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For 2020:

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

Aiming to achieve this goal, the Bank will focus on solving the following problems:

  • Implementation of modern banking technologies;
  • Achievement of performance indicators growth by optimizing business processes and improving the quality and speed of customer service while reducing production costs;
  • Development the Bank’s customer base, on the ground of the provision of a full range of services, focusing on the individual characteristics of each client;
  • Improving the risk management system;
  • Further upgrading of professional potential of employees.

Bank development forecasts

Next year, the Bank plans to complete the implementation of a new automated banking system and equipment for its operation. This step will allow introducing of new interactive services that have no analogues in the Republic and will provide quick and round-the-clock customer service. After the program is set up, most of the business processes will be automated. Also, this program has powerful tools for analytics and reporting, which will introduce new methods of integrated bank management. Business productivity will be significantly improved through more efficient cost management, the implementation of a functional-cost analysis model, and the effective distribution of regulatory capital among products and customers.

With the benefit of this potential, by the end of 2020 it is planned to increase total assets to 6.0 Trillion Sums, or 10.4%. Due to the need to strengthen capital adequacy and liquidity indicators, in 2020 the Bank does not plan an aggressive growth in risky assets. Active operations will be carried out as part of the repayment of existing assets with the redeployment of funds to more profitable products.

The Bank's gross income (net of income from inter-branch operations) in 2020 is planned at 870.7 Billion Sums, which is 6% higher than in 2019. Revenue growth will be achieved through the systematic development of all strategic business areas: corporate area, commercial and retail areas.

Corporate and commercial business

All corporate clients are to be conditionally divided by the Bank into 2 main segments: Large Business Segment and Small Business Segment.

Large Business Segment: This segment is represented by the most demanding customers, who prefer to be served at several banks. They have large amounts of money, and use a whole range of financial services. Such customers require prompt payment and lending, as well as complex products that include complex financial instruments. Such customers prefer to work with highly qualified bank employees who know the specifics of the industry in which the client works.

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

Small Business Segment: This segment is of significant interest to the Bank, as provides an acceptable level of profitability, while at the same time it allows to effectively diversify the customer base. Thanks to economic reforms and active government support for small businesses, the number of potential customers of the Bank is growing rapidly. The customer service policy for this segment in 2020 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. An upward transition to digital channels will offload client managers and open up opportunities for the introduction of new personalized service packages, taking into account industry specifics.

When expanding a customer base, the emphasis will be placed on customers with large balances and good sedimentation. This will increase the balances on accounts of legal entities to 1.69 Trillion Sums by the end of 2020 (including income in foreign currency), which is 31.4% higher than the outcome of 2019.

The banking servicing of corporate customer accounts in national currency is projected to bring a fee and commission income of at least 77.4 Billion Sums, and the banking servicing of foreign currency accounts and the providing services for supporting foreign economic activity will bring a fee and commission income in the amount of 132.8 Billion Sums.

In order to maintain the resource base stability, a special attention will be paid to attracting the fixed-term deposit account s of different legal entities. By the end of 2020, it is planned to bring balance of such kind of deposits to 317.5 Billion Sums (including in foreign currency), and the interest expenses on which will herewith amount to 51.4 Billion Sums. And an average rate on newly opened deposits is 34%.

The attracted funds will be the main source for financing active operations of the Bank – namely lending business. It is planned to increase the Advances Portfolio in 2020 by 29.6% – up to 3 8 Trillion Sum. Out of this amount, 1.77 Trillion UZS are accounted for loans in national currency, and 2.02 Trillion Sums – for loans in foreign currency in Sum equivalent.

The development of the retail business, and retail lending in particular, is a priority area due to the relatively high profitability and a significant degree of diversification of the Advances Portfolio. This indicator is planned to be increased in 2020 from 27% to 36% by increasing the retail loan portfolio by 70.7% from 803 Billion to 1.3 Trillion Sums.

Taking into account the projected volume of lending and interest rates, the Bank expects to receive income from lending in 2020 in the amount of 548.2 Billion Sums. It is 28% higher than the expected outcome of 2019. The rise in incomes of credits is projected at about 28%. This will ensure at the beginning of 2020 the minimum monthly income of $ 40 billion. And this is 2 times higher than the average monthly income from loans at the beginning of 2019.

Retail business

The 24/7 access to banking services, a high speed interaction communication with the Bank and an individual approach in banking services are becoming being of critical importance for retail customers. The population is becoming more financially literate, and prefers to use remote channels without direct contact with bank employees.

Aiming the retail business development in 2020 the Bank is intended:

  • To make convenient, quick and profitable such simple operations as regular payments, transferring funds, making payments for goods and services, saving funds and microloans. A 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 popularize the use of plastic cards. Further, it is important to promote new methods of customer identification.
  • To create 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 client segment. The Bank will develop product packages that are more attractive than stand-alone products. To compile such packages, the Bank will expand its ability to collect, store and analyze customer information.

