tenge tenge tenge tenge
Cash and cash equivalents 16,077 - - - - - - 16,077
Due from financial institutions 4 - 39 154 - - - 197
Financial instruments at fair value through
profit or loss 1 2,069 576 2,023 - 31 - 4,700
Available-for-sale financial assets 15 2,153 515 9,008 107,059 61 - 118,811
Other financial assets 1,363 2 19 474 9 - 829 2,696
Total financial assets 29,809 28,252 61,195 143,133 148,048 92 39,770 450,299
LIABILITIES
Current accounts and deposits from customers (59,248) (43,962) (107,206) (47,118) (50,010) - - (307,544)
financial institutions (8,943) (1,602) (1,794) (12,003) - - - (24,342)
Debt securities issued (94,823) - (392) (11,890) (212) - (1,592) (108,909)
Subordinated debt (25,764) - - - - (2,042) - (27,806)
Amounts payable under repurchase agreements (80,084) - - - - - - (80,084)
Other financial liabilities (653) - - - - - - (653)
Total financial liabilities (269,515) (45,564) (109,392) (71,011) (50,222) (2,042) (1,592) (549,338)
Net position as at 31 December 2013 (239,706) (17,312) (48,197) 72,122 97,826 (1,950) 38,178 (99,039)
The amounts in these tables represent the carrying amounts of financial assets and liabilities as at the reporting date and do not include future interest payments. Overdue
amounts of loans to customers include only the portion of loans that are contractually overdue.
65
28 Capital management
The NBRK sets and monitors capital requirements for the Bank. The Bank and its banking
subsidiaries are directly supervised by the NBRK.
The Bank and its subsidiary banks define as capital those items defined by statutory regulation as
capital for banks:
- Tier 1 capital, which is comprised of ordinary and preference share capital, share premium,
prior periods’ retained earnings/accumulated losses and reserves created thereof, qualifying
perpetual debt less intangible assets and current year losses. Starting from 1 February 2014 Tier 1
capital also includes dynamic reserve.
- Total capital, which is the sum of tier 1 capital, tier 2 capital (in the amount not exceeding tier
1 capital) and tier 3 capital (in the amount not exceeding 250% of the portion of tier 1 capital
attributed to cover market risk) less investments into equity or subordinated debt if their total
exceeds 10% of the total of tier 1 and tier 2 capital.
Tier 2 capital is required for the purposes of calculation of total capital and is comprised of current
year’s income, revaluation reserves, qualifying subordinated liabilities and, prior to
1 February 2014, dynamic reserve in the amount not exceeding 1.25% of risk-weighted assets.
Tier 3 capital is required for the purposes of calculation of total capital and includes subordinated
liabilities not included into tier 2 capital.
Various further limits and qualifying criteria are applied to the above elements of the capital base.
Under the current capital requirements set by the NBRK banks have to maintain:
- a ratio of tier 1 capital less investments to total assets less investments (k1.1)
- a ratio of tier 1 capital less investments to the sum of assets and contingent liabilities, weighted
by the level of credit risk, assets, contingent assets and liabilities, calculated based on the
market risk and a quantitative measure of operational risk (k1.2)
- a ratio of total capital to the sum of assets and contingent liabilities, weighted by the level of
credit risk, assets, contingent assets and liabilities, calculated based on the market risk and a
quantitative measure of operational risk (k2).
Investments for the purposes of calculation of the above ratios represent investments into equity or
subordinated debt if their total exceeds 10% of the total of tier 1 and tier 2 capital.
As at 31 December 2014 the minimum level of ratios as applicable to the Bank and its subsidiary
banks are as follows:
- k1.1 – 6%
- k1.2 - 6%
- k2 - 12%.
66
28 Capital management, continued

The following table shows the composition of the Bank and its banking subsidiaries’ capital position
calculated in accordance with the requirements of the NBRK, as at 31 December 2014:
ABC Bank JSC
(formerly
Bank Temirbank JSC ForteBank)
In million tenge In million tenge In million tenge
Tier 1 capital 181,482 41,392 9,386

Tier 2 capital (6,750) 35,507 4,000
Total capital 134,725 76,899 13,386
Total assets in accordance with the

