IMPORTANT NOTICE IMPORTANT: You Must Read the Following Before Continuing

IMPORTANT NOTICE IMPORTANT: You must read the following before continuing. The following applies to the Prospectus following this notice, and you are therefore advised to read this carefully before reading, accessing or making any other use of the Prospectus. In accessing the Prospectus, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from us as a result of such access. THE PROSPECTUS MAY NOT BE FORWARDED OR DISTRIBUTED OTHER THAN AS PROVIDED BELOW AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. THE PROSPECTUS MAY ONLY BE DISTRIBUTED IN “OFFSHORE TRANSACTIONS” AS DEFINED IN, AND AS PERMITTED BY, REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR WITHIN THE UNITED STATES TO QIBs (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT (“RULE 144A”)). ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE PROSPECTUS IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE U.S. SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. NOTHING IN THE PROSPECTUS CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN RELIANCE ON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QIB OR (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. Confirmation of your representation: In order to be eligible to view the Prospectus or make an investment decision with respect to the securities being offered by the New GDR Offering referred to in the Prospectus, you must be (i) a person that is outside the United States or (ii) a QIB that is acquiring the securities for its own account or for the account of another QIB. By accepting the e-mail and accessing the Prospectus, you shall be deemed to have represented to us that you are outside the United States or that you are a QIB and that you consent to delivery of the Prospectus by electronic transmission. You are reminded that the Prospectus has been delivered to you on the basis that you are a person into whose possession it may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver the Prospectus to any other person. The Prospectus does not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. Under no circumstances shall the Prospectus constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Recipients of the Prospectus who intend to subscribe for or purchase the securities are reminded that any subscription or purchase may only be made on the basis of the information contained in the final prospectus. The information contained in the Prospectus is directed solely at persons (i) outside the United Kingdom or (ii) within the United Kingdom having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or to persons of a kind described in Article 49(2)(a) to (d) of the Order (all such persons being referred to as “relevant persons”). Persons who are not relevant persons must not rely on or act upon the information contained in the Prospectus.

The Prospectus has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently the Bank accepts no liability or responsibility whatsoever in respect of any difference between the Prospectus distributed to you in electronic format and the hard copy version available to you on request from the Bank.

JSC KAZKOMMERTSBANK (incorporated in the Republic of Kazakhstan under the Joint Stock Companies Law with registered number 4466-1910-AO)

This is an offering (the “New GDR Offering”) by JSC Kazkommertsbank (the “Bank”) of up to 75,000,000 global depositary receipts (“New GDRs”, and, together with all currently existing global depositary receipts, the “GDRs”), each representing two common shares of the Bank (the “New Shares” and, together with the Bank’s existing common shares, the “Shares”), to holders of GDRs as of 30 March 2009 (the “Record Date”) at a price of U.S.$2.90 per New GDR (the “New GDR Subscription Price”). GDR holders who have certified (“Eligible Investors”) that they are either (i) “qualified institutional buyers” (“QIBs”) as such term is defined in Rule 144A (“Rule 144A”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or (ii) “qualified investors” (“Qualified Investors”) within the meaning of the relevant implementation of Article 2(1)(e) of the Directive of the European Parliament and of the Council 2003/71/EC (the “Prospectus Directive”) in each relevant jurisdiction that are located and are purchasing New GDRs outside the United States (within the meaning of Regulation S under the Securities Act) and are not affiliates of the Bank or acting on behalf of affiliates of the Bank will be entitled to subscribe for New GDRs under the New GDR Offering. Other certifications may be required for residents in certain jurisdictions. Only Eligible Investors may participate in the New GDR Offering. In order to participate in the New GDR Offering, Eligible Investors must duly complete the subscription materials and required certifications which will be made available by The Bank of New York Mellon, as depositary (the “Depositary”), on Euroclear and Clearstream and DTC (each as defined herein, and, together, the “Clearing Systems”) during a period beginning on or about 9:00 a.m. London time on 31 March 2009 (the “First GDR Subscription Day”) and ending on or about 5:00 p.m. New York time on 27 April 2009 (the “Last GDR Subscription Day” and the period between the First GDR Subscription Day and Last GDR Subscription Day inclusive, the “GDR Pre-emptive Subscription Period”). 0.5658203117 New GDRs will be offered for every one GDR held by Eligible Investors on the Record Date (the “Entitlement”). In no case shall fractional New GDRs be issued, and if any Eligible Investor’s Entitlement is not a whole number of New GDRs, such Eligible Investor will receive an amount of New GDRs equivalent to such Entitlement rounded down to the nearest whole number. The New GDR Offering is being conducted concurrently with an offer of rights to the Bank’s existing shareholders, as provided by the Joint Stock Companies Law of the Republic of Kazakhstan (the “JSC Law”), to subscribe for up to 175,000,000 New Shares on a pre-emptive basis (the “New Share Offering”) at a price of U.S.$1.45 per New Share (the “New Share Subscription Price”). To the extent that any holders of GDRs as of the Record Date do not subscribe for any New GDRs in the New GDR Offering or subscribe for less than their Entitlement, the number of New Shares that would otherwise have been represented by such GDRs together with the New Shares not subscribed for during the subscription period for the New Share Offering (the “Share Pre-emptive Subscription Period”) (the “Excess Shares”) will be publicly offered in Kazakhstan. The offering and sale of the Excess Shares is referred to herein as the “Rump Offering”. Pursuant to the terms and conditions of the Implementation Agreement dated 15 January 2009 (the “Implementation Agreement”) among Samruk-Kazyna National Welfare Fund JSC (“Samruk-Kazyna”), the Bank, Central Asian Investment Company JSC (“CAIC”) and Alnair Capital Holding JSC (“Alnair”), the Bank’s outstanding common shares up to a limit of 25 per cent. will, subject to the fulfilment of certain conditions, be subscribed for by Samruk-Kazyna during the Rump Offering at a price of U.S.$1.45 per New Share. The New GDR Offering, New Share Offering and Rump Offering are together referred to herein as the “Offering”. Application has been made (i) to the U.K. Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the “UK Listing Authority” or “UKLA”) for up to 400,000,000 GDRs (including the New GDRs) to be admitted (“Admission”) to the official list of the UK Listing Authority (the “Official List”) and (ii) to the London Stock Exchange plc (the “London Stock Exchange”) for such GDRs to be admitted to trading on the London Stock Exchange’s Regulated Market (as defined in the Markets in Financial Instruments Directive 2004/39/EC) (the “Regulated Market”). Admission of the New GDRs issued in the New GDR Offering to the Official List and to trading on the Regulated Market is expected to take place on or about 30 April 2009 (the “New GDR Offering Closing Date”). The remainder of the GDRs for which admission to listing is being sought (being the 400,000,000 GDRs less the New GDRs) will be admitted to the Official List and to trading on the Regulated Market either (i) on or about the date of this Prospectus (in the case of GDRs already in existence) or (ii) on the date of their creation (in the case of those GDRs not yet created). No application is currently intended to be made for the GDRs to be admitted to listing or dealt with on any other exchange. The Bank’s existing GDRs are listed on the London Stock Exchange under the symbol “KKB”. The New GDRs that are Regulation S GDRs will have separate temporary CUSIP and ISIN numbers until 40 days after the last closing in the New GDR Offering and thereafter will become fungible with and have the same symbol and CUSIP as the existing Regulation S GDRs. The New Rule 144A GDRs have the same symbol and CUSIP as the existing Rule 144A GDRs. The closing price on 30 March 2009 of the Bank’s existing GDRs on the London Stock Exchange was U.S.$3.60. All dealings before the commencement of unconditional dealings will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned. The GDRs are securities of a specialist nature and should only be bought and traded by investors who are particularly knowledgeable in investment matters. See the section of this document headed “Risk Factors” for a discussion of certain factors that should be considered in connection with an investment in the GDRs. The New GDRs have not been and will not be registered under the Securities Act, and may not be offered, sold, pledged or otherwise transferred within the United States except to certain QIBs in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The New GDRs are being offered and sold outside the United States in accordance with Regulation S under the U.S. Securities Act (“Regulation S”). For a description of these and certain further restrictions on offers, sales and transfers of the New GDRs and the distribution of this document, see “The Offering” and “Selling and Transfer Restrictions”. Ownership of Shares and the exercise of certain rights (including voting rights) are subject to certain legislative restrictions under Kazakhstan law. See “Risk Factors — Risk factors relating to the Bank’s Shares and GDRs — There are restrictions and prohibitions under Kazakhstan law on the ownership of and exercise of shareholders’ rights (including voting rights) with respect to the GDRs and the Shares”. The New GDRs which are sold to Qualified Investors outside the United States (the “Regulation S GDRs”) will be issued in global form and will initially be evidenced by a Master Regulation S GDR (the “Master Regulation S GDR”) registered in the name of Cede & Co., as nominee for the Depository Trust Company (“DTC”). The Master Regulation S GDR will be held by DTC for Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream”) as DTC participants. The New GDRs which are sold to QIBs in the United States (the “Rule 144A GDRs”) will be evidenced by a Master Rule 144A GDR (the “Master Rule 144A GDR” and, together with the Master Regulation S GDR, the “Master GDRs”). Payment for the New GDRs and the Depositary’s issuance fee of up to $0.05 per New GDR and any applicable taxes will be required to be made by Eligible Investors on or before the Last GDR Subscription Day which is 27 April 2009 by wire transfer or certified or official bank checks payable to The Bank of New York Mellon. It is expected that delivery of the New GDRs will be made on or about 30 April 2009. See “Settlement and Transfer”.

The date of this Prospectus is 31 March 2009

RESPONSIBILITY STATEMENT The Bank accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Bank (which has taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and contains no omission likely to affect its import. This document comprises a prospectus (the “Prospectus”) relating to the Bank in respect of the GDRs for the purposes of Directive 2003/71/EC (the “Prospectus Directive”). Investors should rely only on the information in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied on as having been authorised by the Bank or any affiliate thereof. Without prejudice to any obligation of the Bank to publish a supplementary prospectus pursuant to Section 87G of the Financial Services and Markets Act 2000, as amended (“FSMA”) and paragraph 3.4 of the Prospectus Rules, neither the delivery of this document nor any purchase made under this document shall, under any circumstances, create any implication that there has been no change in the affairs of the Bank and its consolidated subsidiaries (together, the “Group”) since, or that the information contained herein is correct as of any time subsequent to, the date of this Prospectus. The contents of this document are not to be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice. The Bank is making no representation to any offeree or purchaser of GDRs regarding the legality of an investment by such offeree or purchaser. Neither the Depositary nor any of its agents shall have any obligations with respect to the New GDR Offering other than those specifically set forth in the Deposit Agreement governing the GDRs. Neither the Depositary nor any of its agents are responsible for the contents of this Prospectus or any other document relating to the New GDR Offering. The information contained in this document has been provided by the Bank and from other sources identified herein. Information under the headings “Presentation of Financial and Certain Other Information”, “Exchange Rates and Exchange Controls”, “Overview of the Bank”, “Overview of the Offering”, “Risk Factors”, “The Offering”, “The Bank”, “The Banking Sector in Kazakhstan”, “Management’s Discussion and Analysis of Results of Operations and Financial Condition”, “Selected Statistical and Other Information” and “Risk Management Policies” includes extracts from information and data publicly released by the National Bank of the Republic of Kazakhstan (the “NBK”) and/or the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Markets and Financial Organisations (the “FMSA”). The Bank accepts responsibility for accurately reproducing such information and data. So far as the Bank is able to ascertain from this publicly available information, no facts have been omitted which would render the reproduced information misleading or inaccurate. This document is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Bank that any recipient of this document should subscribe for or purchase GDRs. Each potential investor in GDRs should read this document in its entirety and determine for itself the relevance of the information contained in this document and its subscription of GDRs should be based upon such investigation as it deems necessary. In making an investment decision, prospective investors must rely upon their own examination of the Bank and the terms of this Prospectus, including the risks involved. The distribution of this document and the offer and sale of the GDRs in certain jurisdictions may be restricted by law. No action has been taken by the Bank that would permit a public offer of Shares or GDRs or possession, publication or distribution of this document (or any other offer or publicity material or application form relating to the GDRs) in any jurisdiction

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where action for that purpose is required, other than in the United Kingdom. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction and the Bank accepts no responsibility therefor. This document does not constitute an offer of, or an invitation to subscribe or purchase, any GDRs in any jurisdiction in which such offer or sale would be unlawful. Further information with regard to restrictions on offers and sales of New GDRs and the distribution of this document is set out in the sections headed “The Offering” and “Selling and Transfer Restrictions”. The ownership of the voting shares of Kazakhstan banks is subject to certain legislative restrictions under Kazakhstan law. In particular, (a) pursuant to a list prepared by the FMSA (which may be updated from time to time, the “List”) legal entities registered in certain specified off-shore jurisdictions or which have affiliates registered in such jurisdictions (except for international banks having a credit rating of “A” or above from certain rating agencies) or (b) individuals who are participants or shareholders in such legal entities may not directly or indirectly own voting shares of a Kazakhstan bank. Accordingly, holders of New GDRs falling under (a) or (b) above cannot exchange GDRs into Shares and cannot own, hold or dispose of the voting Shares. See “Risk Factors — Risk factors relating to the Bank’s Shares and GDRs — There are restrictions and prohibitions under Kazakhstan law on the ownership of and exercise of shareholders’ rights (including voting rights) with respect to the GDRs and the Shares”. NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES THE NEW GDRS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, INVESTORS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY INVESTORS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON SUBSCRIBERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE BANK IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE BANK OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER. NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA 421B”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421B IS TRUE,

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COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. EUROPEAN ECONOMIC AREA In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any GDRs which are the subject of the New GDR Offering contemplated by this Prospectus (the “New GDRs”) may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any New GDRs may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year, (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000 as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of New GDRs shall result in a requirement for the publication by the Bank of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an “offer to the public” in relation to any GDRs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any New GDRs to be offered so as to enable an investor to decide to purchase any GDRs, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. REPUBLIC OF ITALY The offering of the GDRs has not been registered pursuant to Italian securities legislation, accordingly the GDRs have not been offered or sold and will not be offered or sold, in the Republic of Italy in a solicitation to the public, and sales of the GDRs in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation. The GDRs will not be offered, sold or delivered nor will copies of any document relating to the GDRs be distributed in the Republic of Italy except (a) to “Professional Investors”, as defined in Articles 31.2 of CONSOB Regulation No. 11522 of 1 July 1998, as amended (“CONSOB Regulation No. 11522”) pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of 24 February 1998, as amended (the "Italian Financial Act") or (b) in any other circumstances where an express exemption from compliance with the solicitation restrictions applies, as provided under the Italian Financial Act or Regulation No. 11971 of 14 May 1999, as amended.

Any such offer, sale or delivery of the GDRs or any document relating to the GDRs in the Republic of Italy must be: (i) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 285 of 1 September 1993, as amended, the Italian Financial Act, CONSOB Regulation No. 11522 and any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy. Investors should also note that, in any subsequent distribution of the GDRs in the Republic of Italy, Article 100-bis of the Italian Financial Act may require compliance with the law relating to public offers of securities. Furthermore, where the GDRs are placed solely with professional investors and are then systematically resold on the secondary market at any time in the 12 months following such placing, purchasers of the GDRs who are acting outside the course of their business or progression may in certain circumstances be entitled to declare such purchase void and to claim damages from any authorised person at whose premises the GDRs were purchased, unless an exemption provided for under the Italian Financial Act applies.” JAPAN The GDRs have not been and will not be registered under the Financial Instruments and Exchange Law, as amended (the “FIEL”). The GDRs will not be sold directly or indirectly in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or entity organised under the laws of Japan) or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements under the FIEL and otherwise in compliance with such law and any other applicable laws, regulations and ministerial guidelines of Japan. UNITED KINGDOM In the United Kingdom: (a) in connection with the issue or sale of the GDRs, it has only been communicated or caused to be communicated and will only be communicated or caused to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”)) in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and (b) all applicable provisions of the FSMA with respect to anything done in relation to the GDRs in, from or otherwise involving the United Kingdom have been and will be complied with . ENFORCEMENT OF FOREIGN JUDGMENTS The Bank is incorporated under the laws of the Republic of Kazakhstan and all of its operations are located in the Republic of Kazakhstan. None of the Bank’s directors or executive officers is a resident of the United States and all of the Bank’s assets and the assets of such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon the Bank or such persons or to enforce against any of them judgments of U.S. federal or state courts, including judgments predicated upon civil liabilities under the securities laws of the United States or any state or territory within the United States. Kazakhstan’s courts will not enforce any judgment obtained in a court established in a country other than Kazakhstan unless there is in effect a treaty between such country and Kazakhstan providing for reciprocal enforcement of judgments and then only in accordance with the terms of such treaty. There is no such treaty in effect between Kazakhstan and the United Kingdom or the United States.

TABLE OF CONTENTS Page PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION ...... 1 FORWARD LOOKING STATEMENTS ...... 5 EXCHANGE RATES AND EXCHANGE CONTROLS ...... 7 SUMMARY OF THE BANK AND THE OFFERING...... 9 RISK FACTORS ...... 17 THE OFFERING ...... 34 DILUTION ...... 40 CAPITALISATION OF THE BANK...... 41 USE OF PROCEEDS ...... 42 SELECTED CONSOLIDATED FINANCIAL DATA ...... 43 THE BANK ...... 47 THE BANKING SECTOR IN KAZAKHSTAN...... 58 MANANGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION...... 64 SELECTED STATISTICAL AND OTHER INFORMATION ...... 93 RISK MANAGEMENT POLICIES ...... 112 MANAGEMENT...... 118 PRINCIPAL SHAREHOLDERS ...... 123 RELATED PARTY TRANSACTIONS...... 126 DIVIDEND POLICY...... 127 DESCRIPTION OF SHARE CAPITAL AND CERTAIN REQUIREMENTS OF KAZAKHSTAN LAW...... 128 TERMS AND CONDITIONS OF THE GDRS...... 135 SUMMARY OF PROVISIONS RELATING TO THE GDRS WHILE IN MASTER FORM ...... 157 SETTLEMENT AND TRANSFER...... 159 INFORMATION RELATING TO THE DEPOSITARY...... 161 TAXATION...... 162 SELLING AND TRANSFER RESTRICTIONS...... 172 ADDITIONAL INFORMATION...... 177 INDEX TO FINANCIAL STATEMENTS ...... F-1

(vi)

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION The Bank maintains its books of account in Tenge in accordance with the relevant laws in Kazakhstan and with the regulations of the National Bank of Kazakhstan. Unless otherwise indicated, financial information set forth herein relating to the Bank has been derived from its audited consolidated balance sheets and consolidated statements of income, cash flows and changes in equity as at and for the years ended 31 December 2007, 2006 and 2005 (the “Annual Financial Statements”) and the unaudited condensed interim consolidated balance sheet as at 30 September 2008 and condensed interim consolidated statements of income, cash flows and changes in equity for the nine months ended 30 September 2008 and 2007, (the “Interim Financial Statements”, together with the Annual Financial Statements, the “Financial Statements”). These financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”) as promulgated by the International Accounting Standard Board and IAS 34, Interium Financial Reporting, respectively. The annual financial statements are also prepared in compliance with IFRS as adopted in the European Union. Investors should be aware that the Bank has not published any financial statements as at any date, or for any period after, 30 September 2008. The effect of local and global market conditions on the Bank as well as the effect of those conditions on the Bank's customers and counterparties may mean that actual results of operations and financial condition of the Bank as at and for the financial year ended 31 December 2008 or as at any date or for any period thereafter may be materially and adversely different from the results presented as at and for the nine months ended 30 September 2008; accordingly, investors should not assume that the results presented as at and for for the nine months ended 30 September 2008 are an accurate indication of the actual results as at and for for the financial year ended 31 December 2008 or as at any date or for any period thereafter. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Recent Developments”. The Bank expects to publish its financial statements as at and for for the year ended 31 December 2008 on or about 20 April 2009 and if they are published prior to the admission to trading on the LSE of the New GDRs, the Bank will publish a supplement to this Prospectus. Investors who choose to exercise their rights to subscribe for New GDRs or to acquire GDRs prior to the publication of such a supplement should do so with the knowledge that when such financial information or supplement is published there may be a material and adverse change in the market price of the Bank’s Shares and GDRs. Accordingly, investors subscribing for New GDRs will be required to certify that if they do so prior to the publication of such a supplement, they are subscribing on the basis of the information then available and that they are aware of the consequences thereof. Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. The Bank has obtained certain statistical and market information that is presented in this Prospectus on such topics as the Kazakh banking sector and the Kazakh economy in general and related subjects from certain third-party sources described herein. This third-party information is presented in the following sections: “Overview of the Bank”, “Overview of the Offering”, “Risk Factors”, “Banking Sector in Kazakhstan” and “Management’s Discussion and Analysis of Results of Operations and Financial Condition.” The Bank has accurately reproduced such information and, so far as the Bank is aware and is able to ascertain from information published by such third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. Nevertheless, prospective subscribers are advised to consider this data with caution. Prospective subscribers should note that some of the Bank’s estimates are based on such third-party information. Neither the Bank nor the Manager have independently verified the figures, market data or other information on which third parties have based their studies.

The Bank has derived substantially all of the information contained in this Prospectus concerning its competitors from publicly available information, such as annual reports, and has accurately reproduced such information and, so far as the Bank is aware and is able to ascertain from information published by such third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. The Bank has relied on the accuracy of this information without independent verification. In addition, some of the information contained in this Prospectus has been derived from official data of the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Markets and Financial Organisations (the “FMSA”), the National Bank of Kazakhstan (the “NBK”) and the National Statistical Agency of Kazakhstan (the “NSA”). Official data published by Kazakhstan governmental or regional agencies is substantially less complete or researched than those of more developed countries. Further, official statistics, including those produced by the FMSA, the NBK and the NSA, may be produced on different bases than those used in more developed countries. Any discussion of matters relating to Kazakhstan in this Prospectus is, therefore, subject to uncertainty due to concerns about the completeness or reliability of available official and public information. In this Prospectus: ● “2005 Shareholders” refers to CAIC, Mr. Subkhanberdin and Ms. Zhussupova; ● “Alnair” refers to Alnair Capital Holding JSC; ● The “Bank” refers to JSC Kazkommertsbank; ● “Basel Accord” refers to the 1988 Capital Accord adopted by the Basel Committee on Banking Supervision, then known as the Basel Committee on Banking Regulations and Supervisory Practice; ● “Basel II Framework” refers to the report titled “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” of the Basel Committee on Banking Supervision; ● “CAIC” refers to JSC Central Asian Investment Company; ● “CIS” refers to the Commonwealth of Independent States; ● “Clearstream” means Clearstream Banking, société anonyme; ● “DBK” refers to the Development Bank of Kazakhstan; ● “EBRD” refers to the European Bank for Reconstruction and Development; ● “euro”, “EUR” and “€” refer to the single currency of the participating Member States in the Third Stage of European Economic and Monetary Union of the Treaty Establishing the European Community, as amended from time to time; ● “ Euroclear” means Euroclear Bank S.A./N.V.; ● “Fitch” refers to Fitch Ratings Ltd.; ● “FMSA Regulations” refers to the regulations published by the FMSA; ● “GDP” refers to the gross domestic product of Kazakhstan; ● “Government” refers to the government of Kazakhstan; ● “Group” refers to the Bank and its consolidated subsidiaries, namely Kazkommerts International B.V., Kazkommerts Finance 2 B.V., Kazkommerts Capital II B.V., JSC OCOPAIM Grantum Asset Management, JSC Grantum APF, JSC Kazkommerts Securities, JSC SK Kazkommerts-Policy, JSC Kazkommerts Life Insurance Company OJSC

Kazkommertsbank Kyrgyzstan, LLP Processing Company, LLP Moskommertsbank and CJSC Kazkommertsbank Tajikistan; ● “JSC Law” refers to the Joint Stock Companies Law of Kazakhstan; ● “JPY” refers to Japanese Yen, the lawful currency of Japan; ● “KASE” refers to the Kazakhstan Stock Exchange; ● “Kazakhstan” refers to the Republic of Kazakhstan; ● “Moody’s” refers to Moody’s Investor Service, Inc.; ● “Memorandum of Understanding” refers to the Memorandum of Understanding signed on 9 December 2008 between, inter alios, Samruk-Kazyna, CAIC, Alnair, Mr. Subkhanberdin, and the Bank; ● “NBK” refers to the National Bank of Kazakhstan; ● “NBK Regulations” refers to the regulations published by the NBK; ● “NSA” refers to the National Statistical Agency of Kazakhstan; ● “Option Agreement” refers to the Option Agreement dated 15 January 2009 between Samruk-Kazyna and the Signficant Shareholders granting a put option with respect to the Shares; ● “Principal Shareholders” refers to EBRD, CAIC, Alnair and Mr. Subkhanberdin as the principal shareholders in the Bank as of the date of this Prospectus; ● “RUR” refers to Russian roubles, the lawful currency of the Russian Federation; ● “Significant Shareholders” refers to CAIC, Alnair and Mr. Subkhanberdin as the shareholders of the Bank that have entered into the Implementation Agreement with the Bank and Samruk-Kazyna; ● “SME” refers to small- and medium-sized enterprises; ● “S$” and “SGD” refers to the lawful currency of the Republic of Singapore; ● “Standard and Poor’s” refers to Standard and Poor’s Rating Services, a division of the McGraw Hill Companies; ● “Tenge” and “KZT” refer to Kazakhstan Tenge, the lawful currency of Kazakhstan; ● “United States” or the “U.S.” refers to the United States of America; and ● “U.S.$” and “U.S. dollars” refers to the lawful currency of the United States. Solely for the convenience of the reader, this Prospectus presents unaudited translations of certain Tenge amounts into U.S. dollars at specified rates. The Bank has translated the summary income statement information for the year ended 31 December 2007 into U.S. dollars at the rate of U.S.$1.00 = KZT 122.57 and the summary balance sheet information as at 31 December 2007 into U.S. dollars at the rate of U.S.$1.00 = KZT 120.30. The Bank has translated the capitalisation information as at 30 September 2008 into U.S. dollars at the rate of U.S.$.1.00 = KZT 119.84. See “Exchange Rates and Exchange Controls.” No representation is made that the Tenge or U.S. dollar amounts in this Prospectus could have been converted into U.S. dollars or Tenge, as the case may be, at any particular rate or at all.

Except as otherwise indicated, references to the Bank’s corporate businesses include the small and medium sized enterprise (SME) segment.

FORWARD LOOKING STATEMENTS Certain statements included herein may constitute forward looking statements that involve a number of risks and uncertainties. Certain such forward looking statements can be identified by the use of forward looking terminology such as “estimates”, “believes”, “expects”, “may”, “are expected to”, “intends”, “will”, “will continue”, “should”, “would be”, “seeks”, “approximately” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology. These forward looking statements include all matters that are not historical facts. They appear in a number of places throughout this Prospectus and include statements regarding the Bank’s intentions, beliefs or current expectations concerning, amongst other things, the Bank’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Prospective subscribers should be aware that forward looking statements are not guarantees of future performance and that the Bank’s actual results of operations, financial condition and liquidity, and the development of the industry in which it operates, may differ materially from those made in or suggested by the forward looking statements contained in this Prospectus. In addition, even if the Bank’s results of operations, financial condition and liquidity and the development of the industry in which it operates are consistent with the forward looking statements contained in this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause those differences include, but are not limited to: ● the stability of the banking sector in Kazakhstan generally; ● changes in the Bank’s corporate, retail, SME, insurance and investment banking businesses, growth of its cross-selling activities among client segments and products and in its deposit base; ● expectations as to the impact of projects undertaken to improve cost efficiencies and enhance liquidity and revenues; and ● estimates and financial targets for increasing and diversifying the composition, as well as the quality, of the Bank’s loan portfolio. Factors that might affect such forward looking statements include, amongst other things: ● effects of the global financial crisis; ● overall economic and business conditions, including commodities prices; ● the demand for the Bank’s services; ● competitive factors in the industries in which the Bank and its customers compete; ● changes in Government regulation and in the Government’s and/or Samruk-Kazyna’s policies regarding support for the banking sector in Kazakhstan; ● changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations; ● interest rate fluctuations and other capital market conditions; ● exchange rate fluctuations; ● economic and political conditions in international markets, including Governmental changes; ● hostilities and restrictions on the ability to transfer capital across borders; and ● the timing, impact and other uncertainties of future actions.

The sections of this Prospectus entitled “Management’s Discussion and Analysis of Results of Operations and Financial Condition”, “Risk Factors”, “The Bank” and “Selected Statistical and Other Information” contain a more complete discussion of the factors that could affect the Bank’s future performance and the industry in which it operates. In light of these risks, uncertainties and assumptions, the forward looking events described in this Prospectus may not occur. The Bank does not undertake any obligation to publicly update or publicly revise any forward looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward looking statements attributable to the Bank or to persons acting on its behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Prospectus. Notwithstanding the foregoing, the Bank will adhere to its obligations as a Company with securities admitted to the Official List. The Bank’s management has set certain medium-term targets for profitability ratios, which are set out in “Management’s Discussion and Analysis of Results of Operations and Financial Condition”. No assurance can be given as to whether or when the Bank can or will attain these objectives.

EXCHANGE RATES AND EXCHANGE CONTROLS Exchange Rates The currency of Kazakhstan is the Tenge, which was introduced in November 1993. Prior to 5 April 1999, the NBK maintained a managed floating exchange rate system; however, in April 1999, the NBK and the Government of Kazakhstan publicly announced that they would cease to intervene in the foreign exchange markets, allowing the Tenge to float freely. As a result, the Tenge depreciated from a pre-announcement rate of KZT 88 per U.S. Dollar to a rate of approximately KZT 130 per U.S. Dollar in May 1999. For the next three years, the Tenge generally continued to depreciate in nominal terms against the U.S. Dollar, although from 2002 to 2008 it strengthened overall against the U.S. Dollar. On 4 February 2009, the NBK devalued the Tenge by 18 per cent. to KZT 143.98 per U.S.$1.00. This devaluation was due in part to recent pressure on the balance of payments of Kazakhstan as a result of a decline in commodity prices (in particular oil and gas) in the international markets. It is also intended to enhance export competitiveness. The following table sets forth the period-end, average and low and high rates for the Tenge, each expressed in Tenge and based on the KZT/U.S. Dollar exchange rates on the KASE, as reported by the NBK:

Year ended 31 December Period end Average(1) High Low 2000 ...... 144.50 142.13 144.50 138.20 2001 ...... 150.20 146.74 150.20 145.00 2002 ...... 155.60 153.28 155.60 150.60 2003 ...... 144.22 149.58 155.89 143.66 2004 ...... 130.00 136.04 143.33 130.00 2005 ...... 133.77 132.88 136.12 129.83 2006 ...... 127.00 126.09 133.85 117.25 2007 ...... 120.30 122.55 127.00 118.79 2008 ...... 120.77 120.30 120.87 119.48 2009 January...... 121.47 121.27 121.71 120.79 February...... 150.43 144.90 150.43 121.47 March (to 19 March)...... 150.58 150.44 150.60 150.25 ______Note: (1) The average rate reported by the NBK on each day during the relevant period.

The daily average KZT/U.S. Dollar exchange rate on the KASE, as reported by the NBK, on 19 March 2009 was KZT 150.92 per U.S.$1.00. Exchange Controls Kazakhstan has accepted the conditions of paragraphs 2, 3 and 4 of Article VIII of the Charter of the International Monetary Fund and, as a result, has agreed not to introduce or increase any exchange rate restrictions, introduce or modify any practice of multiple exchange rates, enter into any bilateral agreements violating Article VIII or impose any import restrictions. In accordance with Article VIII, a new law on Currency Regulation was adopted in 1996. According to this legislation, all current account operations, including transfers of dividends, interest and other investment income, may be made without restriction and only outflowing capital account operations need to be licensed by or registered with the NBK. Capital inflows are registered and monitored for statistical purposes only, but are not restricted. Following the influx of U.S. Dollars into Kazakhstan due to, among other things, rising oil prices, a number of steps aimed to liberalise the currency control regime were undertaken in Kazakhstan from 2002 to 2004. The Law On Currency Regulation and Currency Control and supporting regulations came into effect at the end of 2005, representing a significant milestone towards achieving the liberalisation of currency operations, extension of export of capital and elimination of double control in Kazakhstan. Among other things, these currency control rules substantially expanded the classes of

Kazakhstan investors that can invest abroad and ease the requirements for international financing to Kazakhstan. Since 1 January 2007, where certain previously ineffective provisions of the Law on Currency Regulation and Currency Control came into effect, it has not been necessary to obtain an NBK licence for any foreign currency transactions, including the opening by Kazakhstan residents of accounts with foreign banks. Further, since 1 January 2007, most foreign currency transactions only require notification to the NBK or are not subject to currency control at all. Only financial loans (with a non-bank local counterparty), direct investments and certain other capital account operations require registration with the NBK. With respect to most of their offshore operations, Kazakhstan banks are only obliged to notify the NBK as to such operations.

SUMMARY OF THE BANK AND THE OFFERING The following summary information should be read as an introduction to this Prospectus, including the consolidated financial statements included in this Prospectus. Any decision by a prospective investor to invest in the GDRs should be based on consideration of this Prospectus as a whole and not solely on this summarised information. Following the implementation of the relevant provisions of the Prospectus Directive (Directive 2003/71/EC) in each member state of the European Economic Area (“EEA”), civil liability will attach to the directors of the Bank in any such member state for this summary, including any translation hereof if, but only if, this summary is misleading inaccurate or inconsistent when read together with the other parts of this Prospectus. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the EEA states, be required to bear the costs of translating this Prospectus before legal proceedings are initiated. Prospective investors should carefully read this Prospectus, including the consolidated financial statements and related notes, before making an investment decision. In particular, prospective investors should consider carefully the factors set forth under the heading “Risk Factors”. The Bank Established in 1990, the Bank is one of the largest banks in Kazakhstan on the basis of total assets, loans and deposits and fourth largest in terms of number of branches (calculated by the Bank on the basis of FMSA data), all as at 30 September 2008. The Bank, in common with all banks in Kazakhstan, has also been affected by the ongoing global economic crisis. As such, the Bank expects its results, including net profit, for the financial year ended 31 December 2008 to be negatively impacted by the continuing global crisis. In particular, the Bank believes that worsened macroeconomic conditions in the second half of 2008 and so far in 2009, as well as declining commodity prices, have had an adverse effect on its asset quality, which will result in an increase in the Bank’s effective provisioning rate. Strategy The Bank’s current strategy is to focus on asset quality and liquidity management, while maintaining its client base and operating efficiency, and includes the following components: Corporate banking ● Focusing on asset quality. ● Participation in the government stabilisation programmes. ● Maintaining its position in corporate deposits. ● Focusing on cross sales and sales of non-credit banking products to corporate borrowers. SME banking ● Maintaining its SME loan portfolio with specific focus on asset quality when making SME loans. ● Optimising its business structure related to SMEs to address the global economic turmoil and its consequences. Retail banking ● Maintaining and seeking opportunities to increase its existing retail deposit base. ● Focusing on increasing non-interest fee based income.

● Optimising and maintaining its distribution network. ● Developing alternative distribution channels. ● Optimising business processes related to retail banking. Risk Factors Certain risk factors relating to the Bank:

• The Bank’s results as at and for the year ended 31 December 2008 may have a material and adverse impact on the market price of the Bank’s Shares and GDRs

• The current and ongoing crisis in the global financial markets and deterioration of general economic conditions have adversely affected the Bank’s results of operations and financial condition and could continue to cause them to decline

• Financial instability in other emerging markets has caused and could continue to cause the price of the Bank’s securities to suffer

• The Bank faces increased risks in 2009 related to the devaluation of the Tenge

• Any unavailability of capital, both in terms of compliance with applicable capital adequacy ratios and in respect of the conduct of its business, would adversely affect the Bank

• Volatility in the real estate market in Kazakhstan may adversely affect the Bank’s asset quality and collateral value

• Changes to NBK minimum reserve requirements and potential restrictions imposed by the FMSA may adversely affect the Bank’s balance sheet and results of operations

• The Bank entered into a funding agreement with the NBK and the FMSA, which constrains its ability to obtain new international financing in the near future

• An expected slowdown in loan growth will likely lead to a gradual seasoning of the Bank’s loan portfolio which may increase the proportion of loan defaults

• Lower expected growth of Kazakhstan’s gross domestic product in 2009 could limit lending opportunities for the Bank and put increasing pressure on the ability of its existing borrowers to repay their loans

• Changes in the liquidity support for the Kazakhstan banking sector may lead to decreased liquidity

• Changes in the regulation of the banking industry in Kazakhstan may adversely affect the Bank’s business and existing regulations are not as developed as in many Western countries

• The Bank’s share ownership is currently highly concentrated

• As a result of the Rump Offering Samruk-Kazyna may become a large shareholder of the Bank and its interests may differ from the interests of the Bank’s other shareholders and the holders of the GDRs

• The Bank faces significant competition, which may increase in the future

• Concentration of the Bank’s loan portfolio subjects it to risks from default by its largest borrowers and from exposure to particular sectors of the Kazakhstan economy

Risk Factors Relating to Kazakhstan

• Risks associated with emerging markets generally

• Risks resulting from failures in the Kazakhstan's banking industry could adversely affect the Bank

• Financial stability legislation has recently been enacted in Kazakhstan and its impact on the Bank is uncertain

• Most of the Bank’s operations are conducted, and substantially all of its assets are located, in Kazakhstan. Accordingly, the Bank is largely dependent on the economic and political conditions prevailing in Kazakhstan

• The Kazakhstan economy is highly dependent on oil exports. Accordingly, the Kazakhstan economy and the Bank may be affected by oil price volatility

• Uncertainty over the outcome of the implementation of further market based economic reforms may impose risks Risks Relating to the Shares and the GDRs

• The market price of the GDRs may fluctuate

• There are restrictions and prohibitions under Kazakhstan law on the ownership of and exercise of shareholders’ rights (including voting rights) with respect to the GDRs and the Shares

• GDR holders who do not acquire New GDRs in the New GDR Offering will experience dilution in their ownership of the Bank

• The financial markets in Kazakhstan are less developed than in western jurisdictions and there may be limited or no liquidity with respect to the Shares underlying the GDRs

• GDRs may be subject to market price volatility and the market price of GDRs may decline disproportionately in response to adverse developments that are unrelated to the Bank’s operating performance

• U.S. and some other non-Kazakhstan holders of the Bank’s Shares or GDRs may not be allowed to exercise pre-emptive rights

• As the Shares underlying the GDRs are quoted in Tenge in Kazakhstan, investors may be subject to potential losses arising out of exchange rate risk on the Kazakhstan Tenge and risks associated with the conversion of Tenge proceeds into foreign currency See “Risk Factors” for a further description of some of the risk factors facing the Bank. Summary Financial and Other Information The following table sets forth summary financial information related to the Bank as at the dates indicated. The data has been extracted without material adjustment from the Financial Statements.

As at 30 September As at 31 December 2008 2007 2006 2005 (unaudited) (KZT millions) Total assets ...... 2,834,623 2,997,232 2,444,302 1,194,869 Loans to customers...... 2,253,651 2,366,335 1,678,840 743,411 Customer accounts ...... 1,096,229 895,083 687,806 303,437 Total equity...... 350,663 319,219 262,101 88,271

Credit Ratings The Bank is rated by three rating agencies: Fitch, Moody’s and Standard and Poor’s. The Bank expects its credit ratings to be as follows:

Fitch Ratings Moody’s Standard & Poor’s Long-term – BB- Long-term – Ba3 Long-term – BB- Short-term – B Financial Strength – E+ Short-term – B Outlook – Negative Outlook – Negative Outlook – Negative

The Offering

Background The Bank has increased the total number of its outstanding common shares by 325 million shares to conduct the New Share Offering and, concurrently with it, the New GDR Offering, whereby approximately 29.5 per cent. of the Bank’s authorised common shares are being offered in the form of New Shares and New GDRs to the Bank’s existing shareholders and GDR holders who are Eligible Investors. To the extent that existing holders of Shares and GDRs do not take up their allotment, Samruk-Kazyna has agreed, subject to the terms and conditions of the Implementation Agreement, to purchase such outstanding New Shares in the Rump Offering, up to a maximum of 25 per cent of the Bank’s total outstanding common shares. Use of Proceeds Assuming the successful completion of the Offering, the Bank expects the net proceeds of the Offering to be approximately U.S.$471.3 million (KZT 70.7 billion). The Bank intends to use the net proceeds from the Offering to improve its capital ratios and for general corporate purposes. Expenses The Bank will, subject to certain conditions, pay expenses in an amount of approximately U.S.$650,000 in connection with the New GDR Offering. The New GDR Offering Up to 75,000,000 New GDRs are being offered to holders of the Bank’s existing GDRs on the Record Date. Eligible Investors can subscribe for their Entitlement, being 0.5658203117 New GDRs for every one GDR held by Eligible Investors on the Record Date. In no case shall fractional New GDRs be issued, and if any Eligible Investor’s Entitlement is not a whole number of New GDRs, such Eligible Investor will receive an amount of GDRs equivalent to such Entitlement rounded down to the nearest whole number. Eligible Investors may make application for a lower whole number than their Entitlement, but will not be entitled to make application for a greater number of New GDRs than their Entitlement. The GDRs are being offered to existing GDR holders who have certified that they are (i) QIBs or (ii) Qualified Investors who are outside the United States and not affiliates of the Bank or acting on behalf of affiliates of the Bank. Other certifications may be required as a condition to subscribe for New GDRs in certain jurisdictions. In the event that it is unlawful for existing GDR holders to exercise their rights under the New GDR Offering or existing GDR holders decide not to exercise their rights under the New GDR Offering, such rights will not be transferable under Kazakhstan law and the Depositary will not sell these rights on behalf of GDR holders and distribute the sale proceeds to GDR holders. At the end of the GDR Pre-emptive Subscription Period, the right of existing GDR holders to subscribe for New GDRs will lapse. Depositary The New GDRs will be delivered by The Bank of New York Mellon, as depositary.

The GDRs Each New GDR will represent two New Shares. The New GDRs will be delivered by the Depositary pursuant to the Deposit Agreement by and between the Bank and the Depositary dated 8 November 2006 (the “Deposit Agreement”). The New GDRs will be evidenced by a Master Regulation S GDR and a Master Rule 144A GDR. Except in the limited circumstances described herein, definitive certificates will not be issued to holders in exchange for beneficial interests in the GDRs represented by the Master GDRs. Subject to the terms of the Deposit Agreement, beneficial interests in the Master Regulation S GDR may be exchanged for beneficial interests in the corresponding number of GDRs represented by the Master Rule 144A GDR, and vice versa. New GDR Subscription U.S.$2.90 per New GDR. In addition, subscribing Eligible Investors Price must pay the Depositary’s issuance fee of up to $0.05 per New GDR and any applicable taxes. New Share Subscription U.S.$1.45 per New Share. Price Dilution Assuming the successful completion of the Offering and the issuance of 325,000,000 New Shares, existing GDR holders not participating in the New GDR Offering will be diluted by 16.53 per cent. Existing shareholders of the Bank not participating in the New Share Offering will also be diluted by 16.15 per cent. GDR Pre-emptive The period beginning on or about 9:00 a.m. London time on 31 Subscription Period March 2009 and ending on or about 5:00 p.m. New York time on 27 April 2009. Method of Subscription for In order to participate in the New GDR Offering, Eligible Investors New GDRs must, prior to the Last GDR Subscription Day, duly complete the subscription materials and required certifications which will be made available by the Depositary through the Clearing Systems and return them to the Depositary. Eligible Investors will pay for the New GDRs, the Depositary’s issuance fee and any applicable taxes by wiring funds directly to the Depositary or by certified or official bank checks payable to The Bank of New York Mellon. Record Date for New GDR 30 March 2009. Offering Rump Offering The GDR Pre-emptive Subscription Period will be conducted concurrently with the Share Pre-emptive Subscription Period. After these periods have ended, the Bank may commence the Rump Offering in which it will offer for sale any Excess Shares. The Rump Offering will be conducted in the Republic of Kazakhstan only. The Bank cannot guarantee that the Rump Offering will take place. Total GDRs Outstanding If the whole amount of the New GDR Offering is subscribed by and Total Share Capital existing GDR holders, the total number of GDRs outstanding after after the Offering the New GDR Offering will be 206,278,011 GDRs. If the Offering is fully subscribed, the Bank’s common share capital after such Offering will consist of approximately 900,000,000 common shares in registered form. Certain of the Bank’s shareholders have

previously agreed not to participate in the Offering. See “The Offering”. Closing Date New GDRs issued in the New GDR Offering will be delivered to the brokerage accounts of participating Eligible Investors through DTC, Euroclear or Clearstream on or about the New GDR Offering Closing Date. Lock-up Following the completion of the Rump Offering, Samruk-Kazyna and the Significant Shareholders have agreed not to dispose of the Shares owned by them other than in accordance with the terms of the Shareholders’ Agreement. See “The Offering—Shareholders’ Agreement”. Transfer and Ownership The Shares and the GDRs will be subject to certain restrictions on Restrictions transfer. These restrictions include limitations on the ability of legal entities registered in, or with affiliated entities registered in, certain specified jurisdictions or individual shareholders participating in companies registered in such jurisdictions to own Shares or to withdraw Shares represented by GDRs and restrictions on shareholders depositing their Shares into or withdrawing their Shares from the depositary facility. Voting The Deposit Agreement contains arrangements allowing holders of GDRs to instruct the Depositary how to vote the underlying Shares in accordance with Kazakhstan law. Listing and Market for the The New Shares will be listed on the KASE. Application has been Shares and GDRs made for admission of up to 400,000,000 GDRs (including the New GDRs) to the Official List and to trading on the Regulated Market for listed securities on the London Stock Exchange. The New GDRs that are Regulation S GDRs will have separate temporary CUSIP and ISIN numbers until 40 days after the last closing in the New GDR Offering and thereafter will become fungible with existing Regulation S GDRs and will be eligible for trading on the London Stock Exchange, and the New Rule 144A GDRs will be fungible with existing Rule 144A GDRs and will be eligible for trading on the London Stock Exchange. The GDRs, including the New GDRs, will be eligible for settlement through the facilities of DTC, Euroclear and Clearstream. Admission to the Official List and to trading on the Regulated Market of the London Stock Exchange is expected to take place on or about the New GDR Offering Closing Date. Dividend Policy There is no guarantee that any future dividends will be declared or paid, and the Bank has no stated policy as to payment of dividends. General Information London Stock Exchange GDR trading symbol: “KKB” Regulation S GDRs (Permanent) CUSIP: 48666E608 ISIN: US48666E6086 Common Code: 027206298 The New Regulation S GDRs will be assigned a temporary CUSIP,

ISIN and Common Code and Eligible Investors will be duly notified. Rule 144A GDRs CUSIP: 48666E509 ISIN: US48666E5096 Common Code: 027206212 PORTAL Rule 144A GDR SKGRNP103 trading symbol:

RISK FACTORS Prior to making an investment decision, prospective investors should carefully consider, along with the other matters referred to in this Prospectus, the following risks associated with investment in the Bank and the New GDRs, as well as Kazakhstan entities generally. The Bank believes that the factors described below represent the principal risks inherent in investing in the New GDRs. However, the risks and uncertainties described below are not the only ones the Bank faces. Additional risks and uncertainties that the Bank is not aware of or that the Bank currently believes are immaterial may also materially adversely affect the Bank’s financial condition or results of operations. If any of the possible events described below occurs, the Bank’s financial condition or results of operations could be materially and adversely affected. Risks Relating to the Bank The Bank’s results as at and for the year ended 31 December 2008 may have a material and adverse impact on the market price of the Bank’s Shares and GDRs Investors should be aware that the Bank has not published any financial statements as at any date, or for any period after, 30 September 2008. The effect of local and global market conditions on the Bank as well as the effect of those conditions on the Bank's customers and counterparties may mean that the actual results of operations and financial condition of the Bank as at and for the financial year ended 31 December 2008 or as at any date or for any period thereafter may be materially and adversely different from the results presented as at and for the nine months ended 30 September 2008 ; accordingly, investors should not assume that the results presented as at and for for the nine months ended 30 September 2008 are an accurate indication of the actual results as at and for for the financial year ended 31 December 2008 or as at any date or for any period thereafter. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Recent Developments”. The Bank expects to publish its financial statements as at and for for the year ended 31 December 2008 on or about 20 April 2009 and if they are published prior to the admission to trading on the LSE of the New GDRs, the Bank will publish a supplement to this Prospectus. However, there is no guarantee that the Bank will complete the audit relating to its results as at and for the year ended 31 December 2008 prior to the completion of the Offering, and in such instance will not release results and will not publish a supplement to this Prospectus. Investors who choose to exercise their rights to subscribe for New GDRs or to acquire GDRs should do so with the knowledge that when such financial information or supplement is published there may be a material and adverse change in the market price of the Bank’s Shares and GDRs. Accordingly, investors subscribing for New GDRs will be required to certify that if they subscribe prior to the publication of such a supplement, they are subscribing on the basis of the information then available and that they are aware of the consequences thereof. The current and ongoing crisis in the global financial markets and deterioration of general economic conditions have adversely affected the Bank’s results of operations and financial condition and could continue to cause them to decline In recent months, the global economy and the global financial system have been experiencing a period of significant turbulence and uncertainty, particularly the very severe disruption of the financial markets around the world that began in August 2007 and that has substantially worsened since September 2008 with adverse consequences for many large global commercial and investment banks, insurance companies and other financial institutions. This disruption has severely impacted general levels of liquidity and the availability of credit together with the terms on which credit is available. Governments around the world, including Kazakhstan’s have sought to inject liquidity into banking systems and to recapitalise the banking sector to reduce the risk of systemic failure and increase confidence in the financial markets.

This market disruption has also been accompanied by a slowdown in many economies including Kazakhstan’s. These developments have already adversely affected the Bank’s earnings and profits. Continued general deterioration in the world economy including, but not limited to, business and consumer confidence, unemployment trends, the state of the housing market, the commercial real estate sector, equity markets, bond markets, foreign exchange markets, counterparty risk, inflation, the availability and cost of credit, lower transaction volumes in key markets, the liquidity of the global financial markets and market interest rates, would further reduce the level of demand for, and supply of, the Bank’s products and services, lead to lower realisations as well as write downs and impairments of investments and negative fair value adjustments of assets, and could materially and adversely impact the Bank’s operating results, financial condition and prospects. The Kazakh banking sector has been particularly affected by the lack of availability of international wholesale debt financing and the volatility of deposits, both of which Kazakh banks have previously heavily relied on as a source of funding. The high dependence on capital market funding poses a significant refinancing risk for both individual banks and the banking system as a whole. Wholesale debt financing has now become significantly more expensive. If the availability of international wholesale debt financing continues to be limited or available at significantly higher cost or if the Bank suffers from increased volatility of its deposit base, this could adversely affect the Bank’s business, financial condition, results of operatings and prospects. The effect of any of these conditions may be exacerbated by the deterioration of the financial condition of other banks in Kazakhstan. The full range and consequences of the risks faced by the Bank are difficult to predict and guard against in view of the fact that many of those risks are either totally or partially outside the control of the Bank and may be exacerbated by the severity of the financial crisis. Financial instability in other emerging markets has caused and could continue to cause the price of the Bank’s securities to suffer Financial instability in any emerging market country tends to adversely affect prices in stock markets as investors move their money to more developed markets that they perceive to be more stable. As has happened in the recent past, financial problems or an increase in the perceived risks associated with investing in emerging economies has caused and could continue to cause foreign investment in Kazakhstan to dampen and adversely affect the Kazakh economy. In addition, during such times, emerging market companies may continue to face severe liquidity constraints if foreign funding sources continue to be withdrawn. If current market conditions and circumstances deteriorate further, or continue for protracted periods of time, this could accelerate the observable decline in credit quality, declines in asset prices, increases in defaults and non-performing debt and/or worsening of general economic conditions in the Bank’s key markets, all of which would materially adversely affect the Bank’s business, profitability and results of operations. Financial instability in any other emerging market country also could materially and adversely affect the Bank’s business and/or the price of its securities. The Bank faces increased risks related to the devaluation of the Tenge A large proportion of the Bank’s funding base is made up of borrowings in currencies other than Tenge whereas the vast majority of its earnings are in Tenge. On 4 February 2009, the NBK devalued the Tenge by 18 per cent. to KZT 143.98 per U.S.$1.00. This devaluation increased the costs of foreign borrowings relative to the Bank’s earnings in Tenge. Further, the devaluation of Tenge will likely affect the quality of the Bank’s assets as the majority of the Bank’s loans are denominated in U.S. dollars, whereas income from its loan portfolio is typically denominated in Tenge. The exact impact of the devaluation of the Tenge on the Bank’s balance sheet and income statement can not be determined at the date of this Prospectus. However, any increase in the relative cost of the Bank’s foreign borrowings could adversely affect the Bank’s customers as well as its business, financial condition, results of operations and prospects.

Any unavailability of capital, both in terms of compliance with applicable capital adequacy ratios and in respect of the conduct of its business, would adversely affect the Bank

As at 30 September 2008, the Bank's Tier I and total capital adequacy ratios calculated in accordance with FMSA Regulations were 10.6 per cent. and 13 per cent., respectively, compared to the minimum levels of 5 per cent. for Tier I and 10 per cent. for total capital required under the FMSA Regulations for commercial banks whose shareholder has the status of the bank holding company under the FMSA Regulations, as is the case for the Bank.

Any deterioration in the Bank's loan portfolio quality and the consequent need to make impairment provision may require the Bank to raise additional capital to meet required capital adequacy levels. In addition, such levels may be increased in the future.

Although the Bank plans additional capitalisation through the Offering and the contemplated purchase of its common shares by Samruk-Kazyna, the failure to raise capital as planned could substantially limit the Bank's ability to meet or to grow its business in compliance with applicable capital adequacy requirements. Any such events would have a material adverse effect on the Bank's prospects, business, financial condition and results of operations. Volatility in the real estate market in Kazakhstan may adversely affect the Bank’s asset quality and collateral value The Bank has a relatively high exposure to the local construction and real estate sectors. Real estate prices in Kazakhstan, having increased significantly since 2002, have dropped sharply since June 2007. Such volatility in the real estate market could have an adverse affect on the Bank’s business, financial condition, results of operations and prospects. Some of the borrowers making up the Bank’s ten largest exposures are involved in sectors that may be affected by the decline in the real estate market, particularly the sectors relating to real estate and construction. The Bank’s exposure to the real estate and construction sectors has been cited in reports of each of the major credit rating agencies as a risk for the Bank and other Kazakh banks. In addition, a substantial amount of the Bank’s loans to customers are secured by real estate. As at 30 September 2008, 43.9 per cent. of total loans to customers were collateralised by real estate. The recent declines in prices of real estate in Almaty and Astana have made it difficult to value certain collateral held by the Bank. The collateral value ultimately realised by the Bank will depend on the fair value as determined at that time and may be materially different from the current or estimated fair value. In the event that a portion of the Bank’s loans to customers which are secured by real estate go into default, the Bank may not be able to recoup the full value of the loan by taking ownership and disposing of the underlying real estate, which may result in a material adverse impact on the Bank’s results of operations and financial condition. Changes to NBK minimum reserve requirements and potential restrictions imposed by the FMSA may adversely affect the Bank’s balance sheet and results of operations The FMSA approved new regulations on portfolio supervision and provisioning on 1 April 2007. These portfolio supervision regulations generally provide for more stringent classification requirements. These new regulations did not result in an increase in the Bank’s provisions. In August 2007, the NBK postponed the implementation of additional reserve requirements to alleviate the liquidity crisis in Kazakhstan’s banking industry. However there is no guarantee that additional reserve requirements will not be required in the future which may result in the Bank having to increase its capital. In December 2007 and again in September 2008, the FMSA adopted resolutions increasing the charter capital and own capital requirements for second-tier banks. Generally, in accordance with current FMSA regulations the minimum own capital (net worth) requirement for commercial banks is to be increased from KZT 1 billion to KZT 5 billion on 1 July 2009 and to KZT 10 billion on 1 January

2011. In addition, the FMSA introduced a new requirement that starting from 3 March 2009, minimum reserve requirements for liabilities should constitute at least 1.5 per cent. of internal liabilities and 2.0 per cent. for other liabilities. In the event that the Bank is unable to meet these or future requirements imposed by the NBK or FMSA, its financial condition and results of operations may be adversely effected. The Bank entered into a funding agreement with the NBK and the FMSA, which constrains its ability to obtain new international financing in the near future. In November 2007, the Bank entered into a funding agreement with the NBK and the FMSA which regulates its lending policy and funding opportunities from NBK and the Bank believes that the NBK and FMSA have entered into similar agreements with other major Kazakh banks. Under the agreement the Bank has agreed to: ● limit (maintain) daily amounts of claims to non-residents of Kazakhstan (both in national and foreign currencies) to the amounts outstanding as at 1 November 2007, including, inter alia, a prohibition on creating, acquiring or increasing interests in any subsidiary and/or dependent companies outside of Kazakhstan, except as otherwise provided in special permits of the NBK issued before 1 November 2007; ● limit (maintain) daily amounts of the Bank’s commitments to non-residents of the Republic of Kazakhstan (both in national and foreign currencies) to the amounts outstanding as at 1 November 2007; ● make all possible efforts to increase its share capital; and ● follow conservative credit and moderate deposit policies. The NBK has been monitoring the Bank’s compliance with the funding agreement and can enforce it by imposing tighter limits on the Bank’s borrowing with the NBK. Although the agreement was designed solely to cover borrowings from the NBK and the Bank may exit the agreement any time, the funding agreement may constrain the Bank’s ability to obtain new financing in the future. If the Bank’s funding is constrained, it could result in an adverse effect on the Bank’s business, financial condition, results of business and prospects. Potential declines in customer deposits, which are an important source of funding for the Bank, may negatively affect the Bank’s funding base The Bank’s deposit base grew by 22.5 per cent. in first nine months of 2008, mainly due to an increase in corporate deposits as temporary excess cash held by national companies, enterprises and joint stock companies were deposited with local commercial banks. However, corporate deposits are volatile in nature (and have been particularly volatile in the current banking crisis), and if such deposits decline the Bank will have to rely more heavily on other sources of funding, including wholesale debt funding on the international markets, which is not as readily available as it was in early 2007 and is now significantly more expensive than deposit funding, which could adversely affect the Bank’s business, financial condition, results of business and prospects. An expected slowdown in loan growth will likely lead to a gradual seasoning of the Bank’s loan portfolio which may increase the proportion of loan defaults The Bank’s net loan portfolio decreased during the first nine months of 2008 by 4.8 per cent. to KZT 2,253,651 million as at 30 September 2008 from KZT 2,366,355 million as at 31 December 2007. As the Bank’s loan portfolio is expected to continue to decrease in line with general slowdown of the economy, it is likely to lead to a gradual seasoning of the Bank’s loan portfolio as the concentration of older loans in the portfolio could be expected to rise. There is some evidence that the likelihood of borrower default increases with loan age. Therefore, as a result of the expected gradual seasoning of

its loan portfolio, the Bank could experience a gradual increase in non-performing loans which could adversely affect the Bank’s business, financial condition, results of business and prospects. Lower expected growth of Kazakhstan’s gross domestic product in 2009 could limit lending opportunities for the Bank and put increasing pressure on the ability of its existing borrowers to repay their loans. The Government expects the growth of Kazakhstan’s gross domestic product to slow in 2009, as a result of reduced access to credit for both corporates and households and a general weakening of business and consumer confidence in Kazakhstan. The Bank expects that lower gross domestic product growth will decrease the number of its new loans to customers from the levels seen in recent years and put increasing pressure on the ability of its current borrowers to repay their existing loans. Lower gross domestic product growth could therefore limit the Bank’s growth in interest income and increase its losses from non-performing loans which could adversely affect the Bank’s business, financial condition, results of business and prospects. Changes in the liquidity support for the Kazakhstan banking sector may lead to decreased liquidity The NBK and the government of Kazakhstan have taken steps to protect the Kazakhstan banking sector from the recent turmoil in the financial markets, including the provision of short-term liquidity support. Starting from the second half of 2008, the NBK adopted a number of measures, aimed at providing additional liquidity to the banks. In particular, minimum reserve requirements changed twice in 2008. Starting from 29 July 2008 the requirements with respect to internal liabilities were reduced from 6 per cent. to 5 per cent. and the requirements with respect to other liabilities decreased from 8 per cent. to 7 per cent.. Starting from 18 November 2008, the above requirements were further reduced to 2 per cent. and 3 per cent., respectively. Starting from 3 March 2009, the requirements were revised to 1.5 per cent. and 2.5 per cent., respectively. Additional measures taken include the deposit of temporary excess cash of national companies, enterprises and joint stock companies, fully or partially owned by the State or controlled by NBK into local commercial banks, and the establishment of the Stressed Assets Fund to buy doubtful assets, in particular mortgage, of commercial banks. Were the NBK and the Government of Kazakhstan to withdraw their liquidity support it would lead to decreased liquidity in the Kazakhstan banking sector. This decreased liquidity would likely result in an increase in the Bank’s funding costs which would adversely affect the Bank’s business, financial condition, results of business and prospects. Changes in the regulation of the banking industry in Kazakhstan may adversely affect the Bank’s business and existing regulations are not as developed as in many Western countries The Bank operates in a highly regulated environment; however, like most of Kazakhstan’s legislation regarding business activities, Kazakhstan’s laws regarding banks and banking activities have only been adopted relatively recently and are subject to change and development, which could, in certain cases, be rapid and unexpected. It is difficult to forecast how changes in banking and financial regulation may affect the Kazakhstan banking system, and no assurance can be given that the regulatory system will not change in a way that will impair the Bank’s ability to provide a full range of banking and financial services or to compete effectively, thus materially and adversely affecting the Bank’s financial condition or results of operations. In addition, notwithstanding regulatory standards in Kazakhstan, prospective investors should understand that regulatory standards applicable to banks in Kazakhstan and the oversight and enforcement thereof by the relevant regulators may differ from those applicable to banking operations in countries with more developed regulatory regimes. As a result, investors may not have the benefit of all of the protections available in such other countries. In February 2007, to reduce the risks associated with rapid growth in the external debt of Kazakhstan banks, the FMSA introduced certain amendments to Kazakhstan’s capital adequacy regulations. These

regulations limit the total amount of foreign borrowings which a bank may incur to a multiple of such bank’s regulatory capital. Although the Bank fully complies with the new regulations as of the date hereof, the Bank’s access to the foreign loan and capital markets may be curtailed in the future. See “The Banking Sector in Kazakhstan”. The future implementation by the FMSA of the recommendations of the Basel II Framework may impose constraints on the Bank’s business which may materially and adversely affect the Bank’s business and financial condition or results of operations. See “The Banking Sector in Kazakhstan”. The Bank’s share ownership is currently highly concentrated As of 30 September 2008, the Bank’s three largest shareholders, referred to herein as the Significant Shareholders, held 69.89 per cent. of the Bank’s outstanding common shares and, following the completion of the New Share Offering and the New GDR Offering, assuming that other shareholders and GDR holders do not participate in the Offering and Samruk-Kazyna purchases 25 per cent. of the outstanding common shares of the Bank in the Rump Offering, around 44.65 per cent. of the Bank’s outstanding shares will be held by the Significant Shareholders. Although these shareholders will beneficially own a smaller percentage of the Shares, pursuant to the Share Trust Management Agreement (as defined herein), the Significant Shareholders shall have the ability to vote the Shares held by Samruk-Kazyna. As such, the Significant Shareholders will be able to control or affect the composition of the Board of Directors, the outcome of any corporate transaction or other matter submitted to the Bank’s shareholders for approval, including acquisitions, divestitures, financings or other transactions of the Bank, and also could prevent or cause a change in control. Further, the interests of the Signficiant Shareholders may conflict with the interests of the Bank’s other shareholders and third parties may be discouraged from making a tender offer or bid to acquire the Bank because of this concentration of ownership. For a description of the ownership of the Bank, see “Principal Shareholders” and “The Offering”. As a result of the Rump Offering Samruk-Kazyna may become a large shareholder of the Bank and its interests may differ from the interests of the Bank’s other shareholders and the holders of the GDRs Pursuant to the relevant agreements between the Significant Shareholders of the Bank, assuming completion of the contemplated purchase of the Bank’s common shares by Samruk-Kazyna, Samruk- Kazyna’s shareholding in the Bank will be equal to 25 per cent. of the total outstanding common stock of the Bank, and the Bank's Principal Shareholders (CAIC, Mr. Subkhanberdin, Alnair and the EBRD) will continue to maintain control of the Bank. Samruk-Kazyna will not participate in the day-to-day management of the Bank. However, as a large shareholder, Samruk-Kazyna may influence the strategy, business plan and operations of the Bank in the future. As the Government’s national management holding company, with the goal of supporting and diversifying Kazakhstan’s economy, the interests of Samruk-Kazyna may differ significantly from or compete with the Bank’s interests or the interests of other shareholders, and there can be no assurance that Samruk-Kazyna will exercise influence over the Bank in a manner that is in the best interests of the Bank, the Bank’s other shareholders or the holders of the GDRs. See “The Offering”. The Bank faces significant competition, which may increase in the future The Bank is subject to significant competition from both domestic and foreign banks. As at 30 September 2008, there were 35 commercial banks in Kazakhstan (excluding the NBK, the DBK and Zhilstroysberbank), of which 15 were banks with foreign participation, including subsidiaries of foreign banks. In addition, regulatory changes may make it easier for foreign banks to increase their penetration in Kazakhstan. As of 30 September 2008 the Bank’s net assets constituted 20.18 per cent. of the total for the banking system of Kazakhstan. There are relatively few large corporate customers that do not have established banking relationships, which means that competition in the sector is intense. The corporate lending segment has begun to mature, necessitating banks to find other sources of revenue, primarily in SME and retail banking.

