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For 2020:

The goal of the Bank is maintaining and further strengthening the position of a modern, innovative and dynamically developing Bank of Uzbekistan which provides a full range of financial services throughout the country.

To achieve this goal, the Bank will focus on the following tasks:

  • introduction of modern banking technologies;
  • increase the performance indicators by optimizing business process, improving the quality and speed of service while reducing the cost of production;
  • expansion of the client base based on the provision of a full range of services, customized to every client, based on their needs and expectations;
  • improving the risk management system;
  • development of professional potential of employees.

Forecasts of bank development

The Bank is planning to complete work on the implementation of a new automated banking system and equipment in 2020. This step will allow introducing new interactive services which have no analogues in other banks and will provide fast and 24/7 customer service. After deploying the program, most of the business processes will be automated. Also, this program has powerful tools for analytics and reporting, which will allow introducing new methods of integrated management of the Bank. Business productivity will be significantly improved through more efficient cost management, implementation of a value analysis model, and efficient allocation of regulatory capital across products and customers.

With this potential, until the end of 2020 it is planned to increase the total assets to 6.6 trillion soums. Aggressive growth of risk assets will not be planned by Bank in 2020 due to the need to strengthen capital adequacy and liquidity indicators. Active operations will be carried out as part of the repayment of existing assets with the re-allocation of funds into more profitable products.

The gross income of the Bank (excluding income from internal operations among branch) in 2020 is planned at the level of 909.2 billion soums. Income growth will be achieved through the systematic development of all strategic business areas: corporate, commercial and retail.

The corporate and commercial business

The Bank divides its corporate clients into 2 main segments: large business and small business.

The segment of large business is represented by the most demanding clients who prefer to be served in several banks, have large funds, and use a wide range of financial services. Such clients require promptness in making payments and lending, as well as complex products that include sophisticated financial instruments. They prefer to work with highly qualified bank employees who know the specific features of the industry in which the client works.

The Bank is planning to develop customer service in this segment by offering individual financial solutions. The bank will expand its product line in the field of short-term lending, trade finance, currency operations and liquidity management products. At the same time, it is important to increase the speed of rendering services, especially in terms of lending. The Bank will create mechanisms for operational interaction between managers of bank and client representatives.

The bank also has a significant interest to the small business segment, because this segment provides an acceptable level of profitability, at the same time allows to the bank to effectively diversify the client base. Thanks to economic reforms and active government support for small businesses, the number of potential clients of the Bank is growing rapidly. The policy for servicing clients of this segment in 2020 will be aimed at transferring clients to service in remote and digital channels, where they will be provided with a convenient solution for monitoring and managing the finances of their business. Transfer to digital channels will relieve client managers and open up opportunities for the introduction of new packages of personalized services, taking into account industry specifics.

While building up the customer base, the emphasis will be on customers with large balances and good settling. This will increase the balances on the accounts of legal entities up to 2.5 trillion soums by the end of 2020 (including in foreign currency).

Servicing corporate clients' accounts in national currency, according to forecasts, will bring commission income in the amount of at least 65.6 billion soums, and servicing accounts in foreign currency and providing services to support foreign economic activity in the amount of 126.4 billion soums.

In order to maintain the stability of the resource base, special attention will be paid to attracting term deposits from legal entities. By the end of 2020, it is planned to increase their balance to 387.8 billion soums (including in foreign currency), interest expenses on which will amount to 52.8 billion soums.

The funds raised will be the main source of financing for the Bank's active operations, namely lending. The loan portfolio in 2020 is planned to increase to 4.1 trillion soums, of which 2.1 trillion soums accounts for loans in the national currency and 2.0 trillion soums for loans in foreign currency (in the soum equivalent).

The development of retail business, and retail lending in particular, is a priority due to the relatively high profitability and significant diversification of the loan portfolio. In 2020, the balance of the retail loan portfolio is forecasted to reach 1.4 trillion soums.