NBRK requirements 617,038 359,973 57,151
Total statutory risk weighted assets,
contingent liabilities, operational and
market risk 374,930 349,668 31,510
k1.1 ratio 24.3% 11.5% 16.4%

k1.2 ratio 37.3% 11.8% 29.8%
k.2 ratio 35.9% 22.0% 42.5%
The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. The impact of the level of
capital on shareholders’ return is also considered and the Group recognises the need to maintain a
balance between the higher returns that might be possible with greater gearing and advantages and
security afforded by a sound capital position.
67
29 Credit related commitments

The Group has outstanding credit related commitments to extend loans. These credit related
commitments take the form of approved loans and credit card limits and overdraft facilities.
The Group provides financial guarantees and letters of credit to guarantee the performance of
customers to third parties. These agreements have fixed limits and generally extend for a period of
up to five years.
The Group applies the same credit risk management policies and procedures when granting credit
commitments, financial guarantees and letters of credit as it does for granting loans to customers.
The contractual amounts of credit related commitments are set out in the following table by
category. The amounts reflected in the table for credit related commitments assume that amounts
are fully advanced. The amounts reflected in the table for guarantees and letters of credit represent
the maximum accounting loss that would be recognised at the reporting date if the counterparties
failed completely to perform as contracted.
2014 2013
Contracted amount
Loan and credit line commitments 90,919 33,805
Guarantees issued and similar commitments 20,214 11,534
Letters of credit and other transaction related contingent
obligations 44 18
111,177 45,357
The total outstanding contractual credit related commitments above do not necessarily represent
future cash requirements, as these credit related commitments may expire or terminate without
being funded. The majority of loan and credit line commitments do not represent an unconditional
credit related commitment by the Group.
30 Operating leases
Leases as lessee
Non-cancellable operating lease rentals as at 31 December are payable as follows:
2014 2013
Less than 1 year 296 42
Between 1 and 5 years 1,643 19
More than 5 years 3,767 -
5,706 61
The Group leases a number of premises and equipment under operating leases. The leases typically
run for an initial period of five to ten years, with an option to then renew the lease. Lease payments
are usually increased annually to reflect market rentals. None of the leases includes contingent
rentals.
During 2014, KZT 647 million is recognised as an expense in profit or loss in respect of operating
leases (2013: KZT 495 million).
68
31 Contingencies
(a) Insurance
The insurance industry in the Republic of Kazakhstan is in a developing state and many forms of
insurance protection common in other parts of the world are not yet generally available. The Group
does not have full coverage for its premises and equipment, business interruption, or third party
liability in respect of property or environmental damage arising from accidents on its property or
related to operations. Until the Group obtains adequate insurance coverage, there is a risk that the
loss or destruction of certain assets could have a material adverse effect on operations and financial
position.
(b) Litigation
In the ordinary course of business, the Group is subject to legal actions and complaints.
Management believes that the ultimate liability, if any, arising from such actions or complaints will
not have a material adverse effect on the financial condition or the results of future operations.
Management is unaware of any significant actual, pending or threatened claims against the Group.
(c) Taxation contingencies
The taxation system in the Republic of Kazakhstan is relatively new and is characterised by frequent
changes in legislation, official pronouncements and court decisions, which are often unclear,
contradictory and subject to varying interpretation by different tax authorities. Taxes are subject to
review and investigation by a number of authorities, which have the authority to impose severe
fines, penalties and interest charges. A tax year remains open for review by the tax authorities during
the five subsequent calendar years; however, under certain circumstances a tax year may remain
open longer.
These circumstances may create tax risks in the Republic of Kazakhstan that are substantially more
significant than in other countries. Management believes that it has provided adequately for tax
liabilities based on its interpretations of applicable Kazakhstan tax legislation, official
pronouncements and court decisions. However, the interpretations of the relevant authorities could
differ and the effect on these consolidated financial statements, if the authorities were successful in
enforcing their interpretations, could be significant.
32 Funds management, trust and custody activities

(a) Funds management and trust activities
The Group provides trust services to individuals, trusts, retirement benefit plans and other
institutions, whereby it holds and manages assets or invests funds received in various financial
instruments at the direction of the customer. The Group receives fee income for providing these
services. Trust assets are not assets of the Group and are not recognised in the consolidated
statement of financial position. The Group is not exposed to any credit risk related to such
placements, as it does not guarantee these investments.
(b) Custody activities