Although foreign owned banks do not currently provide significant domestic competition, some of these institutions have significantly greater resources and cheaper funding sources than the Bank. Foreign banks also have greater international experience, allowing them to target the best domestic corporate customers, as well as foreign companies operating in Kazakhstan. In addition, regulatory changes may make it easier for foreign banks to increase their market penetration in Kazakhstan, and this may be more likely in connection with any eventual World Trade Organisation accession by Kazakhstan. Accordingly, these entities are likely to become competitive with the Bank in the corporate and retail banking sectors in the long-term. Concentration of the Bank’s loan portfolio subjects it to risks from default by its largest borrowers and from exposure to particular sectors of the Kazakhstan economy The Bank intends to seek to continue to diversify its portfolio and reduce concentrations in its lending, both in terms of customers and sectors. As of 1 January 2008, the Bank’s top 20 borrowers comprised 26.15 per cent. of its total gross loans to customers. As of 30 September 2008, the figure increased to 30.36 per cent. A substantial portion of the Bank’s loan portfolio consists of businesses that are engaged in the construction and trade industries or that are dependent on the oil and gas industry. The Bank intends to monitor this credit exposure by focusing on credit quality and developing financial and management controls. However, if these efforts fail, any resulting default or sustained adverse market developments in the industries to which the Bank is exposed may have a material adverse effect on the Bank’s business, financial condition and results of operations. The Bank relies on information provided by clients and other counterparties. The lack of accurate statistical, corporate and financial information in Kazakhstan may limit the ability of the Bank to assess its credit risks accurately. Kazakhstan’s system for gathering and publishing statistical information relating to the Kazakhstan economy generally, or specific economic sectors within it, or corporate or financial information relating to companies or other economic enterprises, is not as comprehensive as those of many countries with established market economies. Moreover, the Bank’s customers, particularly in the SME sector, may not have detailed financial information regarding their creditworthiness. Under-reporting of income in Kazakhstan, which is common, also makes it more difficult for the Bank to accurately make credit assessments. Thus, the statistical, corporate and financial information, including audited financial statements and recognised debt rating reports, available to the Bank as well as other Kazakhstan banks relating to its prospective and existing corporate borrowers or other clients makes the assessment of credit risk, including the valuation of collateral, more difficult. Although the Bank ordinarily estimates the net realisable value of collateral in determining any collateralisation requirements, the difficulties associated with the inability to accurately assess the post–enforcement value of collateral may reduce the accuracy of the Bank’s assessments of credit risk. The Bank, in co-operation with other Kazakhstan commercial enterprises and Experian, an international credit reference agency, established a credit reference bureau in Kazakhstan in 2004 to provide information about potential borrowers. However, the credit reference bureau is still developing and, as a result, the quality of information it provides may not be accurate or sufficient, in which case the Bank may continue to have limited information on which to base its lending decisions. The Bank’s success is reliant on its key personnel The Bank relies on its senior management for the implementation of its strategy and operation of its day-to-day activities. The loss of these individuals for any reason could have a material adverse effect on the Bank’s business, results of operations and financial condition. The banking industry is relatively new in Kazakhstan and there are a limited number of experienced banking managers in the country. The Bank believes that there is also a high level of competition for the services of these individuals. While the Bank believes it has been successful in attracting skilled and motivated

employees and officers, it may be at risk of losing qualified personnel in the increasingly competitive environment. Any failure or interruption in or breach of the Bank’s information systems and any failure to update such systems may have a material adverse effect on the Bank’s business, financial condition or results of operations The Bank relies heavily on information systems to conduct its business. Any failure or interruption in or breach in security of these systems could result in failures or interruptions in its risk management, general ledger, deposit servicing and/or loan origination systems. Although the Bank has developed back up systems and a fully equipped disaster recovery centre, and may continue some of its operations through branches in case of emergency, if the Bank’s information systems failed, even for a short period of time, it might be unable to serve some customers’ needs on a timely basis and might lose their business. Likewise, a temporary shutdown of the Bank’s information systems may result in the Bank incurring costs associated with information retrieval and verification. In addition, a failure to update and develop the Bank’s existing information systems may result in a competitive disadvantage. No assurance can be given that such failures or interruptions will not occur or that the Bank will adequately address them if they do occur. Accordingly, the occurrence of any failures or interruptions could have a material adverse effect on the Bank’s business, financial condition and results of operations. The Bank’s risk management strategies and techniques may leave it exposed to unidentified or unanticipated risks Although the Bank invests substantial time and effort in the development, implementation and monitoring of its risk management strategies and techniques, it may nevertheless fail to adequately manage risks under certain circumstances, particularly when it is confronted with risks that it has not identified or anticipated. If circumstances arise that the Bank has not identified or anticipated in developing its statistical models, its losses could be greater than expected. If its measures to assess and mitigate risk prove insufficient, or if its models yield inaccurate results or incorrect valuations, the Bank may experience material unexpected losses. For example, assets that are not traded on public trading markets, such as derivative contracts between banks, may be assigned values using mathematical models which may be inadequate or imperfect and the values they generate may be incorrect. The deterioration of assets like these could lead to losses that the Bank has not anticipated. The shareholders’ agreement and the subscription agreement between the Bank and the EBRD may limit and restrict the operations and business of the Bank The shareholders’ agreement dated 24 June 2005 as amended on 7 December 2005 (the “EBRD Shareholders’ Agreement”) between the Bank and three of the Bank’s then significant shareholders, Mr. Subkhanberdin, Ms. Nina Zhussupova and CAIC (collectively, the “2005 Shareholders”) and the subscription agreement dated 24 June 2005 as amended on 7 December 2005 (the “Subscription Agreement”) between the Bank and the EBRD may impose limitations and restrictions on the operations and business of the Bank. The EBRD Shareholders’ Agreement requires that the 2005 Shareholders shall not vote and shall procure that any of their representatives on the Bank’s Board of Directors shall not vote, in favour of resolutions to, amongst other things, amend the Bank’s Charter, change the policy statement of the Bank, vary, increase or decrease its authorised or issued share capital or the rights attaching to Shares, grant options, warrants or similar rights convertible into Shares of the Bank, make any distribution, payment or make a return of a capital nature to members, take steps to wind up or dissolve the Bank, make or permit any material change in the Bank’s business or sell, lease, transfer, dispose of or acquire a material part of the Bank’s assets, in each case without the prior approval of the EBRD. It also provides that, in case of the listing of the Bank’s capital on any major stock exchange, the 2005 Shareholders shall ensure that the EBRD shall have the same rights as the 2005 Shareholders have to dispose of its Shares via such stock exchange. Following any listing of the Shares on any major stock exchange, the EBRD shall be entitled to dispose of its Shares in the Bank held at the time of such

listing becoming effective and the 2005 Shareholders shall be entitled to dispose of a proportion of their Shares held at the time of such listing becoming effective equal to the proportion of the number of Shares disposed of by the EBRD. The Subscription Agreement provides that unless the EBRD shall otherwise agree: (a) while the EBRD owns any Shares, the Bank shall not issue any shares of any class, increase its share capital, change the nominal value, or the rights attached to, any of its shares of any class or take any other action which might result in a dilution of the interest in the Bank represented by the Shares held by the EBRD; (b) the Bank shall not make changes, or permit changes to be made, to the nature of its present business or operations and the Bank shall not carry out any business or activity other than banking or financial services business, either directly or through a subsidiary; (c) the Bank shall not make changes, or permit changes to be made, to its share capital; (d) the Bank shall not make any changes, or permit changes to be made, to its Charter, unless such changes are specifically required to be made under the mandatory provisions of the laws of the Republic of Kazakhstan; and (e) the Bank shall not sell, transfer, lease or otherwise dispose of more than a specified percentage of its property or assets (whether in a single transaction or in a series of transactions, related or otherwise) and the Bank shall not undertake or permit any merger, consolidation or reorganisation. According to the EBRD Shareholders’ Agreement, any change or increase in the authorised or issued share capital of the Bank shall be subject to EBRD's prior written consent. The Bank has obtained EBRD's consent in respect of the Offering. For a description of the Shareholders’ Agreement and the Subscription Agreement, see “Principal Shareholders – Shareholders’ Agreement with the EBRD” and “Principal Shareholders – Subscription Agreement with the EBRD” The Bank has not determined whether it is a Passive Foreign Investment Company No determination has been made as to whether the Bank is or may be a passive foreign investment company (a “PFIC”) for the taxable year ended December 31, 2008 or the taxable year ending December 31, 2009 and the Bank does not intend to make any such determination in the future. If the Bank is or were to become a PFIC, investors that are US Holders would be subject to certain adverse tax consequences. See “Taxation—United States—Passive Foreign Investment Company considerations”. Risk Factors Relating to Kazakhstan Risks associated with emerging markets generally The disruptions recently experienced in the international and domestic capital markets have led to reduced liquidity and increased credit risk premiums for certain market participants and have resulted in a reduction of available financing. Companies located in countries in the emerging markets such as Kazakhstan may be particularly susceptible to these disruptions and reductions in the availability of credit or increases in financing costs, which could result in them experiencing financial difficulty. In addition, the availability of credit to entities operating within the emerging markets is significantly influenced by levels of investor confidence in such markets as a whole and as such any factors that impact market confidence (for example, a decrease in credit ratings or state or central bank intervention in one market) could affect the price or availability of funding for entities within any of these markets. In particular, the construction and real estate markets in Kazakhstan have recently experienced significant volatility primarily as a result of the reduction of available financing, which has in turn increased the exposure of Kazakh banks to the construction and real estate markets and has made them more susceptible to macroeconomic factors. See “—Volatility in the real estate market in Kazakhstan could adversely affect the Bank’s business, financial condition, results of business and prospects”. Investors in emerging markets such as Kazakhstan should be aware that these markets are subject to greater risk than more developed markets, including in some cases significant legal, economic and

political risks. Investors should also note that emerging economies such as Kazakhstan’s are subject to rapid change and that the information set out in this Prospectus may become outdated relatively quickly. Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, in the light of those risks, their investment is appropriate. Generally, investment in emerging markets is suitable only for sophisticated investors who fully appreciate the significance of the risks involved. Investors are urged to consult with their own legal and financial advisers before making an investment in the GDRs. Risks resulting from failures in the Kazakhstan's banking industry could adversely affect the Bank

Within the banking industry the default of any institution could lead to defaults by other institutions. Concerns about or a default by, one institution could prevent the Bank from accessing its international credit lines and could also significantly reduce depositors' confidence in the banking industry in general and the Bank in particular or could lead to significant liquidity problems, losses or defaults by other institutions because the commercial soundness of many financial institutions may be closely related as a result of their credit, trading, clearing or other relationships. This risk is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as banks, securities firms and exchanges with whom the Bank interacts on a daily basis. This could in turn have an adverse effect on the Bank's ability to raise new funding and on the Bank's business, financial condition and results of operations.

While the main objectives of the recently-enacted financial stability law are to improve mechanisms for early detection of risks in the financial system there can be no assurance that systemic risk resulting from failures in the banking industry will not adversely affect the Bank. See “—Financial stability legislation has recently been enacted in Kazakhstan and its impact on the Bank is uncertain”. Financial stability legislation has recently been enacted in Kazakhstan and its impact on the Bank is uncertain

On 23 October 2008, the Kazakhstan Parliament adopted the law No.72-IV ZRK on Stability of the Financial System. The law introduces numerous amendments to, among others, Banking Law, Joint Stock Companies Law and Securities Market Law.

The new law sets out the procedures for the Government, with the agreement of the FMSA, in the event of a breach by a bank of capital adequacy or liquidity ratios or if any other prudential and/or other mandatory requirements are breached by a bank two or more times during 12 consecutive calendar months, to acquire, either directly or through a national management holding company, authorised shares in any commercial bank in Kazakhstan to the extent necessary (but not less than 10 per cent. of total amount of issued and placed shares of a bank, including those to be acquired the Government or a national management holding company) to improve such bank’s financial condition and ensure compliance with prudential and/or other mandatory requirements. Management and shareholders of an affected bank do not have the right to approve any such acquisition and any shares issued as part of any such acquisition may be issued without granting pre-emptive rights to existing shareholders.

Following the acquisition, the authority empowered by the Government of Kazakhstan or the national management holding company is entitled to appoint the members of the Board of Directors and/or the Management Board of an affected bank. The number of such members representing the interests of the state or the national management holding company are to be no more than thirty per cent. of their total number.

The main objectives of the law were to improve early detection mechanisms for risks in the financial system, to expand the competence of the Government to acquire shares in commercial banks that face financial problems and competence of the authorised body to address event of default claims made by shareholders of financial institutions and generally to improve the condition of financial institutions in Kazakhstan. The law also aims at consolidating authority to oversee large and second-tier Kazakhstan

banks and enhancing mechanisms for supervising commitments made by banks and other financial institutions.

Pursuant to the terms of the law on financial system stability adopted on 2 February 2009, the Government announced its decision to purchase an approximately 78 per cent. interest in JSC BTA Bank, Kazakhstan's largest commercial bank, for KZT 251 billion. It was also reported that the Government is considering a potential sale of up to half of its controlling stake in JSC BTA Bank to Russia's Sberbank.

Also on 2 February 2009, JSC Alliance Bank, Kazakhstan's fourth-largest commercial bank, announced that its major shareholder had decided to sell 76 per cent. of its shares in that bank to Samruk-Kazyna and on the same date the Government announced that it was considering such purchase, for a total notional consideration of KZT 100.

The financial system stability law is currently in its early stages of implementation and its potential impact on the Bank is not yet possible to predict fully. Kazakhstan corporate governance and disclosure laws apply to the Bank

The corporate affairs of the Bank are regulated by the laws governing companies incorporated in Kazakhstan and by the Bank's charter. The corporate governance regime in Kazakhstan is less developed than that in the United States and the United Kingdom and the rights of shareholders and the responsibilities of members of the Board of Directors and the Management Board under Kazakhstan law are different from, and may be subject to certain requirements not generally applicable to, corporations organised in the United States, the United Kingdom and other jurisdictions. A principal objective of the securities laws of the United States, the United Kingdom and certain other countries is to promote the full and fair disclosure of all material corporate information to the public. Although the Bank is subject to certain Kazakhstan law disclosure requirements, these requirements are less stringent than the comparable requirements in the United States, the United Kingdom or certain other jurisdictions and there is still less information publicly available about the Bank than about comparable companies in the United States, the United Kingdom or certain other jurisdictions. Most of the Bank’s operations are conducted, and substantially all of its assets are located, in Kazakhstan. Accordingly, the Bank is largely dependent on the economic and political conditions prevailing in Kazakhstan Kazakhstan became an independent sovereign state in 1991 as a result of the dissolution of the former Soviet Union. Since then, Kazakhstan has experienced significant change as it emerged from a single party political system and a centrally controlled command economy to a market oriented, democratic model. The transition was initially marked by political uncertainty and tension, a recessionary economy marked by high inflation, instability of the local currency and rapid, but incomplete, changes in the legal environment. Since 1992, Kazakhstan has actively pursued a programme of economic reform designed to establish a free market economy through privatisation of state enterprises. However, as with any transition economy, there can be no assurance that such reforms and other reforms described elsewhere in this Prospectus will continue or that such reforms will achieve all or any of their intended aims. Kazakhstan depends on neighbouring countries to access world markets for a number of its major exports, including oil, gas, steel, copper, ferro alloys, iron ore, aluminium, coal, lead, zinc and wheat. Kazakhstan is thus dependent upon good relations with its neighbours to ensure its ability to export and has taken various steps to promote regional economic integration among neighbouring countries. However, should access to export routes be materially impaired, this could adversely impact the economy of Kazakhstan. Moreover, adverse economic factors in the regional markets may adversely impact Kazakhstan’s economy.

Although Kazakhstan has in the recent past enjoyed relative stability, it could be adversely affected by political unrest in the Central Asian region. Additionally, in common with other countries in Central Asia, Kazakhstan could be adversely affected by terrorism or by military or other action taken against sponsors of terrorism in the region.

According to figures compiled by the NSA, GDP grew in real terms following the adoption of a floating exchange rate policy in April 1999, increasing by 13.5 per cent. in 2001, 9.8 per cent. in 2002, 9.2 per cent. in 2003, 9.4 per cent. in 2004, 9.4 per cent. in 2005, 10.6 per cent. in 2006, 8.5 per cent. in 2007 and 3.9 per cent. during the nine-month period ended 30 September 2008 (source: the NSA).

Kazakhstan is currently experiencing a general economic slowdown which is likely to continue to result in higher unemployment, reduced corporate profitability, increased corporate insolvency rates, increased personal insolvency rates and/or increased interest rates, and this in turn may reduce borrowers' ability to repay loans, cause prices of residential or commercial real estate or other asset prices to fall further, thereby reducing the collateral value on many of the Bank's loans and increasing write downs, and negatively affect the ability and willingness of companies and individuals to place deposits with commercial banks, including the Bank. The Kazakhstan economy is highly dependent on oil exports. Accordingly, the Kazakhstan economy and the Bank may be affected by oil price volatility Countries in the Central Asian region, such as Kazakhstan, whose economies and state budgets rely in part on the export of oil and oil products and other commodities, the import of capital equipment and significant foreign investments in infrastructure projects, could be adversely affected by volatility in oil and other commodity prices and by any sustained fall in them or by the frustration or delay of any infrastructure projects caused by political or economic instability in countries engaged in such projects. In addition, any fluctuations in the value of the U.S. dollar relative to other currencies may cause volatility on earnings from U.S. dollar denominated oil exports. An oversupply of oil or other commodities in world markets or a general downturn in the economies of any significant markets for oil or other commodities or weakening of the U.S. dollar relative to other currencies would have a material adverse effect on the Kazakhstan economy, which would, in turn, have an adverse effect on the business, financial condition and results of operations of the Bank. The national budget for 2009-2011 initially projected revenues on the basis of world oil prices of U.S.$60 per barrel. These projections have been subsequently revised to U.S.$40 per barrel in light of the continuing decline in world oil prices. There can be no assurance that further revisions of the national budget will not be required in light of continuing oil price volatility. Exchange rate policies in Kazakhstan impose risks The Tenge fell by 64.6 per cent. against the U.S. dollar in the year ended 31 December 1999, compared to a depreciation of 10.7 per cent. in the year ended 31 December 1998. From 2003 the Tenge started appreciating in value against the U.S. dollar and in 2006, in 2007, and for the nine months ended 30 September 2008 appreciated by another 5.2 per cent., 5.3 per cent. and 0.4 per cent. respectively against the U.S. dollar. As at 31 December 2006, 31 December 2007 and 31 December 2008 the official KZT/U.S. dollar exchange rate reported by the NBK was KZT 127.00 per U.S.$1.00, KZT 120.30 per U.S.$1.00, and KZT 120.77 per U.S.$1.00 respectively. On 4 February 2009, the NBK devalued the Tenge by 18 per cent. to KZT 143.98 per U.S.$1.00. This devaluation was due in part to recent pressure on the balance of payments of Kazakhstan as a result of a decline in commodity prices (in particular oil and gas) in the international markets. Devaluation of Tenge is also intended to enhance export competitiveness of Kazakhstan goods. A further devaluation or depreciation of the Tenge against the U.S. dollar or other foreign currencies could negatively affect the Bank in a number of ways, including, among other things, by causing a further outflow of Tenge deposits, by increasing the actual cost to the Bank of financing its U.S.

dollar based liabilities and by making it more difficult for Kazakhstan borrowers to service their U.S. dollar loans. Any of these developments may in turn have a material adverse effect on the Bank’s business, financial condition and results of operations. Uncertainty over the outcome of the implementation of further market based economic reforms may impose risks The need for substantial investment in many enterprises has driven the Government’s privatisation programme. The programme has excluded certain enterprises deemed strategically significant by the Government, although major privatisations in key sectors have taken place, such as full or partial sales of certain large oil and gas producers, mining companies and the national telecommunications company. However, there remains a need for substantial investment in many sectors of the Kazakhstan economy and there are areas in which economic performance in the private sector is still constrained by an inadequate business infrastructure. Further, the significant size of the shadow economy may adversely affect the implementation of reforms and hamper the efficient collection of taxes. The Government has stated that it intends to address these problems by improving the business infrastructure and tax administration and by continuing the privatisation process. However, there can be no assurance that these measures will be effective or that any failure to implement them may not materially and adversely affect the Bank’s business and financial condition or results of operations. There are risks associated with the underdevelopment and evolution of the legislative, tax and regulatory framework in Kazakhstan Although a large volume of legislation has come into force since early 1995 (including a new tax code in January 2002 and further in January 2009, laws relating to foreign arbitration and foreign investment, additional regulation of the banking sector and other legislation covering such matters as securities exchanges, economic partnerships and companies, state enterprise reform and privatisation) the legal framework in Kazakhstan is still at a relatively early stage of development compared to countries with established market economies. The judicial system, judicial officials and other government officials in Kazakhstan may not be fully independent of external social, economic and political forces. There have been instances of improper payments being made to public officials, administrative decisions have been inconsistent, and court decisions have been difficult to predict. Further, due to the presence of numerous ambiguities in Kazakhstan’s commercial legislation, in particular its newly adopted tax legislation, the tax authorities may make arbitrary assessments of tax liabilities and challenge previous tax assessments, thereby rendering it difficult for companies to ascertain whether they are liable for additional taxes, penalties and interest. As a result of these ambiguities, as well as the lack of any established system of precedent or consistency in legal interpretation, the tax risks involved in doing business in Kazakhstan are substantially more significant than those in jurisdictions with a more developed tax system. The Government has stated that it believes in continued reform of the corporate governance processes and will ensure discipline and transparency in the corporate sector to promote growth and stability. However, the Government may not continue with such a policy in the future or such policy, if continued, may not ultimately prove to be successful. Therefore, it is not possible to predict the effect of future legislative developments on the Bank’s business and prospects. The Bank expects that the tax legislation in Kazakhstan will become more sophisticated and that there will be additional revenue raising measures which may result in significant additional taxes becoming payable. Additional tax exposure could have a material adverse effect on the Bank’s business and financial condition and on the results of operations of companies operating in Kazakhstan. The newly adopted tax legislation introduced numerous changes to the existing tax regime and it is not clear how the provisions of newly adopted tax legislation will be interpreted and applied.

There are risks associated with the underdevelopment of Kazakhstan’s securities markets

Kazakhstan has a less developed securities market than the United States, the United Kingdom and the rest of Western Europe, which may hinder the development of the Kazakhstan economy. An organised securities market was established in Kazakhstan only in the mid-to-late 1990s and procedures for settlement, clearing and registration of securities transactions may therefore be subject to legal uncertainties, technical difficulties and delays. Although significant developments have occurred in recent years including an initiative to develop Almaty as a regional financial centre, the sophisticated legal and regulatory frameworks necessary for the efficient functioning of modern capital markets have yet to be fully developed in Kazakhstan. In particular, legal protections against market manipulation and insider trading are not as well developed in Kazakhstan, or as strictly enforced, compared to the United States, the United Kingdom and the other Western European countries, and existing laws and regulations may be applied inconsistently. In addition, less information relating to Kazakhstan entities, such as the Bank, may be publicly available to investors in securities issued or guaranteed by such entities than is available to investors in entities organised in the United States, the United Kingdom or the rest of Western Europe Risks Relating to the Shares and the GDRs The market price of the GDRs may fluctuate The market price of the GDRs may be subject to significant fluctuations due to a change in sentiment in the market regarding the GDRs (or securities similar to them). Such risks depend on the market’s perception of the likelihood of completion of the Offering and/or in response to various facts and events, including any regulatory changes affecting the Bank’s operations, variations in the Bank’s operating results and business developments of the Bank and/or its competitors. Stock markets may continue to experience significant price and volume fluctuations affecting the market prices for securities and which may be unrelated to the Bank’s operating performance or prospects. Furthermore, the Bank’s operating results and prospects from time to time may be below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the GDRs. There are restrictions and prohibitions under Kazakhstan law on the ownership of and exercise of shareholders’ rights (including voting rights) with respect to the GDRs and the Shares The ownership of voting shares in Kazakhstan banks is subject to certain legislative restrictions under Kazakhstan law. In particular, pursuant to the List prepared by the FMSA (which may be updated from time to time) (a) legal entities registered in certain specified off-shore jurisdictions or which have affiliates registered in such jurisdictions (except for international banks having a credit rating of “A” or above from certain rating agencies) or (b) individuals who are participants or shareholders in such legal entities may not directly or indirectly own voting shares in a Kazakhstan bank. Accordingly, holders of GDRs falling under (a) or (b) above cannot exchange GDRs into Shares and cannot own, hold or dispose of the Shares. In 2007, the List was amended to leave five jurisdictions (Andorra, Liechtenstein, Liberia, Monaco, and the Marshall Islands) out of 12 previously. However, under the FMSA regulation dated 2 October 2008, the List was further amended to include additional jurisdictions (Antigua and Barbuda, the Bahamas, Barbados, Belize, Brunei, Vanuatu, Guatemala, Grenada, Djibouti, Dominican Republic, Indonesia, Spain (only Canary Islands), Cyprus, China (only Hong Kong Special Administrative Region and Macau Special Administrative Region), Comoros, Costa Rica, Malaysia (only Labuan Enclave), Mauritius, Portugal (only Madeira Island), Maldives, Malta, the Union of Myanmar, Nauru, the Netherlands (only Aruba and the Antilles), Nigeria, New Zealand (only Cook Islands and Niue), Palau, Panama, Samoa, Seychelles, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Saint Lucia, United Kingdom of Great Britain and Northern Ireland (only Anguilla, Bermuda, British Virgin Islands, Gibraltar, Cayman Islands, Montserrat, Turks and Caicos Islands, Isle of Man, Channel Islands (Guernsey, Jersey, Sark, Alderney)), United States of America (only U.S. Virgin Islands, Guam, Puerto Rico), Tonga, the Philippines and Sri Lanka). This new regulation sets 1 April

2009 as a deadline for existing shareholders to adjust their corporate or shareholding status accordingly. Under Kazakhstan law, a share will not give a shareholder voting rights unless information on such shareholder is available to the Kazakhstan Central Securities Depositary. Although the FMSA has clarified that non-disclosure by the GDR holder of its identity to the Kazakhstan Central Securities Depositary should not prevent the latter from exercising or benefiting from other rights (including the right to receive dividends and to have the Depositary exercise pre-emptive rights on their behalf such that holders can receive additional GDRs) there is no assurance that the FMSA or any other relevant authority such as a Kazakhstan court will not take a different view thereby restricting all such GDR holders from exercising or benefiting from any such shareholder rights. Moreover, there can be no assurance that the FMSA or any other relevant authority would not interpret the foregoing legislation as restricting such entities or persons from owning GDRs. See “Description of Share Capital and Certain Requirements of Kazakhstan Law — Summary of the Charter and certain requirements of Kazakhstan Law — Disclosure of beneficial ownership”. GDR holders who do not acquire New GDRs in the New GDR Offering will experience dilution in their ownership of the Bank If GDR holders do not take up the offer of New GDRs under the New GDR Offering their proportionate ownership and voting interests in the Bank will be reduced and the percentage that the common shares underlying their GDRs will represent of the total common shares of the Bank will be reduced accordingly. The financial markets in Kazakhstan are less developed than in western jurisdictions and there may be limited or no liquidity with respect to the Shares underlying the GDRs The trading market for shares in Kazakhstan is currently insignificant and restricted in comparison with Western stock markets, which could lead to the illiquidity of the securities (including the Shares) on the KASE. If there is a trading interruption on the KASE, this could have a negative effect on the price of the underlying shares and indirectly on the GDRs. Sales, or the real or perceived possibility of sales, of a significant number of Shares in the public market could adversely affect prevailing market prices for the Shares and GDRs Sales, or the real or perceived possibility of sales, of a significant number of Shares in the public market could adversely affect prevailing market prices for the Shares and GDRs. Subject to a successful completion of the Offering, Samruk-Kazyna will hold up to 25 per cent. of the Bank’s outstanding common shares. The Bank cannot predict the effect, if any, that market sales of the Shares and GDRs, or the availability of the Shares or GDRs for future sale, will have on the market price of its Shares and the GDRs, but the availability of shares that are eligible for public sale could adversely affect the price of the Shares and the GDRs. Shareholders wishing to deposit Shares into the depositary facility and convert them into GDRs will be required to notify the FMSA thereof Any shareholder wishing to deposit Shares into the depositary facility and convert them into GDRs (including holders of GDRs who have converted their GDRs into Shares and wish to convert back into GDRs) will be required to notify the FMSA thereof within 30 days of such a deposit being made. There is no minimum shareholding threshold and minority shareholders will therefore also be required to notify the FMSA of such a deposit. Failure to do so may result in fines being levied by the FMSA. If no trading market for the GDRs is sustained investors may experience difficulties in selling the GDRs Although the existing GDRs are traded on the Regulated Market, there is no assurance that any active trading market for GDRs will be sustained after the New GDR Offering or that the New GDR

Subscription Price will correspond to the price at which GDRs will trade in the public market subsequent to the New GDR Offering. The following table represents the information of GDR prices and the average daily trading volumes for the periods shown.

LSE Closing Price of GDRs Average Daily Trading Calendar Period High Low Volume (U.S.$) (Number of GDRs) May 2008 16.70 15.73 70,377 June 2008 16.92 14.55 86,155 July 2008 15.22 12.70 19,351 August 2008 12.65 9.48 59,873 September 2008 10.49 7.00 221,619 October 2008 7.27 2.90 620,107 November 2008 8.50 6.13 80,885 December 2008 10.00 7.25 26,434 January 2009 10.10 4.50 2,061 February 2009 5.38 3.45 102,196 March 2009 (up to 4.00 3.12 125,830 March 19)

GDRs may be subject to market price volatility and the market price of GDRs may decline disproportionately in response to adverse developments that are unrelated to the Bank’s operating performance The market has from time to time experienced significant price and volume fluctuations that are not closely related to the operating performance of particular companies. Factors including oil prices, developments in the construction sector, war, increased competition, fluctuations in the Bank’s operating results, the regulatory environment, availability of reserves, natural disasters and general market conditions may have an adverse effect on the market price of the Shares and GDRs. See “— Risk factors relating to the Bank’s Shares and GDRs—If no trading market develops for the GDRs, investors may experience difficulties in selling the GDRs”.) U.S. and some other non-Kazakhstan holders of the Bank’s Shares or GDRs may not be allowed to exercise pre-emptive rights Under Kazakhstan law, subject to certain exceptions, prior to the issue of any new Shares for cash, the Bank must offer all holders of existing Shares pre-emptive rights to subscribe and pay for a sufficient number of Shares to maintain their existing ownership percentages. U.S. holders of Shares or GDRs may not be able to receive or exercise pre-emptive rights for new Shares unless a registration statement under the U.S. Securities Act is effective with respect to such rights or an exemption from the registration requirements of the Securities Act is available. The Bank does not currently plan to register the Shares, GDRs or any future rights under U.S. securities laws. If U.S. holders of Shares or GDRs are not able to receive or exercise pre-emptive rights granted in

respect of their Shares or GDRs in any rights offering by the Bank, then they may not receive the economic benefit of those rights. In addition, their proportional ownership interests in the Bank will be diluted. Similar restrictions may apply in other countries. As the Shares underlying the GDRs are quoted in Tenge in Kazakhstan, investors may be subject to potential losses arising out of exchange rate risk on the Kazakhstan Tenge and risks associated with the conversion of Tenge proceeds into foreign currency Investors that purchase New GDRs are required to pay for such New GDRs in U.S. dollars. Investors are subject to currency fluctuation risk and convertibility risk since the Shares are quoted in Tenge on the KASE. Dividends on the Shares will also be paid in Tenge, and then converted into U.S. dollars for distribution to GDR investors. Any devaluation or depreciation in the Tenge resulting in a decreased value of the Shares or a decreased value of dividend payments could have an adverse effect on holders of the Shares or the GDRs. There can be no assurance that such devaluation or depreciation will not occur in the future. See “— Changes in exchange rate policies in Kazakhstan may impose risks on the Bank”. There are restrictions on the number of Shares for which GDRs may be exchanged Pursuant to Kazakhstan banking laws, no shareholder may own 10 per cent. or more of the Bank’s outstanding Shares without the prior consent of the FMSA. No holder will be able to exchange GDRs for the Bank’s Shares if such exchange would result in such holder owning 10 per cent. or more of the Bank’s Shares unless such holder has the prior approval of the FMSA. Pursuant to the Deposit Agreement and the terms and conditions of the GDRs, the Depositary will restrict the exchange of GDRs for Shares where the Bank notifies the Depositary that such exchange would result in ownership of Shares exceeding the applicable limit or would otherwise violate applicable laws. In addition, the Bank’s share registrar will not record a transfer of Shares if the holding of such Shares by the holder would violate Kazakhstan laws or regulations. Holders who beneficially own more than 10 per cent. of the Bank’s outstanding Shares must obtain consent from the FMSA for such ownership interest and notify the FMSA of any changes therein. FMSA consent for the issue of the New GDRs may not be received Under Kazakhstan law, the consent of the FMSA is required for the Bank to issue and place the New GDRs. The Bank intends to submit an application to the FMSA as soon as practicable. As of the date of this Prospectus, such consent has not yet been granted. Under Kazakhstan law, the FMSA must provide its consent or a reasoned refusal to grant such consent within 15 calendar days from the date of application. If such consent is not granted, the Bank will be prohibited from issuing the New GDRs and participating Eligible Investors will not receive the New GDRs for which they have subscribed. If the Bank is unable to complete the Offering, it may be required to find alternative methods of increasing its core Tier 1 and Tier 1 capital ratios The purpose of the Offering is to allow the Bank to strengthen its capital position. If the Bank is unable to complete the Offering, the Bank may need to assess its capital position in future and, if necessary, and particularly if the Bank’s asset quality continues to deteriorate, may be required to find alternative methods for achieving requisite capital ratios. Such methods could include a reduction in dividends, a reduction in the rate of growth of risk-weighted assets, disposal of certain businesses or increased issuance of Tier 1 securities. There can be no assurance that any of these alternative methods would be successful in increasing the Bank’s capital ratios sufficiently or within the timetable currently envisaged. If the Bank is unable to increase its capital ratios sufficiently, its credit ratings may drop, its cost of funding may increase and its share price may decline.

THE OFFERING Background Samruk-Kazyna was established for the purposes of improving the competitiveness and stability of the Kazakh economy and alleviating the possible effects of changes in world markets on the economic growth in Kazakhstan. To this end Samruk-Kazyna intends to acquire up to a 25 per cent. holding of the Shares. This investment is not being made pursuant to the law No. 72-IV on Stability of the Financial System, but rather as a step in the ongoing implementation of a plan initially announced by the Government of Kazakhstan in a public statement (the “Statement”) entitled “On Further Measures to Stabilise the Banking Sector” dated 28 October 2008. In the Statement the Government of Kazakhstan and the FMSA announced a proposal to strengthen the capital of the Bank as part of a broader plan to stabilise the Kazakh financial system. On 9 December 2008, a memorandum of understanding (the “Memorandum of Understanding”) was entered into by, inter alios, Samruk- Kazyna and the Bank for the purpose of co-ordinating efforts to increase the capitalisation of the Bank. Set forth below is a description of the agreements entered into between the Bank and Samruk- Kazyna to implement the Memorandum of Understanding. Implementation Agreement On 15 January 2009 Samruk-Kaznya, CAIC, Mr. Subkhanberdin, Alnair and the Bank entered into an implementation agreement (the “Implementation Agreement”) to implement Samruk-Kazyna’s investment in up to 25 per cent. of the Shares as envisioned by the Memorandum of Understanding. Pursuant to the terms of the Implementation Agreement, the Bank agreed to offer to its existing shareholders and existing GDR holders the right to purchase New Shares and New GDRs, respectively on a pro rata basis (the “Rights Offering”), provided that Samruk-Kazyna shall own 25 per cent. of the Bank’s Shares following the Rights Offering. CAIC, Mr. Subkhanberdin and Alnair (the “Significant Shareholders” and each a “Significant Shareholder”)) agreed not to subscribe for any rights in the Rights Offering, without the written consent of Samruk-Kazyna. Following the offer to existing shareholders and GDR holders, the Bank agreed to re-allocate the unsubscribed for rights to Samruk-Kazyna and Samruk-Kazyna agreed to subscribe for sufficient rights in order to hold 25 per cent. of the Shares after the Rights Offering. Any remaining rights may be taken up by all of the Significant Shareholders on a pro rata basis, provided that further rights are also offered to and are subscribed for by Samruk-Kazyna to maintain its 25 per cent. post-Rights Offering holding of Shares. Following the completion of the Rights Offering the parties to the Implementation Agreement agreed to ascertain the capital needs of the Bank and the possibility of the Bank issuing to Samruk-Kazyna convertible securities and/or any other financial instruments. Following the completion of the Rights Offering, the Bank shall apply the proceeds of the Rights Offering to increase the Bank’s capitalisation. Shareholders’ Agreement In anticipation of Samruk-Kazyna becoming a shareholder of the Bank, the Significant Shareholders, Samruk-Kazyna and the Bank entered into a shareholders’ agreement dated 15 January 2009 (the “Shareholders’ Agreement”). The Shareholders’ Agreement regulates certain aspects of the dealings between the Bank and its shareholders following the completion of the Rights Offering. Pursuant to the terms of the Shareholders’ Agreement, although Samruk-Kazyna will not be involved in the day-to-day running of the Bank’s business, it will be represented on the board of directors of the Bank by Mr. Subkhanberdin. Additionally, Samruk-Kazyna’s written approval will be required for certain crediting approvals, voting arrangements and for any declarations of dividends. For the period between the date of the completion of the Rights Offering and the expiry of the Option Agreement (as defined below) the only permitted disposals of Shares will be (i) disposals by a Significant Shareholder of all its Shares to any of its affiliates or to any bona fide third party subject to

certain conditions, including the written consent of Samruk-Kazyna, (ii) disposals by Samruk-Kazyna of any or all of its Shares to a governmental authority of competent jurisdiction or (iii) disposals pursuant to the terms of the Option Agreement and Share Trust Management Agreement (as defined below). Samruk-Kazyna may unilaterally terminate the Share Trust Management Agreement with respect to the defaulting Significant Shareholder if inter alia: (i) any Significant Shareholder materially breaches certain provisions of the Shareholders’ Agreement, (ii) any Significant Shareholder improperly performs Samruk-Kazyna’s voting instructions as provided for by the Share Trust Management Agreement or (iii) a reorganization, winding-up, initiation of a bankruptcy procedure or a change of control of CAIC occurs. Option Agreement It is expected that Samruk-Kazyna will hold its equity stake in the Bank for a limited period of time and, to this end, Samruk-Kazyna and the Significant Shareholders entered into an option agreement dated 15 January 2009 (the “Option Agreement”) pursuant to which the Significant Shareholders are granted a call option and Samruk-Kazyna is granted a put option, in respect of all of the Shares to be acquired by Samruk-Kazyna pursuant to the Rights Offering. The call option and the put option may be exercised at any time between the first anniversary and the fifth anniversary of the completion of the Rights Offering. Share Trust Management Agreement If, as a result of the Rights Offering, CAIC and Mr. Subkhanberdin together with the EBRD cease to have voting rights corresponding to 50 per cent. plus one share of the Shares and therefore control of the Bank, a share trust management agreement (the “Share Trust Management Agreement”) will be entered into by CAIC, Mr. Subkhanberdin and Samruk-Kazyna in order to ensure CAIC and Mr. Subkhanberdin together with the EBRD maintain control the Bank.

During the operation of the Share Trust Management Agreement, Samruk-Kazyna will transfer into trust such number of Shares owned by it which is necessary for CAIC and Mr. Subkhanberdin, together with EBRD, to retain the voting rights attached in aggregate to at least 50 per cent. plus 1 Share of the outstanding Shares.

The Significant Shareholders, on their own behalf and solely within the authority granted by the Shareholder Trust Management Agreement, shall hold, use and manage the Shares for the purpose of maintaining the stability of the Bank, strengthening the capital of the Bank, retaining their control of the Bank and in the interests of Samruk-Kazyna Fund and other shareholders of the Bank.

The authority of the Significant Shareholders to use and manage the Shares shall be exclusively limited by the voting rights attached to the Shares under Kazakhstan Laws and the Charter and exercised by the Significant Shareholders at their discretion, save that the Significant Shareholders shall exercise the voting rights attached to the Shares solely in accordance with Samruk-Kazyna Fund’s instructions on matters regarding the appointment of directors and matters to be decided by a qualified majority of votes. The Significant Shareholders may not take actions for disposal of the Shares, including any encumbrance of the Shares.

The New GDR Offering General This is an offering of up to 75,000,000 New GDRs, each representing two New Shares, to existing holders of GDRs as of the Record Date at the New GDR Subscription Price.

New GDRs Each New GDR will represent two New Shares. Subject to all applicable securities laws, Eligible Investors at the Record Date may subscribe for New GDRs at the New GDR Subscription Price. Every one GDR an Eligible Investor holds on the Record Date will entitle that holder to subscribe for 0.5658203117 New GDRs. In no case shall fractional New GDRs be issued, and if any Eligible Investor’s Entitlement is not a whole number of New GDRs, such Eligible Investor’s Entitlement will be rounded down to the nearest whole number. The Depositary will supply GDR holders with this information in accordance with its usual procedures. Eligible Investors may make an application for a lower whole number than their Entitlement but will not be entitled to make application for a greater number of New GDRs than their Entitlement. Record Date The Record Date for determining the holders of GDRs who may subscribe for New GDRs (subject to applicable securities laws) is 30 March 2009. New GDR Subscription Price The New GDR Subscription Price is U.S.$2.90 In addition, subscribing Eligible Investors must pay the Depositary’s issuance fee of up to $0.05 per New GDR plus any applicable taxes. The Depositary has advised that subscribing Eligible Holders should pay a total of U.S.$2.95 per new GDR. If the Depositary’s fee is less than U.S.$0.05 per New GDR, the surplus will be refunded to subscribing Eligible Investors. General Information LSE GDR trading symbol: “KKB” Regulation S GDRs (Permanent)

CUSIP: 48666E608 ISIN: US48666E6086 Common Code: 027206298 New Regulation S GDRs will be assigned a temporary CUSIP, ISIN and Common Code and Eligible Investors will be duly notified. Rule 144A GDRs CUSIP: 48666E509 ISIN: US48666E5096 Common Code: 027206212 PORTAL Rule 144A GDR trading symbol: SKGRNP103

GDR Pre-emptive Subscription Period and Method of Subscription In order to participate in the New GDR Offering, Eligible Investors must, prior to the Last GDR Subscription Day, duly complete the subscription materials and required certifications (the “Subscription Materials”) which will be made available by the Depositary through the Clearing

Systems, return those materials to the Depositary at the address provided on those materials and make payment to the Depositary, by wire transfer to the specified account number or by certified or official bank check payable to The Bank of New York Mellon, in the amount of U.S.$2.95 for each New GDR subscribed for. Any Eligible Investor who holds GDRs through a financial intermediary wishing to subscribe for New GDRs should instruct the financial intermediary through which it holds its GDRs. An Eligible Investor who has not validly subscribed for New GDRs by the end of the GDR Pre- emptive Subscription Period will not be able to subscribe for New GDRs under the New GDR Offering. New GDRs cannot be subscribed for under the New GDR Offering after the Last GDR Subscription Day, which is the end of the GDR Pre-emptive Subscription Period. Notwithstanding Condition 7(iii) of the Terms and Conditions of the GDRs, in the event that it is unlawful for existing GDR holders to exercise their rights under the New GDR Offering, such rights will not be transferable under Kazakhstan law and the Depositary will not sell these rights on behalf of such GDR holders and distribute the proceeds from the sale to such GDR holders. At the end of the GDR Pre-emptive Subscription Period, the right of existing GDR holders to subscribe for New GDRs will lapse. In the event that the issue of the New GDRs is not permitted because the Bank has not obtained FMSA consent therefor (see “Risk Factors - FMSA consent for the issue of the New GDRs may not be received”), the Subscription Funds, if any, will be refunded by the Depositary to participating Eligible Investors on a pro rata basis without deduction in respect of the Depositary’s issuance fee. Timetable ● 30 March 2009 - Record Date. ● 31 March 2009 - First GDR Subscription Day. ● 20 April 2009 – Expected publication of the Bank’s results as at and for the year ended 31 December 2008. There is no guarantee that the audit on the Bank’s financial statements as at and for the year ended 31 December 2008 will be completed prior to the completion of the Offering and in such instance the Bank will not release such financial statements prior to the GDR Offering Closing Date. ● 27 April 2009 - Last GDR Subscription Day (all Subscription Funds for New GDRs and duly completed subscription materials and payments to have been received by the Depositary by 5:00 p.m. New York time). In order to process applications and deliver them to the Depositary by 5:00 p.m. New York time on 27 April 2009, banks, brokers and the Clearing Systems may require participating Eligible Investors to complete the subscription materials in advance of such time. Eligible Investors are warned that failure to subscribe for the New GDRs in accordance with the procedures and time periods required by their bank or broker or the Clearing Systems may result in their being unable to participate in the New GDR Offering. ● 30 April 2009 - Subscription Funds for New GDRs (previously received from Eligible Investors) are paid to the Bank (the “Depositary Payment Date”). ● 30 April 2009 - Expected issue date of New Shares.

● 30 April 2009 – Expected New GDR Offering Closing Date - creation of New GDRs and delivery to the brokerage accounts of participating Eligible Investors through DTC, Euroclear or Clearstream. Settlement Procedure The Depositary has applied to have the temporary Regulation S GDRs accepted into the settlement systems of DTC, Euroclear and Clearstream, and the Rule 144A GDRs currently are eligible for settlement through DTC, Euroclear and Clearstream. Each of the temporary Regulation S GDRs and the Rule 144A GDRs will be evidenced by a Master GDR registered in the name of CEDE & Co., as nominee for DTC. Except in limited circumstances described herein, investors may hold beneficial interests in the GDRs evidenced by the corresponding Master GDR only through DTC, Euroclear or Clearstream whether directly or through participants in those systems. Transfers within and between DTC, Euroclear and Clearstream will be in accordance with their usual rules and operating procedures. See “Settlement and Transfer”. Listing and Trading Application has been made for admission of up to 400,000,000 GDRs (including the New GDRs) to the Official List and to trading on the London Stock Exchange. The New GDRs that are Regulation S GDRs will have separate temporary CUSIP and ISIN numbers until 40 days after the last closing in the New GDR Offering and thereafter will be fungible with existing Regulation S GDRs and will be eligible for trading on the London Stock Exchange. Admission of the New GDRs to the Official List and to trading on the Regulated Market is expected to take place on or about the New GDR Offering Closing Date. New Share Offering Under the provisions of the JSC Law, the Bank’s existing shareholders as at the Record Date will have rights to subscribe for New Shares in the New Share Offering on a pre-emptive basis. This includes the right of the Depositary acting on behalf of the existing owners of the GDRs to subscribe for the New Shares. The New GDR Offering will be conducted concurrently with the New Share Offering. The exercise price for the New Share Offering will be U.S.$1.45 per New Share. The Share Pre-emptive Subscription Period will commence on the date of this Prospectus and remain open for 30 days thereafter. The Depositary will participate in the New Share Offering only to the extent required to acquire a sufficient number of the underlying New Shares to fulfil the allocation of New GDRs in the New GDR Offering in accordance with the subscription materials received by the Depositary from existing GDR holders which are Eligible Investors. The New Share Offering will be made in the ratio of 0.5658203117 New Shares for each one Share then held by shareholders on the Record Date. The terms of the New Share Offering will provide that eligible shareholders will not be entitled to apply for a number of New Shares in excess of their pro rata entitlement. Existing GDR holders will be entitled to participate in the New Share Offering only indirectly through the Depositary acting on their behalf in the New GDR Offering. See “—New GDR Offering”. Rump Offering To the extent that any existing holders of GDRs as of the Record Date do not subscribe for any New GDRs in the New GDR Offering or subscribe for less than their Entitlement, the number of New Shares that would otherwise have been represented by such New GDRs together with the New Shares not subscribed for during the Share Pre-emptive Subscription Period will be publicly offered in Kazakhstan. Pursuant to the terms and conditions of the Implementation Agreement, the Excess Shares, up to a limit of 25 per cent. of the Bank’s outstanding common shares will, subject to the fulfilment of certain conditions, be subscribed by Samruk-Kazyna. In the event that there are any

Excess Shares following the Offering and the Rump Offering, the Bank’s Board of Directors may determine to offer them in a separate transaction. The Bank cannot guarantee that the Rump Offering will take place. See “Risk Factors — Risk Factors relating to the Bank’s Shares and GDRs — If the Bank is unable to complete the Offering, it may be required to find alternative methods of increasing its core Tier 1 and Tier 1 capital ratios.” Lock-up arrangements Following the completion of the Rump Offering, Samruk-Kazyna and the Significant Shareholders have agreed not to dispose of the Shares owned by them other than in accordance with the terms of the Shareholders’ Agreement. See “The Offering—Shareholders’ Agreement”.

DILUTION Assuming the successful completion of the Offering and the issuance of 325,000,000 New Shares, existing GDR holders not participating in the New GDR Offering will be diluted by 16.53 per cent. Existing shareholders of the Bank not participating in the New Share Offering will also be diluted by 16.15 per cent.

CAPITALISATION OF THE BANK The following table sets forth the consolidated capitalisation of the Bank as at 30 September 2008. This information is unaudited and should be read in conjunction with “Use of Proceeds”, “Selected Consolidated Financial Data”, “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and the Bank’s unaudited interim consolidated financial information, and the related notes thereto, included elsewhere in this Prospectus.

As at 30 September 2008 (U.S.$ thousands)(1) (KZT millions) (unaudited) Long-term debt: Senior long-term debt(2) ...... 9,832,268 1,178,299 Subordinated long-term debt(3) ...... 889,119 106,552 Total long-term debt...... 10,721,387 1,284,851 Shareholders’ equity: Share capital(4) ...... 58,378 6,996 Share premium(4) ...... 1,275,075 152,805 Property revaluation reserve...... (20,953) 5,715 Reserves ...... 1,583,461 181,536 Total equity attributable to equity holders of the parent...... 2,895,961 347,052 Total capitalisation...... 13,617,348 1,631,903 ______(1) See “Selected Consolidated Financial Data” for information as to the U.S. dollar/KZT exchange rate used to calculate the U.S. dollar amounts. (2) Long-term debt represents liabilities that fall due after more than one year and are not subordinated. (3) Subordinated long-term debt is the portion of subordinated debt which falls due after more than one year. In December 2002, the Bank registered an issue of KZT 7.5 billion 8 per cent. subordinated notes due in 2009. As at 31 March 2007 the Bank had sold KZT 3.5 billion of these notes primarily to pension funds on the domestic market. (4) As at 1 October 2008, the Bank’s issued and fully paid share capital consisted of 575,000,000 common shares. As at 1 October 2008, the Bank held 224,921 of the Bank’s shares as treasury shares (1 January 2008 – 21,205 shares). On 15 January 2009, the Bank’s board of directors adopted a resolution on the issue of 325,000,000 New Shares which are being offered to the Bank’s existing GDR holders under the New GDR Offering and the Bank’s existing common shareholders under the New Share Offering. There can be no assurance that all or any part of the Offering will be successfully completed. See “Risk Factors – Risk factors relating to the Bank’s Shares and GDRs – If the Bank is unable to complete the Offering, it may be required to find alternative methods of increasing its core Tier 1 and Tier 1 capital ratios”.

In December 2008 the Bank repaid a U.S.$1.3 billion syndicated loan facility with the final scheduled payment of U.S.$69 million. In February 2009 the Issuer repaid SGD100,000,000 fixed rate notes issued in February 2006 through Kazkommertsbank’s subsidiary, Kazkommerts International B.V. and guaranteed by the Bank, under the guaranteed debt issuance programme. Except as disclosed above, there has been no material change in the Bank’s capitalisation since 30 September 2008.

USE OF PROCEEDS Assuming the successful completion of the Offering, the Bank expects the net proceeds of the Offering to be approximately U.S.$471.3 million (KZT 70.7 billion). The Bank intends to use the net proceeds from the Offering to improve its capital ratios and for general corporate purposes. The Bank will, subject to certain conditions, pay expenses in an amount of approximately U.S.$650,000 in connection with the New GDR Offering.

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below as at 30 September 2008 and for the nine- month periods ended 30 September 2008 and 2007 has been derived from, and should be read in conjunction with the Bank’s unaudited condensed interim consolidated financial information, including the notes thereto, contained elsewhere in this Prospectus. The selected consolidated financial data presented below as at and for the three years ended 31 December 2007, 2006 and 2005 has been derived from and should be read in conjunction with the Bank’s audited financial statements, including the notes thereto, contained elsewhere in this Prospectus. The unaudited condensed interim consolidated financial information has been prepared using the same accounting principles and on the same basis as the audited financial statements and, in the opinion of the Bank’s management, include all adjustments, consisting of normal recurring adjustments necessary for a fair representation of interim results. These interim results are not necessarily indicative of results to be expected for the full year. Solely for the convenience of the reader, the Bank has translated the selected income statement information for the year ended 31 December 2007 into U.S. dollars at the rate of U.S.$1.00 = KZT 122.57, balance sheet information as at 31 December 2007 into U.S. dollars at the rate of U.S.$1.00 = KZT 120.30, the selected income statement information for the nine months ended 30 September 2008 into U.S. dollars at the rate of U.S.$1.00 = KZT 120.33 and balance sheet information as at 30 September 2008 into U.S. dollars at a rate of U.S.$1.00 = KZT 119.84. Prospective investors should read the following summary selected consolidated financial data and other information in conjunction with the information contained in “Risk Factors”, “Capitalisation of the Bank,”, “Management’s Discussion and Analysis of Results of Operations and Financial Condition”, “Selected Statistical and Other Information”, the Bank’s unaudited condensed interim consolidated financial information and audited financial statements, including and the Financial Statements and the related notes thereto, and the other financial data appearing elsewhere in this Prospectus.