Taking into account the forecasted volume of loans and interest rates, the Bank intends to receive income from lending in 2020 in the amount of 567.6 billion soums.

Retail business

For individual customers, access to 24/7 services, high-speed interaction with the Bank and individuals are becoming critical. The population is becoming more financially literate, and prefers to use remote channels without direct contact with Bank employees.

To develop retail business in 2020, the Bank must:

  • make convenient, fast and profitable operations, such as, regular payments, transfer of funds, making payments for goods and services, saving funds and taking microloans. For this purpose, special attention will be paid to salary projects, transfers of funds between individual accounts, overdrafts and credit lines secured by financial assets. It is necessary to develop savings products and popularize the use of plastic cards, introducing new methods of customer identification.
  • build long-term and close relationships with clients. To solve this problem, it is important to understand the needs of customers and find an individual approach to each customer segment. Bank will develop product packages that are more attractive than stand-alone products. To create such packages, the Bank will expand its capabilities to collect, store and analyze customer information.

It is expected that, Bank will earn income in the amount of 82.4 billion soums from servicing individuals in 2020. At the same time, income from services provided using plastic cards (card issuance, transaction processing, payment acceptance) will amount to 56.6 billion soums. Revenue from services provided in retail business departments (money transfers, transfer of funds from accounts, cash withdrawal) is expected to reach 25.8 billion soums.

Moreover, retail clients are strategic for the Bank, as their funds form 40% of the Bank's resource base. In 2020, it is planned to increase the balances on deposits of individuals up to 2.3 trillion soums, of which term deposits will amount to 1.9 trillion soums. Taking into account the current average deposit rates, namely 4% for deposits in foreign currency and 18% for deposits in national currency, a gradual increase in balances in both national currency and foreign currency are expected.

Bank expenses and financial results

The forecast of interest expenses for 2020 (excluding interest on inter-branch deposits) is 295 billion soums. The increase in interest expenses is associated with an increase in rates on financial resources in the market, which is a consequence of the tightening of the monetary policy of the Central Bank. In addition, the Central Bank's requirements for a long-term resource base have increased, for which the Bank will need to attract additional term deposits for a period of more than a year, which are more expensive compared to "short" resources.

Interest-free expenses in 2020 are planned at the level of 83.3 billion soums. Growth is expected by 2020, due to increase in commission income, as well as income in the form of exchange differences, when performing spot and conversion operations.

The forecast of operating expenses for 2020 is 316 billion soums. The main expenditure items that affect the growth of operating expenses are:

  • employee expenses in the form of salaries and other payments;
  • contributions to the Deposit guarantee Fund. The Bank is going to increase contributions to the Deposit guarantee Fund in connection with further attracting deposits from the population, in accordance with the requirements of the legislation.
  • depreciation of fixed assets and intangible assets. In 2020, server equipment is going to start operating, which will increase the cost of depreciation and amortization.
  • administrative expenses, taxes, legal, consulting, audit, insurance and other operating expenses.

Taking into account the above-described trends and forecasts, the Bank's net profit for 2020 is forecasted at least 120.7 billion soums. At the same time, the return on assets will be 2.0%, and the return on total capital will be 17.2%.

For 2019:

The purpose of the bank is to retain and further strengthen the position of the modern, innovative and dynamically developing bank of Uzbekistan, which provides the entire range of financial services throughout the country.

To achieve this goal, the bank will focus on the following tasks:

  • introduction of modern banking technologies;
  • increase in efficiency indicators due to optimization of business processes, improvement of quality and speed of service, while reducing production costs;
  • expansion of the customer base, based on the provision of a full range of services, with a focus on the individual characteristics of each client;
  • improvement of risk management system;
  • development of professional potential of employees.

With this potential, by the end of 2019 it is planned to increase total assets to 5.7 trillion UZS, or 19%. At the same time, the growth of the bank’s liabilities for 2019 is planned at the level of 19% and total capital of 17%.

Gross income of the bank (minus income from operations between branches) in 2019 is planned at the level of 792.6 billion UZS, which is 30% higher than in 2018. Revenue growth will be achieved through the systematic development of the main strategic business areas: corporate and retail.