The Group provides custody services to its customers, whereby it holds securities on behalf of
customers and receives fee income for providing these services. These securities are not assets of
the Group and are not recognised in the consolidated statement of financial position.
69
33 Related party transactions

(a) Transactions with members of the Board of Directors and the Management Board
Total remuneration included in personnel expenses for the years ended 31 December 2014 and 31
December 2013 is as follows:
2014 2013
Members of the Board of Directors 134 93
Members of the Management Board 129 173
263 266
These amounts include cash benefits in respect of members of the Board of Directors and the
Management Board.
(b) Transactions with other related parties
Other related parties include the shareholders and other companies and organisations. The
outstanding balances and average effective interest rates as at 31 December 2014 and related profit
or loss amounts of transactions for the year ended 31 December 2014 with other related parties are
as follows:
Shareholders Other related parties Total
Average Average
In million interest In million interest In million
tenge rate, % tenge rate, % tenge
Statement of financial position
ASSETS
Due from financial institutions 3,000 9.40 3,000
Loans to customers - - 2,125 5.88 2,125
LIABILITIES
Current accounts and deposits
from customers 1,812 4.00 24,890 2.49 26,702
institutions - - 146 - 146
Subordinated debt - long-term
loans - - 1,700 8.00 1,700
Unrecognised exposures
Guarantees - - 429 - 429
70
33 Related party transactions, continued

(b) Transactions with other related parties, continued
Other state
companies and Fellow Other related
Samruk-Kazyna organisations subsidiaries parties Total
In million tenge In million tenge In million tenge In million tenge In million tenge
Profit/(loss)
Interest income 6,044 804 11 - 6,859
Interest expense (7,029) (6,413) (1,033) (7) (14,482)
General administrative expenses - - (403) - (403)
Other operating expenses - (58) (924) - (982)
71
The outstanding balances and the related average interest rates as at 31 December 2013 and related profit or loss amounts of transactions for the year ended
31 December 2013 with other related parties are as follows:
Other state companies
Samruk-Kazyna and organisations Fellow subsidiaries Other related parties Total
Average Average Average Average
In million interest rate, In million interest rate, In million interest rate, In million interest rate, In million
tenge % tenge % tenge % tenge % tenge
Statement of financial position
ASSETS
Cash and cash equivalents - - 1,510 - 11 - - - 1,521
Financial instruments at fair value through
profit or loss - - 4,498 2.01 - - - - 4,498
Available-for-sale financial assets 106,038 6.0 12,712 4.90 61 118,811
Other assets - - 66 - - - - - 66
LIABILITIES
customers 68,139 7.84 3,294 6.50 26,420 6.61 146 - 97,999
financial institutions - - 23,822 6.84 - - - - 23,822
Debt securities issued - - 1,044 9.41 - - - - 1,044
Subordinated debt - liability component of
preference shares 1,544 12.83 - - - - - - 1,544
Amounts payable under repurchase
agreements - - 71,009 5.50 - - - - - 71,009
Unrecognised exposures
Guarantees - - 7,409 - 58 - - - 7,467
72

Other state
companies and Fellow Other related
Samruk-Kazyna organisations subsidiaries parties Total
In million tenge In million tenge In million tenge In million tenge In million tenge
Profit/(loss)
Interest income 6,360 693 16 - 7,069
Interest expense (6,161) (5,543) (2,487) (7) (14,198)
Net gain/(loss) on financial instruments at fair value through profit or loss - 250 (110) - 140
General administrative expenses - - (505) - (505)
Other operating expenses - (168) - - (168)
34 Analysis by segment
The Group’s primary format for reporting segment is business.
The Bank, prior to December 2014, was organised on the basis of four main business segments: retail banking, corporate banking, financial institutions and treasury. As
during 2014, the Group was undergoing significant restructuring and merger processes, the Chief Operating Decision Maker determined that the previous operating
segments did not provide appropriate information to decide how to allocate resources in a way that would enable the Chief Operating Decision Maker to focus on the
Group’s primary objective during 2014.
The Chief Operating Decision Maker suspended reporting by business segment and requested specific information required in order to ensure the restructuring and merger
take place. Following the restructuring, which took place on 15 December 2014, the Group continues to monitor liquidity as its most significant operational indicator.
Management has authorised the implementation of a management reporting system that will allow for the future generation of information in respect of reportable operating
segments as yet to be determined based on the Group’s business requirements. These system changes are currently being implemented.
Accordingly, as business segment information was not presented to or used by the Chief Operating Decision Maker for 2014, management has not presented business
segment information.
73
35 Financial assets and liabilities: fair values and accounting classifications