Nine months ended 30 September Year ended 31 December 2008 2008 2007 2007 2007 2006 2005 (unaudited) (unaudited) (audited) (thousands (thousands of U.S.$, of U.S.$, except per (millions of KZT, except except per share data) per share data) share data) (millions of KZT, except per share data) Income Statement: Interest income...... 2,402,127 289,048 224,657 2,630,574 316,458 147,250 86,407 Interest expense...... (1,149,165) (138,279) (122,511) (1,409,210) (169,528) (83,115) (45,855) Net interest income before provision for impairment losses on interest bearing assets ...... 1,252,963 150,769 102,146 1,221,363 146,930 64,135 40,552 Provisions for impairment losses on interest bearing assets ...... 470,872 (56,660) (49,717) (581,513) (69,956) (32,887) (17,833) Net interest income ...... 782,091 94,109 52,429 639,850 76,974 31,248 22,719 Net (loss)/gain on financial assets and liabilities at fair value through profit or loss ...... (250,827) (30,182) 15,266 179,776 21,627 4,744 849 Net gain/(loss) on foreign exchange and precious metals operations...... 122,455 14,735 (11,770) (154,655) (18,605) 5,204 1,591 Fee and commission income...... 131,929 15,875 17,887 195,827 23,558 17,537 10,684 Fee and commission expense...... (21,574) (2,596) (1,783) (22,552) (2,713) (1,672) (1,269) Net realised gain on investments available-for-sale...... 881 106 69 341 41 29 12 Dividends received...... 1,446 174 136 1,205 145 83 10 Other income...... 66,434 7,994 5,184 57,515 6,919 3,042 2,690 Net non-interest income...... 50,744 6,106 24,989 257,456 30,972 28,967 14,567 Operating income...... 832,835 100,215 77,418 897,307 107,946 60,215 37,286 Operating expenses ...... (217,718) (26,198) (20,747) 259,352 (31,200) (19,053) (13,368) Profit before other operating provisions and results of associates...... 615,117 74,017 56,671 637,955 76,746 41,162 23,918 Provision for impairment losses on other transactions...... (7,953) (957) (992) 10,291 (1,238) (383) (880) Provision for guarantees and other off-balance sheet contingencies...... (18,283) (22) (1,255) 26,484 (3,186) (1,548) (1,059) Share of results of associates ...... (9,150) (1,101) 726 11,081 1,333 1,130 174 Operating profit before income tax...... 597,831 71,937 55,150 612,261 73,655 40,361 22,153 Income tax expense...... (183,180) (22,042) 12,373 (132,203) (15,904) (12,600) (2,338) Net profit...... 414,651 49,895 42,777 480,058 57,751 27,761 19,815 Attributable to: Equity holders of the parent...... 411,286 49,490 40,836 465,195 55,963 25,985 18,392 Minority interest 3,366 405 1,941 14,863 1,788 1,776 1,423 EARNINGS PER SHARE Basic and diluted 0.59 71.36 59.03 0.67 80.85 48.08 41.36

As at 30 September As at 31 December 2008 2008 2007 2007 2006 2005 (unaudited) (unaudited) (audited) (U.S.$ (KZT (U.S.$ thousands) million) thousands) (KZT millions) Balance Sheet: Assets: Cash and balances with the national (central) banks. 1,527,478 183,053 1,397,739 168,148 209,005 37,229 Precious metals ...... 2,261 271 — — 807 — Financial assets at fair value through profit or loss... 573,857 68,771 1,569,210 188,776 322,618 140,375 Loans and advances to banks...... 2,116,097 253,593 1,769,102 212,823 197,191 254,287 Loans to customers...... 18,805,499 2,253,651 19,670,283 2,366,335 1,678,840 743,411 Investments available-for-sale ...... 139,544 16,723 25,237 3,036 2,628 427 Investments held-to-maturity...... 5,115 613 3,117 375 357 562 Investments in associates ...... 20,135 2,413 26,783 3,222 1,755 425 Goodwill...... 20,068 2,405 19,992 2,405 2,405 2,405 Property, equipment and intangible assets...... 293,550 35,179 284,780 34,259 15,681 8,662 Other assets ...... 149,792 17,951 148,404 17,853 10,569 7,086 Total assets...... 23,653,395 2,834,623 24,914,647 2,997,232 2,441,856 1,194,869 Liabilities: Loans and advances from banks ...... 2,879,464 345,075 6,013,558 723,431 884,301 379,206 Customer accounts ...... 9,147,438 1,096,229 7,440,424 895,083 687,806 303,437 Financial liabilities at fair value through profit or 200,125 23,983 64,256 7,730 3,554 189 loss...... Debt securities issued...... 5,864,428 702,793 6,148,695 739,688 424,162 303,133 Other borrowed funds ...... 1,135,481 136,076 1,238,022 148,934 68,814 50,604 Provisions...... 93,500 11,205 88,429 10,638 6,758 4,934 Deferred income tax liabilities...... 342,340 41,026 253,500 30,496 16,850 8,290 Dividends payable...... 3,813 457 17 2 1 1 Other liabilities...... 153,129 18,351 115,087 13,845 8,587 4,591 Subtotal ...... 19,819,718 2,375,195 21,361,988 2,569,847 2,100,833 1,054,385 Subordinated debt ...... 907,585 108,765 899,135 108,166 78,922 52,213 Total liabilities...... 20,727,303 2,483,960 22,261,123 2,678,013 2,179,755 1,106,598 Equity: Equity attributable to equity holders of the parent .... 2895,961 347,052 2,549,185 306,667 246,829 81,295 Minority interest...... 30,132 3,611 104,339 12,552 15,272 6,976 Total liabilities and equity...... 23,653,396 2,834,623 24,914,647 2,997,232 2,441,856 1,194,869

As at and for the nine months ended 30 September As at or for the year ended 31 December 2008 2007 2007 2006 2005 (unaudited) (%) Combined Key Ratios: Return on average shareholders’ equity.... 20.0 19.5 19.5 22.1 26.1(1) Return on average assets(2) ...... 2.3 2.2 2.1 2.1 2.5 Operating expenses/operating income before provisions for impairment losses...... 16.7 16.3 17.5 19.4 24.3 Operating expenses/operating income after provisions for impairment losses . 26.1 26.8 28.9 30.0 35.9 Profitability Ratios: Net interest margin(3)(4) ...... 7.9 5.9 6.2 5.1 5.5 Net interest income after provisions for impairment losses/average interest-earning assets(3)...... 4.9 3.0 3.2 2.5 3.1 Operating expenses/net interest income before provisions for impairment losses...... 17.4 20.3 21.2 28.1 33.0 Operating expenses/average total assets(34)...... 1.2 1.1 1.2 1.3 1.7 Balance Sheet Ratios: Total net loans to customers/total assets... 79.5 80.6 79.0 68.7 62.2 Deposits/total assets ...... 38.7 27.5 29.9 28.1 25.4 Total equity/total assets...... 12.4 10.0 10.7 10.8 7.4 Liquid assets/customer accounts(5) ...... 41.4 58.4 57.6 99.5 133.6 Liquid assets/liabilities of up to one month(5) ...... 114.4 97.6 106.4 95.6 151.9 Capital Adequacy Ratios:(6) Total capital...... 17.8 14.0 15.1 15.1 14.4 Tier I Capital ...... 12.2 9.4 11.7 12.4 11.0 Credit Quality Ratios:(7) Non-performing loans/total gross loans.... 6.2 2.4 3.1 1.6 3.1 Non-performing loans/total gross loans and guarantees ...... 5.9 2.3 2.9 1.6 3.0 Allowances for impairment losses/non-performing loans...... 131 197 184 263 176 Allowances for impairment losses/total gross loans ...... 8.1 4.8 5.6 4.3 5.5 Macroeconomic Data: Consumer Price Inflation (for the 12 months then ended)...... 19.2 8.6 18.8 8.4 7.5 Real GDP (change during the 12 months then ended)...... 3.9 9.6 8.9 10.7 9.7 ______(1) Based on the average of opening and closing balances for the period. (2) Based on period end balances. (3) Averages are based upon average daily balances. (4) Net interest margin means net interest income before provision for impairment losses/average interest-earning assets. (5) Liquid assets include cash and balances with the national (central) banks, loans and advances to banks (with maturities of less than one month), assets held-for-trading and securities purchased under reverse repurchase agreements. (6) Calculated in accordance with the Basel Accord, as currently in effect. (7) For the definition of non-performing loans used by the Bank, see “Selected Statistical and Other Information – Non-performing Loans.”

THE BANK The Bank is one of the largest banks in Kazakhstan in terms of total assets, loans and deposits (calculated by the Bank on the basis of FMSA data as at 30 September 2008). The Bank provides a full range of corporate, SME and retail banking services through a network of 23 full-service branches (corporate and retail services) and 166 limited-service braches in Kazakhstan as at 30 September 2008. In addition, the Bank has well-developed alternative distribution channels including 883 ATMs (of which 146 are cash-in ATMs), 8,553 point-of-sale terminals and telephone banking and internet banking. Through its non-banking subsidiaries the Bank also provides insurance, brokerage, asset management and pension fund management services in Kazakhstan and corporate, SME and retail banking services in Russia, Tajikstan and Kyrgyzstan. The Bank’s long term credit ratings are “Ba3” by Moody’s, “BB-” by S&P and “BB-” by Fitch. As at 30 September 2008, the Bank was a market leader in lending to corporates in Kazakhstan with a 26.8 per cent. market share. The Bank provides various services to its corporate and SME clients, including trade and structured finance products, project finance services, transactional services, internet banking and asset management services, as well as short term credit facilities and other general banking services. The Bank offers its retail customers a comprehensive range of products including deposit and current accounts, residential mortgages, consumer loans, internet banking and debit and credit cards. The Bank is a market leader in terms of point-of-sale terminals and number two in the market in terms of ATMs. It has a strong position in servicing high net worth individuals where the Bank believes it is a market leader. The Bank has a well-established treasury department. The main objective of the Bank’s treasury operations is to efficiently manage liquidity, interest rate and market risks by managing its foreign currency exposure and funding costs in the foreign exchange and money markets. The Bank’s treasury operations largely comprise spot transactions in Tenge and other currencies, transactions in government securities and the utilisation of currency derivatives for hedging purposes. Brokerage and investment banking services are undertaken by the Bank through its subsidiary JSC Kazkommerts Securities. The Bank is authorised to engage in other activities, including the sale, purchase and safekeeping of precious metals (including gold and silver). Since 2001 the Bank has offered asset management services as well as insurance and pension products to its corporate and retail clients. History The Bank was established in 1990 as JSC Medeu Bank by a group of local businessmen and community organisations in the period of economic liberalisation which preceded the end of the Soviet Union. The current Chairman of the Bank’s Board of Directors, Nurzhan Subkhanberdin, was hired as a manager in 1990. By 1991 Mr. Subkhanberdin had organised a new management team and JSC Medeu Bank’s name was changed to JSC Kazkommertsbank. During the next few years the Bank’s shareholders acquired a number of small banks and transferred their customers to the Bank. Subsequently management decided that organic growth was preferable to growth by acquisitions. In 1994, Mr. Subkhanberdin and other members of the management team gained control of the Bank. In 1997, the Bank was the first bank in Kazakhstan to conduct an initial public offering including the offering of global depositary receipts. This offering doubled the Bank’s capital base. Following the offering the Bank received its first rating from an international credit rating agency and became the second largest bank in terms of assets and capitalisation in Kazakhstan. The Bank received its first international syndicated loan in 1997 and its first Eurobond issue was in 1998. In 1999, the Bank was the first CIS bank to receive two international syndicated loans after the Russian financial crisis. In 2002, the Bank started a substantial upgrade of its information technology systems and agreed to take management control of LLP Moskommertsbank. In the same year, the Bank’s Kyrgyzstan subsidiary received a banking licence. In 2003, the EBRD purchased 15 per cent. of the outstanding shares of

the Bank. In October 2005, the Bank acquired a 100 per cent. interest in JSC OCOPAIM Grantum Asset Management and an 80 per cent. interest in JSC Grantum Pension Fund. In November 2005, it became the first bank in the CIS to issue Tier I hybrid capital. The Bank has banking licence no. 48 and is registered with the Ministry of Justice under no. 4905-1900-AO. The registered office of the Bank is 135 “Zh” Gagarin Avenue, Almaty 050060, Kazakhstan and its telephone number is +7 3272 585 125. Strategy The slowdown of the Kazakh economy, significant turbulence and uncertainty in the global financial system and worsening economic conditions in the Bank’s key markets from 2007 up to the present has caused the Bank to review its strategy. The Bank’s current strategy is to focus on asset quality and liquidity management, while maintaining its client base and operating efficiency. Corporate banking As at 30 September 2008, the Bank was the Kazakh market leader in lending to corporates with a market share of 26.8 per cent. (calculated by the Bank on the basis of FMSA data). The Bank intends to maintain its position in this market by implementing the following strategy: ● Focusing on asset quality. The Bank continues to concentrate its efforts to reduce the negative impact of macroeconomic conditions on the quality of its loan portfolio. The Bank works closely with its corporate clients to prioritise their financing needs and to assist in mergers, acquisitions and asset disposals. As a part of these efforts, the Bank has established a dedicated unit to monitor and manage its exposure to the construction sector. ● Participation in the government stabilisation programmes. Such participation provides the liquidity required to continue financing corporate clients in residential construction and the real economy. The Bank is the leading participant in the Samruk-Kazyna residential construction programme (the outstanding amount of deposits under this programme is KZT 32 billion). On 30 January 2009 the Bank received a KZT 84.0 billion deposit from Samruk- Kazyna to be used over a 36 month period to help refinance the Bank’s corporate clients. The terms of the deposit enable the Bank to decrease interest rates for its borrowers. ● Maintaining its corporate deposits. The Bank has been able to develop strong relationships with large corporates due to its extensive experience and well-developed corporate client relationship management system. This ensures the Bank benefits from deposits placed and kept with it by both large corporates and state-owned companies. The Bank’s goal is to maintain its strong relationships with corporate clients and therefore maintain its corporate deposit base. ● Focusing on cross sales and sales of non-credit banking products to corporate borrowers. The Bank will work with its corporate borrowers to offer a wide range of non-credit products, as well as non-banking products including insurance. The Bank has established a special unit to work with non-credit customers to offer these products. SME banking ● Maintaining its SME loan portfolio with specific focus on asset quality when making SME loans. The Bank will continue to refinance its SME clients under the Government stabilisation programme. The total funds received from Samruk-Kazyna to refinance SME clients was KZT 18.7 billion as at 25 March 2009. ● Optimising its business structure related to SMEs to address the global economic turmoil and its consequences. Since 2008 loans to medium-sized enterprises have been made by the Bank’s headquarters in Almaty. The local branches continue to offer banking products to

small businesses as well as cash and non-cash settlement services to both small and medium sized businesses. Retail banking The Bank’s strategy in retail banking includes: ● Maintaining and seeking opportunities to increase its existing retail deposit base. Due to the recent lack of confidence in the international capital markets and the downgrading of Kazakhstan’s long-term credit ratings, the Bank will focus on the diversification of its funding base and the attraction of new retail deposits. ● Focusing on increasing non-interest fee based income. The Bank will concentrate its efforts on offering a wide range of non-interest fee based products to its retail customers, including, but not limited to, cash settlement operations, credit and debit cards and telephone and internet banking, while seeking out other non-interest fee based products. ● Optimising and maintaining its distribution network. The Bank will increase its efforts to optimise its branch network by locating outlets in areas which continue to have a high density of business activity and/or population, closing less profitable branches, negotiating reductions in property costs and decreasing personnel. ● Developing alternative distribution channels. The Bank intends to continue to exploit its leadership in information technology systems to further develop its automated distribution channels, including its ATM network, internet banking and telephone banking. The Bank is also aiming to acquire new retail clients and to retain its existing clients by providing a wide range of products, such as payment services and foreign currency exchange through alternative distribution channels. ● Optimising business processes related to retail banking. The Bank will focus on optimising business processes related to retail banking through the automation of processes by using WorkFlow software, the introduction of queue control systems and the training and evaluation of personnel. The Bank believes that these initiatives will enable the Bank to improve the speed and quality of client services. Subsidiaries The following table sets forth certain information, accurate as at 30 September 2008, regarding the Bank’s principal subsidiaries, affiliates and entities over which it exercises management control.

Shareholders’ Name equity Net income (KZT millions, unaudited) Domestic JSC UlarUmit Pension Fund(1) ...... 2,037 (2,446) JSC OCOPAIM Grantum Asset Management...... 1,624 64 JSC Grantum APF...... 1,751 4 JSC SK Kazkommerts-Policy ...... 6,023 1,593 JSC Kazkommerts Life Insurance Company...... 675 (183) JSC Kazkommerts Securities ...... 853 (348) JSC OCOPAIM Zhetysu...... 982 (1,655) LLP Processing Company...... 3 — Foreign Moskommertsbank...... 16,468 452 East Kommerts Investment Company ...... 4,219 (853) OJSC Kazkommertsbank Tajikistan...... 1,220 11 OJSC Kazkommerts Kyrgyzstan ...... 1,685 470 Finance Subsidiaries Kazkommerts International B.V.(2) ...... 2,030 247 Kazkommerts Capital 2 B.V.(2) ...... 120 (18) Kazkommerts Finance 2 B.V.(2) ...... 425 48 ______(1) Affiliate. (2) Special purpose vehicle.

Except as described below, all the entities listed above are wholly owned by the Bank. Domestic The Bank’s principal domestic subsidiaries and affiliates are: ● JSC OCOPAIM Grantum Asset Management. JSC OCOPAIM Grantum Asset Management is a wholly owned subsidiary of the Bank. As at 30 September 2008, JSC OCOPAIM Grantum Asset Management had a 5.8 per cent. market share of total Kazakh pension fund assets (calculated by the Bank on the basis of FMSA data). JSC OCOPAIM Grantum Asset Management is licensed to carry out pension fund investment management, investment portfolio management and broker dealer activity on the securities market. ● JSC Grantum APF. The Bank purchased an 80.1 per cent. stake in JSC Grantum Pension Fund from ABN AMRO in 2005 for total consideration of U.S.$13.3 million. JSC Grantum Pension Fund’s primary business is pension asset management. As at 30 September 2008, it had a 5.62 per cent. market share of total Kazakh pension fund assets (calculated by the Bank on the basis of FMSA data). ● JSC SK Kazkommerts-Policy. JSC SK Kazkommerts-Policy was a wholly owned subsidiary of the Bank from 1999 until 2003 when the EBRD purchased a 35 per cent. interest. In May 2008, the Bank exercised its option to repurchase the 35 per cent. stake held by the EBRD and once again became the sole shareholder. As of September 2008, JSC SK Kazkommerts-Policy was one of the leading non-life insurance companies in Kazakhstan with a market share, on the basis of gross written premiums, of approximately 7.6 per cent. of the Kazakh non-life insurance market (according to the FMSA). JSC SK Kazkommerts-Policy primarily underwrites property and casualty insurance policies for retail and commercial clients while providing valuable cross-selling opportunities for the Bank. ● JSC Kazkommerts Life Insurance Company. In September 2006, the Bank acquired 100 per cent. of the outstanding shares of its insurance subsidiary, JSC Kazkommerts Life Insurance Company for KZT 800 million. JSC Kazkommerts Life Insurance Company conducts a life insurance business. As at 30 September 2008 JSC Kazkommerts Life Insurance Company had a total share capital of KZT 675 million. ● JSC Kazkommerts Securities. JSC Kazkommerts Securities is a wholly owned subsidiary of the Bank. It was established to provide investment services to both foreign and domestic clients and to participate in privatisation projects. JSC Kazkommerts Securities is engaged in investment banking and brokerage operations and is one of the major underwriters of corporate domestic bonds in Kazakhstan. As at 31 December 2007, JSC Kazkommerts Securities had KZT 1,861 million in assets. As at 30 September 2008 JSC Kazkommerts Securities had KZT 2,211 million in assets. ● LLP Processing Company. In 2004, the Bank acquired 100 per cent. of LLP Processing Company, which provides for the clearing and settlement of payment card transactions. ● JSC UlarUmit Pension Fund. As at 30 September 2008 the Bank owned a 49.35 per cent. minority stake in the JSC UlarUmit Pension Fund which held 17.25 per cent. of the total of Kazakh pension funds’ assets (calculated by the Bank on the basis of FMSA data). In March 2009 the Bank sold all of its shares in JSC UlarUmit Pension Fund to other shareholders of that company. ● JSC OCOPAIM Zhetysu. As at 30 September 2008 the Bank owned a 50 per cent. stake in the JSC OCOPAIM Zhetysu, which is licensed to carry out pension fund investment management, investment portfolio management and broker dealer activities on the securities market. In March 2009 the Bank sold its 50 per cent. stake in JSC OCOPAIM Zhetysu to existing shareholders of the company.

Foreign The Bank’s principal foreign subsidiaries and entities over which it exercises managerial control are described below: ● Commercial Bank “Moskommertsbank” LLC has been a strategic partner of the Bank since 2001 and in May 2008 became a wholly owned subsidiary of the Bank. Commercial Bank “Moskommertsbank” LLC is a universal bank focusing on SME, retail and private banking. It has 11 full-service branches and 7 limited-service branches in major Russian cities. As at 30 April 2008, Moskommertsbank LLC was ranked 74th largest bank in Russia by asset size, with total assets as at 31 December 2007 of U.S.$1.94 billion, a retail loan portfolio of U.S.$1.2 billion and corporate loan portfolio of U.S.$0.5 billion. As at 30 September 2008 Moskommertsbank LLC had total assets of U.S.$ 1.9 billion and retail and corporate loan portfolios of U.S.$ 1.1 billion and U.S.$ 0.6 billion respectively. ● OJSC Kazkommertsbank Kyrgyzstan. OJSC Kazkommertsbank Kyrgyzstan is a commercial bank headquartered in Bishkek with two further branches in Dzhalal-Abad and Osh. The Bank purchased a 72.4 per cent. stake in OJSC Kazkommertsbank Kyrgyzstan in 2002 for KZT 244 million and subsequently increased its shareholding to 94.6 per cent. OJSC Kazkommertsbank Kyrgyzstan offers both retail and corporate banking services. OJSC Kazkommertsbank Kyrgyzstan initially focused on servicing the Bank’s existing clients conducting business in Kyrgyzstan, in 2006, OJSC Kazkommertsbank Kyrgyzstan refocused on its domestic retail and SME markets. ● CJSC Kazkommertsbank Tajikistan. CJSC Kazkommertsbank Tajikistan was registered in December 2007. It is a commercial bank headquartered in Dushanbe and is a wholly owned subsidiary of the Bank with chartered capital of U.S.$10 million. In January 2008 Kazkommertsbank Tajikistan was issued by the National Bank of Tajikistan with licenses for banking in national and foreign currencies. CJSC Kazkommertsbank Tajikistan enables the Bank to offer clients in Tajikistan regular banking services. ● East Kommerts Investment Company. The Bank acquired a 50 per cent. stake in LLC “IC (Investment Company) East Capital” in 2007 and renamed it LLC “IG (Investment Group) East Kommerts”. LLC “IG East Kommerts” offers full range of brokerage, asset management and advisory services. Finance subsidiaries The Bank’s principal finance subsidiaries are: ● Kazkommerts International B.V. Kazkommerts International B.V. is a wholly owned finance subsidiary of the Bank which has raised approximately U.S.$3.05 billion in the domestic and international capital markets since 1998. Its total outstanding debt as at 30 September 2008 was U.S.$ 5.6 billion. ● Kazkommerts Finance II B.V. Kazkommerts Finance II B.V. is a wholly owned finance subsidiary of the Bank. In November 2005 Kazkommerts Finance II B.V. raised U.S.$100 million through the issue of perpetual notes in the international capital markets. Its total outstanding debt as at 30 September 2008 was U.S.$ 0.5 billion. ● Kazkommerts Capital II B.V. Kazkommerts Capital II B.V is a wholly owned finance subsidiary of the Bank, which is used to raise capital in international markets. Its total outstanding debt as at 30 September 2008 was U.S.$ 0.1 billion.

Banking Services Corporate banking The Bank has been servicing corporate clients for over 16 years and believes that its continuous focus on quality of service has made it the bank of choice for large corporates in Kazakhstan. The principal products and services the Bank offers to corporate clients include short-term, medium-term, project finance and credit facilities denominated both in Tenge and other currencies (predominantly U.S. dollars and euro) as well as transactional services including trade finance, structured finance and cash management. Trade finance products include letters of credit, guarantees and advance payment facilities. As at 30 September 2008, corporate loans accounted for 82.9 per cent. of the Bank’s loan portfolio. Due to the economic downturn in Kazakhstan the Bank has significantly limited its lending activities. Loans to trade, residential, commercial and industrial real estate sectors constitute the majority of the Bank’s loan book. The sectoral composition of the loan portfolio did not change significantly over the first three quarters of 2008 largely due to the fact the Bank has been one of the major participants in the Governmental stabilisation programmes. Under these programmes the Bank continues to lend to the sectors of the economy that have been most affected by the economic downturn, such as the construction sector. Despite the global economic downturn the Bank is striving to support the import and export financing needs of its corporate clients using traditional trade finance instruments such as documentary letters of credit and guarantees, ECA covered financing and financing under the credit lines of development institutions, such as the EBRD, Islamic Development Bank and Deutsche Investitions-und Entwicklungsgesellschaft mbH. SME banking The range of products offered to SME clients is similar to that offered to the Bank’s large corporate customers. Loans constitute the largest part of the Bank’s exposure to this sector. The Bank’s lending relationship with an SME customer generally commences with a working capital loan and develops into the financing of capital expenditures as the customer’s business grows. The Bank was one of the first banks in Kazakhstan to cooperate with the EBRD in its programme for the development of the SME sector and thereby benefited from the funding and training which the EBRD provided. The programme started in 1998 and established a framework for lending to the SME sector. All five of the largest banks in Kazakhstan have participated in the EBRD development programme. Although the programme has now ended, participants continue to report on the status of their loans to this sector which fall between U.S.$50,000 and U.S.$200,000. The Bank is involved in a similar programme in Kyrgyzstan through its subsidiary OJSC Kazkommertsbank Kyrgyzstan. Since 2008, the Bank has attempted to optimise its business structure in relation to SMEs to address the global economic downturn and its consequences. Medium-sized borrowers are now served by the Bank’s headquarters in Almaty. The branches continue to offer banking products to small businesses as well as cash and non-cash settlement services to both small and medium sized businesses. The introduction of a scoring system and the transfer of the credit approval process to the decision making centre, as described in “Risk Management Policies,” is expected to facilitate faster decision making. The Bank will continue to refinance its SME clients under the Government stabilisation programme. The total funds received from Samruk-Kazyna to refinance SME clients was KZT 18.7 billion as at 25 March 2009.

Retail banking The Bank provides a comprehensive range of banking products with the aim of both becoming each existing client’s primary bank and attracting new clients. The Bank also seeks to maintain its retail deposit base and to maximise non-interest fee based revenues. The Bank has one of the leading retail banking franchises in Kazakhstan with a 19.2 per cent. share of the Kazakh retail deposit market and a 13.8 per cent. share of the Kazakh retail loans market as at 30 September 2008 (according to FMSA data). The Bank offers its retail customers a comprehensive range of retail products including deposit and current accounts, debit and credit cards, residential mortgages and consumer loans. As at 30 September 2008, retail customer deposits totalled KZT 286,873 million, which was the third largest retail deposit base in the country (calculated by the Bank on the basis of FMSA data). The Bank will concentrate its efforts on maintaining its existing retail deposit base. In addition, the Bank may experience retail deposit inflows due to the recent changes in the Kazakh banking sector’s landscape which have impacted strategic competitors. The Bank is also focusing increasingly on attracting payroll accounts from its corporate clients. The Bank has strong positions in the debit and credit card markets. It issues debit cards, credit cards and virtual cards. Virtual cards are a special category of debit card which have particular security features and can only be used for internet transactions. The Bank issues both VISA and Europay/MasterCard cards which provide access to the Cirrus/Maestro system. The Bank is an exclusive partner for the distribution of American Express cards in Kazakhstan. In 2002, the Bank was the first bank in Kazakhstan to issue EMV-standard chip cards for use at certified point-of-sale terminals. In 2003, the Bank was the first bank in Kazakhstan to obtain certification for card servicing under the 3D-Secure protocol developed by VISA International (with the support of MasterCard International) to protect against internet fraud. By 30 September 2008, the Bank had issued over 1,000,000 cards, most of which were debit and credit cards. The Bank was the first bank in Kazakhstan to offer a credit card with bonus features. Such cards are branded as the “GO!Card”. Bonus points can be earned and redeemed at any of approximately 800 trade partners in the GO!Card network. As at 30 September 2008, the Bank had issued more than 720,000 GO!Cards. Although credit cards are not as extensively used in Kazakhstan as in some other countries, the Bank believes that this market will continue to grow and that at present it is one of the market leaders in terms of volume of card transactions. The Bank’s settlement and payment system, both at branches and via the internet, enables individuals to pay a wide range of bills, including utility and social security bills. The Bank has a UNICOM system which facilitates rapid client payments due to the automation of back office processes. The Bank’s consumer loan portfolio consists of car loans and express loans. These loans are approved through an expedited approval process focused on proved and transparent income of a potential borrower. The Bank has entered into agency agreements with a number of car dealers under which their customers can finance their purchases. In 2002, the Bank was the first bank in Kazakhstan to offer residential mortgages. Residential mortgages comprised 54.7 per cent. of the Bank’s gross retail loan portfolio as at 30 September 2008. Due to the recent negative developments in the construction sector in Kazakhstan, and a reduction in a disposable income of individuals, the Bank has significantly decreased its new mortgage lending, while focusing on the quality of its existing portfolio. In February 2009, Samruk-Kazyna allocated KZT 120 billion to refinance existing mortgage loans, of which the Bank received KZT 24 billion. Refinancing is subject to certain eligibility criteria set by the Fund. Under this programme, the Bank will be able to substantially reduce interest rates for some of its existing customers.

Other banking and financial services The main objective of the Bank’s treasury operations is to efficiently manage liquidity and interest rate and market risks by managing its foreign currency exposure and funding costs through operations in the foreign exchange and money markets. The Bank’s treasury operations consist largely of spot transactions in Tenge and other currencies, transactions in government securities and currency derivatives used for hedging purposes. Brokerage and investment banking services are undertaken by the Bank through its subsidiary JSC Kazkommerts Securities. The Bank is authorised to engage in other activities, including the sale, purchase and safekeeping of precious metals (including gold and silver). Since 2001 the Bank has offered asset management services and insurance and pension products to its corporate and retail clients. Although the Bank engages in securities transactions on behalf of its clients, the Bank does not engage in a material volume of proprietary trading in securities. Distribution Network Branches As at 30 September 2008, the Bank’s branch network comprised, in addition to its head office in Almaty, 23 full-service branches and 166 limited-service branches. The Bank has reconsidered its branch network expansion plans due to the economic downturn. The Bank will increase its efforts to optimise its branch network by locating outlets in areas which continue to have a high density of business activity and/or population, closing less profitable branches, negotiating reductions in property costs and decreasing personnel. For business optimisation and efficiency purposes, the Bank has centralised corporate (including medium sized) business operations in its headquarters, while the branches continue to provide cash and non-cash settlement services, small business lending, credit and debit card and retail services. The co-ordination and planning of the operations of the branches and internal controls of each branch are regulated and overseen by the Bank’s head office which monitors the operations and financial results of the branches and is responsible for the development of the Bank’s regional policies and strategies. All branches also undergo an annual internal audit. See “Risk Management Policies”. Alternative distribution channels As at 30 September 2008, the Bank operated 883 ATMs in cities throughout Kazakhstan. The Bank believes that its ATM network is the second largest in Kazakhstan and seeks to attract customers to its network by locating machines in densely populated areas and areas with high footfall, such as shopping malls and large office buildings. The Bank has a policy of only placing ATMs in locations that are accessible for 24-hour maintenance. The Bank believes that, relative to its competitors, it maintains a high ratio of machines to issued debit and credit cards thus ensuring easy access to funds. The Bank charges a fee for each ATM withdrawal, including withdrawals by its own account holders. As at 30 September 2008 the Bank operated 8,553 point-of-sale terminals, making it the market leader in Kazakhstan. The Bank was the first local bank to offer telephone and internet banking services. Currently internet banking services include online access to account statements, payment of mobile and fixed line telephone bills, payment of utility and cable TV bills, and the payment of taxes. Telephone banking customers are able to obtain account and card balance information, pay mobile and fixed line phone bills and cable TV bills. As at 30 September 2008, over 170,000 customers had registered for internet banking services. Additionally, as at 30 September 2008 the Bank had 210 Info kiosks in Kazakhstan. Info kiosks provide the full range of services available to internet banking retail customers.

In addition to providing services to the Bank’s customers, the Bank’s call centre has recently become involved in debt collection at early stages of overdue payments. Technology In 2002, the Bank introduced and implemented Equation DBA, a centralised, integrated banking information system which connects the head office to the branches. The Bank believes that the full implementation of the Equation DBA system has significantly improved the scope and efficiency of its information systems with respect to risk management and financial reporting under IFRS. In 2003 the Bank introduced an Oracle-based WorkFlow electronic documents circulation system, which reduces human error and accelerates client servicing. In order to improve its efficiency, the Bank is introducing new banking technologies such as a customer relationship management system based on the integration of Siebel CRM and CallCenter software products. The Bank is also introducing a new business process management system, which is based on Oracle’s WorkFlow software, and new internet banking systems for both retail and corporate clients. The Bank utilises credit scoring technologies for potential loans to retail and SME clients. In particular, the Bank is currently using an application scorecard for the approval of credit cards. This scoring model has been developed with the assistance of Experian (an international provider of information, analytical and marketing services). Experian is also currently developing several other applications on the Bank’s behalf including behavioural scorecards for both the credit card business and SME business of the Bank. Furthermore, the Bank has developed several scoring models for express and car loan products in-house. The Bank is planning to extend the use of scoring models to other consumer products. In co-operation with consultants, the Bank is currently evaluating opportunities to further automate its risk management systems and provide real-time monitoring of its risk exposures. Over the next few years the Bank expects to implement increasingly automated risk management software systems. In 2005 the Bank initiated an e-procurement system which now has more than 1600 registered suppliers and more than 2500 registered users. The system has held more than 1300 on-line auctions, generating substantial savings to the Bank. The Bank’s computer systems are located in a stand-alone data centre in Almaty, which is earthquake and fire resistant and equipped with a back-up power supply system. The data centre has advanced access control and security systems including 24-hour continuous video monitoring. The data centre is also equipped with an intrusion detection system and a network monitoring and analysis system. The Bank plans to open a second back-up data centre in Astana which will have substantially the same capabilities as the Almaty data centre and further reduce the possibility of operational failure. The Bank regularly undertakes emergency drills in order to test its ability to operate via the data centre. The Bank believes that it would be able to re-establish full operational functions within one to ten days, depending on the nature of the relevant incident. Security and Anti-Money Laundering In co-operation with consultants, the Bank has implemented security procedures and policies for all of its locations. Each new branch is initially reviewed by the Bank’s Security Department to ensure compliance with the Bank’s procedures and policies. All of the Bank’s branches contain video surveillance systems and each of its ATMs is monitored by CCTV. The Bank maintains a strict anti-money laundering policy in relation to all of its customers. The Bank interviews most applicants and performs background investigations. All applicants are required to provide the Bank with identification documents, as well as their Kazakh tax identification number. Each new high net worth customer must be recommended by an existing high net worth customer.

Properties The Bank owns the majority and leases the remainder of its branch premises, foreign exchange bureau properties, ATMs, residential apartments, garages, warehouses and other facilities in Kazakhstan. For leased properties, the Bank typically enters into operational leases with terms of between six months and ten years. As at 30 September 2008, the gross book value of the Bank’s fixed assets was KZT 23.1 billion, including the Bank’s head office building which had a gross book value of KZT 2.1 billion. On 25 May 2006, the Bank entered into a general construction agreement with Yuksel Turkuaz-Yda Insaat Ticaret Ltd to build a new head office building for the Bank in the Almaty Finance Centre. The value of the contract is approximately U.S.$66.5 million. The Bank has also entered into a number of other contracts relating to the construction of its new head office and the total cost of the project is estimated to be approximately U.S.$100 million. As at 30 September 2008, the Bank had spent approximately U.S.$87.3 million in connection with this project. Insurance The Bank has a banker’s blanket bond insurance policy provided by JSC SK Kazkommerts-Policy (and reinsured with a leading international reinsurer). This policy covers losses in relation to banks and financial institutions, computer fraud, safe deposit theft and ATM and internet services fraud. The maximum coverage depends on the type of insurance but will not exceed KZT 366 million, either for individual events or in aggregate. Coverage is subject to a number of conditions and qualifications and money-laundering liabilities and losses due to terrorism are specifically excluded. In addition, the Bank has a number of other insurance policies provided by JSC SK Kazkommerts-Policy, including obligatory insurance of employer’s civil liability to employees, third-party liability insurance (maximum coverage KZT 150 million) and voluntary property insurance (maximum coverage KZT 4,925 billion). The policies are typically renewable annually. Competition Kazakhstan’s banking industry was principally established following the independence of Kazakhstan in 1991. As at 30 September 2008, there were 36 commercial banks in Kazakhstan. Banks in Kazakhstan can be divided into three groups: large local banks (including the Bank, Halyk Savings Bank and Bank TuranAlem, of which Bank TuranAlem was recently nationalised); banks under foreign ownership (such as The Royal Bank of Scotland in Kazakhstan, Citibank Kazakhstan, HSBC Kazakhstan, Bank Centercredit and ATF Bank); and smaller local banks. The Bank believes that its main competitors are Halyk Savings Bank, Bank Centercredit and ATF. On 2 February 2009, the Government announced its decision to purchase a stake of approximately 78 per cent. of BTA bank, Kazakhstan’s largest commercial bank. It was also reported that the Government is considering a potential sale of up to half of its controlling stake in BTA Bank to a strategic investor. On 2 February 2009, a major shareholder of Alliance Bank, Kazakhstan’s fourth largest commercial bank, announced that they intend to sell a 76 per cent. stake to Samruk-Kazyna.

The Bank believes that competition in its target markets is primarily driven by brand identity and quality of customer service. The Bank believes that it is well positioned to compete on the basis of its size, large capital base, the geographical profile of its loan portfolio, participation in the Government stabilisation programme, strong franchise in corporate segment, experienced management team, cost efficiency, risk management, advanced and integrated information technology system, and presence in non-banking financials services. The following table sets out the top 10 banks (by assets) in Kazakhstan (unconsolidated data as provided by FMSA) as at 30 September 2008:

As at 30 September 2008 KZT millions (%) Bank TuranAlem ...... 3,083,342 24.67 Kazkommertsbank ...... 2,522,040 20.18 Halyk Bank...... 1,823,030 14.58 Alliance Bank ...... 1,054,463 8.44 ATF Bank 1,009,571 8.08 Bank CenterCredit ...... 999,911 8.00 Nurbank ...... 314,254 2.51 Temir Bank...... 305,850 2.45 Bank Caspian...... 257,572 2.06 Eurasian Bank...... 244,155 1.95 Top 10 Banks...... 11,614,089 92.91 Others ...... 886,183 7.09 Total...... 12,500,272 100.00

Employees As at 30 September 2008, the Bank had 5,537 full-time employees, of which 3,904 were employed in its branches, and 1,633 were employed at the Bank’s head office in Almaty. The average age of the Bank’s employees is 32 years and a large portion of them are university graduates. The Bank has not experienced strikes or other work stoppages resulting from labour disputes and has no unionised employees. The following table shows the number of employees of the Bank as at the dates indicated:

As at30 September As at 31 December 2008 2007 2006 2005 (unaudited) (unaudited) Head office ...... 1,633 1,577 1,239 973 Branches ...... 3,904 5,205 3,929 2,670 Total...... 5,537 6,782 5,168 3,643 Reduction in personnel over the first three quarters of 2008 was mainly attributable to decreased staffing of branches, including retail sales personnel and support staff.

To promote operational efficiency, the Bank emphasises education and experience amongst its employees. As part of an organisational restructuring the Bank has introduced staffing guidelines and a new human resources management policy to improve the quality of the Bank’s personnel. The Bank also holds internal and external training and staff rotation programmes designed to improve the skills and cross-selling ability of employees. Litigation There are no and have been no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Bank is aware) during the 12 months prior to the date of this Prospectus, or in the recent past which may have or have had significant effects on the Bank’s or the Group’s financial position or profitability.

THE BANKING SECTOR IN KAZAKHSTAN Introduction Since mid-1994, the government of Kazakhstan has adhered to a strict macroeconomic stabilisation programme, combining tight budgetary discipline, stringent monetary policy and structural economic reforms, which have sharply reduced inflation and lowered interest rates. Kazakhstan has a two-tier banking system with the central bank of Kazakhstan, the NBK, comprising the first tier and all other commercial banks comprising the second tier. Generally, all credit institutions in Kazakhstan are required to be licensed and regulated by the FMSA (prior to 2004 this licensing role was carried out by the NBK). The government of Kazakhstan, the NBK and the FMSA have undertaken significant structural reforms in the banking sector, aimed at promoting consolidation and improving the overall viability of the system. Recent Developments

Global financial instability and market dislocation has negatively affected the Kazakhstan banking sector resulting in asset quality deterioration and reduced funding sources for Kazakh banks. Statistics published by the FMSA show the continuation of asset quality deterioration in 2008 when non- performing loans (comprising doubtful 5th category, loss loans and provisions created on related loans) in the banking sector increased from 5.1 per cent. as at 30 June 2008 to 8.03 per cent. as at 31 December 2008. The banking sector overall showed a net loss of KZT 53 million for the second half of 2008 and assets of the banking sector also declined in that period.

On 23 October 2008 new legislation relating to the stability of the Kazakhstan financial system was adopted. With a view to protecting interests of banks’ creditors and ensuring the stability of the Kazakhstan banking system, the legislation, inter alia, empowered the Government, with the agreement of the FMSA, in the event of a breach by a bank of capital adequacy or liquidity ratios or if any other prudential and/or other mandatory requirements are breached by a bank two or more times during 12 consecutive calendar months, to acquire, either directly or through a national management holding company, the authorised shares of such bank to the extent necessary to improve such bank’s financial condition and ensure compliance with prudential and/or other mandatory requirements. The acquisition may not be for less than 10 per cent. of the total number of placed shares, including those to be acquired the Government or a national management holding company. Any issues of shares and any acquisition thereof by the Government or by the national management holding company may be carried out without approval of the relevant bank or its shareholders and may over-ride pre-emption rights. The Government or the national management holding company must sell the acquired shares within one year of their acquisition to a third party investor or investors. However, this term may be extended if the financial position of the bank shows no signals of improvement.

On 2 February 2009, the Government announced its decision to purchase an approximately 78 per cent. stake in BTA Bank, Kazakhstan's largest commercial bank, for KZT 251 billion. It was also reported that the Government is considering a potential sale of up to half of its controlling stake in BTA Bank to Russia's Sberbank. Also on 2 February 2009, Alliance Bank, Kazakhstan's fourth- largest commercial bank, announced that its major shareholder had decided to sell 76 per cent. of that bank's shares to Samruk-Kazyna and on the same date the Government announced that it was considering such purchase, for a total notional consideration of KZT 100.

The NBK decreased its refinancing rate from 10.5 per cent. to 10.0 per cent. effective from I January 2009, and from 10.0 per cent. to 9.5 per cent. effective from 5 February 2009. The stated reason for the rate cut was the shortage of liquidity in the market.

The National Bank of Kazakhstan and the FMSA

The NBK is the central bank of Kazakhstan and although it is an independent institution, it is subordinate to the President of Kazakhstan. The President has the power, among other things, to appoint (with the approval of Parliament) and remove the NBK’s Chairman, to appoint and remove the NBK’s Deputy Governors on the recommendation of the Governor, to approve the annual report of the NBK, to approve the concept and design of the national currency, and to request information from the NBK. Mr. Grigoriy Marchenko was appointed Governor of the NBK in January 2009. The principal governing bodies of the NBK are the Executive Board and the Board of Directors. The Executive Board, the highest governing body of the NBK, consists of nine members, including the Chairman, four other representatives of the NBK, a representative of the President, two representatives of the Government and the chairperson of the FMSA.

Currently, the principal task of the NBK is to ensure price stability in Kazakhstan. The NBK is also empowered to develop and conduct monetary policy, organise banking settlement systems, conduct currency regulation and control, assist in ensuring stability of the financial system and protect the interests of depositors with commercial banks. Following legislative changes in July 2003, the FMSA was formed and, on 1 January 2004, took over responsibility for most of the supervisory and regulatory functions in the financial sector, which were previously performed by the NBK. The FMSA is an independent institution reporting directly to the President. The principal task of the FMSA is to regulate and supervise Kazakhstan's financial markets and financial institutions, including banks, insurance companies, pension funds and pension asset management companies, as well as professional participants of the securities market. The FMSA is empowered, among other things, to license financial institutions, to approve prudential standards for them, to approve, jointly with the NBK, the scope of financial reporting for financial institutions and to monitor the activities of, apply sanctions to (where necessary) and to participate in the liquidation of, financial institutions. Administration of anti monopoly legislation in Kazakhstan with respect to the banking sector was transferred from FMSA to the Agency of the Republic of Kazakhstan for Protection of Competition (the “Competition Agency”). However, certain issues of anti-monopoly regulation are under the jurisdiction of both the Competition Agency and the FMSA. For example, certain transactions with a value exceeding certain thresholds require preliminary consent of the Competition Agency. Such thresholds for purposes of regulated financial organisations shall be established jointly by the Competition Agency and the FMSA. Banking Reform and Supervision Reform of the banking sector began in 1995 with the NBK’s introduction of international prudential standards, including capital adequacy requirements and liquidity ratios to regulate and protect the banking system, transparency requirements as to the auditing of banks by local and international auditors, harmonisation of local accounting practices to IFRS and personnel training programmes. In addition, to strengthen the banking industry, promote stability and move towards internationally accepted practices, the NBK required commercial banks to adopt recapitalisation and corporate enhancement plans with the aim of enhancing their ability to attract long-term, private investors. In 2000, guidelines were established for bank inspections and for periodic reporting by commercial banks to the NBK, now the FMSA. In 2003, all banks were requested to develop and install internal risk management systems. Capital Adequacy The FMSA further refined its capital adequacy and credit exposure standards in September 2005, when it adopted a resolution (which was subsequently amended in November 2005, May and June 2006, February, May, August and October 2007, and February, April, October and December 2008) to set limits and rules for calculating capital adequacy, single party exposure, liquidity ratios and open currency positions.

In November 2005, new regulations regarding regulatory capital and risk management came into effect in Kazakhstan. These regulations represent a substantial step towards the implementation of the Basel accord. In particular, the new regulations introduce the concepts of hybrid capital eligible to be included in Tier I and Tier II capital, Tier III capital (qualified subordinated debt) and operational and market risks and include rules for calculating risk with respect to derivatives. Further, the new regulations establish reduced capital adequacy ratios for banks one of whose shareholders is a bank holding company. Such reduced rates are 5.0 per cent. for the K1 ratio (compared to a generally applicable ratio of 6.0 per cent.) and 10.0 per cent. for the K2 ratio (compared to a generally applicable ratio of 12.0 per cent.). A bank holding company is an entity, whether domestic or foreign, that owns not less than 25.0 per cent. of the voting shares of a Kazakh bank and has received the FMSA’s permission to be a bank holding company. Separately, the FMSA introduced more stringent requirements for internal risk management and supervision on a consolidated basis (for banks and bank holding companies). In February 2007, to reduce the risks associated with rapid growth in the external debt of Kazakh banks, the FMSA introduced amendments to its capital adequacy regulations which, imposed limits on foreign borrowings or “external liabilities” which a bank can incur to a multiple of such bank’s “own capital” as calculated both including and excluding debt securities issued. These amendments mean that banks will not be permitted to increase borrowings from non domestic holders (subject to certain exceptions) to a level in excess of certain multiples of regulatory capital and may result in banks exceeding the prescribed ratios and having to either repay foreign sourced debt or increase their regulatory capital. The final current ratios that will be applicable to the Bank are (i) two times own capital for external liabilities excluding debt securities issued by special purpose subsidiaries of the Bank guaranteed by the Bank (k8 ratio) and (ii) four (three, starting from 1 July 2009) times own capital for external liabilities including such debt securities issued (k9 ratio). The FMSA monitors compliance with capital adequacy standards (in accordance with international standards set by the Basel Committee), current liquidity ratios, maximum credit exposures to single borrowers and related parties, maximum investments in fixed and other non-financial assets and limits on contingent obligations and foreign exchange positions. Additionally, the FMSA applies regulations on problem asset classification and contingent obligations (similar to the World Bank’s Guidelines for Asset Classifications) and loan loss reserves. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition – Equities and capital ratios”. Reserve requirements In July 2008, reserve requirements for foreign currency borrowings from non residents and borrowings through the issuance of notes and subordinated debt instruments (regardless of residence) were reduced to 7.0 per cent. from 8.0 per cent. and domestic borrowings from residents were reduced to 5.0 per cent. from 6.0 per cent. NBK introduced the new requirements for the purpose of providing Kazakh banks with additional liquidity to support their loan originating operations. In November 2008, further reductions of the minimum reserve requirements were implemented, reducing reserve requirements on other liabilities to 3 per cent. and reserve requirements for domestic liabilities to 2 per cent. Effective from 3 March 2009, NBK further reduced the minimum reserve requirements on other liabilities to 2.5 per cent. and on domestic liabilities to 1.5 per cent. Deposit insurance In December 1999, a self funded domestic deposit insurance scheme was established and as at 30 September 2008, 35 banks, including subsidiaries of foreign banks and the Bank, were covered by the scheme. The insurance coverage is presently limited to personal deposits in any currency up to a maximum amount per customer (KZT 5,000,000) at any given bank. Starting from 1 January 2012,

the maximum guaranteed amount is scheduled to be reduced from KZT 5,000,000 to 1,000,000. Only banks participating in the deposit insurance scheme are authorised to open accounts and take deposits from private individuals. It is anticipated that participant banks will be called upon to make further contributions to the scheme as a result of payments made by the scheme to depositors of JSC Valut Transit Bank. See “– Commercial Banks”. Acquisition of interests in Kazakh banks Current legislation requires FMSA approval of any acquisition of a shareholding of 10 per cent. or more (whether held independently or jointly with another legal entity) in a Kazakh bank. Furthermore, a foreign entity holding 10 per cent. or more of a Kazakh bank must obtain a credit rating from one of the rating agencies which are recognised by the FMSA. The rating of such an entity should be long term and should not be less than (a) Kazakhstan’s sovereign rating (or equivalent) or (b) if the entity is a financial institution, the rating should be not less than ‘BB-’ (by Standard&Poors) or the equivalent, provided that the country in which the entity is domiciled has a rating of not less than ‘BB-’ (by Standard&Poors) or the equivalent and the respective regulator has an agreement on information exchange with the FMSA. Other regulations In addition, in June 2006 the FMSA implemented new measures to restrict Kazakh banks from having outstanding external short-term financings which exceed a bank’s regulatory capital. These measures may limit a bank’s ability to extend the maturity of certain short-term facilities causing it to look to longer term financings or customer deposits to replace such short-term facilities. A failure to replace these facilities could lead to an increase in a bank’s funding costs, an increase in its liquidity and interest rate risk or both. See “Management’s Discussion and Analysis of Results of Operations and Financial Condition – Equity and capital ratios”. To address concern about currency mismatches and more precisely, manage banks’ liquidity, the FMSA has also tightened requirements to open/net currency positions and introduced various limits of currency liquidity. In December 2006, and with effect from 1 April 2007, the FMSA approved new rules on classification of assets and provisioning. While the principles of classification and provisioning remain mainly unchanged, the new rules, among others, introduced more stringent requirements regarding monitoring of credit files, developed a definition of financial soundness with respect to borrowers, provided for a more differentiated approach to various types of borrowers, loans and security and stipulated the right of the FMSA to demand that a bank to increase its provisioning ratios. The Regional Financial Centre of Almaty Following the adoption of the relevant law on 5 June 2006, the Regional Financial Centre of Almaty (“RFCA”) was established on 10 June 2006 for the purposes of developing Kazakhstan’s securities market and integrating it into the international capital markets, attracting investments in Kazakhstan’s economy and marketing Kazakhstan’s capital to foreign securities markets. The RFCA is governed by internal regulations regarding the relations between its participants and relations between foreign and local participants. Overall control and supervision of the activities of the RFCA as well as the registration of its participants, is performed by the Agency for Regulation of Operations of RFCA. The securities listed on RFCA shall be traded on the RFCA’s special trading platform. The RFCA’s special trading platform is based on the trading platform of KASE. Commercial Banks The number of commercial banks has decreased from 184 in mid 1994 to 38 as at the end of 2002 compared to 35 as at the 30 September 2008. This decrease is largely a result of the NBK’s stringent policy towards increased capitalisation and liquidity of the banking system. The general reduction in the number of banks has largely been at the expense of small- and medium-sized banks.

In November 2001, the government of Kazakhstan divested its remaining 33 per cent. stake in OJSC Halyk Bank, by means of privatisation through a public auction. In February 2004, the entire share capital of EximBank Kazakhstan, formerly a state-owned bank, was sold by tender to a consortium of 11 members for KZT 2.1 billion. In June 2005, the banking licence granted to JSC Nauryz Bank was terminated by the FMSA and currently JSC Nauryz Bank is in the process of liquidation as required by a court ruling in November 2005. On 24 December 2005, the FMSA adopted a resolution to suspend the banking licence granted to JSC Industrial Bank of Kazakhstan for six months due to violations of prudential standards. In December 2006, FMSA revoked the banking licence of JSC Valut-Transit Bank due to the violation of Kazakh laws, improper performance of contractual obligations and breach of prudential standards. A decision on the mandatory liquidation of JSC Valut-Transit Bank was adopted by the special inter-district economic court of Karaganda on 13 February 2007 and came into effect on 1 March 2007. As of 20 January 2008, the Kazakhstan deposit insurance fund reported total payments of KZT 13.8 billion, of the expected KZT 16 billion, to the depositors of JSC Valut-Transit Bank As at 30 November 2008, 19 of the 35 commercial banks (excluding the NBK, the DBK and Zhilstroysberbank) had registered capital of over KZT 5 billion and 16 banks had a registered capital of KZT 1 billion to KZT 2 billion. Any bank whose own capital (net worth) falls below KZT 500 million is required to apply to the FMSA for voluntary reorganisation into an organisation performing only limited banking operations. For a discussion of the competition facing the Bank, see “Description of the Business – Competition”. In 2001, the government of Kazakhstan established the DBK to provide medium- and long-term financing and otherwise facilitate industrial projects in Kazakhstan. DBK was established with a charter capital of KZT 30 billion. Within the commercial banking sector, DBK is not presently considered a competitor of the Bank as it is not licensed to accept commercial or retail deposits or to provide corporate settlement services. However, the Bank expects that DBK may become an important competitor in the corporate lending sector once it obtains the relevant licences. The DBK is not treated as a commercial bank for the purposes of market share data and ranking in this Prospectus. The liberalisation of the economy in Kazakhstan in recent years has resulted in a number of foreign companies, including banks, establishing operations in Kazakhstan through direct investment and otherwise participating in the banking and financial services sector. A foreign bank may not open a branch in Kazakhstan. Accordingly, foreign banks must establish a Kazakh subsidiary or joint venture in order to operate as a bank in Kazakhstan. While foreign-owned banks do not currently provide significant domestic competition and are not active in the retail banking sector, the Bank believes that such banks, some of which may have significantly greater resources and a cheaper funding base than the Bank, will, together with the larger local banks, become the Bank’s primary long-term competitors in the corporate banking sector. Foreign banks also bring international experience in servicing customers and target the most important corporate customers of Kazakhstan’s domestic banks as well as foreign companies operating in Kazakhstan. Citibank Kazakhstan was established in 1998 and has been aggressively increasing its market share in corporate banking. Citibank Kazakhstan is expected to be a major long-term competitor of the Bank, particularly with respect to corporate lending. RBS Kazakhstan is presently the largest bank under foreign ownership in terms of total assets. The Bank believes that RBS Kazakhstan will be a major competitor of the Bank in the future, particularly with respect to corporate banking and capital markets activities. As at 30 September 2008, there were 15 banks with foreign participation operating in Kazakhstan, including RBS Kazakhstan, Citibank Kazakhstan and HSBC Bank Kazakhstan. Under relevant Kazakhstan legislation, a bank with foreign participation is defined as a bank with more than

one-third direct or indirect foreign ownership. Banks with less than one-third direct or indirect foreign ownership are considered domestic banks. A number of foreign banks have opened representative offices in Kazakhstan, including JPMorgan Chase Bank N.A., Dresdner Bank AG, Deutsche Bank AG, American Express Bank Ltd., Commerzbank AG, ING Bank N.V., Bankgesellschaft Berlin and Société Générale. Calculated by the Bank on the basis of FMSA data, the total capital of commercial banks increased as at 30 September 2007 from KZT 1,340 billion to KZT 1,519.6 billion as at 30 September 2008. During such period, the total assets of such banks increased as at 30 September 2007, amounted to approximately KZT 11,470 billion. to KZT 12,500 as at 30 September 2008. The aggregate liabilities as at 30 September 2007 increased from KZT 10,129 billion to approximately KZT 10,980 billion as at 30 September 2008 and their aggregate net income amounted KZT 71.047 million as at 30 September 2008.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion and analysis is intended to assist in the understanding and assessment of the trends and significant changes in the Bank’s results of operations and financial condition. Historical results may not indicate future performance. The forward-looking statements contained in this review are subject to a variety of factors that could cause actual results to differ materially from those contemplated by such statements. Factors that may cause such a difference include, but are not limited to, those discussed in “Forward-Looking Statements” and “Risk Factors”. In this document, the consolidated financial statements presented are those of the Bank and its subsidiaries. This discussion is based on the unaudited interim financial information and audited consolidated financial statements of the Bank and should be read in conjunction with its unaudited interim financial information and audited consolidated financial statements and the accompanying notes appearing elsewhere in this Prospectus. Unless otherwise indicated, all of the financial data and discussions thereof are based upon the Bank’s Unaudited Interim Financial Information and Audited Financial Statements prepared in accordance with IFRS. See “Presentation of Financial and Certain Other Information”. Investors should be aware that the Bank has not published any financial statements as at any date, or for any period after, 30 September 2008. The effect of local and global market conditions on the Bank as well as the effect of those conditions on the Bank's customers and counterparties may mean that actual results of operations and financial condition of the Bank as at and for the financial year ended 31 December 2008 or as at any date or for any period thereafter may be materially and adversely different from the results presented as at and for the nine months ended 30 September 2008; accordingly, investors should not assume that the results presented as at and for for the nine months ended 30 September 2008 are an accurate indication of the actual results as at and for for the financial year ended 31 December 2008 or as at any date or for any period thereafter. See “—Recent Developments”. The Bank expects to publish its financial statements as at and for for the year ended 31 December 2008 on or about 20 April 2009 and if they are published prior to the admission to trading on the LSE of the New GDRs, the Bank will publish a supplement to this Prospectus. Investors who choose to exercise their rights to subscribe for New GDRs or to acquire GDRs prior to the publication of such a supplement should do so with the knowledge that when such financial information or supplement is published there may be a material and adverse change in the market price of the Bank’s Shares and GDRs. Accordingly, investors subscribing for New GDRs will be required to certify that if they do so prior to the publication of such a supplement, they are subscribing on the basis of the information then available and that they are aware of the consequences thereof. Recent Developments Recent market and economic conditions have been unprecedented and challenging with tighter credit conditions and slower growth. Continued concerns about the health of the financial sector in many countries, possible inflation, energy costs, geopolitical issues and the availability and cost of credit have contributed to increased market volatility and diminished expectations for various economies. The Bank, in common with all banks in Kazakhstan, has also been affected by the ongoing crisis. As such, the Bank expects its results for the financial year ended 31 December 2008 to be negatively impacted by the continuing global crisis. In particular, the Bank believes that worsened macroeconomic conditions in the second half of 2008 and so far in 2009, as well as declining commodity prices, have had an adverse effect on its asset quality, which will result in an increase in the Bank’s effective provisioning rate. Further, on 4 February 2009, the Tenge devalued by 18 per cent. This devaluation was due in part to recent declines in Kazakhstan's balance of payments and foreign exchange reserves as a result of falls in commodity prices, in particular oil and gas, in the international markets. This exacerbated

the difficulties already facing the local banking sector resulting in substantial government support for the sector. The Bank is in the process of evaluating the impact of the devaluation on its loan portfolio but expects that there will be deterioration in its quality. The extent of such deterioration and the impact of it on the Bank’s results of operations and financial condition cannot be determined at this time but is expected to be adverse. See “Risk Factors—The Bank’s results as at and for the year ended 31 December 2008 may have a material and adverse impact on the market price of the Bank’s Shares and GDRs”. In addition, concern about the stability of the banking sector in Kazakhstan has led to material reductions in liquidity as wholesale funding has become more expensive and less available. In part, because of this and due to the deteroration in asset quality, in the first quarter of 2009 Kazakhstan’s sovereign wealth fund Samruk-Kazyna provided substantial financial support to the banking sector. For example, in January-February 2009, Samruk-Kazyna provided support amounting to KZT476 billion to certain of the Kazakh banks. The support took a number of forms, including direct equity investments as well as the placing of deposits with the banks. With respect to the Bank, Samruk-Kazyna placed a term deposit in the amount of KZT120 billion, of which 36 billion will be used by Samruk-Kazyna to purchase Shares in the Rump Offering and the remaining KZT84 billion took the form of a term deposit provided to provide refinancing to the Bank’s corporate customers. Samruk-Kazyna has also provided an additional KZT120 billion by way of deposits in Kazakh banks to provide SME lending and refinancing and an additional KZT120 billion by way of deposits to support the refinancing of retail mortgages, of which the Bank received deposits of KZT24 billion and KZT16 billion, respectively. Samruk-Kazyna has committed to provide an additional KZT 240 billion for finance construction projects and new mortgages, KZT 120 billion for lending to infrastructure projects and KZT 4 billion for miscellaneous financing. However, as of the date of this Prospectus none of these additional funds have been disbursed. One of the reasons for Samruk-Kazyna’s funding of mortgage refinancing has been the devaluation of the Tenge. Many retail mortgages in Kazakhstan were denominated in U.S. dollars and, as a result of the devaluation, in Tenge terms they have become much more expensive to service. The banks are using the new funds to refinance their mortgage loan portfolios at reduced interest rates. In February 2009, Standard and Poor’s, Fitch Ratings and Moody’s Investor Services downgraded the rating of the Bank to BB-, BB- and Ba3, respectively. According to statements released by the rating agencies, this downgrade reflects the increasingly negative impact of the global economic crisis on the Kazakh economy and its banking sector. Further, on 24 February 2009, Moody’s Investor Services downgraded the rating assigned to Notes issued by Kazkommerts DPR Company, an orphan special purpose vehicle established by the Bank for the sale of its diversified payment rights (“KKB DPR Programme”). The downgrade was the result of a nearly 30 per cent. decline in cash flows (calculated on the basis of the previous 12 month quarterly average) flowing into the KKB DPR Programme. This significant drop has been caused by, amongst others, adverse economic conditions in developed countries that import significant amounts of Kazakh products (effectively decreasing the aggregate level of demand for Kazakh exports), falls in commodity prices and the changing global economic circumstances. Given the current state of the global economy, it is unclear whether the drop in the volume of DPRs will continue or whether the volume of DPRs will increase. Under the terms of each series of Notes, if Moody's has assigned a rating of "Ba3" or lower to the domestic currency deposit rating of KKB, the Required Amount (the amount required to be captured and collected in the collection account before excess flows of diversified payment rights can pass on to KKB) for each series must be increased significantly.

