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Best Domestic Bank
|Guram Andronikashvili, ForteBank|
Best Corporate and Investment Bank
There is no financial institution in Kazakhstan quite like Halyk Bank. When Moody’s Investors Service surveyed the country’s financial system in September, it pointed to a common complaint: the system is fragmented. Halyk Bank, which has 34% of total banking assets, is the exception to that rule.
The bank was given a vote of confidence by the government in 2017, when it was chosen to play a crucial role in a series of bailouts and consolidations that rescued the banking system, struggling in the wake of a plummeting oil price and a devaluation of the currency.
Halyk absorbed Kazkommertsbank, the biggest bank in the country. It was helped by the government’s willingness to take bad assets off the latter’s book.
Halyk emerged as the undisputed leader in Kazakhstan’s banking system. Its strengths mean it was a strong contender for all of the best bank awards of 2019, but it is in corporate banking where the bank really stands out from the crowd, partly because so many of its rivals are concentrating on the low-touch, high-growth consumer market.
Halyk lent KT9.32 trillion ($24 billion) to its corporate clients in the 12 months to the end of September, representing almost 60% of its gross lending activity. It banks all the main client segments, lending sizeable amounts to the service sector, traders, construction, transport and agriculture.
Kazakhstan’s capital markets are still barely formed, despite the presence of two stock exchanges, but Halyk Bank is doing its bit. The lender, which is already listed on the Kazakhstan Stock Exchange, went for a secondary listing on the newly launched Astana International Stock Exchange (AIX) in early October.
Perhaps unsurprisingly, it picked itself as a global coordinator for that deal, but it has also won business from elsewhere. When Kazakhstan’s sovereign wealth fund Samruk-Kazyna turned to the London Stock Exchange and the AIX for a sale of depository receipts in September, it picked Halyk to help manage the local tranche. That ended up being the marginally bigger portion of the deal, representing $63.3 million against the $62.9 million raised in London.
Halyk casts a shadow over smaller banks scrambling for business in the country. But unlike Kazkommertsbank, its predecessor atop the domestic banking system, Halyk appears a safe pair of hands to a client base and a domestic economy that desperately needs strong, responsible banks to help Kazakhstan unlock its vast potential.
Best International Bank
|Andrey Kurilin, Citi|
Best Digital Bank
|Andrey Timchenko, Alfa-Bank|
Alfa-Bank, run by chief executive Andrey Timchenko, is no exception to any of this. It does much of what its rivals do; it is simply better at it.
Entering the top floor of the bank’s head office in Nazarbayev Street in Almaty is like walking into a stereotypical Silicon Valley startup: colourful sofas everywhere, break-out areas, young bankers wearing jeans and T-shirts. This could be nothing more than window dressing except for one key point: Alfa-Bank has the numbers to back it up.
The bank, a subsidiary of a Russian lender, reckons that roughly 1,500 entrepreneurs create an Alfa account every month, out of about 8,000 starting up new businesses. Some 95% of its client transactions are now done online or through a mobile app.
It joined Swift’s cross-border payment system at the start of 2019 and has since processed about $600 million of transfers.
Alfa-Bank’s customers no longer need to go into one of its branches to open an account. SMEs can open accounts online with nothing more than an ID card, a mobile phone number and a home address. After that, every client is assigned a dedicated account manager, so they’re always talking to the same person when they call up Alfa.
The bank is determined to make its digital offering help it acquire SME clients, a key growth market. Earlier in 2019, it launched a pilot programme bringing together 130 small stores and their five largest distributors, allowing the retailers to get instant loans to purchase supplies. The shop owners can then pay back these loans using Alfa-Bank ATMs or Kassa 24 machines, a series of bright yellow terminals dotted around the country.
Best Bank For SMEs
|Sergey Kovalenko, ATF-Bank|
But ATF Bank’s commitment to smaller clients makes it the standard-bearer.
The bank, managed by chief executive Sergey Kovalenko, increased its lending to SMEs by 40% in 2018, capping a 150% rise in its loan portfolio over three years. Echoing the moves of its rivals, it has partly been doing this by relying more and more on technology.
In July 2018, it created its Landau credit analysis system, a credit-scoring software that dramatically speeds up the approval of new loans. ATF says the average speed of SME loan approval fell from 43 days in 2016 to between 10 and 14 days in 2018. This is still slower than some of its rivals, but ATF Bank’s total-banking offering is enough to attract that steady growth in clients.
ATF is now focusing its efforts on serving SMEs in a more comprehensive way than simply offering loans, which is where some other banks start and finish. It is eyeing a variety of product launches in the sector, including help with documentation and settlement.
The bank’s loans and guarantees may help it win business, but in a highly competitive market, that additional help will help it keep business – giving it more chance of maintaining clients as small enterprises become medium-sized ones, and medium-sized ones grow large.
Best Bank For CSR
Home Credit Bank
|Karel Horak, Home Credit Bank|
In many emerging markets, that would be enough. Banks in fast-growing economies often allow CSR to fall by the wayside, saying when pressed that their lending contributes, in a vague way, to the greater good. Not Home Credit.
The lender, which has been run by chief executive Karel Horak since August 2018, has made improving financial literacy a key part of its mission statement.
Home Credit first committed to improving financial literacy in Kazakhstan in 2014 and has since hosted more than 200 large events, attended by over 370,000 people, as well as 230 smaller-scale seminars. It has set up a website, Finclass, where its own staff offer tips to existing and potential clients alike.
The fully licensed bank, a subsidiary of a Czech consumer finance company, is also attempting the difficult job of teaching financial literacy to children, creating a Monopoly-style board game called ‘Financial forest’ and partnering with a local TV network to launch two seasons of a children’s show that has financial literacy as a key theme.
The bank appears to do little beyond financial literacy, but in a fast-growing economy where consumers are spoiled for choice by a large number of banks that is perhaps the most important topic for a financial institution to focus on.
Other banks might take a wider approach to CSR – a touch of sustainability there, a pinch of gender pay reviews there – these often feel like box-ticking exercises. Home Credit’s approach to financial literacy has gone well beyond that.
The bank was in the running for several awards this year but was pipped by stronger local rivals who remain a step ahead, but in its investments in CSR, Home Credit has no equals in Kazakhstan. That will engender customer loyalty and may be enough to tip the scales in those other battlegrounds it has with its rivals – those that will have a real impact on the bottom line.