(a) Accounting classifications and fair values
The table below sets out the carrying amounts and fair values of financial assets and financial liabilities as at 31 December 2014:
Loans and Available-for- Other amortised Total carrying Fair

‘In million tenge Trading receivables sale cost amount value
Cash and cash equivalents - 88,632 - - 88,632 88,632
Due from financial institutions - 12,150 - - 12,150 12,128
Financial instruments at fair value through profit or loss 28,572 - - - 28,572 28,572
Loans to customers - 561,327 - - 561,327 536,439
Available-for-sale financial assets - - 129,068 - 129,068 129,068
Other financial assets - 3,540 - - 3,540 3,967
28,572 665,649 129,068 - 823,289 798,806
Current accounts and deposits from customers - - - 513,559 513,559 510,548

Deposits and balances from banks and other financial institutions - - - 33,365 33,365 34,520
Debt securities issued - - - 63,037 63,037 60,447
Subordinated debt - - - 27,807 27,807 20,485
Amounts payable under repurchase agreements - - - 98,291 98,291 98,291
Other financial liabilities - - - 9,104 9,104 8,324
- - - 745,163 745,163 732,615
74
35 Financial assets and liabilities: fair values and accounting classifications, continued
(a) Accounting classifications and fair values, continued
The table below sets out the carrying amounts and fair values of financial assets and financial liabilities as at 31 December 2013:
Loans and Available-for- Other amortised Total carrying Fair

‘In million tenge Trading receivables sale cost amount value
Cash and cash equivalents - 16,077 - - 16,077 16,077
Due from financial institutions - 197 - - 197 197
Financial instruments at fair value through profit or loss 4,700 - - - 4,700 4,700
Loans to customers - 307,818 - - 307,818 305,801
Available-for-sale financial assets - - 118,811 - 118,811 118,811
Other financial assets - 2,696 - - 2,696 2,696
4,700 326,788 118,811 - 450,299 448,282
Current accounts and deposits from customers - - - 307,544 307,544 307,544

Deposits and balances from banks and other financial institutions - - - 24,342 24,342 24,342
Debt securities issued - - - 108,909 108,909 40,004
Subordinated debt - - - 27,806 27,806 9,691
Amounts payable under repurchase agreements - - - 80,084 80,084 80,084
Other financial liabilities - - - 653 653 653
- - - 549,338 549,338 462,318
75
35 Financial assets and liabilities: fair values and accounting classifications,