With respect to the Bank’s liquidity position generally, since 30 September 2008 the Bank has repaid approximately KZT 30 billion in outstanding foreign public debt obligations. In addition, the Bank recently announced a buy-back of up to U.S.$175 million in notes issued by Kazkommerts DPR Company pursuant to the KKB DPR Programme. The Bank anticipates a total of U.S.$1.8 billion in scheduled payments of principal and interest in 2009 and believes it has sufficient liquidity available to meet these demands. Critical Accounting Policies The Bank’s results of operations and financial condition presented in the Financial Statements, notes to the Financial Statements and selected statistical and other information appearing elsewhere within this Prospectus are, to a large degree, dependent upon the Bank’s accounting policies. The Bank’s significant accounting policies are described in Note 3 to the Financial Statements. Analysis of financial results of operations for the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007 Net profit attributable to equity holders of the parent The following table presents the main components of the Bank’s net profit attributable to equity holders of the parent for the nine months ended 30 September 2008 and 30 September 2007:

For nine months ended 30 September 2008 2007 Variation % (KZT millions) (unaudited) Interest income ...... 289,048 224,657 28.7 Interest expense...... (138,279) (122,511) 12.9 Net interest income before provision for impairment losses on interest bearing assets ...... 150,769 102,146 47.6 Provisions for impairment losses on interest bearing assets...... (56,660) (49,717) 14.0 Net interest income...... 94,109 52,429 79.5 Net non-interest income...... 6,106 24,989 (75.6) Operating income ...... 100,215 77,418 29.4 (26,198) (20,747) 26.3 Operating expenses ...... Provision for impairment losses on other transactions...... (957) (992) (3.5) Provisions for guarantees and other off-balance sheet contingencies...... (22) (1,255) (98.2) Share of results of associates ...... (1,101) 726 (251.7) Profit before income tax ...... 71,937 55,150 30.4 Income tax expense ...... (22,042) (12,373) 78.1 Net profit ...... 49,895 42,777 16.6 Attributable to: Equity holders of the parent ...... 49,490 40,836 21.2 Minority interest...... 405 1,941 (79.1) Combined key ratios Return on average shareholders’ equity...... 20.0% 19.5% — Return on average assets ...... 2.3% 2.2% — Net interest margin...... 7.9% 5.9% —

Profit before income tax for the nine months ended 30 September 2008 increased by 30.4 per cent. to KZT 71.9 billion from KZT 55.2 billion in the nine months ended 30 September 2007. Income tax expense for first nine months of 2008 was KZT 22 billion, or 78.1 per cent. higher compared to the same period in 2007. The Bank’s net profit increased by 16.6 per cent. in the first nine months of 2008 to KZT 49.9 billion, compared to KZT 42.8 billion in the same period of 2007.

Interest income The following table sets out details of the Bank’s interest income for the nine months ended 30 September 2008 and 30 September 2007:

For nine months ended 30 September Variation 2008 2007 % (KZT millions) (unaudited) Interest income on loans to customers and on reverse repurchase agreements...... 274,966 210,107 30.8 Interest on loans and advances to banks and on reverse repurchase agreements...... 8,981 7,122 26.1 Interest on securities ...... 4,323 6,717 (35.6) Total interest income ...... 289,048 224,657 28.7 During the nine months ended 30 September 2008, total interest income increased by 28.7 per cent. or KZT 64.4 billion to KZT 289.0 billion. The growth was primarily a result of the 8.9 per cent. growth in the Bank’s average interest earning assets as well as an increase in yield on interest earning assets from 12.9 per cent. in nine months of 2007 to 15.2 per cent. in nine months of 2008. This growth was partially offset by a decline in interest income from investment securities. Average interest earning assets for the period ended 30 September 2008 were KZT 2,532 billion compared to KZT 2,325 billion in the same period of 2007. Interest earned on loans to customers was the primary component of interest income growth, its share in interest income increased to 95.1 per cent. in the first nine months of 2008 compared to 93.5 per cent. in the first nine months of 2007. Interest income on loans to customers increased by 30.8 per cent. in nine months of 2008 compared to nine months of 2007. The major reasons were the growth in average volumes of gross loans to customers by 12.4 per cent. to KZT 2,383 billion in nine months of 2008 from KZT 2,121 billion in nine months of 2007 as well as increase in average interest rates on loans to customers to 16 per cent. compared to 13.5 per cent. for nine months of 2007. Loans to customers constituted 87 per cent. of average interest-bearing assets during the first nine months of 2008, remaining unchanged from the same period in 2007. The following table sets out the average annual yield on loans to customers for the nine months ended 30 September 2008 and 30 September 2007:

2008 2007 (%) KZT loans to customers...... 15.4 13.9 to corporates...... 15.1 13.3 to individuals ...... 17.2 16.8 Foreign currency loans to customers ...... 15.4 13.0 to corporates...... 16.0 12.8 to individuals ...... 13.0 13.7 Total gross loans to customers...... 15.4 13.3 Total loans to customers after provisions on impairment losses...... 16.6 13.8 Interest income from loans and advances to banks including reverse repurchase agreements increased 26.1 per cent. to KZT 9.0 billion for the nine months ended 30 September 2008 compared to KZT 7.1 billion for the same period in 2007. The increase was due to an increase in the average balance of loans and advances to banks, slightly offset by a decrease in the average yield earned on such loans and advances.

The following table sets out the average annual yield on the loans and advances to banks for the nine months ended 30 September 2008 and 30 September 2007:

2008 2007 (%) KZT loans and advances to banks...... 6.8 5.8 Foreign currency loans and advances to banks ...... 5.2 5.5 Total loans and advances to banks ...... 5.4 5.6 Total loans and advances to banks after provisions on impairment losses ...... 5.4 5.7 Interest income on debt securities decreased by 35.6 per cent. to KZT 4.3 billion for the first nine months of 2008 from KZT 6.7 billion for the same period in 2007. The decrease reflected a KZT 34.7 billion, or 32.2 per cent., decrease in the average volume of marketable securities held from KZT 107.9 billion in first nine months of 2007 to KZT 73.2 billion in the first nine months of 2008. Also contributing to the decrease was a decline in the average yield earned on debt securities. The following table sets out the average annual yield on debt securities for the nine months ended 30 September 2008 and 30 September 2007:

2008 2007 (%) KZT debt securities...... 9.3 6.0 Foreign currency debt securities ...... 6.5 8.7 Total debt securities...... 7.9 8.3 Interest expense The following table sets out details of the Bank’s interest expense for the nine months ended 30 September 2008 and 30 September 2007:

For the period ended 30 September Variation 2008 2007 % (KZT millions) (unaudited) Interest on debt securities issued...... 53,469 47,600 12.3 Interest expense on customer accounts and repurchase agreements ...... 53,538 37,429 43.0 Interest expense on loans and advances from banks and repurchase agreements...... 24,399 30,734 (20.6) Dividends...... 451 462 (2.4) Interest expense on securitization program...... 4,887 5,529 (11.6) Other interest expense...... 1,535 757 102.7 Total interest expense ...... 138,279 122,511 12.9 Interest expense increased by 12.9 per cent., or KZT 15.8 billion, for the nine months ended 30 September 2008 compared to the same period in 2007. The increase was largely a result of an 8.7 per cent. growth in average interest bearing liabilities for the nine months ended 30 September 2008 compared to the same period in 2007 as well as an increase in the average cost of interest- bearing liabilities from 7.2 per cent. in the first nine months of 2007 to 7.5 per cent. in the same period of 2008. The increase in interest expense was largely a result of the increase in interest expense on customer accounts and repurchase agreements. Interest expense on customer accounts and repurchase agreements increased 43.0 per cent. to KZT 53.5 billion for the nine months ended 30 September 2008 compared to KZT 37.4 billion for the same period in 2007. This increase was due to an increase in both the average balance of customer accounts and an increase in the average yield paid on such accounts. Interest expense on securities issued constituted 38.7 per cent. of total interest expense in the first nine months of 2008. Interest expense on securities issued increased by 12.3 per cent., or KZT 5.9 billion, during the first nine months of 2008 compared to the same period in 2007. The increase resulted from issue of U.S.$125 million Eurobonds in December 2007 maturing in 2012 and the issue of three-year

U.S.$230 million Eurobonds in May 2008, as well as due to the changes in foreign currency exchange rates. The following table sets out the average cost of customer accounts for the nine months ended 30 September 2008 and 30 September 2007:

For the nine months ended 30 September 2008 2007 (%, unaudited) Customer deposits...... 7.5 6.5 KZT deposits ...... 7.4 6.6 Time deposits (corporate) ...... 9.1 7.3 Time deposits (retail)...... 11.0 10.8 Demand deposits (corporate) ...... 1.4 0.5 Demand deposits (retail)...... — — Foreign currency deposits ...... 7.5 6.4 Time deposits (corporate) ...... 7.8 10.8 Time deposits (retail)...... 9.8 7.1 Demand deposits (corporate) ...... 0.5 0.2 Demand deposits (retail)...... — — Interest expense on loans and advances from banks decreased by 20.6 per cent. to KZT 24.4 billion for the first nine months of 2008 from KZT 30.7 billion for nine months of 2007. The decrease was attributable to the decrease in the average borrowings from banks and financial institutions, which decreased by 25 per cent. for the first nine months of 2008 compared to the same period of 2007. The following table sets out the average cost of loans and advances from banks for the nine months ended 30 September 2008 and 30 September 2007:

For the nine months ended 30 September 2008 2007 (%, unaudited) Correspondent accounts...... 0.04 0.12 KZT ...... 0.21 0.3 Foreign currency...... — 0.00 Short-term interbank loans...... 6.6 6.8 KZT ...... 7.0 7.0 Foreign currency...... 6.6 6.8 Long-term loans from banks...... 7.2 6.5 KZT ...... 8.3 5.5 Foreign currency...... 7.2 6.5 Total loans and advances from banks ...... 6.4 6.3

Net interest income The following table sets out details of the Bank’s net interest income in for nine months ended 30 September 2008 and 30 September 2007:

Period ended 30 September Variation 2008 2007 % (KZT millions) (unaudited) Interest income ...... 289,048 224,657 28.7 Interest expense ...... (138,279) (122,511) 12.9 Net interest income before provisions for impairment losses on interest bearing assets...... 150,769 102,146 47.6 Provisions for impairment losses ...... (56,660) (49,717) 14.0 Net interest income ...... 94,109 52,429 79.5

Net interest income before provisions for impairment losses increased by 47.6 per cent. to KZT 150.8 billion in the first nine months of 2008 from KZT 102.1 billion during the same period of 2007. The increase resulted primarily from the increased yield on average interest earning assets, which increased from 12.9 per cent. in the first nine months of 2007 to 15.2 per cent. in the same period of 2008. In addition, the yield on average interest bearing liabilities remained relatively unchanged, from 7.3 per cent. in the first nine months of 2007 to 7.6 per cent. in the first nine months of 2008. Net interest margin (defined below) for the first nine months of 2008 was 7.9 per cent. compared to 5.9 per cent. in nine months of 2007. The following table sets out selected financial indicators of net income for the periods ended 30 September 2008 and 30 September 2007.

For the nine months ended 30 September 2008 2007 Variation (KZT millions) (unaudited) (%) Average interest bearing assets...... 2,532,420 2,324,700 8.9 Interest income ...... 289,048 224,657 28.6 Net interest income before provisions for impairment losses on interest bearing assets...... 150,769 102,146 47.6 Yield(1), ...... 15.2% 12.9% Net interest margin(2), ...... 7.9% 5.9% Spread(3), ...... 7.7% 5.6% ______(1) Interest income divided by average interest bearing assets. (2) Refer to “Selected Consolidated Financial Data” included elsewhere in this Prospectus for the definition of net interest margin. (3) Interests rate on a average interest bearing assets minus interest rates on average interest bearing liabilities. Provisions for impairment losses In the first nine months of 2008 the Bank created additional provisions for impairment losses on interest bearing assets to a total amount of KZT 56.7 billion, compared to KZT 49.7 billion in the first nine months of 2007. The following table presents data on the Bank’s provisions for impairment losses in the nine months ended 30 September 2008 and 20 September 2007:

For the nine months ended 30 September 2008 2007 Variation (KZT millions) (unaudited) (%) Provisions for impairment loss on loans to customers ...... 57,636 49,628 16.1 Provisions for/(recoveries on) impairment losses on loans and advances to banks...... (976) 89 (1,196.6) Total provisions for impairment losses ...... 56,660 49,717 14.0 Expenses on provisions for impairment losses on loans to customers for the first nine months of 2008 were KZT 57.6 billion, compared to KZT 49.6 billion in the first nine months of 2007, an increase of 16.1 per cent. Because the Bank is expecting further deterioration of its loan portfolio, the Bank continued to make general provisions, which resulted in an increase in the effective rate of provisions on loans to customers to 8.0 per cent. as at 30 September 2008 compared to 4.7 per cent. as at 30 September 2007. The average volume of provisions for impairment losses on loans to customers in the first nine months of 2008 was KZT 170.6 billion, compared to KZT 90.2 billion in the same period of 2007. The increase was primarily due to an increase in the provisioning rate from 4.7 per cent. to 8.0 per cent.

Net non-interest income Net non interest income decreased by 75.6 per cent. to KZT 6.1 billion for the first nine months ended 30 September 2008 from KZT 25 billion for nine months ended 30 September 2007. The primary reason for the decrease in net non interest income was a loss on financial assets held for trading during the nine months ended 30 September 2008, compared to a gain experienced during the same period of 2007. The loss from financial assets held for trading resulted from unrealised losses from the revaluation of currency and interest rate swaps used to hedge the liabilities denominated in non- functional currencies (such as Japanese Yen, Euro, Pound and Singaporean dollar) and liabilities with floating interest rates. Partially offsetting the loss was a gain on foreign exchange and precious metal operations during the first nine months of 2008, compared to a loss during the same period of 2007. The gain on foreign exchange is a result of the revaluation of assets and liabilities denominated in non-functional currencies. Fee and commission income decreased by 11 per cent. in the nine months ended 30 September 2008 compared to the same period in 2007. The decrease was primarily the result of a 30.5 per cent. reduction in cash due to the reduced volumes of new loans. However, the structure of fee and commission income for nine months of 2008 did not change, cash and documentary operations remaining the major contributors with 60.7 per cent. share in fees and commission income as at 30 September 2008 compared to 63.5 per cent. as at 30 September 2007. Partially offsetting the decline in cash was an increase in income from operations relating to plastic cards, which increased by 23 per cent. for the first nine months of 2008 compared to the same period of 2007. Fee and commission expense increased by 45.5 per cent. to KZT 2.6 billion for nine months of 2008 from KZT 1.8 billion for nine months of 2007. The increase in fee and commission expense was mainly attributable to increased fees and commissions on plastic cards services, which increased by 22 per cent. in the nine months ended 30 September 2008 compared to the same period of 2007. Other non-interest income, comprising of net realised gain on investments available-for-sale, dividends received, and other income increased by 54.2 per cent. to KZT 7.9 billion for nine months of 2008 compared to KZT 5.1 billion for nine months of 2007. A majority of this increase related to KZT 3.1 billion gain from purchase of subsidiaries. Operating expenses

For the nine months ended September Variation 2008 2007 % (KZT million) (unaudited) Staff costs ...... 13,057 10,777 21.2 Depreciation and amortization...... 2,454 1,857 32.1 Lease...... 2,681 1,539 74.2 Payments to the Individuals’ Deposit Insurance Fund...... 1,280 1,287 (0.5) Advertising expenses ...... 1,079 876 23.2 Property and equipment maintenance ...... 1,678 894 87.7 Value added tax ...... 581 608 (4.4) Communications...... 579 494 17.2 Business trip expenses ...... 312 377 (17.2) Taxes, other than income tax ...... 515 233 121.0 Bank card services ...... 378 200 89.0 Consulting and audit services ...... 265 279 (5.0) Vehicle maintenance...... 219 204 7.4 Security services ...... 325 225 44.4 Other expenses...... 795 897 (11.5) Total operating expenses...... 26,198 20,747 Operating expenses / Net interest income before provisions on impairment losses 17.4% 20.3% Operating expenses / Average asset 1.2% 1.1%

Operating expenses increased by 26 per cent. to KZT 26.2 billion during the nine months ended 30 September 2008 compared to KZT 20.7 billion nine months of 2007. Staff costs constituted 50 per cent. of operating expenses in both periods. Staff costs increased by 21 per cent. to KZT 13,057 million in the nine months ended 30 September 2008 from KZT 10,777 million or 52 per cent. for the first nine months of 2007. Staff costs increased despite a decrease in the number of employees of the Group, which decreased by 3 per cent. over the period to 7,511 as at 30 September 2008 from 7,717 as at 31 December 2007. This is primarily due to a large number of employee departures in the third quarter of 2008, which resulted in a decrease in total number of staff as at 30 September 2008 but overall during the period there was an increase in costs. Depreciation and amortisation costs increased by 32 per cent. to KZT 2,454 billion as at 30 September 2008 from KZT 1,857 billion as at 30 September 2007. The increase was due to the Bank’s investment in its customer service network throughout the nine months ended 30 September 2008. As a result, tangible and intangible assets as at 30 September 2008 increased by 18 per cent compared to 30 September 2007. Depreciation and amortization costs was 9 per cent of operating expenses compared to 10 per cent in 2007. Depreciation and amortization costs of the Bank as a percentage of consolidates, depreciation and amortization costs during the period decreased from 86 per cent to 80 per cent due to increased fixed assets of subsidiaries. Lease expenses increased by 74 per cent. to KZT 2,681 billion from KZT 1,539 billion due to the expansion of the Bank’s client service network and new offices. As a percentage of total operating expenses, lease expenses increased from 7 per cent. in 2007 to 10 per cent. as at 30 September 2008. Taxation The statutory corporate income tax rate in Kazakhstan was 30 per cent. as at 30 September 2008. Tax expense increased 78.1 per cent. To KZT 22,042 million for the nine months ended 30 September 2008 compared to KZT 12,373 million for the same period in the previous year. The effective tax rate for the first nine months of 2008 was 30.6 per cent. compared to 22.4 per cent. for the same period of 2007. On 20 December 2008 the corporate income tax rate in Kazakhstan changed from 30 per cent. to 20 per cent.

Results of Operations for the Years ended 31 December 2007, 2006 and 2005 Net profit attributable to equity holders of the parent The following table presents the main components of the Bank’s net profit attributable to equity holders of the parent for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Interest income ...... 316,458 147,250 86,407 114.9 70.4 Interest expense ...... (169,528) (83,115) (45,855) 104.0 81.3 Net interest income before provision for impairment losses on interest bearing assets ...... 146,930 64,135 40,552 129.1 58.2 Provisions for impairment losses on interest bearing assets ...... (69,956) (32,887) (17,833) 112.7 84.4 Net interest income ...... 76,974 31,248 22,719 146.3 37.5 Net non-interest income...... 30,972 28,967 14,567 6.9 98.9 Operating income...... 107,946 60,215 37,286 79.3 61.5 Operating expenses...... (31,200) (19,053) (13,368) 63.8 42.5 Provision for impairment losses on other transactions...... (1,238) (383) (880) 223.3 (56.5) Provisions for guarantees and other off-balance sheet contingencies .... (3,186) (1,548) (1,059) 105.8 46.2 Share of results of associates ...... 1,333 1,130 174 18.0 549 Profit before income tax ...... 73,655 40,361 22,153 82.5 82.2 Income tax expense...... (15,904) (12,600) (2,338) 26.2 438 Net profit ...... 57,751 27,761 19,815 108.0 40.1 Attributable to: Common equity holders of the parent 46,468 20,626 14,927 125.3 38.1 Preferred equity holders of the parent 9,495 5,359 3,465 77.2 54.6 Minority interest ...... 1,788 1,776 1,423 0.7 24.8 Combined key ratios Return on average shareholders’ equity...... 19.5% 20.6% 26.1% — — Return on average assets...... 2.1% 2.0% 2.5% — — Net interest margin(1) ...... 6.2% 5.1% 5.5% — — ______(1) See “Selected Consolidated Financial Data” for the definition of “net interest margin”. Profit before income tax for the year ended 31 December 2007 increased by 82.5 per cent. to KZT 73,655 million from KZT 40,361 million for the year ended 31 December 2006, which in turn represented a 82.2 per cent. increase from KZT 22,153 million for the year ended 31 December 2005. The increase is as a result of the factors described below.

Interest income The following table sets out details of the Bank’s interest income for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Interest income on loans to customers and on reverse repurchase agreements...... 297,608 132,830 76,256 124.1 69.5 – loans to customers ...... 295,179 131,479 75,648 124.5 69.1 –reverse repurchase agreements ... 2,429 1,351 608 79.8 124.8 Interest on loans and advances to banks and on reverse repurchase agreements...... 9,312 6,994 3,961 33.1 76.3 –loans and advances to banks ...... 8,825 6,532 3,923 35.1 66.5 –reverse repurchase agreements ... 487 462 38 5.4 926 Interest on debt securities...... 8,596 7,183 4,087 19.7 75.7 Amortisation of discount on loans .... 942 243 2,103 287.7 — Total interest income ...... 316,458 147,250 86,407 114.9 70.4 During the year ended 31 December 2007, total interest income increased by 114.9 per cent. to KZT 316.5 billion from KZT 147.3 billion for the year ended 31 December 2006 which in turn represented a 70.4 per cent. increase over the year ended 31 December 2005 (KZT 86.4 billion). This growth is primarily a result of the 91.6 per cent. (2007) and 70.4 per cent. (2006) growth in the Bank’s average interest earning assets, and also of increased profitability of these assets to 13.3 per cent. (2007) from 11.8 per cent. (2006) and 11.7 per cent. (2005). Average interest earning assets in 2007 amounted to KZT 2,387 billion, compared to KZT 1,246 billion in 2006 and KZT 731 billion in 2005. The primary component of interest income growth in 2007 and 2006 was from loans to customers, their share in interest income increased from 90 per cent. in 2005 to 90.2 per cent. in 2006 and 94 per cent. in 2007. Interest on loans to customers in 2007 increased by 2.2 times as a result of increase in average gross customer loan portfolio to KZT 2,204 billion from KZT 1,029 billion in 2006 and increase in average interest rates on loans to 13.68 per cent. from 13.03 per cent. in 2006. The following table sets out the average annual yield on the Bank’s interest earning assets in 2007, 2006 and 2005:

For the year ended 31 December 2007 2006 2005 (%) KZT loans to customers...... 13.9 12.8 13.4 to corporates ...... 13.6 12.4 13.0 to individuals ...... 15.5 16.9 17.7 Foreign currency loans to customers ...... 13.2 12.8 13.3 to corporates ...... 13.2 12.6 13.0 to individuals ...... 13.3 13.5 14.3 Total gross loans to customers ...... 13.4 12.8 13.3 Total net loans to customers...... 14.1 13.4 14.1 Interest income from loans and advances to banks including reverse repurchase agreements increased to KZT 9.3 billion for the year ended 31 December 2007, compared to KZT 7 billion for the year ended 31 December 2006, and KZT 3.9 billion for the year ended 31 December 2005. The increase in interest income on loans and advances to banks was primarily due to an increase in average interest rates from 4.1 per cent. in 2005 to 6.5 per cent. in 2006 and 9.6 per cent. in 2007.

The following table sets out the average annual yield on the Bank’s loans to banks in 2007, 2006 and 2005:

For the year ended 31 December 2007 2006 2005 (%) KZT loans to banks...... 5.13 4.23 3.98 Foreign currency loans to banks ...... 10.95 7.10 4.12 Total loans to banks...... 9.58 6.48 4.11 Total loans and advances to banks, net of provisions for impairment losses ...... 9.65 6.52 4.13 Interest income on debt securities increased to KZT 8.6 billion for the year ended 31 December 2007 from KZT 7.2 billion for the year ended 31 December 2006 and KZT 3.1 billion the year ended 31 December 2005. The increases were due to the increase in the average volume of marketable securities from KZT 80 billion in 2005 to KZT 125.3 billion in 2006 and KZT 139.4 billion in 2007 and also due to increase in the average rate of interest earned on these securities to 6.2 per cent. in 2007 from 5.7 per cent. in 2006, notwithstanding a fall in the average rate of interest earned on these securities in 2006 from 5.9 per cent. in 2005.

For the year ended 31 December 2007 2006 2005 (%) KZT securities ...... 7.2 6.4 4.1 Foreign currency securities...... 5.7 5.6 7.4 Total securities...... 6.2 5.7 5.9 Interest expense The following table sets out details of the Bank’s interest expense for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Interest on debt securities issued...... 64,111 40,263 22,136 59.2 81.9 Interest expense on customer accounts...... and repurchase agreements ...... 51,542 18,157 11,689 183.9 55.3 – customer accounts...... 51,475 18,059 11,649 185.0 55.0 – repurchase agreements...... 67 98 40 -31.6 145.0 Interest expense on loans and advances from banks and repurchase agreements...... 43,789 19,609 10,572 123.3 85.5 – loans and advances from banks...... 40,165 17,836 10,475 125.2 70.3 – repurchase agreements...... 3,624 1,773 97 104.4 172 Dividends on preferred shares ...... 604 636 669 (5.0) (4.9) Interest expense on securitization program ...... 7,947 3,744 — 112.3 — Other interest expense...... 1,535 706 789 117.4 (10.5) Total interest expense ...... 169,528 83,115 45,855 104.0 81.3 Interest expense increased by 104 per cent., or KZT 86.4 billion, to KZT 169.5 billion for the year ended 31 December 2007 from KZT 83.1 billion for the year ended 31 December 2006, after having increased by 81.3 per cent. for the year ended 31 December 2006 from KZT 45.9 billion for the year ended 31 December 2005. The increase in 2007 is largely a result of a 91.2 per cent. growth in average interest bearing liabilities and increase in cost of interest-bearing liabilities from 6.96 per cent. for the year ended 31 December 2006 to 7.4 per cent. for the year ended 31 December 2007. In 2006, both the balance of interest-bearing liabilities and the cost of such liabilities increased when compared to 2005.

Issued debt securities continue to hold the largest share in the structure of the Bank’s average interest bearing liabilities. Their share decreased to 31.4 per cent. in 2007 from 37.9 per cent. in 2006. The decrease was a result of growth of other components of interest bearing liabilities. The share of average customer accounts in 2007 increased to 33.2 per cent. from 29.1 per cent. in 2006. Share of banks deposits increased to 30.1 per cent. from 28.1 per cent. The structure of interest expenses changed in accordance with structure of average interest bearing liabilities. Share of interest expenses on issued debt securities in total interest bearing liabilities equalled to 37.8 per cent. in 2007, 48.4 per cent. in 2006 and 52 per cent. in 2005. Share of interest expenses on customer accounts equalled to 30.4 per cent. in 2007, 21.8 per cent. in 2006 and 22.7 per cent. in 2005. Share of interest expenses on banks accounts equalled to 25.8 per cent. in 2007, 23.6 per cent. in 2006 and 18.7 per cent. in 2005. Interest expense on securities issued increased 59.2 per cent. or KZT 23.8 billion in 2007, after increasing by KZT 14.8 billion in 2206. The share of interest expense on securities issued comprised 37.8 per cent. of total interest expenses. The increases in each year were partly as a result of the funds raised internationally by the Bank in 2006 and in 2007, namely: GBP350 million 7.625 per cent. notes issued in February 2007, EUR750 million 6.875 per cent. notes issued in February 2007, U.S.$250 million zero coupon notes issued in June 2007, JPY 25 billion 2.212 per cent. notes issued in July 2007, SGD100 million 4.25 per cent. notes issued in February 2006, EUR300 million 5.125 per cent. notes issued in March 2006, U.S.$200 million 8.625 per cent. subordinated notes issued in July 2006, U.S.$500 million 7.5 per cent. notes issued in November 2006. As a result, the average volume of securities issued grew 58.1 per cent. to KZT 721.4 billion for 2007 from KZT 456.4 billion in 2006 and increased 88.3 per cent. in 2006 from KZT 242.4 billion in 2005. Interest expense on customer accounts increased by 183.9 per cent. to KZT 51.5 billion for the year ended 31 December 2007 compared to KZT 18.1 billion for the year ended 31 December 2006 and KZT 10.4 billion for the year ended 31 December 2005. These increases were due to a 2.2 times and 50.3 per cent. growth in customer accounts during 2007 and 2006. The average cost of customer deposits increased from 4.5 per cent. in 2005 to 5.2 per cent. in 2006 and 6.7 per cent. in 2007. The following table sets out the average cost of the Bank’s customer accounts for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December 2007 2006 2005 (%) Customer deposits...... 6.74 5.20 4.46 KZT deposits...... 6.96 5.45 4.82 Term deposits (corporate)...... 8.15 7.30 7.08 Term deposits (individuals) ...... 10.89 9.20 8.89 Demand deposits (corporate) ...... 0.54 0.17 0.42 Demand deposits (individuals) ...... 0.00 0.00 0.00 Foreign currency deposits ...... 6.09 4.65 4.16 Term deposits (corporate)...... 8.47 8.56 5.06 Term deposits (individuals) ...... 7.73 6.29 5.72 Demand deposits (corporate) ...... 0.18 0.10 0.30 Demand deposits (individuals) ...... 0.02 0.01 0.00

Interest expense on loans and advances from banks increased by 2.2 times to KZT 43.8 billion for the year ended 31 December 2007, from KZT 17.8 billion for the year ended 31 December 2006 and increased 100.1 per cent. for the year ended 31 December 2006 from KZT 8.5 billion for the year ended 31 December 2005. These increases were attributable to an increase in the average volume of borrowing from banks and financial institutions by 2.1 times in 2007 and 81.1 per cent. in 2006 and were also attributable to increases in average interest rates on inter bank borrowings to 6.32 per cent. in 2007 from 5.95 per cent. in 2006 and 5.71 in 2005. The following table sets out the average cost of loans from banks for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December 2007 2006 2005 (%) Loro accounts...... 0.1 0.1 0.3 KZT ...... 0.3 0.2 0.4 Foreign currency...... 0.0 0.1 0.1 Short term inter-bank borrowings ...... 6.5 6.0 4.2 KZT ...... 7.2 4.4 2.5 Foreign currency...... 6.5 6.0 4.5 Long term inter-bank borrowings...... 6.8 6.1 6.0 KZT ...... 5.5 5.9 6.0 Foreign currency...... 6.8 6.1 6.0 Interest expense on the Bank’s securitisation programme grew by 112.3 per cent. due to a placement of U.S.$500 million principal amount of securitised bonds in April 2007. Provisions for impairment losses In 2007 the Bank created additional provisions on possible impairment loss on interest-bearing assets in amount of KZT 70 billion (increase in charges by 112.7 per cent.) compared to KZT 32.9 billion in 2006 (increased in charges by 84.4 per cent.), and KZT 17.8 billion in 2005. The following table presents data on the Bank’s provisions for impairment losses in the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Provisions for impairment loss on loans to customers ...... 69,541 33,277 17,121 108.7 94.4 Provisions related to purchase on East Capital IC ...... 46 — — 100 — Provisions for/(recoveries on) impairment losses on loans and advances to banks...... 459 (390) 712 217.7 (154.8) Total provisions for impairment losses ...... 69,954 32,887 17,833 112.7 84.4 Provisions for impairment losses on loans to customers in 2007 increased KZT 69.5 billion from KZT 33.3 billion in 2006, and increased by 94.4 per cent. in 2006 from KZT 17.12 billion in 2005. The growth in provisions for impairment losses on loans to customers of 108.7 per cent. was mainly attributable to a 43 per cent. increase in the average gross loan portfolio by KZT 753.9 billion for the year ended 31 December 2007 compared to 2006. At the same time, in 2006 the average gross loan portfolio increased by 2.2 times compared to 2005. Based on the conservative provisioning policy of the Bank, 1 per cent. general provisions were created in 2007, resulting in increased effective rate of provisions on loans to customers to 5.6 per cent. in 2007 from 4.2 per cent. for 2007, while it was 5.4 per cent. for 2005. Average volume of provisions on impairment losses on loans to customers in 2007 was KZT 99.2 billion compared to KZT 50.2 billion in 2006 and KZT 32.8 billion in 2005. The increase

in the average provisions by 97.6 per cent. or KZT 49 billion in 2007 resulted from increased average performing loans by KZT 1.153 billion or 2.1 times. The share of average non-performing loans in total loans in 2007 was at the level of 2006 or 0.02 per cent. compared to 0.02 per cent. Provisions for impairment losses on loans to banks in 2007 were KZT 459 billion. Recoveries on impairment losses on loans to banks in 2006 were KZT 390 million, compared to provisions for impairment losses on loans to banks of KZT 712 million in 2005, which was due to deterioration in loan portfolio quality. The increase in 2007 was due to a substantial increase in gross loans and advances to banks as at 31 December 2007 by KZT 16 billion compared to 31 December 2006. Net interest income The following table sets out details of the Bank’s net interest income in the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Interest income ...... 316,458 147,250 86,407 114.9 70.4 Interest expense ...... (169,528) (83,115) (45,855) 104.0 81.3 Net interest income before provision for impairment losses on interest bearing assets ...... 146,930 64,135 40,552 129.1 58.2 Provisions for impairment losses on interest bearing assets ...... (69,956) (32,887) (17,833) 112.7 84.4 Net interest income ...... 76,974 31,248 22,719 146.3 37.5 The higher net income in 2007 compared to 2006 was, mainly, attributable to significant increase in net interest income by 146.3 per cent. Net interest income before provision for impairment losses increased by 129.1 per cent. to KZT 146.9 billion in the year ended 31 December 2007, KZT 64.1 billion in 2006, and KZT 40.5 billion in 2005. The increases resulted primarily from 91.6 per cent. growth in average interest earning assets compared to 91.2 per cent. increase in average interest bearing liabilities. At the same time, growth in average yield on interest bearing assets to 13.26 per cent. in 2007 from 11.82 per cent. in 2006 was 1.44 points higher compared to growth of average yield on interest bearing liabilities by 0.49 points (from 6.87 per cent. in 2006 to 7.36 per cent. in 2007). Net interest margin before provisions on impairment losses on interest bearing assets to average interest bearing assets was 6.2 per cent. in 2007 compared to 5.1 per cent. in 2006 and 5.5 per cent. in 2005. The following table sets out selected financial indicators of net income for the periods ended 31 December 2007, 2006 and 2005.

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions) (%) Average interest bearing assets...... 2,386,933 1,245,882 731,088 91.6 70.4 Interest income ...... 316,458 147.250 86.407 114.9 70.4 Net interest income before provisions for impairment losses on interest bearing assets...... 76,794 31,248 22,719 145.7 37.5 Yield(1), ...... 13.3% 11.8% 11.8% Net interest margin(2), ...... 3.2% 2.5% 3.1% Spread(3), ...... 5.9% 5.0% 5.0% ______(1) Interest income divided by average interest bearing assets. (2) See “Selected Consolidated Financial Data” for the definition of “net interest margin” (3) Interest rate on average interest bearing assets minus interest rate on average interest bearing liabilities.

Net non interest income Net non interest income increased by 6.9 per cent. to KZT 31 billion for the year ended 31 December 2007 from KZT 29 billion for the year ended 31 December 2006 and increased by 98.9 per cent. for the year ended 31 December 2006 from KZT 14.6 billion for the year ended 31 December 2005. The structure of net non-interest income in 2007 changed to some extent compared to 2006 primarily due to increases in net fees and commissions. The share of fee and commission income in net non-interest income decreased to 60.5 per cent. in 2006 from 64.6 per cent. in 2005, while in 2007 the share increased to 76.1 per cent., which was primarily attributable to decreased share of net gains from foreign exchange operations and net gains on financial assets at fair value though profit or loss to 9.8 per cent. in 2007 from 34.3 per cent. in 2006. Fee and commission income increased to KZT 23.6 billion for the year ended 31 December 2007 from KZT 17.5 billion for the year ended 31 December 2006, and from KZT 10.7 billion for the year ended 31 December 2005. The increases were primarily as a result of a growing range of banking products and increase in general volumes of banking operations. In addition, growth in fee and commission income was a result of growing activities of the Bank’s pension fund and asset management company. The structure of fee and commission income compared to 2006 and 2005 did not change significantly. The increases were mainly a result of increased cash operations fees and commissions and documentary operations commission, their share in fee and commission income was 50.9 per cent. in 207, 48.2 per cent. in 2006, and 53.6 per cent. in 2005. In 2007 plastic cards commissions increased by 60.6 per cent. compared to 2006, and by 54.0 per cent. in 2006 compared to 2005. The share of plastic cards commissions in total fee and commission income decreased to 10.8 per cent. in 2006 compared to 11.5 per cent. in 2005, and increased to 12.9 per cent. in 2007 due to further development of card business. Foreign exchange and securities operations commissions increased by 56.2 per cent. in 2007 compared to 2006 due to increased volumes of non-cash operations, while there was an increased by 86.6 per cent. in 2006 compared to 2005. Fee and commission expense increased by 62.3 per cent. to KZT 2.7 billion for the year ended 31 December 2006 from KZT 1.7 billion for the year ended 31 December 2005, and KZT 1.3 billion for the year ended 31 December 2005. The increases in fee and commission expense were mainly attributable to increases in the volume of transactions and the number of cards issued, which increased by 60 per cent. compared to 41.4 per cent. in 2006. In addition, in 2007 29 per cent. of fee and commission expense was represented by insurance claims, which increased by 66 per cent. compared to 2006 due to 1.5 times growth in net amount of insurance claims of Kazkommerts-Policy subsidiary. Other commission expense decreased by 1.4 per cent. to KZT 139 million for the year ended 31 December 2006 from KZT 141 million for the year ended 31 December 2005 and increased to KZT 192 million for the year ended 31 December 2007. The increase in net non-interest income was also attributable to the net gain on financial assets at fair value through profit or loss, which increased significantly to KZT 4,744 million in 2006 from KZT 849 million in 2005, and then to KZT 21,627 million in 2007 primarily due to increase in gains from derivative financial instruments on foreign currency. Net loss/gain on foreign exchange and precious metals operations in the year ended 31 December 2007 decreased by 457.5 per cent. to a net loss of KZT 18.605 billion compared to the net gain of KZT 5.2 billion in 2006. Other non interest income increased by 125.3 per cent. to KZT 7,105 million for the year ended 31 December 2007 compared to KZT 3,154 million for the year ended 31 December 2006 and KZT 2,712 million for the year ended 31 December 2005. After consolidation of the Bank’s financial statements with financial statements of Kazkommerts Policy JSC insurance subsidiary, the insurance premiums received by JSC SK Kazkommerts Policy were main contributor to the other non interest income, despite decreased share from 80.6 per cent. in 2006 to 59.7 per cent. in 2007. Insurance premiums increased to KZT 4.1 billion in 2007 from KZT 2.5 billion in 2006 and KZT 2.4 billion in

2005. The Bank believes that growth in insurance premiums over the period under review was a general reflection of the continuing development of the insurance market in Kazakhstan. Operating expenses The following table sets out the principal components of the Bank’s operating expenses for the years ended 31 December 2007, 2006 and 2005:

For the year ended 31 December Variation 2007 2006 2005 2007/2006 2006/2005 (KZT millions, except percentages) (%) Staff costs ...... 15,980 9,154 6,517 74.6 40.5 Depreciation and amortization...... 2,519 1,833 1,564 37.5 17.2 Lease...... 2,400 1,134 514 111.6 120.6 Insurance of individual deposits ...... 1,742 402 311 333.3 29.3 Advertising expenses ...... 1,519 1,038 587 46.3 76.8 Fixed assets maintenance...... 1,392 945 666 47.3 41.9 Value added tax ...... 1,208 640 456 88.7 40.4 Communication ...... 707 476 367 48.5 29.7 Business trip expenses ...... 524 323 256 62.2 26.2 Taxes other than income tax ...... 424 176 144 140.9 22.9 Plastic cards expenses...... 383 207 130 85.0 59.2 Consultancy and audit...... 382 136 257 180.9 (47.1) Vehicle maintenance...... 325 210 150 54.8 40.0 Security services ...... 326 204 145 59.8 40.7 Training services...... 240 177 95 35.6 53.9 Fines ...... 11 1,028 212 (98.9) 384.9 Other expenses...... 1,118 970 997 15.3 (1) Total operating expenses...... 31,200 19,053 13,368 63.80 42.5 Operating expenses/net operating income before provisions for impairment losses ...... 16.3% 20.5% 24.3% Operating expenses/average total assets(1)...... 1.1% 1.4% 1.7% ______(1) Averages are based on average daily balances. Operating expenses increased by 64 per cent. to KZT 31,200 million in the year ended 31 December 2007 from KZT 19,053 million in the year ended 31 December 2006 and increased by 42.5 per cent. in 2006 compared to 2005. Staff costs accounted for 51 per cent. of operating expenses for 2007 compared to 48 per cent. for 2006. The increase reflected an increase in employees’ salaries, an increase in the number of employees as the Bank grew its retail business as well as increased amount of motivation. The number of the Group’s employees increased by 33 per cent. over the period to 7,972 as at 31 December 2007 compared to 6,007 as at 31 December 2006. Staff costs increased by 40.5 per cent. in 2006 compared to 2005. The increase reflected the increase in salaries in line with market as well as increase in the number of employees by 43 per cent. from 4,209 as at 31 December 2005 to 6,007 as at 31 December 2006. Depreciation and amortisation costs increased during 2007 and 2006. Thus, depreciation and amortisation costs increased by 37 per cent. in 2007 compared to 2006 and by 17.2 per cent. in 2006 compared to 2005. The increases were due to the Bank’s investment in its customer service network. As a result, average tangible and intangible assets in 2007 were two times higher than the average in the same period in 2006, and in 2006 were 49 per cent. higher than the average in the same period in 2005. At the same time, fixed assets maintenance costs also increased in 2007 by 47.3 per cent. to KZT 1,392 million compared to KZT 945 million in 2006 and increased by 41.9 per cent. in 2006 from KZT 666 million in 2005.

The Bank had 190 branches as at 31 December 2007, including 25 full-service branches (central offices) and 165 outlets. 81 outlets were opened in 2007 compared to 40 outlets in 2006. The majority of newly opened branches were located in the rented premises. As a result, lease costs increased by 2.1 times in 2007 to KZT 2,400 million from KZT 1,134 million in 2006. In 2006 lease costs also increased by 2.2 times compared to 2005. Costs on insurance on individual deposits in 2007 increased by 4.3 times to KZT 1,742 million compared to KZT 402 million in 2006 due to increased deposit base. The growth in 2006 was by 29.3 per cent. compared to 2005. Advertising expenses increased by 46 per cent. to KZT 1,519 million n the year ended 31 December 2007 from KZT 1,038 million in the year ended 31 December 2006 due to an active advertising campaign promoting the Bank and its products and services. The share of the costs on retail products advertisement was 67 per cent. of total advertising costs. The growth in advertising costs was triggered along with opening of new distribution channels in 2006, when advertising costs increased in 2006 compared to 2005. VAT payments increased to KZT 1,208 million in the year ended 31 December 2007 from KZT 640 million in year ended 31 December 2006 and KZT 456 million in the year ended 31 December 2005. The increases were in line with the increase in overall operating expenses and expenditures on fixed assets. Business trip costs increased significantly by 62 per cent. in 2007 to KZT 524 million compared to KZT 323 million in 2006 due to the increased number of business trips in line with active policy on training of retail business personnel from branch offices in the Bank’s headquarters. Plastic cards expenses increased by 85 per cent. to KZT 383 million as at 31 December 2007 from KZT 207 million in 2006 due to increased number of plastic cards, increased number of ATMs and point of sale terminals. The Bank had 770 ATMs as at 31 December 2007, including 127 Cash-in ATMs, and 556 ATMs as at 31 December 2006. All ATMs dispense cash as well as allowing card-to-card transfers. Plastic cards expense in 2006 increased by 59 per cent. compared to 2005. The consultancy and audit expenses increased to KZT 382 million in 2007 from KZT 136 million in 2006. In 2005, 2006 and 2007, the major increase related to the ABN Amro risk management consultancy services. Vehicle maintenance expenses increased by 55 per cent. to KZT 325 million in 2007 from KZT 210 million in 2006 due to increased number of vehicles, growth of prices for petrol, spare parts, and repair. The expenses on maintenance of office vehicles were 65 per cent. of total vehicle maintenance expenses, expenses on maintenance of cash transfer vehicles were 19 per cent., and expenses on rent of cargo transport were 16 per cent. In 2006 the vehicle maintenance expenses increased by 41 per cent. compared to 2005. Training expenses amounted to KZT 240 million in 2007 compared to KZT 177 million in 2006 due allocation of funds for special training of retail business staff in line with active development of branch network. In this light, training expense in 2007 increased by 36 per cent. compared to 2006, and increased by 54 per cent. in 2006 compared to 2005. In 2007 the Bank paid fines and penalties in amount of KZT 11 million. In 2005 the Bank paid fines and penalties in amount of KZT 212 million, including payment of KZT 143 million of penalties for the previous years as a result of complex inspection by tax authorities. Other expenses in 2007 amounted to KZT 1,118 million compared to KZT 970 million in 2006, and KZT 977 million in 2005. The share of other expenses in total operating expenses in 2007 decreased to 3.6 per cent. from almost 5 per cent. in 2006. Other expenses include sponsorship expenses, stationery, post and courier expenses and representation and other different expenses.

Taxation The statutory corporate income tax rate in Kazakhstan is 30 per cent. Tax expense increased by 26.2 per cent. in 2007 compared to 2006 to KZT 15.9 billion, and increased by 5.4 times in 2006 compared to 2005. The effective tax rate in 2007 was 21.6 per cent. compared to 31.2 per cent. in 2006 due to expenses related to re-submission of tax declaration on corporate income tax for the year of 2003 in amount of KZT 1,454 million. The effective tax rate in 2006 (disregarding tax expenses related to 2003) was 27.6 per cent. Financial Condition as at 30 September 2008 and 31 December 2007, 2006 and 2005 Total Assets The following table presents data regarding the Bank’s assets as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December % of % of % of % of 2008 total 2007 total 2006 total 2005 total (unaudited) (KZT millions, except percentages) Assets: Cash and balances with national (central) banks... 183,053 6.5 168,148 5.6 209,005 8.6 37,229 3.1 Precious metals ...... 271 — — — 807 — — — Assets held for trading ...... 68,771 2.4 188,776 6.3 322,618 13.2 140,375 11.8 Loans and advances to banks...... 253,593 8.9 212,823 7.1 197,191 8.1 254,287 21.3 Loans to customers ...... 2,253,651 79.5 2,336,335 79.0 1,678,840 68.7 743,411 62.2 Investments available-for-sale ...... 16,723 0.6 3,036 0.1 2,628 0.1 427 — Investments held-to-maturity...... 613 — 375 — 357 — 562 0.1 Investments in associates ...... 2,413 0.1 3,222 0.1 1,755 0.1 425 — Property, equipment and intangible assets ...... 35,179 1.2 34,259 1.1 15,681 0.6 8,662 0.7 Other assets and goodwill ...... 20,356 0.7 20,258 0.7 12,974 0.6 9,491 0.8 Total assets...... 2,834,623 100 2,997,232 100 2,441,856 100.0 1,194,869 100.0 As at 30 September 2008, the Bank had total assets of KZT 2,834,623 million, a decrease of 5.4 per cent. (KZT 162,609 million) from 31 December 2007. As at 31 December 2007, the Bank had total assets of KZT 2,997,232 million, an increase of 122.7 per cent. compared to 31 December 2006. As at 31 December 2005, the Bank had total assets of KZT 1,194,869 million, an increase of 69.7 per cent. compared to 31 December 2004. The decreases in total assets were mainly attributable to decrease in investments and loans to customers. The Bank’s net loans to customers decreased of 4.8 per cent. (KZT 112,684 million) to KZT 2,253,651 million as at 30 September 2008 from KZT 2,366,335 million as at 31 December 2007. The ratio of net loans to total assets increased to 79.5 per cent. as at 30 September 2008 from 79.0 per cent. as at 31 December 2007, which in turn was an increase from 68.8 per cent. at 31 December 2006 and from 62.2 per cent. as at 31 December 2005. Cash and balances with national (central) banks increased of 8.9 per cent. (KZT 14,905 million) as at 30 September 2008. Loans and advances to banks increased of 19.2 per cent. (KZT 40,770 million) as at 30 September 2008. Retail loans decreased of KZT 67,315 million (14.9 per cent.) to KZT 385,015 million as at 30 September 2008. Retail loans as a percentage of total loans decreased from 15.1 per cent. as at 31 December 2007 to 13.6 per cent. as at 30 September 2008. The amount of retail loans declined in line with the overall decrease in the loan portfolio. Loans to corporate clients decreased KZT 45,369 million to KZT 1,868,636 million as at 30 September 2008 from KZT 1,914,005 million as at 31 December 2007, and increased by 119.4 per cent. as at 31 December 2006 from KZT 601 billion as at 31 December 2005. Corporate loans as a percentage of total loans increased from 63.9 per cent. as at 31 December 2007 to 65.9 per cent. as at 30 September 2008. As at 31 December 2006 loans to corporate clients amounted to 58.0 per cent. of total loans. The increase in total assets in 2007 and 2006 was due to a significant increase in Eurobond and syndicated loan funding in the second half of each year as the Bank invested funds raised through inter-bank loans pending their re-deployment in financing customer loans.

The Bank’s securities portfolio (including financial assets at fair value through profit or loss, investments available for sale and investments held to maturity) decreased to 3.1 per cent. (KZT 88,520 million) as at 30 September 2008 from (KZT 195,409 million) as at 31 December 2007. Financial assets at fair value through profit or loss were the main component of the Bank’s securities portfolio over the periods under review and constituted 77.7 per cent. of the portfolio as at 30 September 2008. The Bank’s cash and balances with the NBK and with the Central Bank of Russia increased by 8.9 per cent. to KZT 183,053 million (6.5 per cent. of total assets) as at 30 September 2008 from KZT 168,148 million as at 31 December 2007 and KZT 209,005 million as at 31 December 2006 and KZT 37.229 million as at 31 December 2005. Fixed and intangible assets of the Bank increased by 2.7 per cent. to KZT 35,2 billion as at 30 September 2008 from KZT 34.3 billion as at 31 December 2007 primarily as a result of the expansion of the Bank’s branch network. The ratio of fixed assets to total assets increased from 0.64 per cent. as at 31 December 2006 and to 1.14 per cent. as at 31 December 2007 and to 1.24 per cent. as at 30 September 2008 due to implementation of the Bank’s retail strategy, including opening 40 new outlets in 2006 and 81 new outlets in 2007. In May 2007 The Bank started retail arm re-branding and new outlets were opened using new brand ‘Kazkom’. The re-branding coincided with the launch of a branch modernisation programme and reflected the general trend amongst its customers to refer to the bank as ‘Kazkom’. As at 30 September 2008 the Bank had 23 branches and 166 outlets within Kazakhstan. In addition, as at 30 September 2008, the Bank has a wide distribution network including internet-banking, 883 ATMs, approximately 9,000 point of sale terminals and imprinter, and a call-center. The Bank’s average daily assets increased by 9.9 per cent. to KZT 2,876 billion for the nine months ended 30 September 2008 from KZT 2,618 billion for the nine months ended 30 September 2007. The increase in the nine months ended 30 September 2008 was mainly due to a 9 per cent. (KZT 182,028 million) increase in the Bank’s net average loan portfolio. In addition, the Bank’s average daily loans and advances to banks increased by KZT 55,494 million (1.3 times) in the nine months ended 30 September 2008 and its average daily portfolio of marketable securities decreased by KZT 34,742 million (1.5 times). The Bank’s average interest earning assets increased by 8.9 per cent. for the nine months of 2008 compared to nine months of 2007 and equalled KZT 2,532,420 million. Total liabilities The following table presents data regarding the Bank’s liabilities as at 30 September 2008, 31 December 2006, 2005 and 2004:

As at 30 September As at 31 December 2008 % of total 2007 % of total 2006 % of total 2005 % of total (unaudited) (KZT millions, except percentages) Liabilities: Loans and advances from banks ...... 345,075 13.9 723,431 27.0 884,301 40.6 379,206 34.3 Customer accounts...... 1,096,229 44.1 895,083 33.4 687,806 31.6 303,437 27.4 Financial assets at fair value through profit or loss.... 23,983 1.0 7,730 0.3 3,554 0.2 189 0.0 Debt securities issued...... 702,793 28.3 739,688 27.6 424,162 19.4 303,133 27.4 Other borrowed funds ...... 136,076 5.5 148,934 5.6 68,814 3.1 50,604 4.6 Deferred income tax liabilities...... 41,026 1.7 30,496 1.1 16,850 0.8 8,290 0.7 Other liabilities...... 30,013 1.2 24,485 0.9 15,346 0.9 9,526 0.9 Subtotal ...... 2,375,195 95.6 2,569,847 96.0 2,100,833 96.4 1,054,385 95.3 Subordinated debt...... 108,765 4.4 108,166 4.0 78,922 3.6 52,213 4.7 Total liabilities...... 2,483,960 100 2,678,013 100 2,179,755 100.0 1,106,598 100.0 As at 30 September 2008, the Bank’s total liabilities decreased by 7.2 per cent. to KZT 2,483,960 million from KZT 2,678,013 million as at 31 December 2007, which in turn represented an increase of 22.8 per cent. from KZT2,180,376 million as at 31 December 2006 which

in turn represented an increase of 97.0 per cent. compared to KZT 1,106,598 million as at 31 December 2005. Customer accounts increased by 22.5 per cent. to KZT 1,096,229 million as at 30 September 2008 from KZT 895,083 million as at 31 December 2007 which in turn was an increase from KZT687,806 million as at 31 December 2006 and KZT 303,437 million as at 31 December 2005. As of 30 September 2008 corporate deposits increased to KZT 809.0 billion from KZT 585.4 billion as at 31 December 2007. As of 30 September 2008 KZT deposits decreased to 51.2 per cent. from 60.6 per cent. as at 31 December 2007. Corporate deposits constituted 73.8 per cent. of total customer deposits as at 31 December 2008 compared to 67.6 per cent. as at 31 December 2007. There is a stable trend of increase of time deposits both in customer and corporate deposits. As at 30 September 2008 share of time deposits in corporate sector equal to 77.6 per cent. (75.9 per cent. as at 31 December 2007) and 98.7 per cent. in retail sector (88.7 per cent. as at 31 December 2007). Retail deposits decreased to KZT 237,811 million as at 30 September 2008 from KZT 309,679 million as at 31 December 2007 and constituted 26.2 per cent. of total customer deposits compared to 34.6 per cent. as at 31 December 2007. Debt securities issued decreased by 5.0 per cent. to KZT 702,793 million as at 30 September 2008 from KZT 739,688 million as at 31 December 2007, and increased from KZT 424,162 million as at 31 December 2006. In 2005-2007 the Bank issued: U.S.$150 million 7 per cent. 5 year Eurobonds in February 2005. U.S.$500 million 8 per cent. 10 year Eurobonds in November 2005. SGD100 million 4.25 per cent. 3 year Eurobond in February 2006. EUR300 million 5.125 per cent..5 year Eurobonds in March 2006. U.S.$500 million 7.5 per cent. 10 year Eurobonds in November 2006. In February 2007 the Bank has issued debt securities in two lots: EUR750 million 6.875 per cent. at 99.227 per cent. price GBP350 million 7.625 per cent. at 99.962 per cent. price. U.S.$250 million 1 year Eurobonds in May 2007. As at 30 September 2008 issued debt securities included promissory notes of Russian companies in the amount KZT 33,037 million and debt securities issued by JSC Moskommertsbank. Share of debt securities in total liabilities of the Bank increased to 28.3 per cent. as at 30 September 2008 from 27.6 per cent. as at 31 December 2007. Loans and advances received from banks decreased for KZT 378,356 million to KZT 345,075 million as at 30 September 2008 from KZT 723,431 million as at 31 December 2007, KZT 884,301 million as at 31 December 2006 and KZT 379,206 million as at 31 December 2005. For details, see “—Funding and liquidity”. Other borrowed funds decreased to KZT 136,076 million as at 30 September 2008 compared to KZT 148,934 million as at 31 December 2007 and KZT 68,814 million as at 31 December 2006 and KZT 50,604 million as at 31 December 2005. The Bank’s outstanding subordinated debt amounted to KZT 108,765 million as at 30 September 2008, a slight increase of 0.6 per cent. from KZT 108,166 million as at 31 December 2007. The increase in 2006 was due to the Bank’s issuance in July 2006 of U.S.$200 million 8.625 per cent. ten year subordinated debt securities and JSC Moskommertsbank’s issuance of U.S.$20 million

10.0 per cent. debt securities. The increase in 2008 was predominantly due to changes in exchange rates. Equity and capital ratios The Bank’s shareholders’ equity increased by 13.2 per cent. to KZT 347,052 million as at 30 September 2008 compared to KZT 306,667 million as at 31 December 2007. The Bank’s equity increased primarily due to the increased provisions created on possible loan losses. Shareholders’ equity was KZT 262,101 as at 31 December 2006 and KZT 88,271 as at 31 December 2005. The increase as at 31 December 2006 was due to a public placement of the Bank’s Shares on the London Stock Exchange by existing shareholders in November 2006 followed by domestic offer of the Bank’s Shares among existing shareholders as well as KZT 27.8 billion net profit earned during 2006. As at 30 September 2008, the Bank’s equity capital, calculated in accordance with the Basel Accord, was KZT 454.0 billion and Tier I capital was KZT 311.9 billion, representing a total capital increase from KZT 415.3 billion as at 31 December 2007 and a Tier I capital decrease from KZT 321.5 billion as at 31 December 2007. As at 30 September 2008, the Bank’s Tier I capital adequacy ratio and total capital adequacy ratio, each calculated in accordance with the Basel Accord, were 12.2 per cent. and 17.76 per cent., respectively, compared with 11.72 per cent. and 15.15 per cent., respectively, as at 31 December 2007 and 15.1 per cent. and 12.4 per cent., respectively as at 31 December 2006. The following table sets out information on the Bank’s capital and its consolidated capital adequacy ratios as at 30 September 2008, 31 December 2007, 2006 and 2005, all calculated in accordance with the Basel Accord, as in effect as of the date hereof:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT millions) (unaudited) (audited) Ordinary Share capital (1) ...... 5,748 5,749 5,748 3,750 Share premium...... 152,805 152,855 152,534 15,902 Retained earnings (2)...... 140,271 84,843 58,763 40,481 Net profit -(4) 55,963 25,985 18,392 Minorities ...... 3,611 12,552 15,272 6,976 Goodwill...... (2,405) (2,405) (2,405) (2,405) Hybrid Tier I capital(3) ...... 11,867 11,900 12,546 13,286 Total Tier I capital (Basel) ...... 311,897 321,457 268,443 96,382 Total Tier II capital (Basel)...... 142,143 93,847 56,702 31,261 Total capital (Basel)...... 454,040 415,304 325,145 127,643 Risk weighted assets ...... 2,557,136 2,741,648 2,170,124 929,898 Ratios Tier I ...... 12.2% 11.7% 12.4% 10.3% Total Capital ...... 17.8% 15.2% 15.0% 13.7%

(1) This item does not include preferred shares. (2)This item does not include current net profit. (3) Hybrid Tier I capital refers to Perpetual Loan Participation Notes issued by Kazkommerts Finance 2 B.V. in November 2005 (4) As calculation of Tier I Capital requires inclusion of only audited net profit, the net profit for the period ended 30 September 2008 was not included.