It is expected that from the servicing of individuals in 2020, the Bank will earn income in the amount of 25.8 Billion Sums, which is 7% higher than in 2019. At the same time, the income from services provided using plastic cards (card issuing, transaction processing, acquiring, and acceptance of payments) will amount to 40 Billion Sums. The income from services rendered in retail business departments (money transfers, transfer of funds from accounts, cash withdrawals) is expected to reach the amount of 40.1 Billion Sums.

Moreover, the retail customers are strategic customers for the Bank. The funds of these customers amount 45% of the Bank’s resource base. In 2020, it is planned to bring the balances on deposits of individuals to the level of 2.5 Trillion Sums, which is 15% higher than the expected outcome of 2019. The time deposits amount to 2 Trillion Sum. Considering the current average rates on deposits, namely 4.5% on deposits in foreign currency and 18% on deposits in national currency, a gradual increase in balances in the national currency are expected. It is expected a contemporaneously decrease in balances in the foreign currency.

Bank expenses and financial results

The forecast of interest expenses for 2020 (excluding interest on inter-branch deposits) is 268.3 Billion. This is 6% higher than the same indicator in 2019. The increase of interest expenses is associated with an increase in interest rates on financial resources in the market. This is a consequence of tightening the monetary policy of the Central Bank. In addition, the requirements of the Central Bank for a long-term resource base have increased. To fulfill these requirements, the Bank will need additional attraction of term deposits for a period of more than a year. And the time deposits are more expensive than “short-term resources”.

The interest-free expenses in 2020 are to be expected at the level of 73.6 Billion Sums. The expenses for them are expected to increase in 2020. This is due to an increase in commission income, as well as income in the form of exchange rate differences, during spot and conversion transactions.

The forecast of operating expenses for 2020 is 266.3 Billion. This is 17% higher than expected expenses for 2019. The main expense items that will affect the growth of operating expenses are:

  • Advertising and Marketing. The Bank has launched a full-scale marketing company in 2019. This marketing company will continue also in 2020 in connection with the development of the retail business.
  • Deposit Insurance Fund Contributions. In connection with the further attraction of household and private deposits, the Bank will increase contributions to the deposit insurance fund in accordance with the requirements of the law.
  • Fixed Assets Depreciation and Non-Material Assets. The server equipment will be put into operation in 2020. This will increase the cost of depreciation and amortization.

Taking into account the above trends and forecasts, the Bank’s net profit in 2020 is forecasted to be at least 130.8 Billion Sums. At the same time, the return on average assets will amount to 2.2%, and return on total capital will reach 18.7%.

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.

For 2017


This business plan determines the main directions of JSCB "Kapitalbank" development for 2017, provides the formulation of the task, the unity of the overall goal and coordination of efforts of all structural divisions to increase the efficiency of the Bank's activities.

The Bank's goal is to retain and further strengthen the position of the modern, innovative and dynamically developing Bank of Uzbekistan, which provides the full range of financial services throughout the country.

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

  • expansion of the customer base, based on the provision of a full range of services, with an orientation to the individual characteristics of each customer;
  • introduction of modern banking technologies;
  • increase in performance indicators for the accounts of optimizing business processes, improving quality and speed of service while reducing production costs;
  • improvement of the risk management system;
  • development of professional potential of employees.

Next year, the Bank intends to make great investments in modern banking technologies. This step will enable the introduction of new interactive services and provide fast and round-the-clock customer service. In addition, it is planned to automate most of the business processes, as well as introduce new methods of integrated Bank management and performance evaluation.

Next year, the Bank will continue to develop all strategic business lines: corporate, commercial and retail.

The development of corporate business will be aimed at the growth and improvement of the customer base quality, with an emphasis on potential customers who have a need for a range of banking services. When building up the resource base, emphasis will be placed on customers with large balances, as well as small business in order to diversify the resource base. To maintain the stability of resources, special attention will be paid to attracting time deposits of legal entities. The attracted funds will be the main source of financing for the Bank's active transactions, namely, lending.
The development of retail business will be aimed at expanding services related to payments of individuals and remittances.

Due to the fact that the volume of non-cash payments by individuals is growing rapidly in the country, as well as the rapid development of e-commerce, next year will be significantly expanded the range of services provided through information kiosks and other distance channels. In order to develop services for remittances, next year it is planned to create a network of mini-offices - remote self-service points, implemented through ATMs and information kiosks.

With the successful implementation of the above tasks, total assets by the end of 2017 should reach the level of 3 trillion 303 billion soums, which is equivalent to an increase of 25%, while maintaining the growth of liabilities by 26% and capital by 22%. The growth of gross revenues of the Bank for 2017 is planned at the level of 4%. Net profit of the Bank is planned in the amount of 61.6 billion soums, which will ensure the return on assets at 2.1% and the profitability of total capital at the level of 19.4%.

BUSINESS PLAN EXECUTION



2017


in thousand UZS

Plan

Fact

Percentage of completion

Assets

3 334 817 717

3 537 462 152

106%

Liabilities

3 004 032 515

3 198 463 929

106%

Capital

330 785 202

338 998 223

102%

Gross income

886 928 400

921 108 636

104%

Net income

50 137 524

52 025 703

104%





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%

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