continued
(a) Accounting classifications and fair values, continued
The estimates of fair value are intended to approximate the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. However, given the uncertainties and the use of subjective judgment, the fair
value should not be interpreted as being realisable in an immediate sale of the assets or transfer of
liabilities.
Fair values of financial assets and financial liabilities that are traded in active markets are based on
quoted market prices or dealer price quotations. For all other financial instruments the Group
determines fair values using other valuation techniques.
The objective of valuation techniques is to arrive at a fair value determination that reflects the price
that would be received to sell the asset or paid to transfer the liability in an orderly transaction
between market participants at the measurement date.
Valuation techniques include net present value and discounted cash flow models, comparison to
similar instruments for which market observable prices exist and other valuation models.
Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates,
credit spreads and other premia used in estimating discount rates, bond and equity prices, expected
price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value
determination that reflects the price of the financial instrument at the reporting date that would have
been determined by market participants acting at arm’s length.
The Group uses widely recognised valuation models to determine the fair value of common and
more simple financial instruments, such as interest rate and currency swaps that use only observable
market data and require little management judgment and estimation. Observable prices and model
inputs are usually available in the market for listed debt and equity securities, exchange traded
derivatives and simple over the counter derivatives such as interest rate swaps.
For more complex instruments, the Group uses proprietary valuation models. Some or all of the
significant inputs into these models may not be observable in the market, and are derived from
market prices or rates or are estimated based on assumptions. Example of instruments involving
significant unobservable inputs include certain securities for which there is no active market.
The following assumptions are used by management to estimate the fair values of financial
instruments:
 discount rate ranging from 8.8% to 16.4% are used to calculate expected future cash flows
from loans to corporate customers
 discount rates ranging from 10.9% to 33.5% are used to calculate expected future cash
flows from loans to retail customers.
(b) Fair value hierarchy
The Group measures fair values using the following fair value hierarchy that reflects the
significance of the inputs used in making the measurements:
 Level 1: quoted market price (unadjusted) in an active market for an identical instrument.
 Level 2: inputs other than quotes prices included within Level 1 that are observable either
directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes
instruments valued using: quoted market prices in active markets for similar instruments;
quoted prices for similar instruments in markets that are considered less than active; or
other valuation techniques where all significant inputs are directly or indirectly observable
from market data.
76

continued
(b) Fair value hierarchy, continued
 Level 3: inputs that are unobservable. This category includes all instruments where the
valuation technique includes inputs not based on observable data and the unobservable
inputs have a significant effect on the instrument’s valuation. This category includes
instruments that are valued based on quoted prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect differences between the
instruments.
The table below analyses financial instruments measured at fair value at 31 December 2014, by the
level in the fair value hierarchy into which the fair value measurement is categorised. The amounts
are based on the values recognised in the consolidated statement of financial position:
Level 1 Level 2 Level 3 Total
Note tenge tenge tenge tenge
Assets
Financial instruments at fair
value through profit or loss 14 21,241 7,331 - 28,572
assets 16 - 24,956 104,112 129,068
21,241 32,287 104,112 157,640
The table below analyses financial instruments measured at fair value at 31 December 2013, by the
level in the fair value hierarchy into which the fair value measurement is categorised. The amounts
are based on the values recognised in the consolidated statement of financial position:
Level 2 Level 3 Total
Note In million tenge In million tenge In million tenge
Assets
Financial instruments at fair value
through profit or loss 14 4,700 - 4,700
Available-for-sale financial assets 16 12,773 106,038 118,811
17,473 106,038 123,511
The following table shows a reconciliation for the year ended 31 December 2014 for fair value
measurements in Level 3 of the fair value hierarchy:
Available-for-sale financial assets
In million tenge
Balance at beginning of the year 106,038
Profit or loss:
- in interest income 6,307
- in other comprehensive income (1,933)
Coupon received (6,300)
Balance at end of the year 104,112
Level 3 includes bonds of the Samruk-Kazyna that are unquoted. Their fair value was determined
with reference to government securities having similar terms assuming that no additional credit risk
adjustment is required.
77

continued
The following table shows a reconciliation from the beginning balances to the ending balances for
fair value measurements in Level 3 of the fair value hierarchy for the year ended 31 December 2013:
Available-for-sale financial Financial instruments at fair
assets value through profit or loss
Balance at beginning of the year 107,327 702
Profit or loss:
- in interest income 6,359 41
- net gain on financial instruments at fair
value through profit or loss - 141
- in other comprehensive income (1,908) -
Coupon received (5,740) (54)
Sales - (830)
Balance at end of the year 106,038 -
Total gains or losses included in profit or loss for the year ended 31 December 2014 and
31 December 2013 in the above tables are presented in the statement of profit or loss and other
comprehensive income as follows:
Level 3
Debt and other fixed income
In million tenge instruments
2014 2013
Total gains or losses included in profit or loss for the period:
Net gain on other financial instruments at fair value through profit
or loss - 141
Total gains or losses recognised in other comprehensive income
- net change in fair value of available-for-sale financial assets (1,933) (1,908)
Although the Group believes that its estimates of fair value are appropriate, the use of different
methodologies or assumptions could lead to different measurements of fair value. For fair value
measurements in Level 3 as at 31 December 2014, changing assumed discount rates by 100 basis
points would have the following effects:
Effect on other comprehensive
Effect on profit or loss income
In million tenge Favorable (Unfavorable) Favorable (Unfavorable)
assets - - 7,887 (7,195)
For fair value measurements in Level 3 as at 31 December 2013, changing assumed discount rates
by 100 basis points would have the following effects:
Effect on other comprehensive
Effect on profit or loss income
In million tenge Favorable (Unfavorable) Favorable (Unfavorable)
assets - - 8,680 (7,856)
78