The following table sets out information on the Bank’s capital and its consolidated capital adequacy ratios as at 30 September 2008, 31 December 2007, 2006 and 2005, all computed based upon the Bank’s consolidated statutory financial statements in accordance with applicable regulations of the FMSA then in effect. The information has not, therefore, been prepared in accordance with IFRS.

FMSA’s As at As at 31 December minimum 30 September requirements 2008 2007 2006 2005 Not less than KZT KZT KZT KZT KZT Share capital ...... 5 billion(1) 159.8 billion 159.9 billion 159.8 billion 5.0 billion Not less than K1-Tier I capital to total assets ...... 5% 10.6 8.3 9.6 5.8 K2-own capital to total risk weighted Not less than assets...... 10% 13.0 12.3 12.9 11.7 The ratio was cancelled on 01.07.2008 and is planned to be re-instated on 1 K4-current liquidity ratio ...... More than 30% April 2009 135.0 123.6 144.3 More than K4-1-quick liquidity ratio ...... 100%(2) 649.9 — — — More than K4-2-quick liquidity ratio ...... 90%(3) 379.3 — — — More than K4-3-quick liquidity ratio ...... 80%(4) 255.0 76.4 107.1 134.3 More than K4-4-quick currency liquidity ratio ...... 100%(5) 890.9 — — — More than K4-5-quick currency liquidity ratio ...... 90%(6) 553.8 — — — More than K4-6-quick liquidity ratio ...... 80%(7) 379.5 102.7 — — K6-investments to fixed assets and non-financial assets to equity as a Not more than percentage of own capital...... 50% 9.3 9.6 6.1 8.7 Minimum reserve requirements as a percentage of average customer account Not less than balances plus qualified international 6% for internal borrowings...... liabilities(8) 6.8 7.9 9.1 7.5 Maximum net currency position as a 8.6 5.0 10.2 3.9 percentage of own capital...... 25% (short) (long) (short) (short) Maximum currency position in currencies of countries whose sovereign rating is “A” or higher (Standard&Poors) or its equivalent, and in Euro as well as refined precious metals, as a percentage of own capital ...... 11.2 4.0 11.8 4.6 12.5% (short) (long) (short) (short) Maximum currency position in currencies of countries whose sovereign rating is lower than “A” (Standard&Poors) or its equivalent, as a percentage of own capital……………... 2.5 0.2 0.8 0.37 5% (long) (long) (long) (long) Maximum aggregate credit exposure to related parties (including on-balance and off-balance sheet exposures) as a percentage of own capital...... 100% 16.1 16.3 11.4 10.9 K7- maximum limit of short-term 1 (1.7 before liabilities for non-residents...... 01.01.07) 0.157 0.421 1.504 — K8 - total liabilities for non-residents to Not more than own capital...... 4(9) 1.331 2.318 — — K9 - total liabilities for non-residents and Not more than debt securities to own capital ...... 6(10) 3.066 4.117 — — Funds placement into internal assets Not less than ratio ...... 100% 158.0 192.0 172.0 204.0 Maximum exposure as a percentage of own capital to any single borrower – related parties...... 10% 9.0 8.1 7.1 5.4 – other borrowers ...... 25% 22.3 20.5 17.9 22.9 – on unsecured loans ...... 10% 6.4 7.6 6.7 9.3 ______

(1) Effective from 28 October 2008, for newly established banks. Prior to 28 October 2008, the minimum charter capital requirement was KZT 1.5 billion. (2) K4 1 ratio became applicable from 01.07.08 and shall be calculated as average monthly high liquid assets to average monthly accrued liabilities with remaining maturity date up to 7 days. (3) K4 2 ratio became applicable from 01.07.08 and shall be calculated as average monthly liquid assets with remain maturity date up to 1 month including high liquid assets to average monthly accrued liabilities with remain maturity date up to 1 month. (4) Before 01.07.08 K 5, a current liquidity ratio with a required normative of not less than 50%, was equivalent of K4-3 ratio. Effective 01.07.08, K4-3 shall be calculated as average monthly liquid assets with remaining maturity date up to 3 months, including highly liquid assets, to average monthly value of accrued liability with remaining maturity up to 3 months. (5) K4 4 ratio became applicable from 01.07.08 and shall be calculated as average monthly highly liquid assets in foreign currency to average monthly accrued liabilities with remaining maturity date up to 7 days in the same foreign currency. (6) K4 5 ratio became applicable from 01.07.08 and shall be calculated as average monthly liquid assets in foreign currency with remaining maturity date up to 1 month including highly liquid assets to average monthly accrued liabilities with remaining maturity date up to 1 month in the same foreign currency. (7) K4-6 ratio became applicable from 01.07.08 and shall be calculated as average monthly liquid assets in foreign currency with remaining maturity date up to 3 months, including highly liquid assets, to average monthly accrued liabilities with maturity date up to 3 months in the same foreign currency. (8) Effective from 29 July 2008, the minimum reserve requirement for internal liabilities was reduced from 6 per cent. to 5 per cent. Effective from 18 November 2008, the minimum requirement was reduced to 2 per cent. and effective from 3 March 2009, the requirement for internal liabilities was further reduced to 1.5 per cent. (9) The current K8 ratio shall not be greater than 2. (10) The current K9 ratio shall not be greater than 4. Starting from 1 July 2009, the K9 ratio is planned to be changed to 3.

For purposes of the above ratios: ● Under Kazakh law, “share capital” means capital which must be provided in order to establish a company or a bank. A bank’s share capital may only be formed with cash contributions. The sources of contributions to share capital are subject to certain limitations and specific disclosure requirements. ● The FMSA’s definition of “own capital” is the sum of Tier I capital plus Tier II capital (to the extent it does not exceed Tier I capital) and, starting from 1 January 2006, Tier III capital (not exceeding 250 per cent. of the portion of Tier I capital aimed to cover market risk) less investments of a bank into equity and into certain subordinated debt. Tier I capital is the sum of share capital plus share premium plus retained earnings plus perpetual financial instruments less intangible assets and, starting from 22 November 2005, qualified term less losses of previous years less current year deficit. Tier II capital is the sum of current profit for the period plus revaluation reserves plus general provisions (to the extent that they do not exceed 1.25 per cent. of risk weighted assets) plus paid perpetual financial instruments which are not included into Tier I capital plus Tier II subordinated debt which is included into own capital (net worth) (but no more than 50 per cent. of Tier I capital) excluding repaid subordinated debt. Starting from 1 January 2006, Tier III capital is the sum of Tier III subordinated debt plus Tier II subordinated debt not included into the calculation of Tier II capital. Since November 2005, for a bank with a banking holding company (that is, an entity holding not less than 25.0 per cent. of its voting share capital, alone or together with affiliated companies) among its shareholders, K1 must be not less than 5.0 per cent. and for other banks it must not be less than 6.0 per cent. K2 must be not less than 10.0 per cent. and for other banks it must be not less than 12.0 per cent. In addition, starting from 1 January 2006, assets weighted by credit, market and operational risk (as opposed to only credit risk) have to be taken into account when calculating the K2 ratio. ● The current liquidity ratio is the ratio of monthly average highly liquid assets to monthly average demand liabilities. For this purpose, “highly liquid assets” include cash, refined precious metals, certain securities issued by the Government, the NBK or certain other Kazakhstan entities, call deposits with the NBK and with banks with an appropriate credit rating, overnight loans to such banks, securities issued by foreign governments and entities with an appropriate credit rating. In addition starting form 14 February 2009, highly liquid assets also include deposits with NBK maturity of which is up to 7 days. ● The short term liquidity ratio is calculated as the ratio of average monthly assets with a maturity of not more than three months, including highly liquid assets, to average monthly

liabilities with a term of not more than three months, including demand liabilities. A bank may include within its assets for this purpose certain securities issued by the Government or the NBK that are not included in the calculation of highly liquid assets if liabilities secured by those securities are included in the calculation of liabilities for this purpose. ● For purposes of calculating the current or short term liquidity ratio, capital regulations provide that certain assets should not be included in the computation, including claims on non residents established in jurisdictions that have not assumed information exchange obligations, and if a bank has outstanding unpaid obligations to its creditors or depositors or has violated Kazakhstan’s legislation on payments and money transfers during the relevant reporting period, the liquidity ratios shall be deemed to be not satisfied, irrespective of the actual position. ● At no time during the five years preceding the date of this Prospectus has the Bank been in breach of applicable capital adequacy or liquidity ratios. ● With effect from 13 July 2006, the minimum reserve requirement for all internal liabilities was established in amount of 6 per cent., and for all other liabilities – in amount of 8 per cent. Effective from 29 July 2008, the minimum reserve requirement for internal liabilities was reduced from 6 per cent. to 5 per cent., and for other liabilities was reduced from 8 per cent. to 7 per cent. Effective from 18 November 2008, the minimum requirement for internal liabilities was reduced to 2 per cent. (from 5 per cent) and for other liabilities requirement was reduced to 3 per cent. (from 7 per cent). Effective from 3 March 2009, the requirement for internal liabilities was further reduced to 1.5 per cent. and for other liabilities was reduced to 2.5 per cent. Funding and liquidity To date, the Bank has generally funded its operations through deposits, accessing the international capital markets and from interbank borrowings. However, in the current global crisis some historical forms of funding are currently unavailable, such as the international capital markets and in some instances, interbank borrowings. The bank has adopted a strategy during the current crisis to ensure it has adequate funding for its operations and will continue to rely on its strategy to attract and retain deposits from both retail and corporate customers. Additionally the Bank intends to rely on funding provided by the Government of Kazakhstan pursuant to its various initiatives to strengthen the Kazakh financial sector. See “The Offering” for a description of the various agreements entered into between the Bank and Samruk- Kazyna to provide funding for the Bank. As at 30 September 2008, 46.4 per cent. of the Bank’s liabilities had a maturity of less than one year, while 46.7 per cent. of its assets had a maturity of less than one year. The Bank believes that loans with shorter or the same maturity as corresponding funding sources provide stability and flexibility to its funding. The Bank believes that its management of assets and liabilities have allowed the Bank to maintain prudent levels of liquidity. As at 30 September 2008, the Bank’s funding base consisted of demand and time deposits (44.1 per cent.), debt securities issued (28.3 per cent.), loans and advances from banks including repo transactions (13.9 per cent.), and other borrowed funds (5.8 per cent.). As at 31 December 2007, the Bank’s funding base consisted of demand and time deposits (33.4 per cent.), debt securities issued (27.6 per cent.), loans and advances from banks including repo transactions (27.0 per cent.) and other borrowed funds (5.7 per cent.). The Bank increased its deposit base as total customer accounts increased by 22.5 per cent. to KZT 1,096.2 billion as at 30 September 2008 from KZT 895.1 billion as at 31 December 2007 and KZT 687.8 billion as at 31 December 2006. The Bank has implemented a strategy to replace international funding by domestic funding.

As at 30 September 2008, retail deposits (less interest accrued) comprised 26.2 per cent. of total customer deposits (less interest accrued). In accordance with its retail strategy, the Bank will focus on maintaining its existing retail deposit base and seeking for opportunities to further increase it in order to diversity its funding base. Over the course of the past several years the Bank and its finance subsidiaries have entered into a number of financing arrangements with commercial banks and international financial institutions, as well as in the domestic and international capital markets. Some of the most important of these are described below. Equity Offerings Since 1994, the Bank has participated in a number of special programmes, arranged and sponsored through the NBK and the Ministry of Finance of Kazakhstan, as well as international financial institutions, such as the EBRD, the International Bank for Reconstruction and Development, the Islamic Development Bank, Kreditanstalt Wiederaufbau and the Asian Development Bank. In July 1997 the Bank raised U.S.$50 million through an international offering of its Shares in the form of GDRs, which are traded on the London, Istanbul, Frankfurt and Berlin Stock Exchanges. In December 2001, the Bank raised U.S.$21.2 million through a public offering of 55.6 million Preference Shares in Kazakhstan. In 2004 and 2005 the Bank placed Preference Shares raising U.S.$18.2 million and U.S.$52.3 million, respectively. In 2005 the Bank raised U.S.$33 million through another placement of its Shares. In the second half of 2006 the Bank was the first financial institution in Kazakhstan to conduct an initial public offering of its shares to institutional investors in the United States and elsewhere through the listing of its Shares (in the form of GDRs) on the London Stock Exchange. The domestic placement of 103.5 million Shares at a price of U.S.$9.25 per Share was completed on 9 January 2007. The domestic placement was the second stage of public offer. As part of the first stage, several shareholders of the Bank sold 91,495,412 Shares in the form of GDRs and used the proceeds of such sale to subscribe for new shares during domestic placement. The proceeds received by the selling shareholders exceeded U.S.$845 million. Term and Syndicated Loans In September 2002, the Bank signed a U.S.$50 million four-year term-loan agreement with the EBRD. The loan was effectively structured as two tranches: a U.S.$30 million loan for four years provided by the EBRD and a U.S.$20 million loan syndicated with commercial banks for four years with a prepayment option at the EBRD’s election after two years. On 20 July 2007 the Bank signed loan agreement with the EBRD. The loan was effectively structured as two tranches: tranche A for U.S.$100 million and tranche B for U.S.$200 million. As at 30 September 2008, the Bank had an aggregate of U.S.$277.8 million on this loan outstanding to the EBRD. The Bank obtained its first syndicated loan in 1997. Since then, the Bank has been active in the syndicated loan market and has obtained and repaid a total of 14 international syndicated loan facilities. In December 2005 the Bank obtained, through the Issuer, a two tranche syndicated loan organised by Bank of Tokyo Mitsubishi for the amount of U.S.$1.3 billion which was fully repaid in December 2008. In August 2006 the Bank obtained a syndicated loan for the amount of U.S.$850 million organised by ING Bank. In December 2006 the Bank obtained a syndicated loan organised by Bank of Tokyo Mitsubishi, ING, UniCredit and Standard Chartered Bank for the total amount of U.S.$1 billion. Participants of the loan include more than 30 banks including Middle East and Far East Banks. This loan consists from two parts, 1-year A - for the amount U.S.$700 million with a 0.275 per cent. rate over LIBOR and 3-year B - for the amount U.S.$300 million with a 0.6 per cent. rate over LIBOR. Lead Arrangers were The Bank of Tokyo Mitsubishi UFJ, Ltd., ING Wholesale Banking, Standard Chartered Bank, UniCredit Markets & Investment Banking and ICICI Bank. The first part of the loan in amount of U.S.$700 million was repaid in December 2007, and the second part of the loan in amount of U.S.$300 million is due in December 2009.

In February 2008 and September 2008 the Bank effected, in accordance with its payment schedule, repayments of Syndicated Loans in the amounts U.S.$450 million and U.S.$600 million respectively. Repayment of principal amount and accrued interest was effected from own sources of the Bank. Syndicated Loan for U.S.$600 million has been arranged by the syndicate of banks, including The Bank of Tokyo Mitsubishi UFJ, Ltd., Citibank N.A., Standard Bank Plc and Mizuho Corporate Bank. The initial amount of Syndication arranged in August 2006 for 18 months was U.S.$850 million. In August 2007 using option for voluntary prepayment the Bank has prepaid U.S.$400 million. This Syndication has been arranged by Citibank, N.A., Deutsche Bank AG, ING Bank and Mizuho Corporate Bank. Subject amount has been used for financing of export-import operations of clients of the Bank. International Bond Offerings The Bank has been active in the international capital markets for a number of years and as at 30 September 2008 had KZT 645.6 billion of Eurobond borrowings outstanding. In February 2005 the Bank issued U.S.$150 million five year bonds with a 7 per cent. coupon. In November 2005 the Bank issued U.S.$500 million bonds with a ten year maturity and a coupon of 8 per cent. In February 2006, the Bank issued S$100 million three year bonds with a coupon of 4.25 per cent. In March and November of 2006 the Bank placed a five year eurobond of EUR300 million with a 5.125 per cent. coupon and a ten year eurobond of U.S.$500 million with a 7.5 per cent. coupon. In February 2007 the Bank issued a ten year EUR750 million eurobond with a 6.785 per cent. coupon and a five year GBP350 million eurobond with a 7.625 per cent. coupon. The Bank has a U.S.$5,000,000,000 debt issuance programme for issues of notes that may be listed on the London Stock Exchange. In December 2005 the Bank placed three series of bonds under its Future Flow Securitisation Programme, the first in the amount of U.S.$300 million for seven years with three years’ grace and floating rate. In June 2006 the Bank placed two additional series of bonds each in the amount of U.S.$100 million with three years grace and a floating rate. In April 2007 the Bank placed three additional series of 10-year bonds in the aggregate amount of U.S.$500 million. In May 2008 the Bank repaid 1-year European commercial paper in the amount U.S.$250 million. The total amount of repayments of principal amount for external obligations of the Bank as at 30 September 2008 was U.S.$2.2 billion. Repayments have been effected in accordance with payment schedules from own sources of the Bank. The Bank has announced that the Bank will henceforward effect repayments of external obligations in accordance with existing repayment schedules. The following table sets out certain liquidity ratios for the Bank as at the dates indicated:

As at 30 September As at 31 December 2008 2007 2006 2005 (%) Liquid assets/total assets ...... 16.0 17.2 28.1 34.0 Liquid assets/total deposits ...... 41.4 57.6 99.6 133.8 Liquid assets/liabilities up to one month ...... 114.4 106.4 95.6 152.0 Loans to customers, net/total assets ...... 79.5 79.0 68.8 62.2 Loans to customers, net/customer accounts...... 205.6 264.4 244.1 245.0 Loans to customers, net/total equity ...... 642.7 741.3 640.5 842.2 Treasury operations The main purpose of treasury operations of the Bank is effective managing of liquidity, interest rates and market risks by operations on money market, stock market, which leads to decrease of sensibility to foreign currency and funding expenses. Treasury operations of the Bank are mainly spot trading by KZT and foreign currency, trading by state securities, currency swap and forward operations for the purpose of hedging. As at 30 September 2008 financial assets at fair value through profit or loss decreased to KZT 68.8 billion from KZT 188.8 billion as at 31 December 2007 and KZT 322.6 billion as at

31 December 2006. The change during 2008 was primarily attributable to the retirement of debt securities of international financial institutions. Foreign Currency Position Currency risk is a risk of fluctuations of financial instrument due to a fluctuation of currency exchange rate. Financial position and money flows of the Bank are undergone to fluctuations of exchange rate of foreign currencies. Committee of managing of assets and liabilities effects managing of currency risk by definition of open foreign currency position based on apprehended devaluation of KZT and other macroeconomic indicators, what allow to the Bank to bring to minimum losses from significant fluctuations of national and foreign currencies exchange rates. Treasury Department effects daily control for open foreign currency position for the purpose of its compliance with regulator’s requirements. The following table sets out the net open foreign currency position of the Bank as at 31 September 2008, 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (%) Net long/(short) position (millions of U.S. dollars)...... 590.3 523.8 (56.3) 31.3 As a percentage of shareholders’ equity ...... 20.2 19.7 2.7 4.8 As a percentage of total liabilities ...... 2.8 2.4 0.3 0.4 The FMSA regulates and closely monitors the net open foreign currency position of banks. According to the FMSA’s requirements, from 1 September 2006, a bank’s aggregate net open foreign currency position may not exceed 25 per cent. of its capital and the open foreign currency position for any single currency of countries with sovereign rating no lower than “A” assigned by Standard & Poor’s may not exceed 12.5 per cent. of its capital. The open short and long positions for any currency of a country with a sovereign rating lower than “A” by Standard & Poor’s are limited to 5 per cent. of the Bank’s capital. Foreign currency assets include all foreign currency accounts belonging to a bank and the total value of its forward currency purchases. Foreign currency liabilities include all foreign currency accounts held with a bank and the total value of its forward foreign currency sales. At weekly meetings, the Bank’s ALMC monitors the size of net open foreign currency positions. On 4 February 2009, the NBK devalued the tenge by 18 per cent to KZT 143.98 per U.S.$1.00. This devaluation increased the costs of foreign borrowings relative to the Bank’s earnings in tenge. Further, the devaluation of tenge will likely affect the Bank’s asset quality and income statement, as the majority of the Bank’s loans are denominated in U.S. dollars, whereas income from the loan portfolio is denominated in Tenge. See “—Recent Developments”. Off-Balance Sheet Arrangements In the normal course of its activity, the Bank enters into certain financial instruments with off-balance sheet risk in order to meet the needs of its customers. These instruments, which include guarantees, letters of credit, forward contracts and option contracts, involve varying degrees of credit risk and are not reflected in the balance sheet of the Bank. As at 30 September 2008 the Bank had issued outstanding guarantees totalling KZT 107,012 million compared to KZT 94,582 million as at 31 December 2007 and KZT 91,683 million as at 31 December 2006. The Bank’s maximum exposure to credit losses for guarantees and letters of credit is reflected in the contractual amount of these transactions. Since many of the commitments are expected to expire without being drawn upon, the total contractual amount does not necessarily represent future cash requirements. Provisions for losses on contingent liabilities are recognised when the Bank has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the obligation can be made.

Contractual Commitments As at 30 September 2008, provisions for losses on contingent liabilities were KZT 7.2 billion, as compared to KZT 7.2 billion as at 31 December 2007, KZT 4.1 billion as at 31 December 2006 and KZT 2.6 billion as at 31 December 2005. The following table sets forth the commitments and contingent liabilities of the Bank in KZT, by contractual maturity, as at 30 September 2008:

Up to three Three months Six months to Over months to six months one year one year Total (KZT millions) Guarantees...... 14,998 18,335 27,063 46,616 107,012 Letters of credit ...... 36,770 13,029 5,478 3,334 58,611 Total...... 51,768 31,364 32,541 49,949 165,623 The following table sets forth the commitments and contingent liabilities of the Bank in KZT, by contractual maturity, as at 31 December 2007:

Up to three Three months Six months to Over months to six months one year one year Total (KZT millions) Guarantees...... 20,034 18,848 16,979 38,733 94,594 Letters of credit ...... 49,780 16,836 17,737 6,145 90,498 Total...... 69,814 35,684 34,716 44,878 185,092 The following table sets forth the commitments and contingent liabilities of the Bank in KZT, by contractual maturity, as at 31 December 2006:

Up to three Three months Six months to Over months to six months one year one year Total (KZT millions) Guarantees...... 7,390 11,026 20,356 52,911 91,683 Letters of credit ...... 37,171 18,941 26,432 9,868 92,413 Total...... 44,561 29,967 46,788 62,779 184,095 The Bank uses the same credit control and management policies in undertaking off-balance sheet commitments as it does for its on-balance sheet operations.

SELECTED STATISTICAL AND OTHER INFORMATION The following tables present certain selected statistical information and ratios for the Bank as at and for the periods indicated. Accordingly, the information below should be read in conjunction with the Unaudited Interim Financial Information, including the notes thereto, prepared in accordance with IAS 34, and Audited Financial Statements, including the notes thereto, prepared in accordance with IFRS and included elsewhere in this Prospectus and the information included in ” Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Selected Consolidated Financial Data”.

Average Balances The following table sets out the Bank’s average balances of assets and liabilities based upon the average of the daily balances of the Bank and its consolidated subsidiaries and affiliates as at 30 September 2008 and December 2007, 2006 and 2005:

For the period ended For the year ended 31 December 30 September 2008 2007 2006 2005 Average Average Average Average Average Average Average Average balance interest rate balance interest rate balance interest rate balance interest rate (KZT (KZT (KZT (KZT millions) (%) millions) (%) millions) (%) millions) (%) Assets: Loans to and deposits with other banks, net...... 219,320 5.38 119,634 9.65 126,051 6.52 93,017 4.13 Loans to and deposits with other banks... 220,418 5.35 120,511 9.58 126,655 6.48 93,488 4.11 Tenge...... 15,494 6.75 28,419 5.13 27,037 4.23 7,343 3.98 Foreign currency .. 204,924 5.25 92,092 10.95 99,618 7.10 86,145 4.12 Allowance for impairment losses ...... (1,098) — (877) — (604) — (471) — Tenge...... — — — — (35) — (146) — Foreign currency .. (1,098) — (877) — (569) — (325) — Correspondent account with NBK 127,033 — 143,320 — 62,933 — 8,073 — Tenge...... 28,793 — 79,967 — 55,257 — 5,611 — Foreign currency .. 98,240 — 63,353 — 7,676 — 2,462 — Marketable securities...... 73,200 7.87 139,419 6.17 125,347 5.73 79,989 5.92 Tenge...... 35,806 9.32 46,260 7.17 26,777 6.38 36,514 4.11 Foreign currency .. 37,394 6.49 93,159 5.67 98,570 5.56 43,475 7.43 Loans to customers, net...... 2,212,483 16.62 2,105,263 14.07 979,567 13.45 547,371 14.09 Performing loans ..... 2,293,001 16.03 2,164,492 13.68 1,011,021 13.03 559,749 13.78 Tenge...... 888,679 16.14 686,370 14.20 280,420 13.08 157,763 13.94 Foreign currency .. 1,404,322 15.97 1,478,122 13.44 730,601 13.01 401,986 13.72 Non-performing loans ...... 90,077 — 39,942 — 18,738 — 20,462 — Tenge...... 41,799 — 15,269 — 5,988 — 6,743 — Foreign currency .. 48,278 — 24,673 — 12,750 — 13,719 — Allowance for impairment losses ...... (170,595) — (99,171) — (50,192) — (32,840) — Tenge...... (91,013) — (36,039) — (15,832) — (10,830) — Foreign currency .. (79,582) — (63,132) — (34,360) — (22,010) — Cash ...... 35,759 — 35,862 — 18,442 — 12,904 — Tenge...... 19,810 — 19,665 — 9,453 — 6,634 — Foreign currency .. 15,949 — 16,197 — 8,989 — 6,270 — Correspondent accounts with other banks...... 27,417 0.64 22,616 0.87 14,917 0.88 10,710 0.76 Tenge...... 2,678 — 3,181 — 1,547 0.00 1,048 — Foreign currency .. 24,739 0.71 19,435 1.02 13,370 0.98 9,662 0.84 Fixed and intangible assets, net...... 37,464 — 26,763 — 13,817 — 9,252 — Tenge...... 35,236 — 24,972 — 12,380 — 8,442 — Foreign currency .. 2,228 — 1,791 — 1,437 — 810 — Goodwill ...... 2,405 — 2,405 — 2,405 — 254 — Tenge...... 2,405 — 2,405 — 2,405 — 254 — Foreign currency .. — — — — — — — — Investments ...... 3,805 — 2,313 — 637 — 328 — Tenge...... 3,211 — 2,313 — 637 — 328 — Foreign currency .. 594 — — — — — — — Other assets...... 137,275 — 96,314 — 39,479 — 20,682 — Tenge...... 67,946 — 38,418 — 14,926 — 9,371 — Foreign currency .. 69,329 — 57,896 — 24,553 — 11,311 — Total Assets ...... 2,876,161 13.40 2,693,909 11.75 1,383,595 10.64 782,580 10.96 Tenge...... 1,050,844 14.06 911,200 11.22 420,960 9.39 229,075 10.38 Foreign currency .. 1,825,317 13.02 1,782,709 12.02 962,636 11.19 553,505 11.20 Liabilities: Demand deposits...... 194,465 0.94 189,112 0.39 113,642 0.13 74,115 0.32 Tenge...... 137,058 1.17 142,385 0.47 76,963 0.15 44,897 0.36 Foreign currency .. 57,407 0.40 46,727 0.14 36,679 0.08 29,218 0.25 Time deposits ...... 763,003 9.12 574,395 8.83 235,679 7.64 158,225 6.40 Tenge...... 359,464 9.81 430,140 9.11 163,124 7.95 62,161 8.03 Foreign currency .. 403,539 8.50 144,255 8.01 72,555 6.96 96,064 5.35 Correspondent accounts of other banks...... 34,375 0.04 40,685 0.09 7,969 0.13 3,200 0.31 Tenge...... 5,614 0.21 11,144 0.30 4,398 0.19 2,480 0.37 Foreign currency .. 28,761 — 29,541 — 3,571 0.06 720 0.07

For the period For the year ended 31 December ended 30 September 2008 2007 2006 2005 (KZT millions, except for percentages) Average interest-earning assets(1)...... 2,532,420 2,386,933 1,245,882 731,088 Average assets(1) ...... 2,876,161 2,693,909 1,383,595 782,580 Interest income ...... 289,048 316,458 147,250 86,407 Net interest income before provision for impairment loss ...... 94,109 76,974 31,248 22,719 Net profit ...... 49,895 57,751 27,761 19,815 Yield(2) ...... 15.2% 13.3% 11.8% 11.8% Margin(3) ...... 4.9% 3.2% 2.5% 3.1% Spread(4) ...... 7.7% 5.9% 5.0% 5.0% Return on average assets(5) ...... 2.3% 2.1% 2.0% 2.5% ______(1) Based on average daily balances. (2) Interest income as a percentage of average interest-earning assets. (3) Net interest income before provision for impairment losses as a percentage of average interest-earning assets. (4) Average rate on interest-earning asset minus average rate on interest-bearing liabilities. (5) Net profit as a percentage of average assets. Assets As at 30 September 2008 total assets of the Bank were KZT 2,835 billion as compared to KZT 2,997 billion as at 31 December 2007. Decrease comprised KZT 162,2 billion or 5.4 per cent.

The following table sets out the major asset groups of the Bank, broken down by currency, as at the indicated dates:

For the period ended As at 31 December 30 September 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (%) millions) (%) millions) (%) millions) (%) Trading and investment portfolio Tenge...... 61,691 2.2 65,946 2.2 81,198 3.3 14,711 1.2 Foreign currency ...... 26,829 0.9 129,463 4.3 246,160 10.1 127,078 10.6 Total...... 88,520 3.1 195,409 6.5 327,358 13.4 141,789 11.8 Precious metals Tenge...... — — — — — — — — Foreign currency ...... 271 — — — 807 — — — Total...... 271 — — — 807 — — — Cash and balances with national (central) banks Tenge...... 83,633 3.0 57,840 1.9 189,718 7.8 16,405 1.4 Foreign currency ...... 99,420 3.5 110,308 3.7 19,287 0.7 20,824 1.7 Total...... 183,053 6.5 168,148 5.6 209,005 8.5 37,229 3.1 Loans and advances to banks Tenge...... 22,714 0.8 12,968 0.4 76,647 3.1 4,114 0.3 Foreign currency ...... 231,176 8.2 201,131 6.7 121,401 5.0 251,418 21.0 Allowance for impairment losses ...... (297) (—) (1,276) (—) (857) — (1,245) (0.1) Total...... 253,593 8.9 212,823 7.1 197,191 8.1 254,287 21.2 Loans and advances to customers Tenge...... 904,098 31.9 948,380 31.6 551,214 22.6 247,613 20.7 Foreign currency ...... 1,545,846 54.5 1,558,318 52.0 1,201,562 49.2 537,960 45.0 Allowance for impairment losses ...... (196,293) (6.9) (140,363) (4.7) (73,936) (3.0) (42,162) (3.5) Total...... 2,253,651 79.5 2,366,335 79.0 1,678,840 68.8 743,411 62.2 Goodwill ...... 2,405 0.1 2,405 0.1 2,405 0.1 2,405 0.2 Other assets...... 53,130 1.9 52,112 1.7 26,250 1.1 15,748 1.3 Assets Total Tenge assets...... 1,023,902 36.1 1,071,742 35.8 896,244 36.7 271,121 22.7 Total foreign currency assets ...... 1,810,721 63.9 1,925,490 64.2 1,545,612 63.3 923,748 77.3 Total assets...... 2,834,623 100.0 2,997,232 100.0 2,441,856 100.0 1,194,869 100.0

Liabilities The following table sets out the major liability groups, broken down by currency, as at the indicated dates:

For the nine months As at 31 December ended 30 September 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (%) millions) (%) millions) (%) millions) (%)

Loans and advances from banks Tenge...... 14,483 0.6 31,993 1.2 171,762 7.9 16,033 1.4 Foreign currency ...... 330,592 13.3 691,438 25.8 712,539 32.7 363,173 32.8 Total...... 345,075 13.9 723,431 27.0 884,301 40.6 379,206 34.2 Customer accounts Tenge...... 561,291 22.6 542,353 20.3 387,384 17.8 135,747 12.3 Foreign currency 534,938 21.5 352,730 13.2 300,422 13.8 167,690 15.2 Total...... 1,096,229 44.1 895,083 33.5 687,806 31.6 303,437 27.5 Debt securities issued Tenge...... — — — — 3,133 0.1 4,084 0.4 Foreign currency ...... 702,793 28.3 739,688 27.6 421,029 19.3 299,049 27.0 Total...... 702,793 28.3 739,688 27.6 424,162 19.4 303,133 27.4 Other borrowed funds Tenge...... 6,522 0.3 18,929 0.7 156 — 210 — Foreign ...... 129,554 5.2 130,005 4.9 68,658 3.1 50,394 4.6 Total...... 136,076 5.5 148,934 5.6 68,814 3.1 50,604 4.6 Subordinated debt Tenge...... 29,179 1.2 28,929 1.1 21,770 1.0 16,282 1.5 Foreign currency ...... 79,586 3.2 79,237 3.0 57,152 2.6 35,931 3.2 Total...... 108,765 4.4 108,166 4.1 78,922 3.6 52,213 4.7 Other liabilities(1)...... 95,022 3.8 62,711 2.4 35,750 1.5 18,005 1.6 Total liabilities Tenge...... 691,872 27.9 671,690 25.1 612,633 28.1 186,484 16.9 Foreign currency ...... 1,792,088 72.1 2,006,323 74.9 1,567,122 71.9 920,114 83.1 Total...... 2,483,960 100.0 2,678,013 100.0 2,179,755 100.0 1,106,598 100.0 ______(1) Other liabilities include derivative financial instruments, provisions, dividends payable and deferred income tax liabilities.

Currency Exchange Rate Risk The following table shows the Bank’s exposure to foreign currency exchange rate risk by principal currencies as at 30 September 2008:

Other KZT U.S.$ EUR RUR Currency Total (KZT millions) Assets: Cash and balances with the national (central) banks...... 83,633 10,130 6,168 6,147 76,975 183,053 Precious metals...... — — — — 271 271 Financial assets at fair value though profit or loss ...... 46,631 2,194 6,032 10,039 3,875 68,771 Loans and advances to banks, less allowance for impairment losses ...... 22,713 151,164 51,440 21,228 7,048 253,593 Loans to customers, less allowance for impairment losses ...... 810,187 1,330,245 14,867 97,095 1,257 2,253,651 Investments available—for—sale...... 12,053 4,670 — — — 16,723 Investments held—to—maturity...... 594 — — — 19 613 Investments in associates and other entities .... 2,413 — — — — 2,413 Goodwill...... 2,405 — — — — 2,405 Fixed and intangible assets, less accumulated depreciation ...... 32,978 — — 2,041 160 35,179 Other assets, less allowance for impairment losses...... 10,295 2,368 281 4,927 80 17,951 Total assets ...... 1,023,902 1,500,771 78,788 141,477 89,685 2,834,623 Liabilities: Loans and advances from banks ...... 14,483 294,866 13,314 21,602 810 345,075 Customer accounts ...... 561,291 475,649 38,355 18,445 2,489 1,096,229 Financial liabilities at fair value though profit or loss...... 20,605 3,353 — — 25 23,983 Debt securities issued...... — 372,945 186,516 26,976 116,356 702,793 Other borrowed funds ...... 6,522 129,554 — — — 136,076 Provisions ...... 5,107 5,284 672 137 5 11,205 Deferred income tax liabilities...... 40,909 — — 112 5 41,026 Dividends payable...... 451 — — — 6 457 Other liabilities...... 13,325 1,469 34 3,484 39 18,351 Subordinated debt...... 29,179 79,586 — — — 108,765 Total liabilities ...... 691,872 1,362,706 238,891 70,756 119,735 2,483,960 Open balance sheet position...... 332,030 138,065 (160,103) 70,721 (30,050) — Accounts payable on forward contracts...... (93,129) (337,287) (190) (35,584) (107,210) (573,400) Accounts receivable on forward contracts...... 50,690 229,340 156,710 4,079 145,510 586,329 Net derivative financial instruments position .. (42,439) (107,947) 156,520 (31,505) 38,300 — Total open position...... 289,591 30,118 (3,583) 39,216 8,250 — Liquidity and Interest Rate Risk The Bank’s senior management monitors asset and liability maturities to ensure that they are consistent with its strategy, that the Bank has sufficient liquidity and that the Bank is in compliance with limits established by the FMSA and its internal procedures. The Bank’s Assets and Liabilities Management Committee (“ALMC”) also reviews the Bank’s positions.

The following table summarises the Bank’s assets and liabilities by maturity as at 30 September 2008 and contains certain information regarding interest rate sensitivity. The table assumes that the Bank is able to trade Kazakh and foreign government securities on the open market and therefore treats them as assets with a maturity of up to one month rather than long-term assets according to their maturity. As at 30 September 2008, the Bank’s cumulative positive maturity gap for all periods was KZT 168,184 million.

Maturity undefined (including allowance One to Three for 30 Up to one three months to One to five Over five impairment September month months one year years years losses) 2008 Total (KZT millions) Assets: Cash and balances with the national (central) banks ...... 20,000 — — — — — 20,000 Financial assets at fair value though profit or loss ...... 11,614 2,277 32,300 16,610 450 — 63,251 Loans and advances to banks...... 180,862 16,306 45,271 8,809 1,246 — 252,494 Loans to customers ...... 164,728 153,668 431,150 850,993 562,744 — 2,163,283 Investments available-for-sale ...... 176 119 916 4,241 5,241 — 10,693 Investments held-to-maturity...... 19 — — 105 469 — 593 Total interest-bearing assets...... 377,399 172,370 509,637 880,758 570,150 — 2,510,314 Cash and balances with national (central) banks ...... 163,042 — — — — — 163,042 Precious metals ...... 271 — — — — — 271 Investments in associates and other entities .. — — — — — 12,570 12,570 Goodwill...... — — — — — 2,405 2,405 Fixed and intangible assets ...... — — — — — 35,179 35,179 Accrued interest income on interest-bearing Assets ...... 34,994 28,291 19,851 9,594 161 — 92,891 Other assets ...... 6,685 3,237 7,444 585 — — 17,951 Total assets...... 582,391 203,898 536,932 890,937 570,311 50,154 2,834,623 Liabilities: Loans and advances from bank...... 44,482 81,196 55,500 140,173 20,192 — 341,543 Customer accounts...... 323,889 198,426 306,980 246,646 3,113 — 1,079,054 Debt securities issued...... 2,998 827 37,161 336,186 301,997 — 679,169 Other borrowed funds ...... — — 8,437 59,563 67,812 — 135,812 Subordinated debt ...... — — — 3,297 103,255 — 106,552 Total interest-bearing liabilities...... 371,369 280,449 408,078 785,865 496,369 — 2,342,130 Financial liabilities at fair value though profit or loss ...... 2,297 3,350 3,761 14,499 76 — 23,983 Provisions...... 768 1,095 3,931 797 612 4,002 11,205 Deferred tax liability...... 2,900 47 12,750 14,316 11,013 — 41,026 Dividends payable...... — 457 — — — — 457 Accrued interest expense on interest-bearing liabilities...... 11,759 10,611 21,821 2,552 65 — 46,808 Other liabilities...... 7,217 4,940 5,911 283 — — 18,351 Total liabilities...... 396,310 300,949 456,252 818,312 508,135 4,002 2,483,960 Liquidity gap...... 186,081 (97,051) 80,680 72,625 62,176 — — Interest sensitivity gap ...... 6,030 (108,079) 101,559 94,893 73,781 — — Cumulative interest sensitivity gap...... 6,030 (102,049) (490) 94,403 168,184 — — Cumulative interest sensitivity gap as a percentage of total assets ...... 0.21% (3.60%) (0.02%) 3.33% 5.93% — — Although the relative maturities of the Bank’s assets and liabilities give an indication of the Bank’s sensitivity to interest rate movements, it is an imprecise measure as it does not take into account the frequency with which the Bank is able to reprice its assets or with which its liabilities reprice. However, a positive gap by maturities means that an increase in interest rates would, generally, have a positive effect on net interest income. The Bank believes that its sensitivity to interest rate changes is largely reduced due to its ability to reprice certain loans that mature within one year, as well as loans maturing after one year under certain circumstances. In addition, a significant percentage of its loan portfolio maturing after one year is funded by fixed-rate long-term funds. However, if the average maturity of the Bank’s loan portfolio increases without a corresponding increase in the average maturity of its liabilities, the Bank will be exposed to increasing interest rate risk. The share of long term assets comprised 51.5 per cent. as at 30 September 2008 compared to 53.3 per cent. as at 31 December 2007.

The share of long term liabilities comprised 53.4 per cent. as at 30 September 2008 compared to 50.8 per cent. as at 31 December 2007. The Bank, when possible, funds loans under the special programmes established by National Bank of the Republic of Kazakhstan, Ministry of Finance of the Republic of Kazakhstan, National Prosperity Fund “Samruk-Kazyna”, Small Entrepreneurs Development Fund DAMU and international financial institutions. Securities Portfolio The size of the Bank’s securities portfolio decreased by 55.1 per cent as at 30 September 2008 to KZT 86.1 billion compared to KZT 192.2 billion as at the end of 2007. The decrease was mainly in the Bank’s trading portfolio because of the sale of bonds of international financial organizations of KZT 83.9 billion. The Bank’s investment in securities of prime Kazakh companies and Kazakh municipal bonds decreased by KZT 11.8 billion to KZT 18.2 billion, compared to KZT 30.0 billion as at 31 December 2007. Securities of Russian entities in the Bank’s portfolio totalled KZT 6.2 billion as at 30 September 2008. The volume of short-term NBK notes as at 30 September 2008 increased by KZT 12.9 billion to KZT 14.7 billion compared to KZT 1.8 billion as at the end of 2007. The following table shows the composition of securities held by the Bank and its investments in associated entities as at the indicated dates:

For the nine months ended As at 31 December 30 September 2008 2007 2006 2005 (KZT millions) Financial assets at fair value through profit or loss ...... 68,771 188,776 322,618 140,375 Investments available-for-sale ...... 16,723 3,036 2,628 427 Investments held-to-maturity ...... 613 375 357 562 Total...... 86,107 192,187 325,603 141,364 Investments in associates and other entities ...... 2,413 3,222 1,755 425 Total securities and investments in associates and other entities ...... 88,520 195,409 327,358 141,789 The average portfolio of marketable securities decreased by 47.5 per cent. to KZT 73.2 billion as at 30 September 2008 from KZT 139.4 billion for 2007, whilst average interest rates increased to 7.9 per cent. from 6.2 per cent. as at the end of 2007. Maturity Profile of Securities Portfolio The maturity structure of the Bank’s securities portfolio (Financial at fair value through profit or loss, Investments available for sale and Investments held to maturity) as at 30 September 2008 indicates that 56 per cent. of the portfolio had maturities of less than one year. The following table sets forth certain information as to the maturity of the Bank’s securities portfolio excluding accrued interest income on these securities as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (share (KZT (share (KZT (share (KZT (share millions) %) millions) %) millions) %) millions) %) Up to one month...... 11,809 14.0 10,459 5.5 32,644 10.1 43,067 30.8 From one to three months ...... 2,396 2.8 129,374 67.9 217,265 67.1 22,062 15.8 From three months to one year .. 33,216 39.2 32,030 16.8 65,223 20.1 71,981 51.5 From one to five years...... 20,956 24.7 1,639 0.9 1,842 0.6 489 0.4 Over five years ...... 6,160 7.3 1,355 0.7 640 0.2 377 0.3 Maturity not determined(1)...... 10,157 12.0 15,649 8.2 6,128 1.9 1,726 1.2 Total...... 84,694 100.0 190,506 100.0 323,742 100.0 139,702 100.0 ______(1) Equity securities.

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The following table shows the structure of the average marketable securities portfolio and average interest rates as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September For the year ended 31 December 2008 2007 2006 2005 (Average (Average (Average (Average (KZT interest (KZT interest (KZT interest (KZT interest millions) rate, %) millions) rate, %) millions) rate, %) millions) rate, %) NBK notes ...... 4,364 5.8 13,968 4.7 6,454 3.6 18,384 3.9 Corporate bonds ...... 67,114 8.1 116,301 6.4 36,855 8.7 24,424 9.2 Medium-term and long-term notes of the Ministry of Finance of the Republic of Kazakhstan and Ministry of Finance of Russian Federation ...... 1,578 5.5 4,085 6.2 3,063 4.9 10,354 4.8 Eurobonds of foreign governments. 3 4.4 4,416 4.3 76,817 4.5 23,623 4.7 Eurobonds of the Ministry of Finance of the Republic of Kazakhstan...... — — 361 4.9 1,694 5.4 2,215 4.4 Domestic municipal bonds...... 106 8.6 223 8.5 395 8.5 514 8.9 Short-term notes of the Ministry of Finance of the Republic of Kazakhstan and Kyrgyz Republic...... 35 7.9 65 6.4 69 5.1 475 3.2 Total...... 73,200 7.9 139,419 6.2 125,347 5.7 79,989 5.9 Loan Portfolio Loans, letters of credit and letters of guarantee The Bank offers a variety of corporate banking products including loans, trade financing, letters of credit and letters of guarantee. The following table sets out the composition of the Bank’s loans to customers and contingent liabilities exposure as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT millions) Loans Loans to customers...... 2,410,427 2,486,149 1,717,756 772,006 Loans under reverse repurchase agreements ...... 39,517 20,549 35,020 13,567 Allowance for impairment losses...... (196,293) (140,363) (73,936) (42,162) Loans to customers, net...... 2,253,651 2,366,335 1,678,840 743,411 Contingent liabilities Letter of guarantee ...... 107,012 94,582 91,683 39,928 Letter of credit...... 58,611 65,449 92,413 59,951 Provisions for contingent liabilities ...... (7,203) (7,216) (4,055) (2,589) Total contingent liabilities, net...... 158,420 152,815 180,041 97,290 Total loans to customers and contingent liabilities, net ...... 2,412,071 2,519,150 1,858,881 840,701 As at 30 September 2008, the gross loan portfolio (excluding letters of credit and letters of guarantee) decreased by 2.3 per cent. to KZT 2,450 billion compared to KZT 2,507 billion as at 31 December 2007 The average gross loan portfolio for the nine months ended 30 September 2008 increased by 8.1 per cent. to KZT 2,383 billion compared to KZT 2,204 billion as at the end of 2007. As at 30 September 2008, the total net loan portfolio (including letters of credit and letters of guarantee) decreased by 4.3 per cent. to KZT 2,412 billion from KZT 2,519 billion as at 31 December 2007. Loan portfolio by type The Bank provides financing for various purposes, although the majority of loans are for working capital purposes and for terms of 12 months or less.

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The following table shows a breakdown of the Bank’s customer loan portfolio before allowance for impairment losses by type of loan as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (share %) millions) (share %) millions) (share %) millions) (share %) Construction repair...... 691,221 28.7 650,527 26.2 463,684 27.0 194,580 25.2 Real estate purchase ...... 366,050 15.2 379,440 15.2 442,101 25.7 13,779 1.8 Working capital finance . 325,194 13.5 387,819 15.6 169,150 9.9 206,698 26.8 Fixed asset purchase...... 277,312 11.5 278,537 11.2 151,590 8.8 94,816 12.3 Equity investment in other enterprises...... 134,137 5.6 138,966 5.6 57,125 3.3 76,499 9.9 Trade finance...... 16,625 0.7 34,002 1.4 20,976 1.2 20,738 2.7 Other...... 599,888 24.8 616,858 24.8 413,130 24.1 164,896 21.3 Total...... 2,410,427 100.0 2,486,149 100.0 1,717,756 100.0 772,006 100.0 During the first nine months of 2008, the Bank continued its lending to individuals and its lending to companies in the construction, transport and communications, mining and metallurgy and machinery construction sectors. Lending to construction, trade sectors and individuals comprise the largest shares in the Bank’s loan portfolio, amounting to 58.9 per cent. of the total loan portfolio as at 30 September 2008. The Bank aims to focus on lending to sectors of the economy that have high growth and development prospects. The following table sets forth certain information as to the structure of the Bank’s customer loan portfolio before allowances for impairment losses by economic sector as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (share %) millions) (share %) millions) (share %) millions) (share %) Trade...... 397,165 16.5 461,745 18.6 305,577 17.8 147,657 19.1 Construction and construction materials...... 597,740 24.8 601,482 24.2 507,954 29.6 210,431 27.3 Individuals...... 424,042 17.6 471,507 19.0 270,459 15.8 101,844 13.2 Real estate...... 175,081 7.3 173,048 7.0 143,040 8.3 15,743 2.0 Hotel business ...... 131,732 5.5 140,616 5.6 43,037 2.5 17,394 2.3 Investment and finances...... 108,207 4.5 107,838 4.3 55,022 3.2 30,236 3.9 Transport and communication ...... 109,610 4.5 112,234 4.5 40,967 2.4 41,040 5.3 Energy ...... 76,265 3.2 69,122 2.8 46,033 2.7 33,922 4.4 Agriculture...... 45,898 1.9 56,406 2.3 50,402 2.9 33,137 4.3 Food industry...... 64,835 2.7 67,214 2.7 54,680 3.2 30,145 3.9 Mining and metallurgy...... 13,324 0.5 12,197 0.5 21,126 1.2 25,681 3.3 Machinery construction...... 43,381 1.8 46,467 1.9 22,985 1.3 13,488 1.7 Culture and art...... 2,575 0.1 5,077 0.2 580 0.0 747 0.1 Medicine...... 6,441 0.3 4,349 0.2 2,525 0.1 3,686 0.5 Other...... 214,131 8.8 156,847 6.2 153,369 9.0 66,855 8.7 Total...... 2,410,427 100.0 2,486,149 100.0 1,717,756 100.0 772,006 100.0 Loan portfolio by currency Foreign currency loans comprise the major part of the Bank’s loan portfolio as a significant part of the Bank’s liabilities are also in foreign currencies. As at 30 September 2008, U.S. dollar-denominated or indexed loans comprised 59.0 per cent. of the Bank’s loan portfolio, compared to 57.9 per cent. as at 31 December 2007. Tenge loans decreased by 9.1 per cent. in the same period, resulting in their comprising 35.9 per cent. of the Bank’s portfolio. Such Tenge loans have a shorter-term maturity profile and usually contain provisions to allow the Bank to increase interest rates or demand early repayment in the event of a devaluation of the Tenge.

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The following table sets forth certain information as to the currency profile of the Bank’s loan portfolio as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (share %) millions) (share %) millions) (share %) millions) (share %) Tenge ...... 810,187 35.9 891,041 37.7 525,052 31.3 220,086 29.6 U.S$...... 1,330,245 59.0 1,369,863 57.9 1,117,469 66.6 501,876 67.5 Euro ...... 14,867 0.7 24,955 1.0 13,683 0.8 6,487 0.9 Other...... 98,352 4.4 80,476 3.4 22,636 1.3 14,962 2.0 Total...... 2,253,651 100.0 2,366,335 100.0 1,678,840 100.0 743,411 100.0 Maturity profile of loan portfolio A significant portion of the Bank’s loan portfolio comprises loans with a maturity of over one year. The Bank’s potential exposure to interest rate and credit risk on such longer-term loans is offset, in part, by the terms of such loans which generally allow the Bank to require early payment of the loan and/or to revise interest rates, thereby reducing the interest rate and credit risk. The following table sets forth certain information as to the maturity of the Bank’s loan portfolio as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (share %) millions) (share %) millions) (share %) millions) (share %) Up to one month...... 199,022 8.8 154,913 6.6 137,072 8.2 44,661 6.0 From one to three months...... 181,416 8.1 179,498 7.6 140,768 8.4 47,156 6.4 From three months to one year...... 450,726 20.0 459,923 19.4 318,457 18.9 167,923 22.6 From one to five years ...... 859,742 38.1 862,121 36.4 619,369 36.9 287,176 38.6 Over five years ...... 562,740 25.0 709,880 30.0 463,174 27.6 196,495 26.4 Total...... 2,253,646 100.0 2,366,335 100.0 1,678,840 100.0 743,411 100.0 Collateralisation of loan portfolio In order to limit its lending risks, the Bank typically requires collateral from borrowers including domestic securities, commercial goods, real estate or cash deposits and personal guarantees. The Bank estimates the net realisable market value of such collateral and regularly monitors the quality of the collateral taken as security. In cases where the existing collateral declines in value, additional collateral may be required from the borrower. The following table sets forth the Bank’s requirements as to the loan amount as a percentage of collateral value based on the type of collateral:

Loan/Value (ratio %) Cash ...... 100 Government securities...... 100 Real estate...... 70 Fixed assets...... 70 Commodities ...... 50 Shares ...... 70 Guarantees...... 100 Concentration of the loan portfolio The Bank’s total loan portfolio decreased by 3.0 per cent. between 30 September 2008 and 31 December 2007, its composition underwent several changes. Loans to construction companies decreased by 0.6 per cent., constituting a 24.8 per cent. share in the Bank’s loan portfolio as at 30 September 2008 compared to 24.2 per cent. as at 31 December 2007. Loans to trade companies decreased by 2.1 per cent., their percentage of the Bank’s total loan portfolio decreasing to

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16.5 per cent. compared to 18.6 per cent. as at the end of 2007. As at 30 September 2008, loans to individuals, including consumer and mortgage lending, decreased by 10.1 per cent. in comparison to the end of 2007. These loans, as a percentage of the Bank’s loan portfolio decreasing from 19.0 per cent. as at 31 December 2007 to 17.6 per cent. as at 30 September 2008. Loans to the transport and communications industries decreased by 2.4 per cent. in the same period, but the percentage of these loans in the Bank’s portfolio remained at the same level of 4.5 per cent. as at 30 September 2008 as compared to the year end 2007. Loans to the oil and gas sector increased by 10.3 per cent. from 31 December 2007 to 30 September 2008, their share in the total loan portfolio increased to 3.2 per cent. compared to 2.8 per cent. in 2007. The oil and gas sector is represented by large Kazakh companies, as well as developing but still relatively small domestic oil producers with existing production facilities. The total amount lent to companies in the agriculture sector decreased by 18.6 per cent. and as a percentage of the Bank’s total loan portfolio (such loans decreased from 2.3 per cent. as at the end of 2007 to 1.9 per cent. as at 30 September 2008. Loans to agricultural companies are primarily provided to large integrated companies involved in all stages of grain production and processing. Loans to the food industry remained at the same level of 2.7 per cent. of the Bank’s total loan portfolio as at the end of 2007. Loans to companies in this sector are principally provided to large conglomerates with potential export capacity. As at 30 September 2008 the Bank’s 20 largest borrowers accounted for 30.4 per cent. of the total loan portfolio compared to 27.2 per cent. as at 31 December 2007. The following table sets forth certain information as to the Bank’s secured and unsecured loans after allowances for impairment losses and each as a percentage of total net loans as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (KZT (KZT (KZT millions) (share %) millions) (share %) millions) (share %) millions) (share %) Secured loans, of which Loans collateralised by real estate...... 1,061,977 44.0 1,086,125 43.7 445,570 25.9 203,045 26.3 Loans collateralised by accounts receivable ...... 102,196 4.2 107,875 4.3 110,545 6.5 126,953 16.4 Loans collateralised by mixed types of collateral...... 216,550 9.0 221,737 8.9 175,867 10.2 104,917 13.6 Loans collateralised by guarantees of enterprises.... 187,479 7.8 190,185 7.6 232,328 13.5 102,095 13.2 Loans collateralised by equipment...... 298,572 12.4 220,645 8.9 133,814 7.8 74,697 9.7 Loans collateralised by securities...... 196,795 8.2 217,550 8.8 175,816 10.2 33,759 4.4 Loans collateralised by inventories...... 67,067 2.8 43,806 1.8 72,719 4.2 29,893 3.9 Loans collateralised by cash or Kazakhstan Government guarantees...... 66,728 2.8 83,530 3.3 53,918 3.1 14,606 1.9 Loans collateralised by guarantees of financial institutions...... 2,794 0.1 8,353 0.3 47,881 2.8 3,197 0.4 Unsecured loans...... 210,269 8.7 306,343 12.3 269,298 15.7 78,844 10.2 Total loans to customers...... 2,410,427 100.0 2,486,149 100.0 1,717,756 100.0 772,006 100.0 Non-performing Loans Corporate and SME loans past due more than 30 days and retail loans delinquent for more than 60 days are considered as non-performing. The Bank applies conservative approach to calculating delinquencies. In particular, the Bank classifies the entire exposure to a client as past due if such a borrower has at least one delinquent loan.

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According to this definition, non-performing loans amounted to 6.2 per cent. as at 30 September 2008, compared to 3.1 per cent. as of 31 December 2007. The table below provides a breakdown of non-performing loans by business segment.

