The country's largest state institute ends 2021 with positive indicators. In just 11 months of this year, DBK approved 19 projects for financing with a total amount of loans of 1.09 trillion tenge in such industries as renewable energy sources, communications, agriculture, chemical and gas chemical industry, metallurgy. Kursiv talked with the Chairman of the bank's Management board, Abay Sarkulov, about how his team was able to build up a loan portfolio in the pandemic, what contribution they can make to the country's “green” development and what plans are ahead for 2022.
- The pandemic, about which a lot has been said over the past two years, has become a challenge for companies not only economically, but also organizationally. How was DBK able to restructure its work during the period of lockdown and the massive transition to "distance work"?
- In fact, we began to change key business processes back in 2019. In April of that year, we started implementing a module for remote access and signing documents with electronic digital signature. By May, the module was deployed, and in just three weeks all colleagues received EDS with the ability to work outside the office.
Then the revision of internal regulatory documents began to exclude paper workflow. As a result, the documents became legitimate in the presence of EDS. Thanks to this, the time for signing each document has been reduced from days and weeks to 15 minutes.
At first, the "iron" IT infrastructure did not allow everyone to work remotely, but in 2019, as needed and according to the availability of funds, we rebuilt the equipment park, bought laptops - first for collegial bodies, members of the Management board and the Board of Directors, as well as other employees, who make funding decisions.
By March 2020, when strict quarantine measures were introduced in the country and a lockdown was announced, the IT transformation of DBK had already been completed.
We have become a truly digital bank that can provide all services online. We immediately issued an order to switch the office to a remote mode of operation, and the process went smoothly.
All employees switched to Zoom and other similar systems, there were fewer meetings, and the bank's efficiency increased - deals were quickly approved and contracts were concluded. As a result, in 2020 we planned to issue loans for 468 billion tenge, as a result we issued 506 billion. This is an indicator of how, thanks to digitalization, we were able to work faster.
It is now clear that against the background of the global crisis, the lending indicator not only returned to the pre-crisis level, but also exceeded historical values.
Currently, the volume of DBK's pipeline projects is $ 6 billion. This year we expect a development plan for projects at the level of 430 billion tenge.
- Projects from which industries are you currently considering?
- DBK has its own mandate, which includes infrastructure and manufacturing projects, for example, metallurgy and the chemical industry. Human capital in Kazakhstan makes it possible to implement technologically complex projects. In addition, there are many communications and tourism projects in the infrastructure.
DBK performance results for 2021
The loan portfolio as of November 31 amounted to KZT 1 856 billion. During this time, 253 billion tenge was invested in the manufacturing industry and infrastructure. During the current year, five projects were put into operation: the multifunctional tourist complex "Karavan-Saray", the Zhairem mining and processing plant, the Turgusun hydroelectric power station, the Shymkent chemical company and the Qaz Carbon processing plant with the Saryarka ferroalloy plant.
- How does DBK work with environmental projects, taking into account the government's priority to achieve carbon neutrality?
- Yes, we are faced with such a task. There are already financed projects for hydro, wind and solar power plants. Pipeline projects with approximately 500 additional megawatts of power for the power system. Our contribution to this area is already noticeable: about 17.5% of the total country funding for renewable energy sources are projects supported by DBK.
In addition, a lot of work is underway to implement ESG standards. We make sure that our other projects also meet the environmental criteria. Next year, we are faced with the task of introducing and applying ESG principles in our work and deciding on a taxonomy of "green" projects.
- Are there any difficulties with the implementation of green projects?
- Here you need to look at the issue of financing. All over the world, funds for such projects are allocated on concessional terms, while in Kazakhstan there is no such concessional lending yet.
When we place our bonds on foreign markets, we see that investors can give money at a more acceptable rate for us for green projects, but only in foreign currency.
When placing securities in Kazakhstan, the difference between "green" and ordinary bonds has not yet been observed.
- What projects were the most vulnerable to the pandemic?
- In general, DBK has a balanced loan portfolio, which covers, for example, metallurgy, agriculture, energy and the chemical industry. Therefore, most projects felt fine during this period. But the pandemic has seriously affected the tourism sector and airports.
For example, due to a lockdown, all flights were terminated for some time. The main source of income at airports is passenger traffic and aircraft maintenance. Clients - Nur-Sultan and Aktau airports - contacted us for a one-year deferral of payments. We went to meet them.
Similarly, for hotels - there was no tourist flow, the occupancy rate dropped to almost zero, and we provided them with an extension.
- What are the most important projects over the past year or two that you could highlight?
- Definitely, this is the Turgusun hydroelectric power station in the East Kazakhstan region. This is a difficult project from a technological point of view, implemented in a mountainous area under difficult climatic conditions - in winter the temperature dropped to minus 40 degrees.
You can also note the Karaganda enterprise YDD Corporation for the production of ferrosilicon. The construction there was completed in record time - less than two years. About 680 people are employed - all highly qualified specialists.
At the same time, 99% of products are exported to 47 countries of the world. Abroad there is a high demand for the products of the Karaganda plant due to their high quality at a relatively low cost.
In the tourism sector, the Rixos Water World Aktau complex can be noted. We started this project even before the pandemic, but during the commissioning of the hotel, a lockdown was announced in the country. However, now the resort is in high demand among tourists.
- What plans does DBK set for itself for 2022?
- Now we have pipeline projects worth $ 6 billion, in terms of industries it is mechanical engineering, metallurgy, a great emphasis on supporting export operations.
A large number of products in demand are produced in Kazakhstan, but sometimes businesses do not have enough finance to promote their goods and services for export, so we help them enter new markets. There are already successful deals for the sale of Kazakhstani juices, dairy and confectionery products, as well as chemical and engineering products.
In addition, next year we will focus on co-financing various projects with other banks. In particular, with the Eurasian Development Bank and VEB.RF.
If we talk about individual projects financed, then these are a gas processing plant, a sugar plant and projects in the fields of renewable energy and tourism.
We are not slowing down today. We set more ambitious goals.