continued
The following table analyses the fair value of financial instruments not measured at fair value, by
the level in the fair value hierarchy into which each fair value measurement is categorised as at
31 December 2014:
Total Total
fair carrying
In million tenge Level 1 Level 2 Level 3 values amount
ASSETS
Cash and cash equivalents - 88,632 - 88,632 88,632
Due from financial
institutions - 12,128 - 12,128 12,150
Loans to customers - 408,318 128,121 536,439 561,327
Other financial assets - 2,259 1,708 3,967 3,540
LIABILITIES
Current accounts and
deposits from customers - 510,548 - 510,548 513,559
institutions - 34,520 - 34,520 33,365
Debt securities issued 12,311 48,136 - 60,447 63,037
Subordinated debt - 20,485 - 20,485 27,807
repurchase agreements - 98,291 - 98,291 98,291
Other financial liabilities - 7,860 464 8,324 9,104
The following table analyses the fair value of financial instruments not measured at fair value, by
the level in the fair value hierarchy into which each fair value measurement is categorised as at
31 December 2013:
Total
Total fair carrying
In million tenge Level 1 Level 2 Level 3 values amount
ASSETS
Cash and cash equivalents - 16,077 - 16,077 16,077
Due from financial
institutions - 197 - 197 197
Loans to customers - 268,762 37,039 305,801 307,818
Other financial assets - 2,696 - 2,696 2,696
LIABILITIES
deposits from customers - 307,544 - 307,544 307,544
Deposits and balances
from banks and other
financial institutions - 24,342 - 24,342 24,342
Debt securities issued 31,891 8,113 - 40,004 108,909
Subordinated debt 9,691 - - 9,691 27,806
repurchase agreements - 80,084 - 80,084 80,084
Other financial liabilities - 653 - 653 653
79
36 Currency analysis
The following table shows the currency structure of financial assets and liabilities at
31 December 2014:
Other
KZT USD EUR currencies Total
In million In million In million In million In million
tenge tenge tenge tenge tenge
ASSETS
Cash and cash equivalents 16,783 62,648 7,251 1,950 88,632
Due from financial
institutions 9,499 2,651 - - 12,150
Financial instruments at
fair value through profit or
loss 18,295 10,277 - - 28,572
Loans to customers 427,298 133,795 78 156 561,327
Available-for-sale
financial assets 129,068 - - - 129,068
Other financial assets 3,018 495 5 22 3,540
Total financial assets 603,961 209,866 7,334 2,128 823,289
LIABILITIES
deposits from customers 318,093 186,700 6,858 1,908 513,559
Deposits and balances
from banks and other
financial institutions 31,180 2,185 - - 33,365
Debt securities issued 3,992 59,045 - - 63,037
Subordinated debt 27,807 - - - 27,807
repurchase agreements 98,291 - - - 98,291
Other financial liabilities 2,992 5,676 367 69 9,104
Total financial liabilities 482,355 253,606 7,225 1,977 745,163
Net recognised positions
as at 31 December 2014 121,606 (43,740) 109 151 78,126
The effect of derivatives
held for risk management
purposes as at
31 December 2014 (53,697) 53,793 - - 96
Net position after
derivatives held for risk
management purposes as
at 31 December 2014 67,909 10,053 109 151 78,222
Net positions as at
31 December 2013 (16,994) (81,880) (622) 457 (99,039)
37 Acquisition of subsidiaries
On 12 December 2014 the Bank acquired all of the shares of Temirbank JSC and ABC Bank JSC
(formerly ForteBank JSC) in exchange for 84,780,537,004 newly issued ordinary shares of the Bank
with an estimated fair value of KZT 49,797 million being the equivalent of the total net assets of
the entities being acquired. Since at the date of acquisition all three entities were controlled by one
individual, Mr. Bulat Utemuratov, the acquisition is accounted for as a business combination under
common control.
From the date of acquisition to 31 December 2014 acquired banks contributed loss of
KZT 422 million.
80
37 Acquisition of subsidiaries, continued