As at As at 31 December 30 September 2008 2007 2006 2005 Corporate lending and SME...... 5.4% 2.9% 1.7% 3.2% Retail lending ...... 9.9% 3.7% 1.5% 2.2% Total loan portfolio ...... 6.2% 3.1% 1.6% 3.1%

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Allowances for Impairment Losses The table below sets forth certain information relating to the Bank’s allowances for impairment losses under the Bank’s internal classification policy as at 30 September 2008 and 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 Total Total Reserves/ Total Total Reserves/ Total Total Reserves/ Total Total Reserves/ exposure reserves Exposure exposure reserves Exposure exposure reserves Exposure exposure reserves Exposure (KZT millions) (%) (KZT millions) (%) (KZT millions) (%) (KZT millions) (%) Standard...... 632,255 15,238 2.4 947,350 22,690 2.4 948,660 24,946 2.6 408,259 10,495 2.6 Watch ...... 1,130,390 66,585 5.9 1,339,380 74,096 5.5 684,697 34,685 5.1 297,498 17,631 5.9 Sub-standard...... 490,840 61,266 12.5 93,061 5,775 6.2 51,938 3,438 6.6 41,126 3,352 8.2 Doubtful ...... 43,000 7,252 16.9 50,923 16,739 32.9 12,290 1,955 15.9 6,627 1,934 29.2 Loss ...... 113,942 45,952 40.3 55,435 21,063 38.0 20,171 8,912 44.2 18,496 8,750 47.3 Total...... 2,410,427 196,293 8.1 2,486,149 140,363 5.6 1,717,756 73,936 4.3 772,006 42,162 5.5

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The effective level of provisioning increased from 5.6 per cent. as at the end of 2007 to 8.1 per cent as at 30 September 2008. As at 30 September 2008 total reserves on loans to customers increased by KZT 52.9 billion to KZT 196.3 billion compared to KZT 140.4 as a the end of 2007. “Standard” and “Watch” loans decreased by 22.9 per cent. and amounted to KZT 1,763 billion as at 30 September 2008, as compared to KZT 2,287 billion as at 31 December 2007 and KZT 1,633 billion as at 31 December 2006. “Sub-standard” loans increased by 427.4 per cent. from 31 December 2007 to 30 September 2008 and their share of the total portfolio increased to 20.4 per cent. as at 30 September 2008, as compared to 3.7 per cent. as at 31 December 2007 and 3.0 per cent. as at the end of 2006. “Doubtful” and “Loss” loans increased by KZT 50.6 billion (by 47.6 per cent.) and their share of the total portfolio increased to 6.5 per cent. as at 30 September 2008, compared to 4.3 per cent. as at the end of 2007 and 1.9 per cent. at the end of 2006. As at 30 September 2008, the Bank wrote off loans in the aggregate amount of KZT 0.9 billion, as compared to KZT 0.7 billion in 2007, and KZT 0.9 billion in 2006. For a description of the Bank’s write-off policy, see “Risk Management Policies.” The following table provides information regarding the Bank’s allowance for impairment losses as at 30 September 2008 and for the years ended 31 December 2007, 2006 and 2005:

As at 30 As at 31 December September 2008 2007 2006 2005 (KZT millions) Allowance for impairment losses at the beginning of period.. 140,363 73,936 42,162 29,879 Provision...... 57,636 69,497 33,277 17,121 Write-off of assets...... (922) (724) (909) (5,359) Recoveries of assets previously written off...... — 81 121 531 Exchange rate difference ...... (784) (2,427) (715) (10) Allowance for impairment losses at the end of the period. 196,293 140,363 73,936 42,162 The following table shows the allocation of the allowance for impairment losses between legal entities and individuals, both in nominal terms and as a percentage of the Bank’s gross customer loan portfolio as at the dates indicated:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT millions except for percentages) Legal entities...... 157,265 7.9% 121,187 6.0% 65,185 4.5% 37,742 5.6% Individuals ...... 39,028 9.2% 19,176 4.1% 8,751 3.2% 4,420 4.3% Total...... 196,293 8.1% 140,363 5.6% 73,936 4.3% 42,162 5.5%

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Contingent Liabilities and Credit Commitments The following table sets forth information relating to the size of the Bank’s contingent liabilities and credit commitments:

As at 30 September As at 31 December 2008 2007 2006 2005 Risk Risk Risk Risk Nominal weighted Nominal weighted Nominal weighted Nominal weighted amount amount amount amount amount amount amount amount (KZT millions) Guarantees issued and similar commitments ...... 107,012 107,012 94,582 94,582 91,683 91,683 39,928 39,928 Letters of credit and other transaction related to documentary operations..... 58,611 10,389 65,449 10,241 92,413 17,982 59,951 11,680 Commitments on loans and unused credit lines ...... 13,093 13,093 10,382 10,382 10,921 10,921 2,670 2,670 Commitments on reimbursement ...... 249 50 25,061 5,012 — — — — Commitments on loans sold to JSC “Kazakhstan Mortgage Company” with regress right...... 75 75 114 114 131 131 42 42 179,040 130,619 195,588 120,331 195,148 120,717 102,591 54,320 Loans and advances to banks As at 30 September 2008, loans and advances to banks, less allowance for impairment losses, increased by 19.2 per cent. to KZT 253.6 billion, as compared to KZT 212.8 billion as at 31 December 2007 mainly due to increase of short-term deposits. At the same time, loans and advances to banks as a percentage of total assets increased from 7.1 per cent. as at the end of 2007 to 8.9 per cent. as at 30 September 2008. The majority of loans and advances to banks (91.0 per cent.) were represented by U.S. dollar accounts as at 30 September 2008. The Bank adheres to a conservative approach in its deposit funding activities. Funds are usually placed for a short term with a maximum limit on the amount deposited, unless such loans are backed by state securities or cash deposits. In particular, the majority (78.1 per cent.) of loans and advances to banks had maturities of less than three months. During nine months of 2008, allowance for impairment losses on loans and advances to banks decreased substantially to KZT 297 million, as compared to KZT 1,276 million in 2007. The decrease resulted from a decrease in impaired loans to CIS banks to KZT 5.5 billion as at 30 September 2008 from KZT 24.8 billion as at 31 December 2007. The effective provisioning rate on impaired loans was 2 per cent. Cash and balances with the NBK, the National Bank of Kyrgyz Republic and the Central Bank of Russia increased from KZT 168.1 billion as at 31 December 2007 to KZT 183.1 billion as at 30 September 2008.

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The following table shows a breakdown by currency of correspondent account balances and loans as at 30 September 2008 and for the years ended 31 December 2007, 2006 and 2005:

As at 30 As at 31 December September 2008 2007 2006 2005 (KZT millions) Correspondent accounts...... 16,211 39,661 30,277 18,478 Tenge...... 535 557 845 199 Foreign currency...... 15,676 39,104 29,432 18,279 Loans and advances to banks...... 237,667 173,759 122,266 236,671 Tenge...... 22,165 11,732 30,296 3,532 Foreign currency...... 215,502 162,027 91,970 233,139 Allowances for impairment losses ...... (297) (1,276) (857) (1,245) Loans and advances to banks, net ...... 237,370 172,483 151,686 253,904 Loans under reverse repurchase agreements ...... 12 679 45,505 383 Tenge...... 12 11 45,505 383 Foreign currency...... — 668 — — Total loans and advances to banks, net...... 253,593 212,823 197,191 254,287 Funding The following table sets out the Bank’s sources of funds as at 30 September 2008 and for the years ended 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (share (KZT (share (KZT (share (KZT (share millions) %) millions) %) millions) %) millions) %) Customer accounts...... 1,096,229 45.9 895,083 34.2 687,806 32.1 303,437 27.9 customer accounts...... 1,095,720 45.9 894,882 34.2 683,422 31.9 303,405 27.9 loans from customers under repo agreements ...... 509 — 201 — 4,384 0.2 32 — Issued debt securities ...... 702,793 29.4 739,688 28.3 424,162 19.9 303,133 27.8 Loans and advances from banks ... 345,075 14.4 723,431 27.7 884,301 41.2 379,206 34.8 loans and advances from banks 344,206 14.4 645,670 24.7 633,449 29.5 320,095 29.4 loans from banks under repo agreements ...... 869 — 77,761 2.9 250,852 11.7 59,111 5.4 Subordinated debt ...... 108,765 4.6 108,166 4.1 78,922 3.7 52,213 4.8 Other funds borrowed ...... 136,076 5.7 148,934 5.7 68,814 3.2 50,604 4.6 Total liabilities...... 2,388,938 100.0 2,615,302 100.0 2,144,005 100.0 1,088,593 100.0 In May 2007 Bank repaid according to the schedule Eurobond in the amount of U.S.$200 million issued in 2002. In May 2008 Bank repaid short term ECP Eurobonds in the amount of U.S.$250 million with 1 year maturity.

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Customer accounts The following table sets forth a breakdown of time and demand deposits by currency as at 30 September 2008 and for the years ended 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (share (KZT (share (KZT (share (KZT (share millions) %) millions) %) millions) %) millions) %) Tenge: Demand deposits...... 139,461 12.7 130,045 14.6 161,498 23.5 58,031 19.1 Retail ...... 2 — 18,545 2.1 16,200 2.4 5,475 1.8 Corporate...... 139,459 12.7 111,500 12.5 145,298 21.1 52,556 17.3 Time deposits ...... 411,893 37.6 399,596 44.6 320,419 46.6 75,813 25.0 Retail ...... 132,776 12.1 130,053 14.5 94,712 13.8 37,138 12.2 Corporate...... 279,117 25.5 269,543 30.1 225,707 32.8 38,675 12.8 551,354 50.3 529,641 59.2 481,917 70.1 133,844 44.1 Foreign currency: Demand deposits...... 45,583 4.1 45,078 5.0 96,100 14.0 56,159 18.5 Retail ...... 3,702 0.3 16,473 1.8 16,652 2.4 15,984 5.3 Corporate...... 41,881 3.8 28,605 3.2 79,448 11.6 40,175 13.2 Time deposits ...... 481,609 43.9 303,647 33.9 97,945 14.2 108,806 35.9 Retail ...... 150,393 13.7 144,404 16.1 68,284 9.9 49,190 16.2 Corporate...... 331,216 30.2 159,243 17.8 29,661 4.3 59,616 19.7 527,192 48.0 348,725 38.9 194,045 28.2 164,965 54.4 Total customer accounts...... 1,078,546 98.3 878,366 98.1 675,962 98.3 298,809 98.5 Accrued interest ...... 17,174 1.6 16,516 1.9 7,460 1.1 4,596 1.5 Total with accrued interest...... 1,095,720 99.9 894,882 100.0 683,422 99.4 303,405 100.0 Loans from customers under repurchase agreements...... 509 0.1 201 — 4384 0.6 32 — Total...... 1,096,229 100.0 895,083 100.0 687,806 100.0 303,437 100.0 As at 30 September 2008 the deposits (not including interest accrued) of the 20 largest depositors accounted for 59.3 per cent. of total deposits, compared to 44.2 per cent. at the end of 2007 and 44.4 per cent. at the end of 2006.

Loans and advances from banks and other borrowed funds The following table sets forth the structure of the Bank’s wholesale funding as at 30 September 2008 and for the years ended 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (KZT (share (KZT (share (KZT (share (KZT (share millions) %) millions) %) millions) %) millions) %) Loans and advances from banks: Correspondent accounts...... 24,264 5.0 72,028 4.9 46,273 4.9 29,121 6.8 Loans from banks...... 220,655 45.9 284,267 29.0 276,779 29.0 45,387 10.5 Deposits of banks...... 5,567 1.2 34,780 0.9 8,382 0.9 8,448 2.0 Loans sold to banks under repo agreements... 869 0.2 77,761 26.3 250,852 26.3 59,111 13.7 Loans from international financial institutions...... 36,237 7.5 44,281 0.8 7,304 0.8 10,611 2.5 Syndicated loan...... 57,483 11.9 210,309 30.9 294,711 30.9 226,528 52.7 Total loans and advances from banks...... 345,075 71.7 723,431 92.8 884,301 92.8 379,206 88.2 Other borrowed funds: Due to Ministry of Finance...... 60 — 80 — 262 — 424 0.1 Due to the Fund of Small Business Support... — — — — — — 21 — Due to other organizations...... 136,016 28.3 148,854 7.2 68,552 7.2 50,159 11.7 Total other borrowed funds...... 136,076 28.3 148,934 7.2 68,814 7.2 50,604 11.8 Total borrowed funds ...... 481,151 100.0 872,365 100.0 953,115 100.0 429,810 100.0 The Bank’s debt securities increased to 28.3 per cent. of the Bank’s liabilities as at 30 September 2008 from 27.6 per cent. as at 31 December 2007 because of the decrease in total liabilities, and 19.5 per cent. as at 31 December 2006 due to new issues in 2007. Long-term liabilities increased to 53.4 per cent. of the Bank’s liabilities as at 30 September 2008 from 50.8 per cent. as at 31 December 2007 and 46.5 per cent. as at 31 December 2006. The Bank also adopts a policy of extending the maturities of its assets in accordance with the maturities of its funds raised in the debt capital markets so as to reduce risks related to interest rate

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changes. Long-term assets (i.e. assets over one year) decreased by 8.6 per cent. during the first nine months of 2008 and accounted for 51.5 per cent. of assets, as compared to 53.3 per cent. of assets as at 31 December 2007. As at 30 September 2008 the asset and liability interest gap was positive in respect of assets and liabilities with maturities of over five years, at 5.9 per cent. of assets. The positive gap means that an interest rate increase would have a positive effect on net interest income. Where practicable, the Bank also links loans to their underlying funding sources through participation in special programmes sponsored by the NBK, the Ministry of Finance of Kazakhstan and international financial institutions. The Bank also endeavours to increase and extend the maturities of its retail time deposits.

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RISK MANAGEMENT POLICIES Management of risks is fundamental to the Bank’s business. The Bank’s risk management function consists of: • Risk identification: The risks, which the Bank is exposed to in its daily activities, are identified by the risk management system. • Measuring risks: The Bank measures its exposure to risk using various quantitative and qualitative methodologies, which include risk based profitability analysis, calculation of possible loss amounts, and utilization of specialized models. Measurement models and associated assumptions are periodically reviewed to ensure that the tools represent the risks adequately and reasonably. • Risk monitoring: The Bank’s policies and procedures determine the processes for mitigating and minimizing the risks and establish limits on various types of operations. Such limits are reviewed on a periodic basis set forth in internal documents of the Bank. • Risk reporting: Risk reporting is performed on a line of business and on a consolidated basis. This information is periodically presented to the management. The Bank’s operations are primarily exposed to the following risks: Credit Risk The Bank is exposed to credit risk which is the risk that a counterparty to a financial instrument will fail to fulfill its obligation to the Bank. This covers actual payment defaults as well as losses in value resulting from a decrease in credit quality of the counterparty.

Risk management and monitoring is performed within set limits by the Credit Committees and Board of the Bank. Risk management coordination is performed by the risk management specialist or Risk Management Department. Daily risk management is performed by the Head of the Credit Departments or Credit Divisions of branches and subsidiaries.

The Bank determines the level of credit risk it undertakes by setting limits on the amount of risk accepted in relation to one borrower, or groups of borrowers, and to industry and geographical segments. Limits on the level of credit risk by a borrower and a product, by industry sector and by region are approved by the Credit Committee. The exposure to any individual borrower is further restricted by sub-limits covering on and off-balance sheet exposures which are set by the Credit Committees.

Off-balance sheet credit commitments represent unused portions of credit in the form of loans, guarantees or letters of credit. The credit risk of off-balance sheet financial instruments is defined as the probability of losses due to the inability of the counterparty to comply with the contractual terms and conditions. With respect to credit risk on off-balance sheet instruments, the Bank is potentially exposed to a loss in an amount equal to the total unused commitments. The actual amount of this loss is likely to be less than the total unused commitments since the commitments are contingent upon customers maintaining certain credit standards. The Bank applies the same credit policy to contingent liabilities as it does to the on-balance sheet financial instruments. Structure of Credit Committees The Bank has been centralizing decision making in the Head Office over the past several years. In particular, authorities of branches and regional directorates on approval of small entrepreneurship and retail loans have been transferred to Decision Making Centers (DMCs) in the Head office. Furthermore, most of branch and regional directorate authorities on corporate loan approvals have also been transferred to the Head Office.

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The Bank currently has the following credit committees: ● Head office committees ● Head Office Credit Committee. This committee is authorized to approve corporate loans of up to U.S.$5million. The committee also approves retail and small entrepreneurship loans which exceed the thresholds and authorities set for DMCs. ● Commercial Directorate. There are eight members of the committee, including the Chair person of the Bank, who presides, and seven Managing Directors. The committee is authorized to approve loans exceeding U.S.$5 million. ● Board of Directors. All loans exceeding 25 per cent. of the Bank’s total assets as well as all transactions with related parties have to be approved by the Board of Directors. ● Regional Directorate Committees. The Bank has six regional directorates, covering the central, southern, western, eastern and northern regions of Kazakhstan as well as the Almaty region. The regional directorates have limited authorities to grant loans, in case such transactions do not result in increase of credit risks of the Bank. ● Branch Committees. Each of the Bank’s branches has a credit committee. The branches have limited authorities to grant loans, in case such transactions do not result in increase of credit risks of the Bank. Corporate loan approvals When considering whether or not to make a corporate loan, in addition to credit proposals by credit managers, the appropriate committee will also obtain advice and recommendations from the following departments and divisions: ● Department of Risk Management. The analytic group within the Head Office, which is divided into sub-groups according to industry, provides advice on commercial loans based on their assessment of the borrower's business and/or the project, to which the loan relates. Their assessment takes into account a number of industry and borrower specific factors, future cash flows of the potential borrower and anticipated risk-adjusted returns for the Bank. For the purpose of the analysis, risk managers utilise the rating model described below. Furthermore, the Department of Risk Management is involved in the Bank's loan portfolio monitoring and in the development of procedures and guidelines with respect to the Bank's lending. ● Collateral Assessment Department and Debt Restructuring Division. The Bank requires collateral for almost all of its loans. According to Kazakh legislation, collateral valuation should be performed by independent collateral valuation companies (“NOKs”). The Collateral Valuation and Debt Restructuring Department reviews appraisal reports issued by NOKs and carries out certification and monitoring of NOKs. The Debt Restructuring Division of the department works with certain categories of problems loans subject to restructuring and collection. ● Legal Department. The Bank obtains legal advice from the Legal Department regarding proposed loans and receives confirmation as to the valid corporate existence of the potential borrower and its authority to enter into loan transactions and grant collateral. ● Security Department. The Security Department provides information on assets, credit history and reputation of potential borrowers. A central credit bureau has recently been established in Kazakhstan and this should improve the quality of information on the credit history of potential borrowers.

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Rating model The Bank has developed an internal rating model, based on principles and methods used by international rating agencies for assessment of credit risk of corporate borrowers. The rating of a corporate borrower is based on an analysis of the financial ratios of such borrower and an analysis of the market and industry sector, in which such borrower operates. The model also takes into consideration various qualitative factors, such as management efficiency and such borrower’s market share.

The application of the internal rating model results in a standardized approach in the analysis of corporate borrowers and provides a quantitative assessment of the creditworthiness of a borrower that does not have a rating from an international rating agency. The model takes into account specific local market conditions.

The quality of the internal rating model is examined on a regular basis through an assessment of both its effectiveness and validity. The Bank revises the model when deficiencies are identified. Retail and SME loan approvals Loans to retail and small entrepreneurship loans are subject to a standardized approval procedure. The Bank has established two new divisions in the Risk Management Department, the Decision Making Centers (DMCs). One DMC processes retail loan applications, while the second unit makes decisions on small entrepreneurship loans. In order to approve or decline an application, the DMCs analyze payment ability and creditworthiness of a potential borrower on the basis of standard terms, criteria and procedures set forth by the Bank.

The DMC on retail is authorized to approve applications from customers with one obligor exposure of up to U.S.$200,000. The DMC on small entrepreneurship has authorities to approve applications from customers with one obligor exposure of up to U.S.$500,000. Applications with larger exposures are referred to one of the relevant credit committees in the Head Office. The DMCs conduct analysis of the applications exceeding their authority limits, and the relevant credit committee takes their conclusions into account in decision making. Scoring models The standardized approach to evaluate credit risks of a borrower includes the use of scoring models for some types of retail and small entrepreneurship products. The statistical scoring models interpret socio-demographic and financial indicators, behavioural variables and the credit history of borrowers. Each of the parameters inserted into scoring model has a numeric value, the sum of which represents the borrower’s internal credit score (rating). The assigned score reflects the probability of default of the borrower.

The scoring models standardize and automate the process of decision making and decrease the operating expenses and operational risks of the Bank. The model is also used in the internal management decision making process as it permits the forecasting of profits and losses of the credit departments. The scoring model is assessed on a continual basis for its effectiveness and validity. Allowance for credit losses The Bank establishes an allowance for impairment losses on loans and off-balance liabilities under IFRS where there is objective evidence that a financial asset is impaired. In order to assess the quality of an asset and to classify it for provisioning purposes, a loan officer takes into account a number of criteria, including financial performance of the borrower, terms of the loan, collateral value and debt service of the borrower.

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Operational Risk The Bank is exposed to operational risk which is the risk of losses that can be a result of any system inefficiencies or breaks of internal processes, systems, presence of human error or effect of any external negative factor.

Each structural unit of the Bank is responsible for managing its own operational risks on a daily basis. The Operational Risks Committee presided by the Chair person of the Bank approves operational risk management (“ORM”) policies and makes all major decisions related to ORM. Risk Management Department performs general monitoring of ORM in the Bank, using the following tools, which comply with the best world banking practices:

• Risk self assessment - Risk Self-assessment is a structured interactive procedure of identifying and evaluating operational risk. Employees from a particular division participate in the process of operational risk evaluation of such division, help to establish control measures and make changes to the Bank's processes and products.

• New processes, products and system assessments - Operational Risk Assessment Procedure is the procedure wherein operational, legal and reputational risks arising from a proposed new initiative or change are identified and assessed in a structured manner, leading to proposals on risk mitigating actions and the acceptance of remaining (residual) risks.

• Operational losses database - The Bank’s Operational Loss Database is an internal database that collects and stores information on all operational risk events and losses.

• Key operational risk controls - Key Operational Risk Controls provide an overview of key risks associated with process scopes and establish key controls to mitigate operational risks. As such they are fundamental to develop operational risk management in the bank. Implementation of Key Operational Risk Controls throughout the Bank is currently in process.

• Key risk indicators - Key Risk Indicators represent a set of measurements used to assess the operational risk profile of a particular area or activity at any given point in time. Implementation of Key Risk Indicators throughout the Bank is currently in process.

The above-mentioned operational risk management tools allow the Bank to identify those banking activities that are most vulnerable to operational risks, to evaluate and monitor losses of the Bank arising from operational risk and to set relevant controls. They are also used to develop preventive and detective tools as well as measures for decreasing the level of risk.

Asset and Liability Management Committee

The Bank's Asset and Liability Management Committee (“ALCO”) seeks to control liquidity, currency, interest rate and market risks. Short meetings of ALCO take place on a weekly basis, while extended meetings are organized monthly. During the meetings ALCO undertakes analysis of the Bank's exposures on the basis of information about maturities, interest margins, cash flows, liquidity and the Bank's net foreign currency positions. The Bank's treasury operations and investment strategies are also planned at ALCO meetings. The Chair person of the Bank presides at ALCO. Five Managing Directors and heads of Risk Management and Treasury Departments are the members of the committee. Liquidity Risk Liquidity risk refers to the availability of sufficient funds to meet deposit withdrawals and other financial commitments of the Bank associated with financial instruments as they actually fall due as a result of decreased ability of the Bank to raise appropriate funds.

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The ALCO controls these types of risks by means of maturity analysis and determines the Bank’s strategy for the next financial period. Current liquidity is managed by Treasury Department through investments in money markets and the placement of available funds in liquid securities in line with the ALCO’s instructions.

With the purpose of managing liquidity risk, the Bank performs daily monitoring of future expected cash flows on clients’ and banking operations, which is a part of the asset and liability management process.

The Bank maintains compliance with liquidity requirements, such as current and short-term liquidity ratios and foreign exchange liquidity limits, set by the regulatory bodies. In the opinion of management, the restrictive nature of these limits ensures that the Bank maintains appropriate liquidity levels. Currency Risk Currency risk is defined as the risk of taking losses from open currency positions and financial instruments in foreign currencies as a result of changes in foreign exchange rates. The Bank is exposed to the effects of fluctuations in foreign currency exchange rates on its open currency positions and trading portfolio.

The ALCO controls currency risk by managing its open currency positions on the basis of macroeconomic analysis and exchange rate forecasts, which give the Bank an opportunity to minimise losses from significant currency fluctuations. Similar to liquidity risk management Treasury Department manages open currency positions of the bank using data generated by the Prudentials Monitoring and Credit Reporting Division on a daily basis.

The FMSA sets restrictions on open currency positions, which also serves to limit the exposure to currency risk. In addition, the Treasury Department uses various hedging strategies including cross currency swaps in order to mitigate currency risks. Interest Rate Risk Interest rate risk arises from the possibility that changes in interest rates will affect the Bank’s future cash flows and value of the Bank's financial instruments.

The ALCO also manages interest rate risk by monitoring and analysing repricing gap and sensitivity reports, as well as interest rate margin reports. This helps the Bank mitigate interest rate risks and maintain a positive interest margin. The Bank's Financial Control Department monitors the Bank's financial performance, regularly assessing the Bank's sensitivity to changes in interest rates and its effect on profitability.

The majority of the Bank's loans are fixed rate agreements. At the same time, the agreements contain clauses enabling the Bank to change interest rates, thus allowing it to significantly mitigate the risk.

In addition, the Bank entered into a number of interest rate swaps in order to hedge the interest rate risk. The Bank monitors its interest rate margin and does not consider itself exposed to significant interest rate risk. Market Risk The Bank defines market risk as currency, equity, commodity and interest rate risks related to its trading and available-for-sale portfolios.

The Treasury Department currently monitors market risk on a daily basis. At the same time, the Bank is in the process of transferring functions on management of market risks from treasury to Market Risk Management Division of Risk Management Department. The division measures the risk and

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generates treasury position reports, which are presented to ALCO. Market Risk Management division calculates VaR to measure the market risk on equity, fixed income and currency positions and breaks it down to individual risk factors (such as foreign exchange risk, interest rate risk and equity risk). This allows the Bank to analyze exposure to each risk factor and make further decisions to mitigate a particular exposure.

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MANAGEMENT General According to its charter, the Bank must have a Board of Directors, the management body of the Bank, as well as a Management Board, the executive body of the Bank. The General Meeting of Shareholders elects the members of the Board of Directors. The Board of Directors, in turn, elects the members of the Management Board. The Board of Directors represents the interests of Shareholders, is responsible for executing the general management of the Bank and approves its strategic and operational plans. The Board of Directors does not perform executive functions. Overall responsibility for the administration of the Bank’s activities is vested in the Management Board. Board of Directors The Bank’s board of directors (the “Board of Directors”) must comprise not less than five and not more than seven persons and is elected by the Shareholders. The members of the Board of Directors elect the chairman from amongst themselves. Members of the Board of Directors serve a term determined by the General Meeting of Shareholders or indefinitely until resignation or removal by a General Meeting of Shareholders. Members of the Board of Directors may be re-elected an unlimited number of times. The powers of the Board of Directors include determining the priority of the Bank’s activities and approving the Bank’s strategic and operational plans. The Board of Directors also makes decisions with respect to the establishment of branches and representative offices of the Bank, participation in the establishment and activities of other enterprises, concluding large-scale transactions and the adoption of operational budgets and estimates of capital expenditures. The Board of Directors must also approve all transactions with related parties. The current members of the Board of Directors are as follows: Nurzhan S. Subkhanberdin (age 45) has served as Chairman of the Board of Directors since September 2002. Prior to that he was Chairman of the Management Board of the Bank, having been appointed to that position in 1993. From 1991 to 1993, he was a First Deputy Chairman of the Bank. Mr. Subkhanberdin graduated from Moscow State University and has a degree in economics from Kazakhstan State University (“KSU”). Daulet H. Sembaev (age 74) has been Deputy Chairman of the Board of Directors since 2002 and was Chairman of the Board of Directors and Advisor to the Chairman of the Management Board from 1999 to 2002. Mr. Sembaev is a former Chairman of the NBK, President of the Kazakhstan Association of Financiers and a member of Parliament. He has also held other positions with different government bodies and private companies. Mr. Sembaev graduated as an engineer from the Kazakhstan Mining Institute in 1958. Nina A. Zhussupova (age 47) has been a member of the Board of Directors since September 2002. Ms. Zhussupova is the Chairman of the Management Board. Since joining the Bank in August 1995, she has served as First Deputy Chairman of the Management Board, Manager of the Accounts Office and Chief Accountant of the Bank. She holds a degree in economics from the Almaty Institute for National Economy (“AINE”). Gail Buyske (age 55) has been a member of the Board of Directors since October 2003. Ms. Buyske acts as an independent Director. Prior to joining the Board, she held the position of Senior Banker with the EBRD. She also worked as a Consultant to the World Bank and as a Vice President of Chase Manhattan Bank. Ms. Buyske holds a doctorate in political science from Columbia University, a master’s degree in international relations from Princeton University and a degree in Russian studies from Middlebury College. Mukhtar S. Yerzhanov (age 59) was elected in 2008 as an independent director. Mr. Yerzhanov has extensive experience in audit and accounting. He is a partner of an audit company, a professor of the Kazakh Economics University and the Turan University, as well as a Chairman of the Committee on

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Development of Audit Theory and Practice under the Chamber of Auditors of Kazakhstan. In addition, Mr. Yerzhanov is the President of the Guild of Internal Auditors and Accountants. John Filmeridis (age 62) was elected in December 2008 as a representative of one of the Bank’s Principal Shareholders – Alnair Capital Holding JSC. Mr. Filmeridis is a consultant to Alnair Capital Holding. He has wide experience in banking sector and prior to joining the Bank’s Board he was President and chief executive of Standard Chartered Bank, Seoul, Korea. The business address of the members of the Board of Directors is the registered office of the Bank. The registered office of the Bank is 135 “Zh” Gagarin Avenue, Almaty 050060, Kazakhstan and its telephone number is +7 3272 585 125. The Management Board The management board (the “Management Board”) must consist of not less than three persons. The Management Board manages the Bank’s affairs on a day-to-day basis and its responsibilities include all other matters not reserved to the exclusive competence of the Board of Directors or the General Meeting of Shareholders. Meetings of the Management Board can be convened as necessary. The current members of the Management Board are as follows: Nina A. Zhussupova (age 47) is the Chairman of the Management Board. Ermek N. Shamuratov (age 54) supervises the Bank’s IT, Call Centre, Banking Card Department and PR Department and has served as a Managing Director of the Bank since 1998. He is the former Deputy Chairman of HSBK and also held a number of other positions within that organisation. He holds a degree in mathematics from KSU. Alexander V. Barsukov (age 38) supervises the Bank’s Legal Department and the Collateral Department and has served as a Managing Director of the Bank since January 2005. Mr. Barsukov is a former managing partner of the law firm McGuire Woods’ office in Kazakhstan. He holds a degree in law from Kazakhstan State National University. Alexander V. Yakushev (age 51) has served as a Managing Director of the Bank since 1999. He is also a Director of the Northern Regional Directorate. He is the former Director of the Bank’s Correspondent Relationships with CIS and Baltic States Banks division. Before joining the Bank in 1996, Mr. Yakushev held various positions with Kramds Bank. He graduated from the Gorky Institute of Foreign Languages and AINE. Beibit T. Apsenbetov (age 43) supervises the Bank’s Corporate Banking Department No. 4, Small Business Development Department and has served as a Managing Director of the Bank since 2002. Mr. Apsenbetov is a former partner of Deloitte & Touche Kazakhstan. He holds a degree in economics from Leningrad State University and is a chartered accountant in Kazakhstan. Baurzhan K. Zhumagulov (age 40) supervises one of the Bank’s Credit Departments and has served as a Managing Director of the Bank since January 2005. Mr. Zhumagulov is a former Deputy General Director of “Caspian Industrial Financial Group” LLP. He holds a degree in economics from Kazakhstan Economic University. Magzhan M. Auezov (age 34) supervises two of the Bank’s Credit Departments, as well as its Corporate Business Development and Project Finance Departments and has served as a Managing Director of the Bank since 2002. Mr. Auezov is a former Country Head of Loan Products of ABN AMRO Bank Kazakhstan and prior to that was Head of the Trade and Commodity Finance Department at the same bank. He holds a graduate degree in International Banking and Finance from Columbia University and an undergraduate degree in International Economics from Georgetown University as well as a diploma in International Affairs from Kazakhstan State National University.

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Andrey I. Timchenko (age 33) supervises the Bank’s Financial Institutions Department, Retail business Development Department, Marketing Department and Business and Product Development Department and has served as a Managing Director of the Bank since 2003. Mr. Timchenko is a former tax adviser with Ernst & Young Almaty. He joined the Bank in 1998 and has held a number of positions in the Bank. He has a graduate degree in law from Kazakhstan State Law University. Dennis Y. Fedossenko (age 33) supervises the Bank’s Treasury Department and has served as a Managing Director of the Bank since 2003. Mr. Fedossenko joined the Bank in 1996 and held a number of positions in the Treasury Department of the Bank. He graduated from the Kazakhstan State Academy of Management. Erik Z. Balapanov (age 41) supervises one of the Bank’s Credit Departments and has served as a Managing Director of the Bank since 2003. Mr. Balapanov formerly held senior positions in Bank TuranAlem, Almaty Commercial Bank and the Development Bank of Kazakhstan. He graduated from the Kazakhstan Institute of Marketing, which is affiliated with the Kazakhstan State Academy of Management. Askarbek Nabiyev (age 35) supervises the Bank’s Financial Control Department and was appointed as a Managing Director in February 2007. He has been with the Bank for 10 years, initially within the economic analysis division. In 2002, he became the Director of the Financial Control Department. He holds a degree in economics from the Kazakh State Academy of Management. Adil Batyrbekov (age 32) supervises the Bank’s Risk Management Department and was appointed as a Managing Director in February 2007. He has headed the Bank’s Risk Management Department since 2004. Prior to joining the Bank, he spent over 6 years as the head of the credit division at ABN AMRO Kazakhstan. He graduated from the Kazakh State Academy of Management as an economist specialising in international affairs, and holds an MBA from the University of Nottingham. Kulyash Erezhepova (age 43) was appointed as a Managing Director in January 2008, supervising the administrative issues of the Bank, such as construction and maintenance of the new branches, logistics and procurement. Ms. Erezhepova holds a degree in Accounting from Almaty National Institute of Economics. She joined Kazkommertsbank in 1994 and has since held a number of positions in the Bank. The business address of the members of the Management Board is the registered office of the Bank. The registered office of the Bank is 135 “Zh” Gagarin Avenue, Almaty 050060, Kazakhstan and its telephone number is +7 3272 585 125.

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The following table sets out the principal amounts of loans outstanding to, and outstanding guarantees issued on behalf of, members of the Board of Directors and Management Board as at 30 September 2008:

Principal amount outstanding (in thousands of KZT) Apsenbetov B.T...... 121,883 Balapanov E.Zh ...... 28,176 Barsukov A.V...... 31,306 Ahmetov A.B...... 8,988 Zhumagulov B.K...... 109 Subhanberdin N.S...... 1,198 Timchenko A.I...... 870 Shamuratov E.N...... 607 Yakushev A.V...... 1,564 Auezov M.M...... 55 Batyrbekov A.U...... 17,959 Erezhepova K.B...... 36,544 Nabiyev A.R ...... 8,553 Zhussupova N.A...... 55 Fedossenko D.E ...... 79 Total...... 257,947

There are no other outstanding loans or guarantees granted by the Bank to any member of the Board of Directors or of the Management Board or to any parties related to them. All loans to members of the Board of Directors and the Management Board set out above have been approved by the Board of Directors as related party transactions and bear interest at rates from 10 to 17 per cent. per annum.

Corporate Governance Corporate governance best practice in Kazakhstan is set out in the Kazakhstan Corporate Management Code. The Kazakhstan Corporate Management Code is based on existing international best practice in the area of corporate governance and sets out recommendations for applying the principles of corporate governance by Kazakhstan joint-stock companies. The Kazakhstan Corporate Management Code was approved by the Expert Council for Securities Market Matters under the NBK in September 2002. The Bank currently complies with the provisions of the Kazakhstan Corporate Management Code in all material aspects, save as to the composition of its Board of Directors, which the Bank intends to remedy. The Bank has adopted the Corporate Governance Code which has approved by the Bank’s Board of Directors and the General Meeting of Shareholders. The Corporate Governance Code is set out of rules which the Bank follows to form, function and improve the Bank’s corporate governance system. The Bank follows the Code in its operation also to ensure the high level of business ethics in relations both within the Bank and with other market makers. The Bank also has adopted a Code of Business Ethics (the “Code”) which defines the Bank’s mission within a corporate governance framework. The Code was approved by the Board of Directors and an employees’ committee. The Code contains guidance on compliance matters, confidentiality and client and employee relations. The Bank has already established an audit committee and a nominations and remuneration committee. The Joint Stock Companies Law of Kazakhstan (the “JSC Law”) also requires that at least one-third of the members of a company’s board of directors should be independent. The Bank needs to approve one additional independent member in order to comply with this requirement and is in the process of seeking a candidate. Any failure to comply with this requirement may result in invalidation of certain corporate decisions that require approval by the Board of Directors.

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Compensation of Directors and Senior Management During the first nine months of 2008, total compensation paid to members of the Board of Directors and members of the Management Board was KZT 64,196,605,031. This included salaries and bonuses and other payments to the Board of Directors and the Management Board. The Bank does not maintain any stock option or similar plans. No member of the Board of Directors or the Management Board has any contract with the Bank or any of its subsidiaries providing for benefits upon termination of employment. The total amount set aside or accrued by the Bank to provide pension or retirement benefits was KZT10.9 million as at 30 September 2008. Conflicts of Interest and Other There are no potential conflicts of interest between any duties of the members of the Board of Directors and the Management Board towards the Bank and their private interests and/or other duties. No member of the Board of Directors or the Management Board has, in the five years preceding the date of this Prospectus: (a) been convicted in relation to fraudulent offences; (b) been associated with any bankruptcy, receivership or liquidation in the capacity of a member of any administrative, management or supervisory body; (c) been subject to public incrimination or sanctions by statutory or regulatory authorities (including designated professional bodies) or disqualified by a court from acting as a member of the administrative, management or supervisory bodies of any company or from acting in the management or conduct of affairs of any company.

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PRINCIPAL SHAREHOLDERS Introduction From late 1994 until November 2006, a majority of the Shares were owned or controlled by the Bank’s directors and senior management, although as a result of the Bank’s IPO and Initial Rights Offering described below, the directors and senior management no longer control a majority of the Shares. To the Bank’s knowledge, as at the date of this Prospectus, the Bank’s directors and senior management beneficially owned 44.6 per cent. of the outstanding Shares. The Bank’s Principal Shareholders have the same voting rights per Share as other shareholders. Principal Shareholders The following table sets forth information, to the Bank’s knowledge as of the date of this Prospectus, with respect to the Principal Shareholders and the beneficial ownership of Shares by: ● each of the Bank’s directors and senior managers; and ● all of the Bank’s directors and senior management as a group. Except as indicated, beneficial ownership includes the sole power to vote and to dispose of Shares.

Shares (%)(1) CAIC(2)...... 184,679,013 32.1 EBRD ...... 48,597,741 8.5 Nurzhan Subkhanberdin (direct ownership)...... 72,570,672 12.6 Central Securities Depository (3)(4)...... 268,363,838 46.7 ______(1) As at of the date of this Prospectus there are 574,387,298 Shares outstanding. Of the originally issued 575,000,000, 612,702 Shares have been repurchased in the open market by the Bank through its subsidiary, Kazkommerts Securities. (2) CAIC is one of the entities through which the Bank’s directors and senior managers beneficially own Shares. As at the date of this Prospectus, CAIC holds 184,679,013 Shares representing 32.1 per cent. of the Shares. 87.2 per cent. of the share capital of CAIC is beneficially owned by Mr. Subkhanberdin, 12.8 per cent. is beneficially owned by Ms. Zhussupova. The table above also includes Mr. Subkhanberdin’s and Ms. Zhussupova’s indirect holdings of Shares in the form of GDRs held by other means. (3) The Central Securities Depository is the registered holder of 268,363,838 Shares. Of these Shares, 263,478,040 Shares are held by Bank of New York Mellon as depositary in relation to the Bank’s existing GDRs. The remaining 5,025,171 Shares are beneficially owned in the form of Shares by persons or entities in Kazakhstan. (4) Alnair Capital Holdings JSC is the beneficial owner of 144,625,896 Shares in the form of GDRs (held through the Bank of New York Mellon as depositary). This beneficial shareholding constitutes 25.5 per cent. of the outstanding Shares on a fully diluted basis.

In addition to the Shares, the Bank had 124,775,079 Preference Shares outstanding as at the date of this Prospectus. Each Preference Share entitles the holder to a fixed annual dividend of U.S.$0.04. If such dividends are not paid, holders of Preference Shares are granted voting rights until all accrued and payable dividends are paid in full. At the option of the Bank, the Bank may offer to the holders of Preference Shares the option to convert all or some of such shares into Shares. In January 2006, the Bank registered with the FMSA a new share issue comprising 200 million Shares and in March 2009, the Bank registered with the FMSA a new share issue comprising 325 million common shares and 50 million preferred shares. In November 2006, the Bank’s three major shareholders at the time, CAIC, Mr. Nurzhan Subkhanberdin and the EBRD (collectively, the “Selling Shareholders”) sold 91,429,412 shares of the Bank’s common stock (“Common Stock”) in the form of Global Depositary Receipts (“Initial GDRs”) on the London Stock Exchange (the “IPO”). The Initial GDRs were sold at a price of U.S.$18.50 per GDR, and each Initial GDR represents two shares of Common Stock. The Selling Shareholders committed to use the proceeds from the IPO to subscribe for new shares of Common Stock offered domestically to the Bank’s pre-IPO shareholders in the Initial Rights Offering (defined below). Total proceeds to the Selling Shareholders exceeded U.S.$845 million. In the second stage of the IPO, the Bank offered 103.5 million shares of Common Stock to its pre-IPO shareholders (the “Initial Rights Offering”). The Bank completed the Initial Rights Offering in January 2007, and raised more than U.S.$957 million (before fees, commissions of investment banks and other expenses paid in connection with the IPO and Initial Rights Offering) in new capital.

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Shareholders’ Agreement with the EBRD In connection with the EBRD’s purchase of Shares in August 2003, the EBRD entered into the Shareholders’ Agreement dated 6 June 2003 (the “Shareholders’ Agreement”) with the Bank and certain shareholders at the time. In connection with the EBRD’s purchase of additional Shares in June 2005, the original shareholders’ agreement was replaced by the Shareholders’ Agreement dated 24 June 2005 as amended on 7 December 2005. The Shareholders’ Agreement provides, amongst other things, that its terms and conditions shall remain in effect for so long as the EBRD holds Shares. The Shareholders’ Agreement also provides that: ● as long as the EBRD holds at least five per cent. of all Shares, the EBRD will have the right to nominate one member of the Board of Directors; ● the 2005 Shareholders shall not vote, and shall procure that any of their representatives of the Board of Directors shall not vote, in favour of resolutions to, amongst other things, amend the Bank’s charter, change the policy statement of the Bank (which sets forth the basic framework whereby the Bank commits to maintain certain policies, procedures and minimum operational standards in order to achieve its stated strategic objectives), vary, increase or decrease its authorised or issued share capital or the rights attaching to Shares, grant options, warrants or similar rights convertible into Shares, make any distribution, payment or make a return to members of a capital nature, take steps to wind up or dissolve the Bank, make or permit any material change in the Bank’s business or sell, lease, transfer, dispose of or acquire a material part of the Bank’s assets, in each case without the prior approval of the EBRD; ● the Management Board will consult the EBRD and take due account of its opinion and recommendations with regard to incorporation of any new subsidiary undertaking of the Bank or the acquisition by the Bank of an interest in any shares in the capital of any corporate body; ● the 2005 Shareholders shall have the right to purchase any Shares held by the EBRD in the event the EBRD wishes to dispose of Shares to a third party; ● in the event that the 2005 Shareholders of any of them receive an offer that would result in the 2005 Shareholders holding less than 51 per cent. of all voting shares of the Bank, the 2005 Shareholders shall cause the purchaser to agree to purchase the Shares held by the EBRD; ● the 2005 Shareholders shall not sell or transfer the Shares of Mr. Subkhanberdin or CAIC to any third party without the EBRD’s prior written consent; ● the EBRD and the 2005 Shareholders shall have the right to subscribe for newly issued Shares in the Bank in proportion to their existing shareholdings; ● upon a notice served by the EBRD on the Bank, the EBRD shall have the right to convert the Shares held by the EBRD into GDRs or American depositary receipts (“ADRs”) and the Bank shall immediately take all actions, including any reorganisation of its share capital as may be required, to ensure that such conversion takes place and the EBRD becomes a lawful owner of such GDRs/ADRs, as the case may be; and ● in case of the listing of the Bank’s capital on any major stock exchange, the 2005 Shareholders shall ensure (and shall take all actions, execute all necessary documents and seek relevant waivers to ensure) that the EBRD shall have the same rights as the 2005 Shareholders have to dispose of its Shares via such stock exchange. Following any listing of the Shares on any major stock exchange, the EBRD shall be entitled to dispose of its Shares held at the time of such listing becoming effective and the 2005 Shareholders shall be entitled to dispose of a proportion of their Shares held at the time of such listing becoming effective equal to the proportion of the number of Shares disposed of by the EBRD. The Shareholders’ Agreement is governed by the laws of Kazakhstan.

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Subscription Agreement with the EBRD In conjunction with the execution of the Shareholders’ Agreement on 24 June 2005, the Bank and the EBRD executed the Subscription Agreement on 24 June 2005 as amended on 7 December 2005 (the “Subscription Agreement”), pursuant to which the EBRD agreed to subscribe for 4,328,811 Shares. The Subscription Agreement also provides that: ● while the EBRD owns any Shares, the Bank shall not unless the EBRD shall otherwise agree: (i) issue any shares of any class; (ii) increase its share capital; (iii) change the nominal value of, or the rights attached to, any of its shares of any class; or (iv) take any other action by amendment of its charter or through reorganisation, consolidation, sale of share capital, merger or sale of assets, or otherwise which might result in a dilution of the interest in the Bank represented by the Shares held by the EBRD; ● unless the EBRD otherwise agrees in writing; (i) the Bank shall not make changes, or permit changes to be made, to the nature of its present business or operations and the Bank shall not carry out any business or activity other than banking or financial services business, either directly or through a subsidiary; (ii) the Bank shall not make changes, or permit changes to be made, to its share capital; and (iii) the Bank shall not make changes, or permit changes to be made, to its charter, unless such changes are specifically required to be made under the mandatory provisions of the laws of the Republic of Kazakhstan; and ● unless the EBRD otherwise agrees in writing, (i) the Bank shall not sell, transfer, lease or otherwise dispose of more than a specified percentage of its property or assets (whether in a single transaction or in a series of transactions, related or otherwise) and (ii) the Bank shall not undertake or permit any merger, consolidation or reorganisation. The Subscription Agreement also contains a number of affirmative and restrictive covenants binding on the Bank unless EBRD otherwise agrees in writing. The Subscription Agreement is governed by the laws of Kazakhstan. Put Option Agreement In addition to the Shareholders’ Agreement, the EBRD also entered into a put option agreement dated 6 June 2003 (the “Put Option Agreement”) with Mr. Subkhanberdin and Ms. Zhussupova. In accordance with the Put Option Agreement, at any time after 31 August 2009, the EBRD shall have the right to require that all or part of its Shares be purchased by Mr. Subkhanberdin or, in the event Mr. Subkhanberdin fails to comply with his obligation to purchase such Shares, by Ms. Zhussupova. The price of any such purchase is to be determined in accordance with a formula contained in the Put Option Agreement. In certain limited circumstances, the EBRD may exercise its put option earlier, in which case a different formula is used to determine the price. See “The Offering” for a description of the agreements between the Bank, its Significant Shareholders and Samruk-Kazyna.

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RELATED PARTY TRANSACTIONS The following table sets forth the Bank’s interest income and expense with respect to transactions with related parties (comprising entities and natural persons that are shareholders, affiliates or entities under common management or control of the Bank), as well as short-term benefits paid to employees who are related parties, for the nine months ended 30 September 2008 and the years ending 31 December 2007, 2006 and 2005:

For the Nine Months Ended 30 September For the Year Ended 31 December 2008 (Unaudited) 2007 2006 2005 (in millions of KZT) Interest income ...... 123 67 130 251 Interest expense...... (333) (438) (258) (250) Short-term employee benefits ...... (676) (621) (500) (662)

As at 30 September 2008 total guarantees issued for related parties amounted to KZT 0.01 billion, as compared to KZT 0.01 billion as at 31 December 2007, KZT 7.1 billion as at 31 December 2006, KZT 0.01 billion as at 31 December 2005. As at 30 September 2008, the Bank’s investments in shares of related companies amounted to KZT 2.4 billion compared to KZT 3.2 billion as at 31 December 2007, KZT 1.8 billion as at 31 December 2006, KZT 0.4 billion as at 31 December 2005. The following table sets forth the total related party transactions of the Bank as at 30 September 2008 and as at 31 December 2007, 2006 and 2005:

As at 30 September As at 31 December 2008 2007 2006 2005 (in millions of KZT) Loans to customers...... 1,140 895 2,052 1,400 Allowance for impairment losses...... 57 33 50 43 Investments in associates ...... 2,413 3222 1,718 388 Customer accounts ...... 4,619 5495 8,326 2,272 Provision for guarantees and other off-balance sheet contingencies ...... — — 356 — Commitments on loans and unused credit lines...... 213 482 651 869 Guarantees issued and similar commitments...... 18 18 7,142 19

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DIVIDEND POLICY The Bank has not paid any dividends on its Shares in the last three fiscal years. There is no guarantee that any future dividends will be declared or paid and the Bank has no stated policy as to payment of dividends. Holders of GDRs will be entitled to receive dividends paid on Shares represented by such GDRs in accordance with the terms of the Deposit Agreement. Cash dividends on Shares represented by GDRs will be paid to the Depositary in Tenge and, except as otherwise described under the Deposit Agreement, will be converted by the Depositary into U.S. dollars and distributed, net of the Depositary’s fees, taxes, if any, and expenses to the holders of such GDRs. The JSC Law and the Charter set out the procedure for determining the dividends on Shares that the Bank distributes to its Shareholders. Subject to the provisions of the JSC Law and the Charter, the Bank may, by a resolution passed by a simple majority of Shareholders present and voting at the General Meeting of Shareholders (an “ordinary resolution”) declare annual, three-month and six- month dividends in accordance with the respective rights of Shareholders. The JSC Law prohibits payment of dividends if the Bank’s “own capital” is negative or would become negative as a result of such payment or if the Bank is insolvent under Kazakhstan bankruptcy legislation or would be as a result of such payment. With respect to annual dividends, a majority of the Board of Directors recommends dividends to the General Shareholders’ Meeting, which then approves the dividends by majority vote. The General Meeting of Shareholders should set up the date on which payment of the dividends in question begins. The Shareholders’ right to receive dividends, once declared, does not lapse. The list of Shareholders entitled to receive dividends is drawn up on the date preceding the date on which payment of the dividends in question begins. If a dividend payable in respect of a Share is delayed by the Bank, then additional interest is payable by the Bank to the Shareholder. No dividend may be paid on any share unless all outstanding dividends declared on the Preference Shares have been paid in full. Except as otherwise provided by the rights and restrictions attached to any class of shares, all dividends will be declared and paid according to the amounts paid up on the shares on which the dividend is paid. If the Bank has received the written consent of the Shareholder concerned, then it may pay dividends with respect to the Shares in the form of Shares or bonds issued by the Bank (but not in the form of any other type of securities). Except as provided by the rights and restrictions attached to any class of shares, the holders of the Bank’s shares will under the JSC Law be entitled to participate in any surplus assets in a winding-up in proportion to their shareholdings. A liquidator may divide among the Shareholders in specie the whole or any part of the assets of the Bank. In addition to its Shares, as at 30 September 2008, the Bank had 124,775,079 non-voting Preference Shares outstanding. Each Preference Share entitles the holder to a fixed annual dividend of U.S.$0.04 multiplied by the Tenge/U.S. dollar exchange rate established on the KASE as of the working day immediately preceding the date of the payment of the dividend. If such dividends are not paid, holders of Preference Shares are granted voting rights until all accrued and payable dividends are paid in full. Each Preference Share also entitles the holder to receive the same dividend that may be paid to any holder of Shares, where such dividend paid to any holder of Shares exceeds U.S.$0.04. The Bank may, in its sole discretion, make an offer to the holders of Preference Shares to convert such Preference Shares into Shares or make an offer to buy the Preference Shares from the holders thereof and upon such acquisition by the Bank, convert such Preference Shares into Shares. See “Taxation” for information regarding taxes payable on dividends on the Shares.

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DESCRIPTION OF SHARE CAPITAL AND CERTAIN REQUIREMENTS OF KAZAKHSTAN LAW GDR holders (including New GDR holders) will be able to exercise their rights with respect to the Shares underlying the GDRs only in accordance with the provisions of the Deposit Agreement and the relevant requirements of the laws of Kazakhstan. See “Terms and Conditions of the GDRs” for more information. Share Capital On 2 March 2009 an increase in the number of authorised shares was approved at a general shareholders meeting. Shareholders approved an increase in authorised capital by 325 million Shares up to 1,100 million Shares and the number of preference shares was increased by 50 million up to 175,000,000 preference shares. The 1,100 million Shares consist of 574,460,118 outstanding Shares (575 million less Shares bought back) and 525 million Shares registered but not placed. The 175 million preference Shares consist of 124,292174 outstanding preference shares (125 million less shares bought back) and 50 million newly issued but not placed Preference Shares. On 10 March 2009 the increase of number of Shares and preference shares was registered with the FMSA. The FMSA registration is evidenced by the Certificate of state registration of the issuance of securities No. A0040 dated 10 March 2009. Each Preference Share entitles the holder to a fixed annual dividend of U.S.$0.04 multiplied by the Tenge/U.S. dollar exchange rate established on the KASE as of the working day immediately preceding the date of the payment of the dividend. If such dividends on the Preference Shares are not paid, holders of Preference Shares are entitled to one vote per share voting together with the Shares as a class until all accrued and payable dividends are paid in full. None of the Preference Shares are convertible by holders into Shares. The Bank may offer to convert the Preference Shares into Shares at any time. All Shares are in registered form in the shareholders register of the Bank, maintained by an independent third party registrar. The registrar is JSC Reyestr Servis of 125/7 Rozybakiyeva Street, Almaty, 050060, Kazakhstan. Ownership of the Bank’s shares is evidenced by an extract from the share register of the Bank. On 30 March 2009 a resolution was passed by the Board of Directors approving 325,000,000 Shares to be offered in the Offering. Summary of the Charter The Charter provides that the Bank’s principal objective is “the attraction and effective use of temporary free funds of its clients and correspondent banks, as well as rendering to the latter all bank services and services in the securities market, for performance of which the Bank has the relevant licences, and also other services provided for by the legislation of the Republic of Kazakhstan.” The Bank’s objects are set out in full in Clause 4.1 of the Charter. The Charter, which was adopted by a special resolution at a General Meeting of Shareholders (a majority of not less than three-quarters of the total number of Shares in issue) on 20 October 2003 (and amended on 5 August 2005, 28 June 2007 and 3 December 2008), includes provisions to the following effect: Share rights Subject to the provisions of the JSC Law and without prejudice to any rights attached to any existing Shares or class of shares, the Bank may issue Shares, Preference Shares and other securities convertible into Shares.

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Subject to the Charter and to the provisions of the JSC Law, the unissued and unplaced Shares of the Bank (whether forming part of the original or any increased capital) are at the disposal of the General Meeting of Shareholders and the Board of Directors respectively. Voting rights Subject to any rights or restrictions attached to any class of shares by or in accordance with the Charter, on a show of hands, each holder of the Shares present in person or by proxy has one vote (save that any holder of Preference Share(s) shall not be entitled to vote except in limited circumstances) and a proxy at a meeting of the Shareholders appointed by a member on behalf of such member’s shareholding shall also have one vote. On a poll, every member present in person or by proxy (except holders of Preference Shares) shall have one vote for each fully paid Share of which he is the holder and the holders of the Preference Shares shall not be entitled to vote except as referred to in “Rights of holders of Preference Shares.” No resolution of Shareholders in writing shall be effective without a quorum (which is persons holding 50 per cent. or more of the voting share capital of the Bank) or, for a repeated meeting called in absence of the 50 per cent. quorum, persons holding 40 per cent. or more of the voting share capital of the Bank. Dividends and other distributions See “Dividend Policy.” Variation of rights Pursuant to the JSC Law, there are two types of share: common and preference. Each type has attached to it the rights set out in the JSC Law. These rights may be extended by a company’s charter (although the Bank’s Charter does not purport to extend such rights), but these rights cannot be restricted. Rights of holders of Preference Shares A Preference Share gives to its holder the right to a preferential right, as compared to holders of Shares, to: (a) a dividend representing not less than U.S.$0.04 per Preference Share, provided always that it shall be not less than the dividend paid on Shares in the same period. Each Preference Share entitles the holder to a fixed annual dividend of U.S.$0.04 multiplied by the Tenge/U.S. dollar exchange rate established on the KASE as of the working day immediately preceding the date of the payment of dividends; and (b) participate in the Bank’s assets on a winding-up pari passu with holders of Shares save that the holders of the Preference Shares will receive payment of that entitlement prior to the holders of Shares. A Preference Share does not give its holder the right to vote at a General Meeting of Shareholders, except: (a) at a General Meeting of Shareholders that considers any issue where the decision may lead to the limitation of the rights of holders of Preference Shares. Decisions on such issues may be taken only if approved by holders of not less than two-thirds of the outstanding Preference Shares; (b) at a General Meeting of Shareholders that reviews a question about the reorganisation of the Bank or its winding-up; and

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(c) if dividends on Preference Shares are not paid in full amount within three months from the expiry date stipulated for its payment. The right of a holder of a Preference Share to vote at a General Meeting of Shareholders when dividends on Preference Shares are not paid in full within three months from the expiry date stipulated for its payment is terminated on the date of payment in full of dividends on the Preference Share held by such holder. Each holder of Preference Shares that has the right to vote at a General Meeting of Shareholders and is present thereat in person or through his representative shall have one vote for each Preference Share held. Unpaid and bought-back Shares The JSC Law states that, until a share is paid in full, a company must not instruct the share to be credited to the personal account of the would-be acquirer. Instead, the share will be credited to the personal account of the company itself (an “issuance account”) with the registrar. Therefore, a Share cannot be placed unless it is fully paid up. Shares which have been bought back by a company are credited to another special account of the company (a “reissuance account”) with the registrar. No dividends accrue or are payable on unplaced Shares or Shares bought back by the Bank, such Shares are not counted for the purposes of determining a quorum, and such Shares do not carry the right to vote. Transfer of Shares To transfer a Share, the holder (or its representative) must sign a written order and submit it to the registrar or nominee for execution, or give suitable electronic instructions as permitted by legislation. The registrar or nominee will execute a buy order by pairing it with a sell order, and vice versa. All dealings with the Shares must be registered by way of making entries on the personal accounts in the registry system or the nominee’s books. Legal title to a Share arises from the moment when the transaction is so registered (unless each party to the transaction has a different nominee, in which case legal title arises from the moment when the transaction is registered in the personal accounts of each nominee in the Kazakhstan Central Depositary). An extract from the personal account of a shareholder in the registry system or a nominee’s books is evidence of that holder’s legal right to a share. A registrar or nominee can refuse to register a transaction if the documents submitted do not conform to legislative requirements. In addition, the FMSA has the right (by notifying the relevant issuer, the registrar and the Kazakhstan Central Depositary) to suspend trading in securities by blocking all or certain personal accounts in the registry or nominee systems if legal requirements establishing (i) the rights and interests of investors when acquiring securities or (ii) the terms and procedures for trading securities have been violated. A fee will ordinarily be payable to the registrar or nominee for registering the transfer, under contractual terms. Alteration of share capital The Bank may from time to time by a three-quarters majority of Shares at a General Meeting of Shareholders (but by no other method) increase its share capital. The Board of Directors may issue and place the Shares within the permitted authorised number of Shares.