The bank conditionally divides corporate clients into 2 main segments: large business and small business.

The bank plans to develop customer service in the large business segment through the offer of individual financial solutions. The bank will expand its product range in the areas of short-term lending, trade finance, foreign exchange operations and liquidity management products. At the same time, it is important to increase the speed of providing services, especially in terms of lending. The bank will create mechanisms for operational interaction between client managers and client representatives.

The small business segment is of significant interest to the Bank, as it provides an acceptable level of profitability, at the same time allows diversifying the customer base effectively. Due to economic reforms and active state support of small businesses, the number of potential customers of the bank is growing rapidly. The customer service policy of this segment in 2019 will be aimed at transferring customers to service in remote and digital channels, where they will be provided with a convenient solution for controlling and managing the finances of their business. Transfer to digital channels will relieve client managers, and open up opportunities for the introduction of new packages of personalized services, taking into account industry specifics.

For the development of retail business in 2019, the bank should:

  • make such simple operations as regular payments, transfer of funds, payment for goods and services, saving funds and microloans convenient, fast and profitable. For this purpose, special attention will be paid to salary projects, transfers of funds between accounts of individuals, overdrafts and credit lines secured by financial assets. It is necessary to develop products for savings and promote the use of plastic cards, introducing new methods of customer identification.
  • build long-term and close relationships with customers. To solve this problem, it is important to understand the needs of customers and find an individual approach to each customer segment. The bank will develop product packages that are more attractive than independent products. To compile such packages, the bank will expand its capabilities in collecting, storing and analyzing customer information.

Taking into account the above trends and forecasts, the bank’s net profit for 2019 is projected at the level of at least 83 billion UZS. At the same time, return on assets will be 1.6% and return on total capital will be 16%.

For 2018:

The Business Plan defines the major directions for “Kapitalbank” JSCB development for 2018, ensures the objective setting, unity of purpose and coordination of efforts of all units in order to improve the performance of the bank.

The Business Plan serves as a base for further management control over the financial activity of the bank, contributes to the quickest adjustment under the conditions of possible changes in financial environment.

All operational plans of bank’s units for 2018 shall be developed according to principles of and in full compliance with the business plan of the bank.

Goal of the bank is to hold and further consolidate the position of modern, innovative and dynamically developing bank of Uzbekistan, rendering the full range of financial services across the country. To achieve this goal, the bank will focus on solving the following issues:

  • introduction of the latest banking technologies;
  • improvement of performance indicators due to business processes optimization, improvement of quality and speed of service, while reducing production costs;
  • expansion of the client base, based on the provision of a full range of services, with a focus on the individual characteristics of each client;
  • risk management system improvement;
  • employees professional capacity building.

In the coming year, the bank plans to complete works on the introduction of a new automated banking system and equipment for its operation. This step will allow introducing new interactive services that are unique in the country and ensure quick and round-the-clock client service. After the program is deployed, most of the business processes will be automated. Moreover, this program contains powerful tools for analytics and reporting that will allow introducing new methods of integrated bank management. Business efficiency will be significantly enhanced by more efficient cost management, implementation of cost-effectiveness analysis model as well as efficient allocation of economic and regulatory capital among products and clients.





2018


in thousand UZS

Plan

Fact

Percentage of completion

Assets

3 991 127 443

4 817 131 061

121%

Liabilities

3 527 142 862

4 328 429 230

123%

Capital

463 984 581

488 701 831

105%

Gross income

664 442 554

608 904 330

92%

Net income

55 306 911

93 995 346

170%





2019


in thousand UZS

Plan

Fact

Percentage of completion

Assets

5 722 942 456

5 482 808 304

96%

Liabilities

5 150 920 070

4 829 907 672

94%

Capital

572 022 386

652 900 631

114%

Gross income

932 458 755

1 050 626 905

113%

Net income

83 320 555

113 487 052

136%

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