If the acquisition of business had occurred on 1 January 2014, management estimates that
consolidated revenue would have been KZT 84,986 million, and consolidated profit for the year
would have been KZT 167,036 million.
The following table summarises the recognised amounts of assets acquired and liabilities assumed
at the acquisition date.
Book values of
Book values of ABC Bank JSC
Temirbank (formerly Total book
JSC on ForteBank JSC) values on
In million tenge Notes acquisition on acquisition acquisition
ASSETS
Cash and cash equivalents 22,505 17,327 39,832
Due from financial institutions 31,694 32 31,726
Financial instruments at fair value
through profit or loss 28,851 3,413 32,264
Loans to customers 277,237 29,914 307,151
Property, equipment and intangible assets 17 3,660 2,297 5,957
Other assets 15,448 283 15,731
Total assets 379,395 53,266 432,661
LIABILITIES
customers 263,376 39,690 303,066
Deposits and balances from banks and
other financial institutions 28,068 79 28,147
Debt securities issued 15,802 - 15,802
Subordinated debt 23,046 3,088 26,134
Deferred tax liabilities 11 7,330 333 7,663
Other liabilities 1,302 750 2,052
Total liabilities 338,924 43,940 382,864
Net assets 40,471 9,326 49,797
38 Subsequent events
On 1 January 2015 Chairmen of the Management Boards and Chief Accountants of the Bank,
Temirbank JSC, and ABC Bank JSC (formerly ForteBank JSC) signed the transfer acts, under
which all property, including claims and obligations of Temirbank JSC and ABC Bank JSC
(formerly ForteBank JSC) have been vested to the Bank.
81

Fortebank JSC (Formerly Alliance Bank JSC) : Consolidated Financial Statements For The Year Ended 31 December 2014

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Fortebank JSC (Formerly Alliance Bank JSC) : Consolidated Financial Statements For The Year Ended 31 December 2014

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Fortebank JSC (Formerly Alliance Bank JSC) : Consolidated Financial Statements For The Year Ended 31 December 2014

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ForteBank JSC

(formerly Alliance Bank JSC)

Consolidated Financial Statements

Independent Auditors’ Report

Consolidated Statement of Cash Flows 7

Notes to the Consolidated Financial Statements 10-81

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Attributable to equity holders of the Bank

(b) Basis of measurement

(c) Functional and presentation currency

(d) Use of estimates and judgments

2 Basis of preparation, continued

(e) Changes in accounting policies and presentation

3 Significant accounting policies

(a) Basis of consolidation

(ii) Acquisitions of entities under common control

(iii) Transactions eliminated on consolidation

(b) Foreign currency

3 Significant accounting policies, continued

(d) Financial instruments

3 Significant accounting policies, continued

(i) Classification, continued

(iv) Amortised cost

(v) Fair value measurement principles

3 Significant accounting policies, continued

(v) Fair value measurement principles, continued

(vi) Gains and losses on subsequent measurement

3 Significant accounting policies, continued

(viii) Repurchase and reverse repurchase agreements

(ix) Derivative financial instruments

3 Significant accounting policies, continued

(d) Financial instruments, continued

(ix) Derivative financial instruments, continued

(e) Property and equipment

(i) Owned assets

3 Significant accounting policies, continued

(e) Property and equipment, continued

(f) Intangible assets

(g) Investment property

3 Significant accounting policies, continued

(h) Impairment, continued

(i) Financial assets carried at amortised cost

(ii) Financial assets carried at cost

3 Significant accounting policies, continued

(iii) Available-for-sale financial assets

(iv) Non financial assets

3 Significant accounting policies, continued

(k) Share capital

(i) Ordinary shares

(ii) Preference share capital

3 Significant accounting policies, continued

(m) Income and expense recognition

(n) Segment reporting

3 Significant accounting policies, continued

(p) New standards and interpretations not yet adopted

4 Net interest income

5 Fee and commission income

6 Fee and commission expense