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Purchase of own shares Subject to the JSC Law and without prejudice to any relevant special rights attached to any class of shares, the Bank may purchase any of its own shares of any class in any way and at any price (whether at par or above or below par). Such shares will be credited to the Bank’s personal account with the registrar. The Bank cannot purchase any of its shares which are being placed in a primary offering, and cannot purchase its own shares before the confirmation by the FMSA of the results of the placement of shares. Any such purchase must be effected with the consent of the relevant shareholder using a valuation methodology which has been approved in advance by a foundation meeting or amended by a General Meeting of Shareholders. Subject to the JSC Law, a shareholder may request the Bank to buy back shares belonging to the shareholder, which the Bank must do within 30 days of receipt by it from the shareholder of a duly formalised request. Shares being bought back by the Bank cannot exceed 25 per cent. of the total number of placed shares of the Bank, and the purchase price cannot exceed 10 per cent. of the size of the Bank’s own capital. Authority to issue Shares Under the JSC Law, the Board of Directors may allot shares by a board resolution. Any decision must state the number, the price of the shares and the manner of subscription. Pre-emption rights Under the JSC Law, a shareholder of the Bank has a pre-emptive right to acquire newly placed shares of the Bank (including newly issued Shares or Shares previously bought back). Holders of Shares have pre-emptive rights on Shares or securities convertible into Shares and holders of Preference Shares have pre-emptive rights on Preference Shares. Within 10 days from the date upon which the Bank takes a decision to place a specified number of shares, it must make an offer to each existing shareholder (either by written notification or by way of publication in the mass media) to acquire the shares pro rata to its shareholding at the placement price established by the Bank in the decision. Each shareholder then has 30 days from the date of such notification or publication to submit an application to acquire shares (i.e., to exercise its pre-emptive right). Upon the expiry of such period, the right to submit an application will lapse. The FMSA has taken the position in the past that persons not holding shares and therefore not disclosed in the register of the KCD, such as holders of GDRs, may not exercise the pre-emptive rights attaching to the underlying shares. Although the FMSA currently takes the position that holders of GDRs may exercise such rights (and although there is nothing in current legislation that would prevent GDR holders from exercising their pre-emptive rights), there is no guarantee that the FMSA will not reverse this position. General meetings The Board of Directors must convene and the Bank must hold general meetings and annual general meetings in accordance with the requirements of the JSC Law. The Board of Directors may call general meetings at such times as it determines. In addition, a general meeting may be convened on the written request of any holder of Shares representing not less than 10 per cent. of the issued Shares. The Board of Directors of the Bank cannot introduce any changes to the agenda or proposed order for conduct of the general meeting conducted pursuant to a request of any holder of Shares representing not less than 10 per cent. of the issued Shares. However, the Board of Directors of the Bank may include additional items to the agenda at its discretion.

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Shareholders are entitled to receive not less than 30 (45 in the event of a meeting in absence) days’ notice of the holding of any general meeting. The General Meeting of Shareholders shall have exclusive competence to determine certain matters, including the following: (a) the introduction of amendments and supplements to, or the approval of new versions of, the Charter; (b) the voluntary reorganisation or winding-up of the Bank, including any change in the Bank’s status as a Kazakhstan joint-stock company; (c) any increase in the amount of issued shares of the Bank or any change in the type of any issued shares of the Bank which have not been placed; (d) the determination of the scope and the expiry dates of the powers of the Board of Directors, the selection of members of the Board of Directors and early termination of their powers, as well as determination of the amount and payment terms of remuneration to members of the Board of Directors; (e) the appointment of an auditing company to undertake the audit of the Bank; (f) approval of annual financial statements and amount of annual dividend paid on Shares, if any; and (g) if such decision may not be taken by the Board of Directors, decisions for the Bank to conclude any transaction by the Bank with any affiliate of the Bank. Matters referred to in paragraphs (a) to (c) above shall require the approval by a qualified majority of Shareholders. Members of the Board of Directors are elected by cumulative voting (whereby each shareholder has a right to give the votes owned by such shareholder completely to one candidate or to be distributed among several candidates to the Board of Directors). The General Meeting of Shareholders has a right to cancel any decision made by any other management body of the Bank on issues related to the internal organisation of the Bank. Directors The Board of Directors must comprise not less than three and not more than five persons. Directors shall be appointed by Shareholders by way of cumulative voting (whereby each Shareholder has a right to give the votes owned by such Shareholder completely to one candidate or to be distributed among several candidates to the Board of Directors). Candidates receiving a majority of votes are appointed to the Board of Directors. If two or more candidates gain an equal number of votes then an additional election is carried out with regard to such candidates. The quorum required for a duly convened meeting of the Board of Directors shall comprise not less than half of the members of the Board of Directors. Each member of the Board of Directors has one vote. Decisions of the Board of Directors are made by simple majority of votes of the members present at the meeting. A General Meeting of Shareholders has a right to terminate early the powers of all or any members of the Board of Directors and to remove any member of the Board of Directors from office. The Board of Directors shall have exclusive competence to determine the following matters: ● the allotment of Shares, including the price, number and the manner of subscription of the Shares to be placed; ● the powers of the Management Board, the selection of the Chairman of the Management Board and members of the Management Board, and early termination of their powers;

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● the remuneration and bonuses to be paid to the members of the Management Board; ● any agreements concerning major transactions of the Bank (being a transaction or combination of interrelated transactions which result or may result in the purchase or disposal by the Bank of assets representing 25 per cent. or more of the total value of the Bank’s assets or an increase of the Bank’s liabilities by an amount equal to or exceeding 10 per cent. of the Bank’s own capital) and related party transactions; ● the establishment of the general terms and conditions of the Bank’s operations and approval of certain internal regulations; ● the establishment of the Bank’s strategic plan, annual operation plan, annual budget, business plan and investment plan; Remuneration of Directors The remuneration of Directors shall be determined by the General Meeting of Shareholders. Permitted interests of Directors A Director cannot participate in discussions or voting on any transaction between the Bank and: ● himself or any connected persons; ● any legal entity in which s/he or any connected persons has a material interest in, or is otherwise affiliated with, that legal entity; or ● any legal entity in which s/he or any connected persons is a Director or Manager. Disclosure of beneficial ownership A list of shareholders that have the right to participate in a meeting of shareholders and vote at the meeting will be prepared by the Bank’s registrar on the basis of information recorded in the register of shareholders of the Bank. However, any shareholder holding Shares through a nominee and whose identity is not disclosed to the KCD shall not be entitled to vote at a meeting of shareholders. Holders of GDRs will be able to exercise their voting rights in accordance with and subject to the limitations set out in Condition 12 (Voting of Shares) of the “Terms and Conditions of the Global Depositary Receipts.” These GDR holders will also be able to exchange GDRs for Shares. Further, ownership of the Shares is also subject to certain legislative restrictions under Kazakhstan law. Specifically, (a) legal entities registered in certain specified offshore jurisdictions such as Andorra, Liechtenstein, Liberia, Monaco, and the Marshall Islands, Antigua and Barbuda, the Bahamas, Barbados, Belize, Brunei, Vanuatu, Guatemala, Grenada, Djibouti, Dominican Republic, Indonesia, Spain (only Canary Islands), Cyprus, China (only Hong Kong Special Administrative Region and Macau Special Administrative Region), Comoros, Costa Rica, Malaysia (only Labuan Enclave), Mauritius, Portugal (only Madeira Island), Maldives, Malta, the Union of Myanmar, Nauru, the Netherlands (only Aruba and the Antilles), Nigeria, New Zealand (only Cook Islands and Niue), Palau, Panama, Samoa, Seychelles, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Saint Lucia, United Kingdom of Great Britain and Northern Ireland (only Anguilla, Bermuda, British Virgin Islands, Gibraltar, Cayman Islands, Montserrat, Turks and Caicos Islands, Isle of Man, Channel Islands (Guernsey, Jersey, Sark, Alderney)), United States of America (only U.S. Virgin Islands, Guam, Puerto Rico), Tonga, the Philippines and Sri Lanka or which have affiliates registered in such jurisdictions (except for international banks having a credit rating of “A” or above from certain rating agencies) or (b) individuals who are participants or shareholders in such legal entities may not directly or indirectly own voting Shares in the capital of the Bank, including Shares. Accordingly, holders of GDRs falling under (a) or (b) above are not entitled to vote through the Depositary at Meetings of Shareholders, cannot exchange GDRs into Shares and cannot own, hold or

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dispose of the Shares. 1 April 2009 is set as a deadline for existing holders of Shares to adjust their corporate or shareholding status accordingly. A holder of Shares that intends to participate in a General Meeting of Shareholders of the Bank should provide a document evidencing that its shareholders (participants) are not registered in offshore jurisdictions listed above if the Bank does not have such information already. A holder of Shares that does not provide such evidence should not be allowed to participate in a General Meeting of Shareholders of the Bank. If such evidence is found out to be untrue or if shareholders of a holder of Shares are registered in above listed offshore jurisdictions the following consequences will ensue: 1) when decision was adopted by a majority of voting Shares (excluding the voting Shares of a holder of Shares that provided the evidence) the decision will be regarded as adopted without taking into account the voting Shares of that holder of Shares.

2) when a vote of a holder of Shares that provided the evidence was decisive the decision of a General Meeting of Shareholders may be declared invalid by claim of the FMSA or other interested parties.

Although the Bank has been advised that such restrictions should not prevent a GDR holder registered in any such jurisdiction (or which has an affiliate registered in such jurisdiction) from exercising or benefitting from other rights (including the right to receive dividends and to have the Depositary exercise pre-emptive rights on their behalf such that holders can receive additional GDRs) there is no guarantee that the FMSA or any other relevant authority such as a Kazakhstan court will not take a different view thereby restricting all such GDR holders from exercising or benefitting from such shareholder rights. Moreover, there can be no assurance that the FMSA or any other relevant authority would not interpret the foregoing legislation as restricting such entities or persons from owning GDRs. In addition, any physical person or legal entity becoming a “major shareholder” or, for legal entities, a “bank holding” company in relation to the Bank should obtain prior written permission of the FMSA. A major shareholder/bank holding company means a person directly or indirectly owning or voting by 10 or 25 per cent. respectively, of the voting shares or can otherwise influence the decisions of the Bank on the basis of an agreement or otherwise as set out by FMSA regulations. In addition any person acquiring 10 per cent. or more of the voting shares of the Bank is considered an affiliate of the Bank and must disclose its identity to the Bank. Information about the identity of an affiliate is not confidential. Mandatory Offers Under the JSC Law a person either alone or jointly with its affiliated persons acquiring 30 or more per cent. of the Shares of the Bank is required to make an offer to the remaining minority Shareholders to buy out their Shares under the market price. Any failure by the acquiror to make such an offer would result in the acquirer being obligated to reduce its shareholding not more than 29 per cent. Related party transactions Related party transactions should be approved by the majority of non-interested members of the Board of Directors or, if all Directors are interested, by the decision of a meeting of shareholders made by the majority of non-interested shareholders or by simple majority vote if all Shareholders are interested.

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TERMS AND CONDITIONS OF THE GDRS The following terms and conditions (except for paragraphs in italics) will be endorsed on each certificate representing GDRs. The Global Depositary Receipts (“GDRs”) represented by this certificate are denominated in U.S. dollars and are each issued in respect of two common shares (the “Shares”) in JSC Kazkommertsbank (the “Bank”) pursuant to and subject to an agreement dated 8 November 2006 (such agreement, as amended from time to time, being hereinafter referred to as the “Deposit Agreement”), and made between the Bank and The Bank of New York Mellon in its capacity as depositary (the “Depositary”). Pursuant to the provisions of the Deposit Agreement, the Depositary has appointed JSC Kazkommertsbank as Custodian (in its capacity as custodian, the “Custodian”) to receive and hold on its behalf any relevant documentation respecting certain Shares the “Deposited Shares”) and all rights, interests and other securities, property and cash deposited with the Custodian which are attributable to the Deposited Shares (together with the Deposited Shares, the “Deposited Property”). The Depositary shall hold Deposited Property for the benefit of the Holders (as defined below) as bare trustee in proportion to their holdings of GDRs. In these terms and conditions (the “Conditions”), references to the “Depositary” are to The Bank of New York Mellon and/or any other depositary which may from time to time be appointed under the Deposit Agreement, references to the “Custodian” are to JSC Kazkommertsbank in its capacity as Custodian or any other custodian from time to time appointed under the Deposit Agreement and references to the “Main Office” mean, in relation to the relevant Custodian, its head office in the city of Almaty or such other location of the head office of the Custodian in Kazakhstan as may be designated by the Custodian with the approval of the Depositary (if outside the city of Almaty) or the head office of any other custodian from time to time appointed under the Deposit Agreement. The GDRs issued under certain deposit agreements entered into in 1997 by the Bank with the Depositary each represented 30 Shares. With effect from 27 September 2006, these GDRs have been redenominated so that they each represent two Shares. The 1997 deposit agreements were governed by New York law. On or about the Closing Date those agreements will be amended so that the GDRs outstanding under them are exchanged for GDRs issued pursuant to the Deposit Agreement. This exchange will take place on or about the thirtieth day after the Closing Date and from that date those GDRs will be fungible with the GDRs being offered in the Global Offer. The 1997 deposit agreement will then be cancelled. References in these Conditions to the “Holder” of any GDR shall mean the person or persons registered on the books of the Depositary maintained for such purpose (the “Register”) as holder. These Conditions include summaries of, and are subject to, the detailed provisions of the Deposit Agreement, which includes the forms of the certificates in respect of the GDRs. Copies of the Deposit Agreement are available for inspection at the specified office of the Depositary and each Agent (as defined in Condition 17) and at the Main Office of the Custodian. Terms used in these Conditions and not defined herein but which are defined in the Deposit Agreement have the meanings ascribed to them in the Deposit Agreement. Holders of GDRs are not party to the Deposit Agreement and thus, under English Law, have no contractual rights against, or obligations to, the Bank or Depositary. However, the Deed Poll executed by the Bank in favour of the Holders provides that, if the Bank fails to perform the obligations imposed on it by certain specified provisions of the Deposit Agreement, any Holder may enforce the relevant provisions of the Deposit Agreement as if it were a party to the Deposit Agreement and was the “Depositary” in respect of that number of Deposited Shares to which the GDRs of which he is the Holder relate. The Depositary is under no duty to enforce any of the provisions of the Deposit Agreement on behalf of any Holder of a GDR or any other person. 1. Withdrawal of Deposited Property and Further Issues of GDRs 1.1 Any Holder may request withdrawal of, and the Depositary shall thereupon relinquish, the Deposited Property attributable to any GDR upon production of such evidence of the

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entitlement of the Holder to the relative GDR as the Depositary may reasonably require, at the specified office of the Depositary or any Agent accompanied by: (i) a duly executed order (in a form approved by the Depositary) requesting the Depositary to cause the Deposited Property being withdrawn to be delivered at the Main Office of the Custodian, or (at the request, risk and expense of the Holder, and only if permitted by applicable law from time to time) at the specified office located in New York, London or Kazakhstan of the Depositary or any Agent, or to the order in writing of, the person or persons designated in such order; (ii) the payment of such fees, taxes, duties, charges and expenses as may be required under these Conditions or the Deposit Agreement; (iii) the surrender (if appropriate) of GDR certificates in definitive registered form properly endorsed in blank or accompanied by proper instruments of transfer satisfactory to the Depositary to which the Deposited Property being withdrawn is attributable; and (iv) the delivery to the Depositary of a duly executed and completed certificate substantially in the form set out either (a) in Schedule 3, Part B, to the Deposit Agreement, if Deposited Property is to be withdrawn or delivered in respect of surrendered Regulation S GDRs, or (b) in Schedule 4, Part B, to the Deposit Agreement, if Deposited Property is to be withdrawn or delivered in respect of surrendered Rule 144A GDRs. 1.2 Upon production of such documentation and the making of such payment as aforesaid for withdrawal of the Deposited Property in accordance with Condition 1.1, the Depositary will direct the Custodian, by tested telex, facsimile or SWIFT message, within a reasonable time after receiving such direction from such Holder, to deliver at its Main Office to, or to the order in writing of, the person or persons designated in the accompanying order: (i) a certificate (if any) for, or other appropriate instrument of title (if any) to or evidence of a book-entry transfer in respect of the relevant Deposited Shares, registered in the name of the Depositary or its nominee and accompanied by such instruments of transfer in blank or to the person or persons specified in the order for withdrawal and such other documents, if any, as are required by law for the transfer thereof; and (ii) all other property forming part of the Deposited Property attributable to such GDR, accompanied, if required by law, by one or more duly executed endorsements or instruments of transfer in respect thereof; provided however that the Depositary may make delivery at its specified office in New York of any Deposited Property which is in the form of cash; provided that the Depositary (at the request, risk and expense of any Holder so surrendering a GDR): (a) will direct the Custodian to deliver the certificates for, or other instruments of title to, or book-entry transfer in respect of, the relevant Deposited Shares and any document relative thereto and any other documents referred to in sub-paragraphs 1.2(i) and (ii) of this Condition (together with any other property forming part of the Deposited Property which may be held by the Custodian or its agent and is attributable to such Deposited Shares); and/or (b) will deliver any other property forming part of the Deposited Property which may be held by the Depositary and is attributable to such GDR (accompanied, if required by law, by one or more duly executed endorsements or instruments of transfer in respect thereof);

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in each case to the specified office located in New York or London of the Depositary (if permitted by applicable law from time to time) or at the specified office in Kazakhstan of any Agent as designated by the surrendering Holder in the order accompanying such GDR. 1.3 Delivery by the Depositary, any Agent and the Custodian of all certificates, instruments, dividends or other property forming part of the Deposited Property as specified in this Condition will be made subject to any laws or regulations applicable thereto. 1.4 The Depositary may, in accordance with the terms of the Deposit Agreement and upon delivery of a duly executed order (in a form reasonably approved by the Depositary) and a duly executed certificate substantially in the form of (a) Schedule 3, Part A of the Deposit Agreement (which is described in the following paragraph) by or on behalf of any investor who is to become the beneficial owner of the Regulation S GDRs or (b) Schedule 4, Part A of the Deposit Agreement (which is described in the second following paragraph) by or on behalf of any investor who is to become the beneficial owner of Rule 144A GDRs from time to time execute and deliver further GDRs having the same terms and conditions as the GDRs which are then outstanding in all respects (or the same in all respects except for the first dividend payment on the Shares corresponding to such further GDRs) and, subject to the terms of the Deposit Agreement, the Depositary shall accept for deposit any further Shares in connection therewith, so that such further GDRs shall form a single series with the already outstanding GDRs. References in these Conditions to the GDRs include (unless the context requires otherwise) any further GDRs issued pursuant to this Condition and forming a single series with the already outstanding GDRs. The certificate to be provided in the form of Schedule 3, Part A, of the Deposit Agreement certifies, among other things, that the person providing such certificate is located outside the United States and will comply with the restrictions on transfer set forth under “Transfer Restrictions.” The certificate to be provided in the form of Schedule 4, Part A, of the Deposit Agreement certifies, among other things that the person providing such certificate is a QIB or is acting for the account of another person and such person is a QIB and, in either case, will comply with the restrictions on transfer set forth under “Transfer Restrictions.” 1.5 Any further GDRs issued pursuant to Condition 1.4 which correspond to Shares which have different dividend rights from the Shares corresponding to the outstanding GDRs will correspond to a separate temporary global Regulation S GDR and/or Rule 144A GDR. Upon becoming fungible with outstanding GDRs, such further GDRs shall be evidenced by a Master Regulation S GDR and a Master Rule 144A GDR (by increasing the total number of GDRs evidenced by the relevant Master Regulation S GDR and the Master Rule 144A GDR by the number of such further GDRs, as applicable). 1.6 The Depositary may issue GDRs against rights to receive Shares from the Bank (or any agent of the Bank recording Share ownership). No such issue of GDRs will be deemed a “Pre-Release” as defined in Condition 1.7. 1.7 Unless requested in writing by the Bank to cease doing so, and notwithstanding the provisions of Condition 1.4, the Depositary may execute and deliver GDRs or issue interests in a Master Regulation S GDR or a Master Rule 144A GDR, as the case may be, prior to the receipt of Shares (a “Pre-Release”). The Depositary may, pursuant to Condition 1.1, deliver Shares upon the receipt and cancellation of GDRs, which have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such GDR has been Pre-Released. The Depositary may receive GDRs in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom GDRs or Deposited Property are to be delivered (the “Pre-Releasee”) that such person, or its customer, (i) owns or represents the owner of the corresponding Deposited Property or GDRs to be remitted (as the case may be),

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(ii) assigns all beneficial right, title and interest in such Deposited Property or GDRs (as the case may be) to the Depositary in its capacity as such and for the benefit of the Holders, (iii) will not take any action with respect to such GDRs or Deposited Property (as the case may be) that is inconsistent with the transfer of beneficial ownership (including without the consent of the Depositary, disposing of such Deposited Property or GDRs, as the case may be), other than in satisfaction of such Pre-Release, (b) at all times fully collateralised with cash or such other collateral as the Depositary determines in good faith will provide substantially similar liquidity and security, (c) terminable by the Depositary on not more than five (5) business days’ notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of GDRs which are outstanding at any time as a result of Pre-Release will not normally represent more than thirty per cent. of the total number of GDRs then outstanding; provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate and may, with the prior written consent of the Bank, change such limits for the purpose of general application. The Depositary will also set dollar limits with respect to such transactions hereunder with any particular Pre-Releasee hereunder on a case by case basis as the Depositary deems appropriate. The collateral referred to in sub-paragraph (b) above shall be held by the Depositary as security for the performance of the Pre-Releasee’s obligations in connection herewith, including the Pre-Releasee’s obligation to deliver Shares and/or other securities or GDRs upon termination of a transaction anticipated hereunder (and shall not, for the avoidance of doubt, constitute Deposited Property hereunder). The Depositary may retain for its own account any compensation received by it in connection with the foregoing including, without limitation, earnings on the collateral. The person to whom a Pre-Release of Rule 144A GDRs or Rule 144A Shares is to be made pursuant to this Condition 1.7 shall be required to deliver to the Depositary a duly executed and completed certificate substantially in the form set out in Schedule 4 Part A of the Deposit Agreement. The person to whom any Pre-Release of Regulation S GDRs or Regulation S Shares is to be made pursuant to this paragraph shall be required to deliver to the Depositary a duly executed and completed certificate substantially in the form set out in Schedule 3 Part A of the Deposit Agreement. 2. Suspension of Issue of GDRs and of Withdrawal of Deposited Property The Depositary shall be entitled, at its reasonable discretion, at such times as it shall determine, to suspend the issue or transfer of GDRs (and the deposit of Shares) generally or in respect of particular Shares. In particular, to the extent that it is in its opinion practicable for it to do so, the Depositary will refuse to accept Shares for deposit, to execute and deliver GDRs or to register transfers of GDRs if it has been notified by the Bank in writing that the Deposited Shares or GDRs or any depositary receipts corresponding to Shares are listed on a U.S. Securities Exchange or quoted on a U.S. automated inter dealer quotation system unless accompanied by evidence satisfactory to the Depositary that any such Shares are eligible for resale pursuant to Rule 144A. Further, the Depositary may suspend the withdrawal of Deposited Property during any period when the Register, or the register of shareholders of the Bank is closed or, generally or in one or more localities, suspend the withdrawal of Deposited Property or deposit of Shares if deemed necessary or desirable or advisable by the Depositary in good faith at any time or from time to time, in order to comply with any applicable law or governmental or stock exchange regulations or any provision of the Deposit Agreement or for any other reason. The Depositary shall (unless otherwise notified by the Bank) restrict the withdrawal of Deposited Shares where the Bank notifies the Depositary in writing that such withdrawal would result in ownership of Shares exceeding any limit under any applicable law, government resolution or the Bank’s constitutive documents or would otherwise violate any applicable laws.

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3. Transfer and Ownership The GDRs are in registered form, each representing two Shares. Title to the GDRs passes by registration in the Register and accordingly, transfer of title to a GDR is effective only upon such registration. The Depositary will refuse to accept for transfer any GDRs if it reasonably believes that such transfer would result in violation of any applicable laws. The Holder of any GDR will (except as otherwise required by law) be treated by the Depositary and the Bank as its beneficial owner for all purposes (whether or not any payment or other distribution in respect of such GDR is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or theft or loss of any certificate issued in respect of it) and no person will be liable for so treating the Holder. Interests in Rule 144A GDRs corresponding to the Master Rule 144A GDR may be transferred to a person whose interest in such Rule 144A GDRs is subsequently represented by the Master Regulation S GDR only upon receipt by the Depositary of written certifications (in the forms provided in the Deposit Agreement) from the transferor and the transferee to the effect that such transfer is being made in accordance with Rule 903 or Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”). Prior to expiration of the Restricted Period (such term being defined as the 40-day period beginning on the latest of the commencement of the offering of the GDRs, the original issue date of the GDRs, and the latest issue date with respect to the additional GDRs, if any, issued pursuant to the over-allotment option granted to the Joint Bookrunners pursuant to the Underwriting Agreement) no owner of Regulation S GDRs may transfer Regulation S GDRs or Shares represented thereby except in accordance with Rule 903 or Rule 904 of Regulation S under the U.S. Securities Act, or to, or for the account of, a qualified institutional buyer as defined in Rule 144A under the U.S. Securities Act (each a “QIB”) in a transaction meeting the requirements of such Rule 144A. There shall be no transfer of Regulation S GDRs by an owner thereof to a QIB except as aforesaid and unless such owner (i) withdraws Regulation S Shares from the Regulation S Facility in accordance with Clause 3.5 of the Deposit Agreement and (ii) instructs the Depositary to deliver the Shares so withdrawn to the account of the Custodian to be deposited into the Rule 144A Facility for issuance thereunder of Rule 144A GDRs to, or for the account of, such QIB. Issuance of such Rule 144A GDRs shall be subject to the terms and conditions of the Deposit Agreement, including, with respect to the deposit of Shares and the issuance of Rule 144A GDRs, delivery of the duly executed and completed written certificate and agreement required under the Deposit Agreement by or on behalf of each person who will be the beneficial owner of such Rule 144A GDRs certifying that such person is a QIB and agreeing that it will comply with the restrictions on transfer set forth therein and to payment of the fees, charges and taxes provided therein. 4. Cash Distributions Whenever the Depositary shall receive from the Bank any cash dividend or other cash distribution on or in respect of the Deposited Shares (including any amounts received in the liquidation of the Bank) or otherwise in connection with the Deposited Property, the Depositary shall, as soon as practicable, convert the same into United States dollars in accordance with Condition 8. The Depositary shall, if practicable in the opinion of the Depositary, give notice to the Holders of its receipt of such payment in accordance with Condition 23, specifying the amount per Deposited Share payable in respect of such dividend or distribution and the earliest date, determined by the Depositary, for transmission of such payment to Holders and shall as soon as practicable distribute any such amounts to the Holders in proportion to the number of Deposited Shares corresponding to the GDRs so held by them respectively, subject to and in accordance with the provisions of Conditions 9 and 11; provided that:

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(a) in the event that the Depositary is aware that any Deposited Shares are not entitled, by reason of the date of issue or transfer or otherwise, to such full proportionate amount, the amount so distributed to the relative Holders shall be adjusted accordingly; and (b) the Depositary will distribute only such amounts of cash dividends and other distributions as may be distributed without attributing to any GDR a fraction of the lowest integral unit of currency in which the distribution is made by the Depositary, and any balance remaining shall be retained by the Depositary beneficially as an additional fee under Condition 16.1(iv). 5. Distributions of Shares Whenever the Depositary shall receive from the Bank any distribution in respect of Deposited Shares which consists of a dividend or free distribution of Shares, the Depositary shall cause to be distributed to the Holders entitled thereto, in proportion to the number of Deposited Shares corresponding to the GDRs held by them respectively, additional GDRs corresponding to an aggregate number of Shares received pursuant to such distribution. Such additional GDRs shall be distributed by an increase in the number of GDRs corresponding to the Master GDRs or by an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the Holders hold their GDRs; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Bank, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall (either by public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) sell such Shares so received and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto. 6. Distributions other than in Cash or Shares Whenever the Depositary shall receive from the Bank any dividend or distribution in securities (other than Shares) or in other property (other than cash) on or in respect of the Deposited Property, the Depositary shall distribute or cause to be distributed such securities or other property to the Holders entitled thereto, in proportion to the number of Deposited Shares corresponding to the GDRs held by them respectively, in any manner that the Depositary may deem equitable and practicable for effecting such distribution; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Bank, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall deal with the securities or property so received, or any part thereof, in such way as the Depositary may determine to be equitable and practicable, including, without limitation, by way of sale (either by public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) and shall (in the case of a sale) distribute the resulting net proceeds as a cash distribution pursuant to Condition 4 to the Holders entitled thereto. 7. Rights Issues If and whenever the Bank announces its intention to make any offer or invitation to the holders of Shares to subscribe for or to acquire Shares, securities or other assets by way of rights, the Depositary shall as soon as practicable give notice to the Holders, in accordance with Condition 23, of such offer or invitation, specifying, if applicable, the earliest date established for acceptance thereof, the last date established for acceptance thereof and the manner by which and time during which Holders may request the Depositary to exercise such rights as provided below or, if such be the case, specifying details of how the Depositary

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proposes to distribute the rights or the proceeds of any sale thereof. The Depositary will deal with such rights in the manner described below: (i) if and to the extent that the Depositary shall, at its discretion, deem it to be lawful and reasonably practicable, the Depositary shall make arrangements whereby the Holders may, upon payment of the subscription price in Tenge or other relevant currency together with such fees, taxes, duties, charges, costs and expenses as may be required under the Deposit Agreement and completion of such undertakings, declarations, certifications and other documents as the Depositary may reasonably require, request the Depositary to exercise such rights on their behalf with respect to the Deposited Shares and to distribute the Shares, securities or other assets so subscribed or acquired to the Holders entitled thereto by an increase in the numbers of GDRs corresponding to the Master GDRs or an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the Holders hold their GDRs; or (ii) if and to the extent that the Depositary shall at its discretion, deem it to be lawful and reasonably practicable, the Depositary will distribute such rights to the Holders entitled thereto in such manner as the Depositary may at its discretion determine; or (iii) if and to the extent that the Depositary deems any such arrangement and distribution as is referred to in paragraphs (i) and (ii) above to all or any Holders not to be lawful and reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Bank, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary (a) will, provided that Holders have not taken up rights through the Depositary as provided in (i) above, sell such rights (either by public or private sale and otherwise at its discretion subject to all applicable laws and regulations) or (b) may, if such rights are not transferable, in its discretion, arrange for such rights to be exercised and the resulting Shares or securities sold and, in each case, distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto. (iv) (a) Notwithstanding the foregoing, in the event that the Depositary offers rights pursuant to Condition 7(i) (the “Primary GDR Rights Offering”), if authorised by the Bank to do so, the Depositary may, in its discretion, make arrangements whereby in addition to instructions given by a Holder to the Depositary to exercise rights on its behalf pursuant to Condition 7(i), such Holder is permitted to instruct the Depositary to subscribe on its behalf for additional rights which are not attributable to the Deposited Shares represented by such Holder’s GDRs (“Additional GDR Rights”) if at the date and time specified by the Depositary for the conclusion of the Primary GDR Offering (the “Instruction Date”) instructions to exercise rights have not been received by the Depositary from the Holders in respect of all their initial entitlements. Any Holder’s instructions to subscribe for such Additional GDR Rights (“Additional GDR Rights Requests”) shall specify the maximum number of Additional GDR Rights that such Holder is prepared to accept (the “Maximum Additional Subscription”) and must be received by the Depositary by the Instruction Date. If by the Instruction Date any rights offered in the Primary GDR Rights Offering have not been subscribed by the Holders initially entitled thereto (“Unsubscribed Rights”), subject to Condition 7(iv)(c) and receipt of the relevant subscription price in Tenge or other relevant currency, together with such fees, taxes, duties, charges, costs and expenses as it may deem necessary, the Depositary shall make arrangements for the allocation and distribution of Additional GDR Rights in accordance with Condition 7(iv)(b).

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(b) Holders submitting Additional GDR Rights Requests shall be bound to accept the Maximum Additional Subscription specified in such Additional GDR Request but the Depositary shall not be bound to arrange for a Holder to receive the Maximum Additional Subscription so specified but may make arrangements whereby the Unsubscribed Rights are allocated pro rata on the basis of the extent of the Maximum Additional Subscription specified in each Holder’s Additional GDR Rights Request. (c) In order to proceed in the manner contemplated in this Condition 7(iv), the Depositary shall be entitled to receive such opinions from Kazakhstan counsel and US counsel to the Bank as in its discretion it deems necessary which opinions shall be in a form and provided by counsel satisfactory to the Depositary and at the expense of the Bank and may be requested in addition to any other opinions and/or certifications which the Depositary shall be entitled to receive under the Deposit Agreement and these Conditions. For the avoidance of doubt, save as provided in these Conditions and the Deposit Agreement, the Depositary shall have no liability to the Bank or any Holder in respect of its actions or omissions to act under this Condition 7(iv) and, in particular, the Depositary will not be regarded as being negligent, acting in bad faith, or in wilful default if it elects not to make the arrangements referred to in Condition 7(iv)(a). The Bank has agreed in the Deposit Agreement that it will, unless prohibited by applicable law or regulation, give its consent to, and if requested use all reasonable endeavours (subject to the next paragraph) to facilitate, any such distribution, sale or subscription by the Depositary or the Holders, as the case may be, pursuant to Conditions 4, 5, 6, 7 or 10 (including the obtaining of legal opinions from counsel reasonably satisfactory to the Depositary concerning such matters as the Depositary may reasonably specify). If the Bank notifies the Depositary that registration is required in any jurisdiction under any applicable law of the rights, securities or other property to be distributed under Condition 4, 5, 6, 7 or 10 or the securities to which such rights relate in order for the Bank to offer such rights or distribute such securities or other property to the Holders or owners of GDRs and to sell the securities corresponding to such rights, the Depositary will not offer such rights or distribute such securities or other property to the Holders or sell such securities unless and until the Bank procures the receipt by the Depositary of an opinion from counsel to the Bank reasonably satisfactory to the Depositary that a registration statement is in effect or that the offering and sale of such rights or securities to such Holders or owners of GDRs are exempt from registration under the provisions of such law. Neither the Bank nor the Depositary shall be liable to register such rights, securities or other property or the securities to which such rights relate and they shall not be liable for any losses, damages or expenses resulting from any failure to do so. If at the time of the offering of any rights, at its discretion, the Depositary shall be satisfied that it is not lawful or practicable (for reasons outside its control) to dispose of the rights in any manner provided in paragraphs (i), (ii), (iii) and (iv) above, the Depositary shall permit the rights to lapse. The Depositary will not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Holders or owners of GDRs in general or to any Holder or owner of a GDR or Holders or owners of GDRs in particular. 8. Conversion of Foreign Currency Whenever the Depositary shall receive any currency other than United States dollars by way of dividend or other distribution or as the net proceeds from the sale of securities, other property or rights, and if at the time of the receipt thereof the currency so received can in the judgement of the Depositary be converted on a reasonable basis into United States dollars and

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distributed to the Holders entitled thereto, the Depositary shall as soon as practicable itself convert or cause to be converted by another bank or other financial institution, by sale or in any other manner that it may reasonably determine, the currency so received into United States dollars. If such conversion or distribution can be effected only with the approval or licence of any government or agency thereof, the Depositary shall make reasonable efforts to apply, or procure that an application be made, for such approval or licence, if any, as it may deem desirable. If at any time the Depositary shall determine that in its judgement any currency other than United States dollars is not convertible on a reasonable basis into United States dollars and distributable to the Holders entitled thereto, or if any approval or licence of any government or agency thereof which is required for such conversion is denied or, in the opinion of the Depositary, is not obtainable, or if any such approval or licence is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute such other currency received by it (or an appropriate document evidencing the right to receive such other currency) to the Holders entitled thereto to the extent permitted under applicable law, or the Depositary may in its discretion hold such other currency for the benefit of the Holders entitled thereto. If any conversion of any such currency can be effected in whole or in part for distribution to some (but not all) Holders entitled thereto, the Depositary may at its discretion make such conversion and distribution in United States dollars to the extent possible to the Holders entitled thereto and may distribute the balance of such other currency received by the Depositary to, or hold such balance for the account of, the Holders entitled thereto, and notify the Holders accordingly. 9. Distribution of any Payments 9.1 Any distribution of cash under Condition 4, 5, 6, 7 or 10 will be made by the Depositary to Holders on the record date established by the Depositary for that purpose (such date to be as close to the record date set by the Bank as is reasonably practicable) and, if practicable in the opinion of the Depositary, notice shall be given promptly to Holders in accordance with Condition 23, in each case subject to any laws or regulations applicable thereto and (subject to the provisions of Condition 8) distributions will be made in United States dollars by cheque drawn upon a bank in New York City or, in the case of the Master GDRs, according to usual practice between the Depositary and DTC. The Depositary or the Agent, as the case may be, may deduct and retain from all moneys due in respect of such GDR in accordance with the Deposit Agreement all fees, taxes, duties, charges, costs and expenses which may become or have become payable under the Deposit Agreement or under applicable law or regulation in respect of such GDR or the relative Deposited Property. 9.2 Delivery of any securities or other property or rights other than cash shall be made as soon as practicable to the Holders on the record date established by the Depositary for that purpose (such date to be as close to the record date set by the Bank as is reasonably practicable), subject to any laws or regulations applicable thereto. If any distribution made by the Bank with respect to the Deposited Property and received by the Depositary shall remain unclaimed at the end of three years from the first date upon which such distribution is made available to Holders in accordance with the Deposit Agreement, all rights of the Holders to such distribution or the proceeds of the sale thereof shall be extinguished and the Depositary shall (except for any distribution upon the liquidation of the Bank when the Depositary shall retain the same) return the same to the Bank for its own use and benefit subject, in all cases, to the provisions of applicable law or regulation. 10. Capital Reorganisation Upon any change in the nominal or par value, sub-division, consolidation or other reclassification of Deposited Shares or any other part of the Deposited Property or upon any reduction of capital, or upon any reorganisation, merger or consolidation of the Bank or to which it is a party (except where the Bank is the continuing corporation), the Depositary shall

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as soon as practicable give notice of such event to the Holders and at its discretion may treat such event as a distribution and comply with the relevant provisions of Conditions 4, 5, 6 and 9 with respect thereto, or may execute and deliver additional GDRs in respect of Shares or may require the exchange of existing GDRs for new GDRs which reflect the effect of such change. 11. Withholding Taxes and Applicable Laws 11.1 Payments to Holders of dividends or other distributions on or in respect of the Deposited Shares will be subject to deduction of Kazakhstan and other withholding taxes, if any, at the applicable rates. 11.2 If any governmental or administrative authorisation, consent, registration or permit or any report to any governmental or administrative authority is required under any applicable law in Kazakhstan in order for the Depositary to receive from the Bank Shares or other securities to be deposited under these Conditions, or in order for Shares, other securities or other property to be distributed under Condition 4, 5, 6 or 10 or to be subscribed under Condition 7 or to offer any rights or sell any securities represented by such rights relevant to any Deposited Shares, the Bank has agreed to apply for such authorisation, consent, registration or permit or file such report on behalf of the Holders within the time required under such laws. In this connection, the Bank has undertaken in the Deposit Agreement to the extent reasonably practicable to take such action as may be required in obtaining or filing the same. The Depositary shall not be obliged to distribute GDRs representing such Shares, Shares, other securities or other property deposited under these Conditions or make any offer of any such rights or sell any securities corresponding to any such rights with respect to which such authorisation, consent, registration or permit or such report has not been obtained or filed, as the case may be, and shall have no duties to obtain any such authorisation, consent, registration or permit, or to file any such report. 12. Voting of Shares 12.1 Holders will have voting rights with respect to the Deposited Shares, subject to and in accordance with any applicable Kazakhstan law. The Bank has agreed to notify the Depositary of any resolution to be proposed at a General Meeting of the Bank and the Depositary will vote or cause to be voted the Deposited Shares in the manner set out in this Condition 12. The Bank has agreed with the Depositary that it will promptly provide to the Depositary notices of meetings of the shareholders of the Bank and the agenda therefor and request the Depositary in writing to prepare, in consultation with the Bank, written requests containing voting instructions by which each Holder may give instructions to the Depositary to vote for or against each and any resolution specified in the agenda for the meeting, which the Depositary shall send to any person who is a Holder on the record date established by the Depositary for that purpose (which shall be the same as the corresponding record date set by the Bank or as near as practicable thereto) as soon as practicable after receipt of the same by the Depositary in accordance with Condition 23. Each Holder will be required to certify in such voting instruction that it is not a person subject to Article 17.5 of the Kazakhstan Law on Banks and Banking Activity (as such law may be amended from time to time), in that it is not (a) a legal entity registered in Andorra, Liechtenstein, Liberia, Monaco, the Marshall Islands, Nauru, the Cook Islands, Guatemala, Indonesia, Burma (Myanmar), Nigeria or the Philippines or which has an affiliate registered in any such jurisdiction (unless such entity is an international bank having a credit rating of “A” or above from one of Moody’s Investors Service, Inc., Standard & Poors Ratings Services, Fitch Ratings Ltd. or Capital Intelligence Ltd.) or (b) a physical person who is a participant or a shareholder in such legal entity. If no such certification is provided to the Depositary by a Holder (an “Uncertified Holder”) the Depositary will not exercise any voting rights in relation to the Deposited Shares which are

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represented by the GDRs which are held by the Uncertified Holder and such voting rights shall lapse. The Bank has also agreed to provide to the Depositary appropriate proxy forms to enable the Depositary to appoint a representative to attend the relevant meeting and vote on behalf of the Depositary. 12.2 In order for each voting instruction to be valid, the voting instructions form must be completed and duly signed by the respective Holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message) in accordance with the written request containing voting instructions and returned to the Depositary by such record date as the Depositary may specify. 12.3 The Depositary will exercise or cause to be exercised the voting rights in respect of the Deposited Shares so that a portion of the Deposited Shares will be voted for and a portion of the Deposited Shares will be voted against any resolution specified in the agenda for the relevant meeting in accordance with the voting instructions it has received. 12.4 If the Depositary is advised in the opinion referred to in Condition 12.7 below that it is not permitted by Kazakhstan law to exercise the voting rights in respect of the Deposited Shares differently (so that a portion of the Deposited Shares may be voted for a resolution and a portion of the Deposited Shares may be voted against a resolution) the Depositary shall, if the opinion referred to in Condition 12.7 below confirms it to be permissible under Kazakhstan law, calculate from the voting instructions that it has received from all Holders (x) the aggregate number of votes in favour of a particular resolution and (y) the aggregate number of votes opposed to such resolution and cast or cause to be cast in favour of or opposed to such resolution the number of votes representing the net positive difference between such aggregate number of votes in favour of such resolution and such aggregate number of votes opposed to such resolution. 12.5 The Depositary will only endeavour to vote or cause to be voted the votes attaching to Shares in respect of which voting instructions have been received. If no voting instructions are received by the Depositary (either because no voting instructions are returned to the Depositary or because the voting instructions are incomplete, illegible or unclear) from a Holder with respect to any or all of the Deposited Shares represented by such Holder’s GDRs on or before the record date specified by the Depositary, the Depositary shall not exercise voting rights in relation to such Deposited Shares and such voting rights shall lapse. 12.6 If the Depositary is advised in the opinion referred to in Condition 12.7 below that it is not permissible under Kazakhstan law or the Depositary determines that it is not reasonably practicable to vote or cause to be voted such Deposited Shares in accordance with Conditions 12.3 or 12.4, the Depositary shall not vote or cause to be voted such Deposited Shares. 12.7 Where the Depositary is to vote in respect of each and any resolution in the manner described in Conditions 12.3 or 12.4 above the Depositary shall notify the Chairman of the Bank and designate a representative to attend such meeting or otherwise cause to be voted the Deposited Shares in the manner required by this Condition 12. The Depositary shall not be required to take any action required by this Condition 12 unless it shall have received an opinion from the Bank’s legal counsel (such counsel being reasonably acceptable to the Depositary) at the expense of the Bank to the effect that such voting arrangement is valid and binding on Holders under Kazakhstan law and the statutes of the Bank and that the Depositary is permitted to exercise votes in accordance with the provisions of this Condition 12 but that in doing so the Depositary will not be deemed to be exercising voting discretion. 12.8 The Depositary is entitled to amend this Condition 12 and Clause 5 of the Deposit Agreement from time to time by written notice to the Bank and the GDR Holders (and subject to the approval of (i) the Bank, such approval not be unreasonably withheld or delayed, and (ii) the relevant authority in Kazakhstan, if required) where the Depositary considers it necessary to

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do so in order to comply with applicable Kazakhstan law. By continuing to hold the GDRs, all Holders shall be deemed to have agreed to the provisions of this Condition 12 and Clause 5 of the Deposit Agreement as such terms may be amended from time to time in order to comply with applicable Kazakhstan law. 12.9 The Depositary shall not, and the Depositary shall ensure the Custodian and its nominee do not, vote or attempt to exercise the right to vote that attaches to the Deposited Shares other than in accordance with instructions given, or deemed given, in accordance with this Condition 12. This summary must be read subject to the detailed terms of Condition 12 and while this summary reflects the voting process expected to be followed in the context of current requirements of Kazakhstan law, it should be noted that this is a developing area subject to change. In order to allow Holders to exercise voting rights with respect to the Deposited Shares, the Bank will send a notice to the registrar no later than 40 days prior to any meeting of holders of Deposited Shares. Within five days of receipt, the registrar will forward such notice to the Central Depositary, who then has two days to forward the notice to the Custodian. The Custodian will then have two days to forward the notice to the Depositary. The Depositary shall in accordance with the Conditions send notice of the meeting to all Holders along with a voting instructions form which will require each Holder to confirm their beneficial ownership and eligibility to vote, as well as to indicate their voting preferences with respect to each resolution to be considered at the meeting. The confirmations and tabulation of the voting preferences received on or prior to the cut-off time specified by the Depositary (which is likely to be the date which is the 21st day after receipt of the notice by the Depositary from the Custodian) will be provided by the Depositary to the Custodian, along with a power of attorney enabling the Custodian to exercise the voting rights in respect of the relevant Deposited Shares. The Custodian will provide a list of beneficial owners to the Central Depositary on a date expected to be a date no later than 23 days from the date on which the notice from the Central Depositary was received by the Custodian. It is expected that within three days of receipt, the Central Depositary will provide the list of beneficial owners to the Registrar who will have three days to provide such list to the Bank. At the relevant meeting, the Custodian will then participate and vote in accordance with the instructions received from the Depositary. 13. Recovery of Taxes, Duties and Other Charges, and Fees and Expenses due to the Depositary The Depositary shall not be liable for any taxes, duties, charges, costs or expenses which may become payable in respect of the Deposited Shares or other Deposited Property or the GDRs, whether under any present or future fiscal or other laws or regulations, and such part thereof as is proportionate or referable to a GDR (the “Charges”) shall be payable by the Holder thereof to the Depositary at any time on request or may be deducted from any amount due or becoming due on such GDR in respect of any dividend or other distribution. The Depositary may sell (whether by way of public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) for the account of the Holder an appropriate number of Deposited Shares or amount of other Deposited Property and will discharge out of the proceeds of such sale any Charges, and any fees or expenses due to the Depositary from the Holder pursuant to Condition 16, and subsequently pay any surplus to the Holder. Any request by the Depositary for the payment of Charges shall be made by giving notice pursuant to Condition 23. 14. Liability 14.1 In acting hereunder the Depositary shall have only those duties, obligations and responsibilities expressly specified in the Deposit Agreement and these Conditions and, other than holding the Deposited Property for the benefit of Holders as bare trustee, does not

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assume any relationship of trust for or with the Holders or owners of GDRs or any other person. 14.2 Neither the Depositary, the Custodian, the Bank, any Agent, nor any of their agents, officers, directors or employees shall incur any liability to any other of them or to any Holder or owner of a GDR or any other person with an interest in any GDRs if, by reason of any provision of any present or future law or regulation of Kazakhstan or any other country or of any relevant governmental authority, or by reason of the interpretation or application of any such present or future law or regulation or any change therein, or by reason of any other circumstances beyond their control, or in the case of the Depositary, the Custodian, any Agent or any of their agents, officers, directors or employees, by reason of any provision, present or future, of the constitutive documents of the Bank, any of them shall be prevented, delayed or forbidden from doing or performing any act or thing which the terms of the Deposit Agreement or these Conditions provide shall or may be done or performed; nor shall any of them incur any liability to any Holder or owner of GDRs or any other person with an interest in any GDRs by reason of any exercise of, or failure to exercise, any voting rights attached to the Deposited Shares or any of them or any other discretion or power provided for in the Deposit Agreement. Any such party may rely on, and shall be protected in acting upon, any written notice, request, direction or other document believed by it to be genuine and to have been duly signed or presented (including a translation which is made by a translator believed by it to be competent or which appears to be authentic). 14.3 Neither the Depositary nor any Agent shall be liable (except for its own wilful default, negligence or bad faith or that of its agents, officers, directors or employees) to the Bank or any Holder or owner of GDRs or any other person, by reason of having accepted as valid or not having rejected any certificate for Shares or GDRs or any signature on any transfer or instruction purporting to be such and subsequently found to be forged or not authentic or for its failure to perform any obligations under the Deposit Agreement or these Conditions. 14.4 The Depositary and its agents may engage or be interested in any financial or other business transactions with the Bank or any of its subsidiaries or affiliates, or in relation to the Deposited Property (including without prejudice to the generality of the foregoing, the conversion of any part of the Deposited Property from one currency to another), may at any time hold or be interested in GDRs for its own account, and shall be entitled to charge and be paid all usual fees, commissions and other charges for business transacted and acts done by it as a bank, and not in the capacity of Depositary, in relation to matters arising under the Deposit Agreement (including, without prejudice to the generality of the foregoing, charges on the conversion of any part of the Deposited Property from one currency to another and on any sales of property) without accounting to Holders or any other person for any profit arising therefrom. 14.5 The Depositary shall endeavour to effect any such sale as is referred to or contemplated in Condition 5, 6, 7, 10, 13 or 21 or any such conversion as is referred to in Condition 8 in accordance with the Depositary’s normal practices and procedures but shall have no liability (in the absence of its own wilful default, negligence or bad faith or that of its agents, officers, directors or employees) with respect to the terms of such sale or conversion or if such sale or conversion shall not be reasonably practicable. 14.6 The Depositary shall not be required or obliged to monitor, supervise or enforce the observance and performance by the Bank of its obligations under or in connection with the Deposit Agreement or these Conditions. 14.7 The Depositary shall have no responsibility whatsoever to the Bank, any Holders or any owner of GDRs or any other person as regards any deficiency which might arise because the Depositary is subject to any tax in respect of the Deposited Property or any part thereof or any income therefrom or any proceeds thereof.

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14.8 In connection with any proposed modification, waiver, authorisation or determination permitted by the terms of the Deposit Agreement, the Depositary shall not, except as otherwise expressly provided in Condition 22, be obliged to have regard to the consequence thereof for the Holders or the owners of GDRs or any other person. 14.9 Notwithstanding anything else contained in the Deposit Agreement or these Conditions, the Depositary may refrain from doing anything which could or might, in its opinion, be contrary to any law of any jurisdiction or any directive or regulation of any agency or state or which would or might otherwise render it liable to any person and the Depositary may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation. 14.10 The Depositary may, in relation to the Deposit Agreement and these Conditions, act or take no action on the advice or opinion of, or any certificate or information obtained from, any lawyer, valuer, accountant, banker, broker, securities company or other expert whether obtained by the Bank, the Depositary or otherwise, and shall not be responsible or liable for any loss or liability occasioned by so acting or refraining from acting or relying on information from persons presenting Shares for deposit or GDRs for surrender or requesting transfers thereof. 14.11 Any such advice, opinion, certificate or information (as is referred to in Condition 14.10) may be sent or obtained by letter, telex, facsimile transmission, telegram or cable and the Depositary shall not be liable for acting on any advice, opinion, certificate or information purported to be conveyed by any such letter, telex or facsimile transmission although (without the Depositary’s knowledge) the same shall contain some error or shall not be authentic. 14.12 The Depositary may call for and shall be at liberty to accept as sufficient evidence of any fact or matter or the expediency of any transaction or thing, a certificate, letter or other communication, whether oral or written, signed or otherwise communicated on behalf of the Bank by a director of the Bank or by a person duly authorised by a director of the Bank or such other certificate from persons specified in Condition 14.10 above which the Depositary considers appropriate and the Depositary shall not be bound in any such case to call for further evidence or be responsible for any loss or liability that may be occasioned by the Depositary acting on such certificate. 14.13 The Depositary shall have no obligation under the Deposit Agreement except to perform its obligations as are specifically set out therein without wilful default, negligence or bad faith. 14.14 Subject as provided in the Deposit Agreement, the Depositary may delegate by power of attorney or otherwise to any person or persons or fluctuating body of persons, whether being a joint Depositary of the Deposit Agreement or not, and not being a person to whom the Bank reasonably objects in writing, all or any of the powers, authorities and discretions vested in the Depositary by the Deposit Agreement and such delegation may be made upon such terms and subject to such conditions, including power to sub-delegate and subject to such regulations as the Depositary may in the interests of the Holders think fit. Subject as aforesaid, any delegation by the Depositary shall be on the basis that the Depositary is acting on behalf of the Holders and the Bank in making such delegation and the Bank shall not in any circumstances and the Depositary shall not (provided that it shall have exercised reasonable care in the selection of such delegate) be bound to supervise, or be in any way responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any misconduct or default on the part of, any such delegate or sub-delegate. However, the Depositary shall, if practicable, and if so requested by the Bank, pursue (at the Bank’s expense and subject to receipt by the Depositary of such indemnity and security for costs as the Depositary may reasonably require) any legal action it may have against such delegate or sub-delegate arising out of any such loss caused by reason of any such misconduct or default. The Depositary shall, within a reasonable time of any such delegation or any renewal, extension or termination thereof, give notice thereof to the Bank. Any delegation under this

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Condition which includes the power to sub-delegate shall provide that the delegate shall, within a specified time of any sub-delegation or amendment, extension or termination thereof, give notice thereof to the Bank and the Depositary. 14.15 The Depositary may, in the performance of its obligations hereunder, instead of acting personally, employ and pay an agent, whether a solicitor or other person, to transact or concur in transacting any business and do or concur in doing all acts required to be done by such party, including the receipt and payment of money. 14.16 The Depositary shall be at liberty to hold or to deposit the Deposit Agreement and any deed or document relating thereto in any part of the world with any banking company or companies (including itself) whose business includes undertaking the safe custody of deeds or documents or with any lawyer or firm of lawyers of good repute, and the Depositary shall not (in the case of deposit with itself, in the absence of its own negligence, wilful default, or bad faith or that of its agents, directors, officers or employees) be responsible for any losses, liability or expenses incurred in connection with any such deposit. 14.17 Notwithstanding anything to the contrary contained in the Deposit Agreement or these Conditions, the Depositary shall not be liable in respect of any loss or damage which arises out of or in connection with its performance or non-performance or the exercise or attempted exercise of, or the failure to exercise any of, its powers or discretions under the Deposit Agreement, except to the extent that such loss or damage arises from the wilful default, negligence or bad faith of the Depositary or that of its agents, officers, directors or employees. 14.18 No provision of the Deposit Agreement or these Conditions shall require the Depositary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and security against such risk of liability is not assured to it. 14.19 For the avoidance of doubt, the Depositary shall be under no obligation to check, monitor or enforce compliance with any ownership restrictions in respect of GDRs or Shares under any applicable Kazakhstan law as the same may be amended from time to time. Notwithstanding the generality of Condition 3, the Depositary shall refuse to register any transfer of GDRs or any deposit of Shares against issuance of GDRs if notified by the Bank, or the Depositary becomes aware of the fact, that such transfer or issuance would result in a violation of such law. 14.20 No disclaimer of liability under the U.S. Securities Act is intended by any provision of the Deposit Agreement. 15. Issue and Delivery of Replacement GDRs and Exchange of GDRs Subject to the payment of the relevant fees, taxes, duties, charges, costs and expenses and such terms as to evidence and indemnity as the Depositary may require, replacement GDRs will be issued by the Depositary and will be delivered in exchange for or replacement of outstanding lost, stolen, mutilated, defaced or destroyed GDRs upon surrender thereof (except in the case of destruction, loss or theft) at the specified office of the Depositary or (at the request, risk and expense of the Holder) at the specified office of any Agent.

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16. Depositary’s Fees, Costs and Expenses 16.1 The Depositary shall be entitled to charge the following remuneration and receive the following remuneration and reimbursement (such remuneration and reimbursement being payable on demand) from the Holders in respect of its services under the Deposit Agreement: (i) for the issue of GDRs (other than upon the issue of GDRs pursuant to the Offering) or the cancellation of GDRs upon the withdrawal of Deposited Property: U.S.$5.00 or less per 100 GDRs (or portion thereof) issued or cancelled; (ii) for issuing GDR certificates in definitive registered form in replacement for mutilated, defaced, lost, stolen or destroyed GDR certificates: a sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs and expenses involved; (iii) for issuing GDR certificates in definitive registered form (other than pursuant to (ii) above): the greater of U.S.$1.50 per GDR certificate (plus printing costs) or such other sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work plus costs (including but not limited to printing costs) and expenses involved; (iv) for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Shares: a fee of U.S.$0.02 or less per GDR for each such dividend or distribution; (v) in respect of any issue of rights or distribution of Shares (whether or not evidenced by GDRs) or other securities or other property (other than cash) upon exercise of any rights, any free distribution, stock dividend or other distribution: U.S.$5.00 or less per 100 outstanding GDRs (or portion thereof) for each such issue of rights, dividend or distribution; (vi) for transferring interests from and between the Regulation S Master GDR and the Rule 144A Master GDR: a fee of U.S.$0.05 or less per GDR; (vii) a fee of U.S.$0.02 or less per GDR (or portion thereof) for depositary services, which shall accrue on the last day of each calendar year and shall be payable as provided in paragraph (viii) below; and (viii) any other charge payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents, in connection with the servicing of Deposited Shares or other Deposited Property which charge shall be assessed against Holders as of the date or dates set by the Depositary and shall be payable at the sole discretion of the Depositary by billing such Holders for such charge or deducting such charge from one or more cash dividends or other cash distributions, together with all expenses (including currency conversion expenses), transfer and registration fees, taxes, duties and charges payable by the Depositary, any Agent or the Custodian, or any of their agents, in connection with any of the above. 16.2 The Depositary is entitled to receive from the Bank the fees, taxes, duties, charges costs and expenses as specified in a separate agreement between the Bank and the Depositary. 17. Agents 17.1 The Depositary shall be entitled to appoint one or more agents (the “Agents”) for the purpose, inter alia, of making distributions to the Holders.

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17.2 Notice of appointment or removal of any Agent or of any change in the specified office of the Depositary or any Agent will be duly given by the Depositary to the Holders. 18. Listing The Bank has undertaken in the Deposit Agreement to use its best endeavours to maintain, so long as any GDR is outstanding, a listing for the GDRs on the official list maintained by the Financial Services Authority (the “Official List”) and admission to trading on the market for listed securities of the LSE. For that purpose the Bank will pay all fees and sign and deliver all undertakings required by the Financial Services Authority and the LSE in connection with such listings. In the event that the listing on the Official List and admission to trading on the market for listed securities of the London Stock Exchange is not maintained, the Bank has undertaken in the Deposit Agreement to use its best endeavours with the reasonable assistance of the Depositary (provided at the Bank’s expense) to obtain and maintain a listing of the GDRs on any other internationally recognised stock exchange in Europe. 19. The Custodian The Depositary has agreed with the Custodian that the Custodian will receive and hold (or appoint agents approved by the Depositary to receive and hold) all Deposited Property for the account and to the order of the Depositary in accordance with the applicable terms of the Deposit Agreement which include a requirement to segregate the Deposited Property from the other property of, or held by, the Custodian provided that the Custodian shall not be obliged to segregate cash comprised in the Deposited Property from cash otherwise held by the Custodian. The Custodian shall be responsible solely to the Depositary provided that, if and so long as the Depositary and the Custodian are the same legal entity, references to them separately in these Conditions and the Deposit Agreement are for convenience only and that legal entity shall be responsible for discharging both functions directly to the Holders and the Bank. The Custodian may resign or be removed by the Depositary by giving 90 days’ prior notice, except that if a replacement Custodian is appointed which is a branch or affiliate of the Depositary, the Custodian’s resignation or discharge may take effect immediately on the appointment of such replacement Custodian. Upon the removal of or receiving notice of the resignation of the Custodian, the Depositary shall promptly appoint a successor Custodian (approved (i) by the Bank, such approval not to be unreasonably withheld or delayed, and (ii) by the relevant authority in Kazakhstan, if any), which shall, upon acceptance of such appointment, and the expiry of any applicable notice period, become the Custodian. Whenever the Depositary in its discretion determines that it is in the best interests of the Holders to do so, it may, after prior consultation with the Bank, terminate the appointment of the Custodian and, in the event of any such termination, the Depositary shall promptly appoint a successor Custodian (approved (i) by the Bank, such approval not to be unreasonably withheld or delayed, and (ii) by the relevant authority in Kazakhstan, if any), which shall, upon acceptance of such appointment, become the Custodian under the Deposit Agreement on the effective date of such termination. The Depositary shall notify Holders of such change immediately upon such change taking effect in accordance with Condition 23. Notwithstanding the foregoing, the Depositary may temporarily deposit the Deposited Property in a manner or a place other than as therein specified; provided that, in the case of such temporary deposit in another place, the Bank shall have consented to such deposit, and such consent of the Bank shall have been delivered to the Custodian. In case of transportation of the Deposited Property under this Condition, the Depositary shall obtain appropriate insurance at the expense of the Bank if and to the extent that the obtaining of such insurance is reasonably practicable and the premiums payable are of a reasonable amount.

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20. Resignation and Termination of Appointment of the Depositary 20.1 The Bank may terminate the appointment of the Depositary under the Deposit Agreement by giving at least 120 days’ prior notice in writing to the Depositary and the Custodian, and the Depositary may resign as Depositary by giving at least 120 days’ prior notice in writing to the Bank and the Custodian. Within 30 days after the giving of either such notice, notice thereof shall be duly given by the Depositary to the Holders in accordance with Condition 23 and, if the GDRs are at that time admitted to the official list of the Financial Services Authority and admitted to trading on the LSE, to the Financial Services Authority and the LSE. The termination of the appointment or the resignation of the Depositary shall take effect on the date specified in such notice; provided that no such termination of appointment or resignation shall take effect until the appointment by the Bank of a successor depositary under the Deposit Agreement and the acceptance of such appointment to act in accordance with the terms thereof and of these Conditions, by the successor depositary. Save as aforesaid, the Bank has undertaken in the Deposit Agreement to use its reasonable endeavours to procure the appointment of a successor depositary with effect from the date of termination specified in such notice as soon as reasonably possible following notice of such termination or resignation. Upon any such appointment and acceptance, notice thereof shall be duly given by the Depositary to the Holders in accordance with Condition 23 and, if the GDRs are at that time admitted to the official list of the Financial Services Authority and admitted to trading on the LSE, to the Financial Services Authority and the LSE. 20.2 Upon the termination of appointment or resignation of the Depositary and against payment of all fees and expenses due to the Depositary from the Bank under the Deposit Agreement, the Depositary shall deliver to its successor as depositary sufficient information and records to enable such successor efficiently to perform its obligations under the Deposit Agreement and shall deliver and pay to such successor depositary all property and cash held by it under the Deposit Agreement. The Deposit Agreement provides that, upon the date when such termination of appointment or resignation takes effect, the Custodian shall be deemed to be the Custodian thereunder for such successor depositary, and the Depositary shall thereafter have no obligation under the Deposit Agreement or the Conditions (other than liabilities accrued prior to the date of termination of appointment or resignation or any liabilities stipulated in relevant laws or regulations). 21. Termination of Deposit Agreement 21.1 Either the Bank or the Depositary but, in the case of the Depositary, only if the Bank has failed to appoint a replacement Depositary within 90 days of the date on which the Depositary has given notice pursuant to Condition 20 that it wishes to resign, may terminate the Deposit Agreement by giving 90 days’ prior notice to the other and to the Custodian. Within 30 days after the giving of such notice, notice of such termination shall be duly given by the Depositary to Holders of all GDRs then outstanding in accordance with Condition 23. 21.2 During the period beginning on the date of the giving of such notice by the Depositary to the Holders and ending on the date on which such termination takes effect, each Holder shall be entitled to obtain delivery of the Deposited Property relative to each GDR held by it, subject to the provisions of Condition 1.1 and upon compliance with Condition 1, payment by the Holder of the charge specified in Condition 16.1(i) and Clause 10.1.1(a) of the Deposit Agreement for such delivery and surrender, and payment by the Holder of any sums payable by the Depositary and/or any other expenses incurred by the Depositary (together with all amounts which the Depositary is obliged to pay to the Custodian) in connection with such delivery and surrender, and otherwise in accordance with the Deposit Agreement. 21.3 If any GDRs remain outstanding after the date of termination, the Depositary shall as soon as reasonably practicable sell the Deposited Property then held by it under the Deposit Agreement and shall not register transfers, shall not pass on dividends or distributions or take

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any other action, except that it will deliver the net proceeds of any such sale, together with any other cash then held by it under the Deposit Agreement, pro rata to Holders of GDRs which have not previously been so surrendered by reference to that proportion of the Deposited Property which is represented by the GDRs of which they are the Holders. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement and these Conditions, except its obligation to account to Holders for such net proceeds of sale and other cash comprising the Deposited Property without interest. 22. Amendment of Deposit Agreement and Conditions All and any of the provisions of the Deposit Agreement and these Conditions (other than this Condition 22) may at any time and from time to time be amended by agreement between the Bank and the Depositary in any respect which they may deem necessary or desirable. Notice of any amendment of these Conditions (except to correct a manifest error) shall be duly given to the Holders by the Depositary, and any amendment (except as aforesaid) which shall increase or impose fees payable by Holders or which shall otherwise, in the opinion of the Depositary, be materially prejudicial to the interests of the Holders (as a class) shall not become effective so as to impose any obligation on the Holders until the expiration of three months after such notice shall have been given. During such period of three months, each Holder shall be entitled to obtain, subject to and upon compliance with Condition 1, delivery of the Deposited Property relative to each GDR held by it upon surrender thereof, payment of the charge specified in Condition 16.1(i) for such delivery and surrender and otherwise in accordance with the Deposit Agreement and these Conditions. Each Holder at the time when such amendment so becomes effective shall be deemed, by continuing to hold a GDR, to approve such amendment and to be bound by the terms thereof in so far as they affect the rights of the Holders. In no event shall any amendment impair the right of any Holder to receive, subject to and upon compliance with Condition 1, the Deposited Property attributable to the relevant GDR. For the purposes of this Condition 22, an amendment shall not be regarded as being materially prejudicial to the interests of Holders if its principal effect is to permit the creation of GDRs in respect of additional Shares to be held by the Depositary which are or will become fully consolidated as a single series with the other Deposited Shares provided that temporary GDRs will represent such Shares until they are so consolidated. 23. Notices 23.1 Any and all notices to be given to any Holder shall be duly given if personally delivered, or sent by mail (if domestic, first class, if overseas, first class airmail) or air courier, or by telex or facsimile transmission confirmed by letter sent by mail or air courier, addressed to such Holder at the address of such Holder as it appears on the transfer books for GDRs of the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address specified in such request. 23.2 Delivery of a notice sent by mail or air courier shall be effective three days (in the case of domestic mail or air courier) or seven days (in the case of overseas mail) after despatch, and any notice sent by telex transmission, as provided in this Condition, shall be effective when the sender receives the answerback from the addressee at the end of the telex and any notice sent by facsimile transmission, as provided in this Condition, shall be effective when the intended recipient has confirmed by telephone to the transmitter thereof that the recipient has received such facsimile in complete and legible form. The Depositary or the Bank may, however, act upon any telex or facsimile transmission received by it from the other or from any Holder, notwithstanding that such telex or facsimile transmission shall not subsequently be confirmed as aforesaid.

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23.3 So long as GDRs are listed on the Official List and admitted to trading on the LSE and the rules of the Financial Services Authority or the LSE so require, all notices to be given to Holders generally will also be published in a leading daily newspaper having general circulation in the UK (which is expected to be the Financial Times). 24. Reports and Information on the Bank 24.1 The Bank has undertaken in the Deposit Agreement (so long as any GDR is outstanding) to furnish the Depositary with six copies in the English language (and to make available to the Depositary, the Custodian and each Agent as many further copies as they may reasonably require to satisfy requests from Holders) of: (i) in respect of the financial year ending on 31 December 2005 and in respect of each financial year thereafter, the consolidated balance sheets as at the end of such financial year and the consolidated statements of income for such financial year in respect of the Bank, prepared in conformity with International Financial Reporting Standards and reported upon by independent public accountants selected by the Bank, as soon as practicable after the end of such year; (ii) if the Bank publishes semi-annual financial statements for holders of Shares, such semi-annual financial statements of the Bank, as soon as practicable, after the same are published; and (iii) if the Bank publishes quarterly financial statements for holders of Shares, such quarterly financial statements, as soon as practicable, after the same are published. 24.2 The Depositary shall upon receipt thereof give due notice to the Holders that such copies are available upon request at its specified office and the specified office of any Agent. 24.3 For so long as any of the GDRs remains outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act if at any time the Bank is neither subject to and in compliance with the reporting requirements of Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, nor exempt from such reporting requirements by complying with the information furnishing requirements of Rule 12g3-2(b) thereunder, the Bank has agreed in the Deposit Agreement to supply to the Depositary such information, in the English language and in such quantities as the Depositary may from time to time reasonably request, as is required to be delivered to any Holder or beneficial owner of GDRs or to any holder of Shares or a prospective purchaser designated by such Holder, beneficial owner or holder pursuant to a Deed Poll executed by the Bank in favour of such persons and the information delivery requirements of Rule 144A(d)(4) under the U.S. Securities Act, to permit compliance with Rule 144A thereunder in connection with resales of GDRs or Shares or interests therein in reliance on Rule 144A under the U.S. Securities Act and otherwise to comply with the requirements of Rule 144A(d)(4) under the U.S. Securities Act. Subject to receipt, the Depositary will deliver such information, during any period in which the Bank informs the Depositary it is subject to the information delivery requirements of Rule 144(A)(d)(4), to any such holder, beneficial owner or prospective purchaser but in no event shall the Depositary have any liability for the contents of any such information. 25. Copies of Bank Notices The Bank has undertaken in the Deposit Agreement to transmit to the Custodian and the Depositary on or before the day when the Bank first gives notice, by mail, publication or otherwise, to holders of any Shares or other Deposited Property, whether in relation to the taking of any action in respect thereof or in respect of any dividend or other distribution thereon or of any meeting or adjourned meeting of such holders or otherwise, such number of copies of such notice and any other material (which contains information having a material

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bearing on the interests of the Holders) furnished to such holders by the Bank (or such number of English translations of the originals if the originals were prepared in a language other than English) in connection therewith as the Depositary may reasonably request. If such notice is not furnished to the Depositary in English, either by the Bank or the Custodian, the Depositary shall, at the Bank’s expense, arrange for an English translation thereof (which may be in such summarised form as the Depositary may deem adequate to provide sufficient information) to be prepared. Except as provided below, the Depositary shall, as soon as practicable after receiving notice of such transmission or (where appropriate) upon completion of translation thereof, give due notice to the Holders which notice may be given together with a notice pursuant to Condition 9.1, and shall make the same available to Holders in such manner as it may determine. 26. Moneys held by the Depositary The Depositary shall be entitled to deal with moneys paid to it by the Bank for the purposes of the Deposit Agreement in the same manner as other moneys paid to it as a banker by its customers and shall not be liable to account to the Bank or any Holder or any other person for any interest thereon, except as otherwise agreed and shall not be obliged to segregate such moneys from other moneys belonging to the Depositary. 27. Severability If any one or more of the provisions contained in the Deposit Agreement or in these Conditions shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained therein or herein shall in no way be affected, prejudiced or otherwise disturbed thereby. 28. Governing Law 28.1 The Deposit Agreement and the GDRs are governed by, and shall be construed in accordance with, English law except that the certifications set forth in Schedules 3 and 4 to the Deposit Agreement and any provisions relating thereto shall be governed by and construed in accordance with the laws of the State of New York. The rights and obligations attaching to the Deposited Shares will be governed by Kazakhstan law. The Bank has submitted in respect of the Deposit Agreement and the Deed Poll to the jurisdiction of the English courts and the courts of the State of New York and any United States Federal Court sitting in the Borough of Manhattan, New York City. The Bank has also agreed in the Deposit Agreement, and the Deed Poll to allow, respectively, the Depositary and the Holders to elect that Disputes are resolved by arbitration. 28.2 The Bank has irrevocably appointed the Law Debenture Corporate Services Limited, 100 Wood Street, London EC2V 7EX, as its agent in England to receive service of process in any Proceedings in England based on the Deed Poll and has agreed to receive service of process in any Proceedings in New York by registered post at the Bank’s registered address at 135-Zh Gagarin Avenue, Almaty, 050060 Republic of Kazakhstan. If for any reason the Bank does not have such an agent in England or New York as the case may be, it will promptly appoint a substitute process agent and notify the Holders and the Depositary of such appointment. Nothing herein shall affect the right to serve process in any other manner permitted by law. 28.3 The courts of England are to have jurisdiction to settle any disputes (each a “Dispute”) which may arise out of or in connection with the GDRs and accordingly any legal action or proceedings arising out of or in connection with the GDRs (“Proceedings”) may be brought in such courts. Without prejudice to the foregoing, the Depositary further irrevocably agrees that any Proceedings may be brought in any New York State or United States Federal Court sitting in the Borough of Manhattan, New York City. The Depositary irrevocably submits to the non-exclusive jurisdiction of such courts and waives any objection to Proceedings in such

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courts whether on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. 28.4 These submissions are made for the benefit of each of the Holders and shall not limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdictions (whether concurrently or not). 28.5 In the event that the Depositary is made a party to, or is otherwise required to participate in, any litigation, arbitration, or Proceeding (whether judicial or administrative) which arises from or is related to or is based upon any act or failure to act by the Bank, or which contains allegations to such effect, upon notice from the Depositary, the Bank has agreed to fully cooperate with the Depositary in connection with such litigation, arbitration or Proceeding. 28.6 The Depositary irrevocably appoints The Bank of New York, London Branch (Attention: The Manager) of 48th Floor, One Canada Square, London E14 5AL, as its agent in England to receive service of process in any Proceedings in England based on any of the GDRs. If for any reason the Depositary does not have such an agent in England, it will promptly appoint a substitute process agent and notify the Holders of such appointment. Nothing herein shall affect the right to serve process in any other manner permitted by law.

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SUMMARY OF PROVISIONS RELATING TO THE GDRs WHILE IN MASTER FORM The New GDRs that are Rule 144A GDRs will become fungible on issue with the existing Rule 144A GDRs. The New GDRs that are Regulation S GDRs initially will be a separate temporary class of GDRs and will become fungible with outstanding Regulation S GDRs on the 41st day after the last closing date in the New GDR Offering. The GDRs will initially be evidenced by (i) a single Master Regulation S GDR in registered form and (ii) a single Master Rule 144A GDR in registered form. Both the Master Rule 144A GDR and the Master Regulation S GDR will be deposited with The Bank of New York Mellon in New York as custodian for DTC and registered in the name of Cede & Co as nominee for DTC. The Master Regulation S GDR will be held by DTC for Euroclear and Clearstream as DTC participants. The Master Regulation S GDR and the Master Rule 144A GDR (collectively the “Master GDRs”) contain provisions which apply to the GDRs while they are in master form, some of which modify the effect of the Terms and Conditions of the GDRs set out in this Prospectus. The following is a summary of certain of those provisions. Unless otherwise defined herein, terms defined in the Terms and Conditions of the GDRs shall have the same meaning herein. The Master GDRs will only be exchanged for certificates in definitive registered form representing GDRs in the circumstances described in (i), (ii), (iii) or (iv) below in whole but not in part. The Depositary will irrevocably undertake in the Master GDRs to deliver certificates evidencing GDRs in definitive registered form in exchange for the relevant Master GDR to the Holders within 60 days in the event that: (i) DTC, Euroclear or Clearstream advises the Company that it is unwilling or unable to continue as depositary and a successor depositary is not appointed within 90 calendar days; or (ii) DTC, Euroclear or Clearstream is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so, and, in each case, no alternative clearing system satisfactory to the Depositary is available within 45 days; or (iii) DTC or any successor ceases to be a “clearing agency” registered under the United States Securities Exchange Act of 1934, as amended; or (iv) the Depositary has determined that, on the occasion of the next payment in respect of the GDRs, the Depositary or its agent would be required to make any deduction or withholding from any payment in respect of the GDRs which would not be required were the GDRs represented by certificates in definitive registered form, provided that the Depositary shall have no obligation to so determine or to attempt to so determine. Any exchange shall be at the expense (including printing costs) of the Bank. A GDR evidenced by an individual definitive certificate will not be eligible for clearing and settlement through DTC, Euroclear or Clearstream. Upon any exchange of a Master GDR for certificates in definitive registered form, or any exchange of interests between the Master Rule 144A GDR and the Master Regulation S GDR pursuant to Condition 3 (Transfer and Ownership), or any distribution of GDRs pursuant to Conditions 5 (Distributions of Shares), 7 (Rights Issues) or 10 (Capital Reorganisation) or any reduction in the number of GDRs represented thereby following any withdrawal of Deposited Property pursuant to Condition 1 (Withdrawal of Deposited Property and Further Issues of GDRs), the relevant details shall be entered by the Depositary on the register maintained by the Depositary whereupon the number of GDRs represented by the Master GDR shall be reduced or increased (as the case may be) for all purposes by the amount so exchanged and entered on the register provided always that if the number of GDRs represented by a Master GDR is reduced to zero such Master GDR shall continue in existence until the obligations of the Company under the Deposit Agreement and the obligations of the Depositary pursuant to the Deposit Agreement and the Conditions have terminated.

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Payments, Distributions and Voting Rights Payments of cash dividends and other amounts (including cash distributions) in relation to the Master GDRs will be made by the Depositary through DTC, on behalf of persons entitled thereto upon receipt of funds therefor from the Bank. A free distribution or stock dividend issue of Shares to the Depositary on behalf of the Holders will result in the record maintained by the Depositary being marked up to reflect the enlarged number of GDRs represented by the relevant Master GDR. Holders of GDRs will have voting rights as set out in the Terms and Conditions of the GDRs. Surrender of GDRs Any requirement in the Terms and Conditions of the GDRs relating to the surrender of a GDR to the Depositary shall be satisfied by the back-entry transfer of GDRs to the DTC account of the Depositary. Notices For as long as the Master Regulation S GDR and the Master Rule 144A GDR are registered in the name of Cede & Co on behalf of DTC, notices to Holders may be given by the Depositary by delivery of the relevant notice to DTC, for communication to persons entitled thereto in substitution for delivery of notices in accordance with Condition 23 (Notices). The Master GDRs shall be governed by and construed in accordance with English law.

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SETTLEMENT AND TRANSFER Clearing and Settlement of GDRs Custodial and depositary links have been established with DTC to facilitate the initial issue of the GDRs and cross-market transfers of the GDRs associated with secondary market trading. DTC DTC has advised the Bank as follows: DTC is a limited-purpose trust company organised under the laws of the State of New York, a “banking organisation” within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities for DTC participants (including Euroclear and Clearstream) and facilitates the clearance and settlement of securities transactions between DTC participants through electronic computerised book-entry changes in DTC participants’ accounts. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organisations. Indirect access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Holders of book-entry interests in the GDRs holding through DTC will receive, to the extent received by the Depositary, all distributions of dividends or other payments with respect to book-entry interests in the GDRs from the Depositary through DTC and DTC participants. Distributions in the United States will be subject to relevant US tax laws and regulations. See “Taxation — United States.” As DTC can act on behalf of DTC direct participants only, who in turn act on behalf of DTC indirect participants, the ability of beneficial owners who are indirect participants to pledge book-entry interests in the GDRs to persons or entities that do not participate in DTC, or otherwise take actions with respect to book-entry interests in the GDRs, may be limited. Clearance and Settlement Procedures Ownership of interest in GDRs evidenced by the Master Regulation S GDR Certificate and the Master Rule 144A GDR Certificate (together the “Master GDRs”) will be limited to DTC participants or persons who hold interests through DTC participants (including Euroclear and Clearstream). Ownership of such interests will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee, Cede & Co (with respect to interests of DTC participants) and the records of DTC participants (with respect to interests of persons other than DTC participants). So long as Cede & Co. as nominee of DTC, is the registered owner or holder of the Master GDRs, Cede & Co., will be considered the sole legal owner of the GDRs evidenced by such security for all purposes under the Deposit Agreement and the GDRs. In addition, no owner of an interest in the GDRs evidenced by the Master GDRs will be able to transfer that interest except in accordance with DTC’s applicable procedures (in addition to those under the Deposit Agreement, and, if applicable, those of Euroclear and Clearstream). Transfers between DTC participants will be effected through DTC. Because DTC can only act on behalf of DTC participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in GDRs evidenced by the Master GDRs to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take action in respect of such interest, may be affected by the lack of physical individual definitive securities in respect of such interest. Transfers between account holders in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

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Subject to compliance with the transfer restrictions applicable to the GDRs described above, cross-market transfers between DTC participants, on the one hand, and directly or indirectly through Euroclear or Clearstream accountholders, on the other, will be effected through DTC in accordance with DTC rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with its rules and procedures and within its established deadlines. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the GDRs, as the case may be, and making or receiving payment in accordance with normal procedures for settlement applicable to DTC. Euroclear and Clearstream accountholders may not deliver instructions directly to the depositaries for Euroclear or Clearstream. Because of the time zone differences, the securities of a Euroclear or Clearstream accountholder purchasing an interest in a security from a DTC participant will be credited during the securities settlement processing day (which must be a business day for Euroclear or Clearstream, as the case may be) immediately following the DTC settlement date and such credit of any transactions in interests in such securities settled during such processing day will be reported to the relevant Euroclear or Clearstream accountholder on such day. Cash received in Euroclear or Clearstream as a result of sales of interest in securities by or through a Euroclear or Clearstream accountholder to a DTC participant will be received for value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account only as of the business day following settlement in DTC. DTC has advised the Bank that it will take any action permitted to be taken by a holder of GDRs only at the direction of one or more DTC participants to whose account or accounts with DTC interests in the GDRs evidenced by the Master GDRs are credited and only in respect of such portion of the number of GDRs, as to which such DTC participant or DTC participants has or have given such direction. Holders of indirect interests in securities evidenced by the Master GDRs through DTC participants have no direct rights to enforce such interests while the securities are in global form. General Although the foregoing sets out the procedures of Euroclear, Clearstream or DTC in order to facilitate the transfers of interests in the GDRs among participants of Euroclear, Clearstream, DTC, none of Euroclear, Clearstream or DTC are under any obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Bank, the Underwriters, the Depositary, the Custodian or their respective agents will have any responsibility for the performance by Euroclear, Clearstream or DTC or their respective participants of their respective obligations under the rules and procedures governing their operations.

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INFORMATION RELATING TO THE DEPOSITARY

The Depositary is a state-chartered New York banking corporation and a member of the United States Federal Reserve System, subject to regulation and supervision principally by the United States Federal Reserve Board and the New York State Banking Department. The Depositary was constituted in 1784 in the State of New York. It is a wholly owned subsidiary of The Bank of New York Mellon Corporation, a New York corporation. The principal office of the Depositary is located at One Wall Street, New York, New York 10286. Its principal administrative offices are located at 101 Barclay Street, 22nd floor West, New York, New York 10286. A copy of the Depositary’s Articles of Incorporation, as amended, together with copies of The Bank of New York Mellon Corporation’s most recent financial statements and annual report are available for inspection at the Corporate Trust Office of the Depositary located at 101 Barclay Street, New York, New York 10286 and at The Bank of New York Mellon, One Canada Square, London E14 5AL.

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TAXATION The Republic of Kazakhstan The following summary of certain Kazakhstan taxation matters is based on the laws and practice in force as of the date of this Prospectus and is subject to any changes in law and the interpretation and application thereof, which changes could be made with retroactive effect. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire, hold or dispose of Shares or GDRs, and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities) may be subject to special rules. Save as otherwise indicated, this summary only addresses the position of investors who do not have any connection with Kazakhstan other than a holding of Shares or GDRs. Investors should consult their professional advisers on the tax consequences of their acquiring, holding and disposing of Shares or GDRs, including their eligibility for the benefits of double tax treaties, under the laws of their country of citizenship, residence, domicile or incorporation, and seek specialist Kazakhstan tax advice as necessary. This summary discusses the Kazakhstan tax consequences of the acquisition, ownership and disposal of Shares and GDRs. In general, Kazakhstan tax legislation with respect to the taxation of securities and financial instruments is not well developed, and in many cases the exact scope of Kazakhstan tax, compliance rules and enforcement mechanism is unclear or open to different interpretations. The only tax that may under certain circumstances apply in Kazakhstan to the above transactions is income tax. No other taxes or duties should be levied in Kazakhstan with respect to the above transactions. For all relevant purposes of this summary, except as noted below (e.g., in relation to treaty relief in respect of dividends), legal entities and individuals are subject to similar income tax treatment. Tax residence Non-resident persons will not become resident in Kazakhstan for Kazakhstan tax purposes by reason only of the acquisition, ownership or disposal of Shares or GDRs. Therefore, under Kazakhstan tax law, legal owners of Shares (“Shareholders”) and holders of GDRs (“GDR Holders”) should only be taxed on their income earned from sources in Kazakhstan, rather than their worldwide income. This summary assumes that all Shareholders, GDR Holders and the issuer of the GDRs are not resident in Kazakhstan for tax purposes. Exempt disposals of Shares The new Tax Code came into effect in Kazakhstan on 1 January 2009. Under the new Tax Code, generally all disposals and acquisitions of the Shares are exempt from any tax payment, reporting or compliance requirements in Kazakhstan, except where disposal is made to a Kazakhstan resident (or a non-resident with a permanent establishment in Kazakhstan) by a transferor registered in a country with a favorable tax regime (e.g., Cyprus, Liechtenstein, Luxembourg, Nigeria, Malta, Aruba, etc.). In addition, any income derived from open sales of the Shares on the Kazakhstan stock exchange or a foreign stock exchange is tax exempt, provided that such Shares are admitted to the official lists of such stock exchange at the time of sale. Currently the Shares are admitted to the First Category of the Official List of the KASE. The tax treatment of all disposals that do not qualify for such exemption is discussed below. Taxable disposals of Shares This discussion applies only to disposals that are not exempt as described above.

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Treatment of acquirer Non-resident buyers or other transferees (including recipients of gift or inheritance) of Shares are not subject to Kazakhstan income tax on acquisition. Treatment of transferor If the disposal of the Shares is made to a Kazakhstan resident (or a non-resident with a permanent establishment in Kazakhstan) and the transferor is registered in a country with a favorable tax regime, the net gain realised from such a disposal is subject to withholding tax in Kazakhstan at the rate of 20 per cent. Disposals include sales, exchanges and gifts. Taxation of dividends Under the new Tax Code, dividends paid on the Shares are exempt from any tax payment, reporting or compliance requirements in Kazakhstan if (i) the Shareholders hold the Shares for more than 3 years, or (ii) the Shares are admitted to the Official List of the KASE on the date of accrual of such dividends. If dividends paid on the Shares are not exempt, such dividends are subject to withholding tax at the rate of 15 per cent. The withholding tax is applied to the gross amount of dividends without allowance for any deductions and satisfies all Kazakhstan income tax obligations with respect to dividends. Shareholders should not be subject to any other tax reporting, payment, registration or compliance requirements with respect to dividends paid on the Shares. Shareholders who are resident in countries with which Kazakhstan has double taxation treaties may be entitled to a reduced rate of withholding tax. Subject to the above, depending on the country of residence and satisfaction of certain other conditions, the dividend withholding tax rates under Kazakhstan’s double tax treaties in effect as of the date of this Prospectus may be between 5 per cent. and 15 per cent. Under double tax treaties effective on the date of this Prospectus, reductions below 10 percent may only be available to beneficial owners that are legal entities. In order to avail themselves of this relief, eligible Shareholders have to provide the Bank with a document issued by the tax authority of their country of residence confirming their tax residence in a treaty jurisdiction. If the above document is not made available to the Bank prior to the date of payment of dividends, then the Bank should apply withholding tax at a standard 15 per cent. rate and account for the withheld amounts to the relevant authority. Shareholders who are eligible for a lower withholding tax rate should later be able to claim a refund of overpaid tax from the government of Kazakhstan. In doing so, they should provide the respective tax authority with a tax residence confirmation. In practice, however, this process may prove to be administratively burdensome. Taxation of GDR Holders Disposals The new Tax Code contains certain provisions expressly addressing depositary receipts. Income from open sales of GDRs on the KASE or a foreign stock exchange is explicitly exempt from tax requirements in Kazakhstan, provided that such GDRs are on the official lists of such stock exchange at the time of sale. In all other instances, income earned from the disposal of GDRs may be subject to Kazakhstan withholding tax at the rate of 15 per cent. (or 20 per cent. if disposal is made to a Kazakhstan resident (or a non-resident with a permanent establishment in Kazakhstan) by a transferor registered in a

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country with a favorable tax regime). It is unclear from the Tax Code how this requirement can be complied with in respect of withholding of Kazakh tax by an acquirer which is a non-resident. Dividends Under the new Tax Code, dividends paid on GDRs (as premiums associated with dividends announced with respect to the Shares represented by such GDRs) are exempt from any tax payment, reporting or compliance requirements in Kazakhstan if the GDRs are admitted to the Official List of the KASE on the date of accrual of such dividends. If dividends paid on GDRs are not exempt, such dividends are subject to Kazakhstan withholding tax at the rate of 15 per cent. The withholding tax is applied to the gross amount of dividends without allowance for any deductions and satisfies all Kazakhstan income tax obligations with respect to the dividends. Premiums received by GDR Holders in relation to dividends that have already been taxed in Kazakhstan should not be subject to any further tax or compliance requirements in Kazakhstan. GDR Holders who are resident in countries with which Kazakhstan has double taxation treaties may be entitled to a reduced rate of withholding tax. Subject to the above, depending on the country of residence and satisfaction of certain other conditions, the dividend withholding tax rates under Kazakhstan’s double tax treaties in effect as of the date of this Prospectus may be between 5 per cent. and 15 per cent. Under double tax treaties effective on the date of this Prospectus, reductions below 10 per cent. may only be available to beneficial owners that are legal entities. In order to avail themselves of this relief, eligible GDR Holders must provide the Bank with a document issued by the tax authority of their country of residence confirming their tax residence in a treaty jurisdiction. In addition, the Bank should have the list of GDR Holders provided by the JSC “Central Depository of Securities” containing information about GDRs and GDR Holders. On the basis of the above documents, the Bank may be entitled to withhold tax at an applicable reduced rate established by a relevant treaty, subject as provided in the Deposit Agreement. If the above documents are not made available to the Bank prior to the date of payment of dividends, then the Bank should apply withholding tax at a standard 15 per cent. rate and account for the withheld amounts to the relevant authority. GDR Holders who are eligible for a lower withholding tax rate should later be able to claim a refund of overpaid tax from the government of Kazakhstan. In doing so, they should provide the respective tax authority with a tax residence confirmation and an extract from the account with JSC “Central Depository of Securities” containing information about GDRs and GDR Holders. In practice, however, this process may prove to be administratively burdensome. United Kingdom The comments below are of a general nature and are based on current United Kingdom law and HM Revenue & Customs practice at the date of this Prospectus, and are subject to any change that may take effect after such date (possibly with retrospective effect). Except as otherwise stated, this summary only discusses certain UK tax consequences of holding the Shares or the GDRs for the absolute beneficial owners of the Shares or the GDRs (1) who are resident or ordinarily resident in the UK for tax purposes; (2) who are not resident for tax purposes in any other jurisdiction; and (3) who do not have a permanent establishment or fixed base in Kazakhstan with which the holding of the Shares or the GDRs is connected (“UK holders”). In addition, the summary (1) only addresses the tax consequences for UK holders who hold the Shares and the GDRs as capital assets, and does not address the tax consequences which may be relevant to certain other categories of UK holders, for example, dealers; (2) assumes that the UK holder does not either directly or indirectly alone control more than 5 per cent., or together with connected or associated persons, control 10 per cent. or more of the issued share capital or voting power of the company; and (3) assumes that a holder of the GDRs is beneficially entitled to the underlying Shares and to the dividends on those Shares.

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The following is intended only as a general guide and is not intended to be, nor should it be considered to be, legal or tax advice to any particular UK holder. Accordingly, potential investors should satisfy themselves as to the overall tax consequences, including, specifically, the consequences under UK law and HM Revenue & Customs practice, of the acquisition, ownership and disposal of the Shares or the GDRs in their own particular circumstances, by consulting their own tax advisers. Withholding tax Dividend payments in respect of the Shares or the GDRs will not be subject to UK withholding tax. Taxation of dividends A UK holder who is an individual resident and domiciled in the United Kingdom will generally be subjected to United Kingdom income tax on a distribution paid in respect of Shares or GDRs. Such UK holder may be entitled to a tax credit (equal to one-ninth of the net distribution received) which may be set off against his income tax liability on the distribution. Where the UK holder falls within the basic rate income tax limit, he will have no further income tax liability with respect to such distribution. If the UK holder is a higher rate income taxpayer, he will have to pay an amount equal to 25 per cent. of the net dividend received, in addition to setting off such available tax credit, in order to satisfy his income tax liability on the distribution. Proposals were announced in the 2008 Pre-Budget Report for the introduction of new non-saving and saving income and dividend income tax rates applicable for taxable income above £150,000. These are intended to take effect from 6 April 2011 and the proposed new dividend income tax rate is 37.5 per cent. When the new rates take effect, to the extent that the gross distribution received by an individual UK holder (when added together with his other taxable income for the relevant tax year) falls above the £150,000 threshold, in addition to setting off his tax credit (as available), he would have to account for tax equal to 30.6 per cent. of the net distribution received, in order to satisfy his income tax liability on the distribution. A UK holder who is an individual resident but not domiciled or ordinarily resident in the United Kingdom will generally be subject to United Kingdom income tax on the dividend paid on the Shares or GDRs to the extent that the dividend is remitted, or treated as remitted, to the United Kingdom, provided certain conditions are met. Currently, a corporate UK holder will generally be subject to United Kingdom corporation tax at a rate of 28 per cent. on the distribution paid in respect of Shares or GDRs. H M Treasury has proposed reforms to the United Kingdom tax treatment of dividends and other distributions received by United Kingdom companies. Draft provisions were published in December 2008 for consultation and are expected to come into force in 2010. Under the proposed reforms, medium and large United Kingdom companies receiving foreign dividends or other distribution (of a non-capital nature) will not be subject to United Kingdom corporation tax on such amount where the dividend or distribution falls into an exempt class and does not contravene any of the anti-avoidance rules set out in the proposed legislation. The precise scope of any reform to the United Kingdom tax treatment of dividends and other distributions received by United Kingdom companies will be unknown until the publication of the final legislation. Effect of Kazakhstan withholding taxes Dividend payments in respect of the Shares and the GDRs will be subject to Kazakhstan withholding taxes. A UK holder should generally be entitled to a credit for Kazakhstan tax properly withheld from such payments against such investor’s liability to income tax or corporation tax on such amounts, subject to UK tax rules for calculation of such a credit.

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Taxation of disposals The disposal by a UK holder of interests in the Shares or the GDRs may give rise to a chargeable gain or allowable loss for the purposes of UK taxation of chargeable gains, depending on the UK holder’s particular circumstances and subject to any exemption or relief. A UK holder who is an individual and domiciled in the UK will generally be liable to UK capital gains tax on chargeable gains made on the disposal of an interest in the Shares or the GDRs at the rate of 18 per cent.. A UK holder who is an individual resident but not domiciled, in the UK will generally be liable to UK capital gains tax to the extent that the chargeable gains made on the disposal of an interest in the Shares or the GDRs are remitted or treated as remitted to the UK provided certain conditions are met. In particular, dealings in the GDRs on the LSE may give rise to remitted profits that would, therefore, give rise to UK capital gains tax liability. An individual holder of the Shares or the GDRs who ceases to be resident or ordinarily resident in the UK for UK tax purposes for a period of less than five years (or a shorter period under certain double tax treaties where applicable) and who disposes of such Shares or GDRs during that period may also be liable on returning to the UK for UK tax on capital gains despite the fact that the individual may not be resident or ordinarily resident in the UK for UK tax purposes at the time of the disposal. A corporate UK holder will generally be subject to UK corporation tax on any chargeable gain arising from a disposal of the Shares or the GDRs. Stamp duty and stamp duty reserve tax Assuming that any document effecting a transfer of one or more of the Shares or the GDRs is neither executed in the UK nor relates to any property situate, or to any matter or thing done or to be done, in the UK (which may include involvement of UK bank accounts in payment mechanics), then no UK stamp duty should be payable on such a document. As the GDRs relate to stock expressed in a currency other than sterling, no “bearer instrument” stamp duty should be payable on either the issue of GDRs or any transfer of stock transferable by means of the GDRs. Assuming that the Shares are not registered in a register kept in the UK, no stamp duty reserve tax should be payable in respect of any agreement to transfer Shares or GDRs. United States Notice Pursuant to Internal Revenue Service Circular 230 To ensure compliance with Internal Revenue Service Circular 230, each investor is hereby notified that any discussion of United States federal tax issues in this Prospectus is not intended or written to be used, and cannot be used, by the investor or any taxpayer for the purpose of avoiding any penalties that may be imposed on the taxpayer under the Internal Revenue Code. Such discussion is written to support the promotion or marketing by the Bank of the New Shares and New GDRs. The discussion is limited to the United States federal tax issues described herein. It is possible that additional issues may exist that could affect the United States federal tax treatment of an investment in the New Shares or New GDRs, or the matter that is the subject of the discussion herein, and this discussion does not consider or provide any conclusions with respect to any such additional issues. Each investor should seek advice based on its particular circumstances from an independent adviser.

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The following is a description of the principal United States federal income tax consequences that may be relevant with respect to the acquisition, ownership and disposition of the New Shares or New GDRs. This description addresses only the United States federal income tax considerations of holders that are initial purchasers of the New Shares or New GDRs pursuant to the offering and that will hold the New Shares or New GDRs as capital assets. This description does not address tax considerations applicable to holders that may be subject to special tax rules, including: ● financial institutions or insurance companies; ● real estate investment trusts, regulated investment companies or grantor trusts; ● dealers or traders in securities or currencies; ● tax-exempt entities; ● individual retirement accounts and other tax-deferred accounts; ● persons that received the New Shares or New GDRs as compensation for the performance of services; ● persons that will hold the New Shares or New GDRs as part of a “hedging” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes; ● certain former citizens and long-term residents of the United States; ● persons that have a “functional currency” other than the U.S. dollar; or ● holders that own or are deemed to own 10 per cent. or more, by voting power or value, of New Shares. Moreover, this description does not address the United States federal estate and gift or alternative minimum tax consequences of the acquisition, ownership and disposition of the New Shares or New GDRs. This description is based: ● on the Internal Revenue Code of 1986, as amended (the “Code”), existing, proposed and temporary United States Treasury Regulations and judicial and administrative interpretations thereof, and the income tax treaty between the United States and Kazakhstan (the “Treaty”), in each case as in effect and available on the date hereof; and ● in part, on the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms. The United States tax laws and the interpretation thereof are subject to change, which change could apply retroactively and could affect the tax consequences described below. For the purposes of this description, a “US holder” is a beneficial owner of the Shares or GDRs that, for United States federal income tax purposes, is: ● a citizen or resident of the United States; ● a corporation, or any entity treated as a corporation created or organised in or under the laws of the United States or any state thereof, including the District of Columbia; ● an estate the income of which is subject to United States federal income taxation regardless of its source; or ● a trust if such trust validly elects to be treated as a United States person for U.S. federal income tax purposes or if a court within the United States is able to exercise primary

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supervision over its administration or one or more United States persons have the authority to control all of the substantial decisions of such trust. A “Non-US holder” is a beneficial owner of the Shares or GDRs that is neither a US holder nor a partnership (or other entity that is treated as a partnership for U.S. federal income tax purposes). If a partnership (or any other entity treated as a partnership for U.S. federal tax purposes) holds the Shares or GDRs, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner should consult its tax adviser as to its tax consequences. This description assumes that the Bank is not a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes. However, no determination has been made as to whether the Bank is or may be a PFIC for the taxable year ended December 31, 2008 or the taxable year ending December 31, 2009 and the Bank does not intend to make any such determination in the future. If the Bank is or were to become a PFIC, US Holders would be subject to certain adverse tax consequences as described below under the heading “Passive Foreign Investment Company considerations.” U.S. Holders are urged to consult their own tax advisors concerning the Bank’s status once the PFIC and the application of the PFIC rules to them in their own particular circumstances. Ownership of GDRs in general For United States federal income tax purposes, a holder of the GDRs will generally be treated as the owner of the New Shares represented by such New GDRs. The United States Treasury Department has expressed concern that depositaries for depositary receipts, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking actions that are inconsistent with the claiming of United States foreign tax credits by US holders of such receipts or shares. Accordingly, the analysis regarding the availability of a United States foreign tax credit for Kazakhstan taxes and the sourcing rules and the eligibility of dividends for a preferential rate of tax described below could be materially and adversely affected by future actions taken by the United States Treasury Department. Distributions Subject to the discussion below under “— Passive Foreign Investment Company considerations,” if you are a US holder, for United States federal income tax purposes, the gross amount of any distribution made to you of cash or property, other than certain distributions, if any, of Shares distributed pro rata to all shareholders of the Bank, including holders of New GDRs, with respect to an investor’s Shares or GDRs, before reduction for any Kazakhstan taxes withheld therefrom, will be includible in an investor’s income as dividend income to the extent such distributions are paid out of the Bank’s current or accumulated earnings and profits as determined under United States federal income tax principles. Non-corporate US holders generally may be taxed on such dividends at the lower rates applicable to long-term capital gains for taxable years beginning on or before 31 December 2010. However, a US holder’s eligibility for such preferential rate would be subject to certain holding period requirements, the non-existence of certain risk reduction transactions with respect to the Shares or GDRs and our eligibility for the benefits of the Treaty. Such dividends will not be eligible for the dividends received deduction generally allowed to corporate US holders. Subject to the discussion below under “— Passive Foreign Investment Company considerations,” to the extent, if any, that the amount of any distribution by the Bank exceeds current and accumulated earnings and profits as determined under United States federal income tax principles, it will be treated first as a tax-free return of an investor’s adjusted tax basis in its New Shares or New GDRs and thereafter as capital gain. The Bank does not maintain calculations of its earnings and profits under United States federal income tax principles. US holders should therefore assume that any distribution with respect to New Shares or New GDRs will constitute ordinary dividend income. US holders should consult their own tax advisers with respect to the appropriate U.S. federal income tax treatment of any distribution received from the Bank.

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In relation to a US holder, if the Bank pays a dividend in a foreign currency (i.e., a currency other than the U.S. dollar), any such dividend will be included in such US holders gross income in an amount equal to the U.S. dollar value of such foreign currency on the date of receipt, which, in the case of GDRs, is the date they are received by the depositary. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution. If the dividend is converted into U.S. dollars on the date of receipt, a US holder generally should not be required to recognise foreign currency gain or loss in respect of the dividend income. A US holder may have any foreign currency gain or loss if the amount of such dividend is not converted into U.S. dollars on the date of its receipt. In relation to US holders, dividends paid by the Bank with respect to New Shares or New GDRs will be treated as foreign source income, which may be relevant in calculating U.S. holders’ foreign tax credit limitation. Subject to certain conditions and limitations, Kazakhstan tax withheld on dividends may be deducted from a US holder’s taxable income or credited against US holders’ United States federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends that the Bank distributes generally will constitute “passive category income” or, in the case of certain US holders, “general category income.” Subject to the discussion below under “— Backup withholding tax and information reporting requirements,” investors who are Non-US holders will generally not be subject to United States federal income or withholding tax on dividends received by them on New Shares or New GDRs, unless they conduct a trade or business in the United States and such income is effectively connected with that trade or business. Sale or exchange of Shares or GDRs Subject to the discussion below under “— Passive Foreign Investment Company considerations,” US holders will generally recognise gain or loss on the sale or exchange of their New Shares or New GDRs, equal to the difference between the amount realised on such sale or exchange and their adjusted tax basis in their New Shares or New GDRs. Such gain or loss will be capital gain or loss. This capital gain or loss generally will be long-term capital gain or loss if the US holder’s holding period in the New Shares or New GDRs exceeds one year. Gain or loss, if any, recognised by such holder will generally be treated as United States source income or loss for United States foreign tax credit purposes. The deductibility of capital losses is subject to limitations. The initial tax basis of a US holder’s New Shares or New GDRs will be the purchase price determined in U.S. dollars. The amount realised on a sale or other disposition of New Shares for an amount in foreign currency will be the U.S. dollar value of this amount determined (1) on the date of receipt of such amount in the case of a cash basis US holder and (2) on the date of sale or disposition in the case of an accrual basis US holder. However, in the case of Shares traded on an established securities market that are sold by a cash basis US holder (or an accrual basis US holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time. Subject to the discussion below under “— Backup withholding tax and information reporting requirements,” Non-US holders will generally not be subject to United States federal income or withholding tax on any gain realised on the sale or exchange of such New Shares or New GDRs unless: ● such gain is effectively connected with their conduct of a trade or business in the United States; or ● if they are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.

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Passive Foreign Investment Company considerations The foregoing discussion assumes that the Bank is not currently, and will not in the future be, classified as a “passive foreign investment company,” or “PFIC,” for United States federal tax purposes. A non-US corporation will be classified as a PFIC for United States federal income tax purposes in any taxable year in which, after applying certain look-through rules, either ● at least 75 per cent. of its gross income is “passive income;” or ● at least 50 per cent. of the average value of its gross assets is attributable to assets that produce “passive income” or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions. No determination has been made as to whether the Bank will be classified as a PFIC for the taxable year ended 31 December 2008 and the Bank does not intend to make any such determination in the future. The Bank’s status in the current and future years will depend on its assets and activities in those years. Consequently there can be no assurance that it will not be considered a PFIC for any taxable year. If the Bank were a PFIC, a US holder would generally be subject to imputed interest charges and other disadvantageous tax treatment (including the denial of the taxation of such dividends at the lower rates applicable to long-term capital gains, as discussed above under “— Distributions”) with respect to any gain from the sale or exchange of, and certain distributions with respect to, such holder’s New Shares or New GDRs. If the Bank were a PFIC, a US holder could make a variety of elections that may alleviate certain tax consequences referred to above, and one of these elections may be made retroactively. However, it is expected that the conditions necessary for making certain of such elections will not apply in the case of the New Shares or New GDRs. If the New Shares or New GDRs are “regularly traded” on a “qualified exchange,” a U.S. Holder may make a mark-to–market election with respect to the New Shares or New GDRs. If a U.S. holder makes the mark-to-market election, for each year in which the Bank is a PFIC, the holder will generally include as ordinary income the excess, if any, of the fair market value of the New Shares or New GDRs, at the end of the taxable year over their adjusted tax basis, and will be permitted an ordinary loss in respect of the excess, if any, of the adjusted tax basis of the New Shares or New GDRs over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). If a U.S. holder makes the election, the holder’s tax basis in the New Shares or New GDRs will be adjusted to reflect the amount of any such income or loss. Any gain recognized on the sale or other disposition of the New Shares or New GDRs will be treated as ordinary income. The New Shares or New GDRs will be considered “marketable stock” if they are traded on a qualified exchange, other than in de minimis quantities, on at least 15 days during each calendar quarter. The London Stock Exchange should constitute a qualified exchange for this purpose provided it meets certain trading volume, listing, financial disclosure, surveillance, and other requirements set forth in applicable U.S. Treasury regulations. However, the Bank cannot be certain that our New Shares or New GDRs will continue to trade on the London Stock Exchange or that our New Shares or New GDRs will be traded on at least 15 days in each calendar quarter in other than de minimis quantities. U.S. holders should be aware, however, that if the Bank is determined to be a PFIC, the interest charge regime described above could be applied to indirect distributions or gains deemed to be attributable to U.S. holders in respect of any of the Bank’s subsidiaries that also may be determined to be a PFIC, and the mark-to-market election generally would not be effective for such subsidiaries. Each U.S. Holder should consult its own tax advisor to determine whether a mark-to-market election is available and the consequences of making an election if the Bank were characterized as a PFIC. Investors should consult their own tax advisers regarding the tax consequences that would arise if the Bank were treated as a PFIC.

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Backup withholding tax and information reporting requirements United States backup withholding tax and information reporting requirements generally apply to certain payments to certain non-corporate holders of stock. Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, Shares or GDRs made within the United States, or by a US payor or US middleman, to a holder of Shares or GDRs, other than an exempt recipient, including a corporation, a payee that is not a United States person that provides an appropriate certification and certain other persons. A payor will be required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the sale or redemption of, Shares or GDRs within the United States, or by a US payor or US middleman, to a holder, other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. The backup withholding tax rate is 28 per cent. through 2010. In the case of such payments made within the United States to a foreign simple trust, a foreign grantor trust or a foreign partnership, other than payments to a foreign simple trust, a foreign grantor trust or a foreign partnership that qualifies as a “withholding foreign trust” or a “withholding foreign partnership” within the meaning of the applicable United States Treasury Regulations and payments to a foreign simple trust, a foreign grantor trust or a foreign partnership that are effectively connected with the conduct of a trade or business in the United States, the beneficiaries of the foreign simple trust, the persons treated as the owners of the foreign grantor trust or the partners of the foreign partnership, as the case may be, will be required to provide the certification discussed above in order to establish an exemption from backup withholding tax and information reporting requirements. Moreover, a payor may rely on a certification provided by a payee that is not a United States person only if such payor does not have actual knowledge or a reason to know that any information or certification stated in such certificate is incorrect. The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and disposition of New Shares or New GDRs. Investors should consult their own tax advisers concerning the tax consequences of their particular situation.

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SELLING AND TRANSFER RESTRICTIONS Selling Restrictions General The distribution of this document and the offer of the New GDRs in certain jurisdictions may be restricted by law and therefore persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions, including those in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. No action has been or will be taken in any jurisdiction other than the approval of this document as a Prospectus for the purposes of the Prospectus Rules that would permit a public offering of the New GDRs, or possession or distribution of the Prospectus or any other offering material, in any country or jurisdiction where action for that purpose is required. Accordingly, the New GDRs may not be offered or sold, directly or indirectly, and neither this document nor any other offering material or advertisements in connection with the New GDRs may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. This document does not constitute an offer to subscribe for or purchase any of the New GDRs offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. Purchasers of the New GDRs may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase. United States The New GDRs have not been and will not be registered under the U.S. Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. New GDRs are being offered and sold (i) outside the United States to institutional investors in accordance with Regulation S, and (ii) in the United States to qualified institutional buyers, or QIBs, as defined in Rule 144A, in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. In addition, until 40 days after the commencement of this offering, an offer or sale of ordinary shares or the GDRs offered in this offering into or within the United States by a dealer may violate the registration requirements of the U.S. Securities Act. United Kingdom In the United Kingdom, this Prospectus is being distributed only to, and offers are only being made to and directed at, persons who (i) have professional experience in matters relating to investments; (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended); (iii) are outside the United Kingdom; or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the offer or sale of any rights or shares may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This Prospectus is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document related is available only to relevant persons. Any investment or investment activity to which this document related is available only to relevant persons and will be engaged in only with relevant persons.

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European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any GDRs which are the subject of the New GDR Offering contemplated by this Prospectus (the “New GDRs”) may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any New GDRs may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year, (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000 as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of New GDRs shall result in a requirement for the publication by the Bank of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an “offer to the public” in relation to any GDRs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any New GDRs to be offered so as to enable an investor to decide to purchase any GDRs, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. Transfer Restrictions Rule 144A GDRs Each purchaser of New GDRs located within the United States, by accepting delivery of this document, will be deemed to have represented, agreed and acknowledged that: (a) it is (A) a qualified institutional buyer within the meaning of Rule 144A, (B) acquiring such New GDRs for its own account or for the account of a qualified institutional buyer and (C) aware, and each beneficial owner of such New GDRs has been advised, that the sale of such Shares to it is being made in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act; (b) it understands that such GDRs (and the Shares represented thereby) have not been and will not be registered under the U.S. Securities Act and may not be offered, sold, pledged or otherwise transferred except (A) in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act to a person that it and any person acting on its behalf reasonably believe is a qualified institutional buyer purchasing for its own account or for the account of a qualified institutional buyer, (B) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S, in each case in accordance with any applicable securities laws of any state of the United States. Such purchaser acknowledges that such New GDRs are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act and that no representation can be made as to the availability of the exemption provided by Rule 144 under the U.S. Securities Act for the resale of New GDRs (and the shares represented thereby);

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(c) the Bank, the Registrar, and their affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. If it is acquiring any New GDRs for the account of one or more qualified institutional buyers, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account; (d) the Master Rule 144A GDR will bear a legend to the following effect, unless the Bank and the Depositary determine otherwise in compliance with applicable law: “THE RULE 144A RESTRICTED GLOBAL DEPOSITARY RECEIPTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON SHARES OF JOINT STOCK COMPANY KAZKOMMERTSBANK REPRESENTED THEREBY (THE “SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE HOLDER HEREOF BY PURCHASING THE GDRs AGREES FOR THE BENEFIT OF JOINT STOCK COMPANY KAZKOMMERTSBANK THAT THE GLOBAL DEPOSITARY RECEIPTS AND THE SHARES CORRESPONDING HERETO MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE HOLDER OF THE GLOBAL DEPOSITARY RECEIPTS REPRESENTED HEREBY WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF SUCH GLOBAL DEPOSITARY RECEIPTS OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. THE BENEFICIAL OWNER OF SHARES RECEIVED UPON CANCELLATION OF ANY RULE 144A GLOBAL DEPOSITARY RECEIPT MAY NOT DEPOSIT OR CAUSE TO BE DEPOSITED SUCH SHARES INTO ANY DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, OTHER THAN A RULE 144A DEPOSITARY RECEIPT FACILITY, SO LONG AS SUCH SHARES ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALE OF THE SHARES OR ANY RULE 144A GLOBAL DEPOSITARY RECEIPTS. OWNERSHIP OF THE SHARES REPRESENTED BY THE GLOBAL DEPOSITARY RECEIPTS IS SUBJECT TO CERTAIN LEGISLATIVE RESTRICTIONS UNDER KAZAKHSTAN LAW. SPECIFICALLY, (A) LEGAL ENTITIES REGISTERED IN ANDORRA, LIECHTENSTEIN, LIBERIA, MONACO, THE MARSHALL ISLANDS, NAURU, THE COOK ISLANDS, GUATEMALA, INDONESIA, BURMA (MYANMAR), NIGERIA AND THE PHILIPPINES (AND/OR SUCH OTHER JURISDICTIONS AS MAY BE SPECIFIED UNDER APPLICABLE KAZAKHSTAN LAW FROM TIME TO TIME) OR WHICH HAVE AFFILIATES REGISTERED IN SUCH JURISDICTIONS (EXCEPT FOR INTERNATIONAL BANKS HAVING A CREDIT RATING OF “A” OR ABOVE FROM ONE OF MOODY’S INVESTORS SERVICE, INC., STANDARD & POOR’S RATINGS SERVICES, FITCH RATINGS LTD. OR CAPITAL INTELLIGENCE LTD.) OR (B) PHYSICAL PERSONS WHO ARE PARTICIPANTS OR SHAREHOLDERS IN

174

SUCH LEGAL ENTITIES MAY NOT DIRECTLY OR INDIRECTLY OWN SHARES. ACCORDINGLY, HOLDERS OF GLOBAL DEPOSITARY RECEIPTS FALLING UNDER (A) OR (B) ABOVE ARE NOT PERMITTED TO EXERCISE VOTING RIGHTS UNDER THE TERMS OF THE DEPOSIT AGREEMENT, CANNOT WITHDRAW THE SHARES FROM THE GLOBAL DEPOSITARY RECEIPTS AND CANNOT OWN SUCH SHARES.”; (e) for so long as Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, it will not deposit such Shares into any depositary receipt facility in respect of Shares established and maintained by a depositary bank other than a restricted depositary receipt facility; and (f) the Bank and its affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Regulation S GDRs Each purchaser of the New GDRs offered in reliance on Regulation S (the “Regulation S GDRs”) will be deemed to have represented and agreed as follows (terms used in this paragraph that are defined in Regulation S are used herein as defined therein): 8. the purchaser is, at the time of the offer to it of New GDRs and at the time the buy order originated, outside the United States for the purposes of Rule 903 under the U.S. Securities Act; (ii) the purchaser is aware that the new Regulation S GDRs have not been and will not be registered under the U.S. Securities Act and are being offered outside the United States in reliance on Regulation S; 8. the temporary Master Regulation GDRs will bear a legend to the following effect, unless the Bank determines otherwise in compliance with applicable law: THE REGULATION S GLOBAL DEPOSITARY RECEIPTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON SHARES OF JOINT STOCK COMPANY KAZKOMMERTSBANK REPRESENTED THEREBY (THE “SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND, PRIOR TO THE EXPIRATION OF A RESTRICTED PERIOD (DEFINED AS THE PERIOD ENDING 40 DAYS AFTER THE LATEST OF (A) THE COMMENCEMENT OF THE OFFERING OF GDRS, (B) THE ORIGINAL ISSUE DATE OF THE GDRS AND (C) THE LATEST ISSUE DATE WITH RESPECT TO THE ADDITIONAL GDRS (IF ANY) ISSUED PURSUANT TO THE OVER-ALLOTMENTS OPTION GRANTED TO THE UNDERWRITERS PURSUANT TO THE UNDERWRITING AGREEMENT) MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (I) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (II) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES; PROVIDED THAT IN CONNECTION WITH ANY TRANSFER UNDER (II) ABOVE, THE TRANSFEROR SHALL PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE SHARES FROM THE REGULATION S FACILITY (AS DEFINED IN THE DEPOSIT AGREEMENT) IN ACCORDANCE WITH THE TERMS

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AND CONDITIONS OF THE DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE DEPOSIT AGREEMENT FOR DEPOSIT IN THE RULE 144A FACILITY (AS DEFINED IN THE DEPOSIT AGREEMENT) THEREUNDER AND THAT RULE 144A GDRs REPRESENTED BY A MASTER RULE 144A GDRs BE ISSUED, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE DEPOSIT AGREEMENT, TO OR FOR THE ACCOUNT OF SUCH QIB. UPON THE EXPIRATION OF THE RESTRICTED PERIOD REFERRED TO ABOVE, THIS REGULATION S GLOBAL DEPOSITARY RECEIPT AND THE SHARES REPRESENTED HEREBY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND, PROVIDED THAT AT THE TIME OF SUCH EXPIRATION THE OFFER OR SALE OF THE GLOBAL DEPOSITARY RECEIPTS REPRESENTED HEREBY AND THE SHARES REPRESENTED THEREBY BY THE HOLDER HEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. OWNERSHIP OF THE SHARES REPRESENTED BY THE GLOBAL DEPOSITARY RECEIPTS IS SUBJECT TO CERTAIN LEGISLATIVE RESTRICTIONS UNDER KAZAKHSTAN LAW. SPECIFICALLY, (A) LEGAL ENTITIES REGISTERED IN ANDORRA, LIECHTENSTEIN, LIBERIA, MONACO, THE MARSHALL ISLANDS, NAURU, THE COOK ISLANDS, GUATEMALA, INDONESIA, BURMA (MYANMAR), NIGERIA AND THE PHILIPPINES (AND/OR SUCH OTHER JURISDICTIONS AS MAY BE SPECIFIED UNDER APPLICABLE KAZAKHSTAN LAW FROM TIME TO TIME) OR WHICH HAVE AFFILIATES REGISTERED IN SUCH JURISDICTIONS (EXCEPT FOR INTERNATIONAL BANKS HAVING A CREDIT RATING OF “A” OR ABOVE FROM ONE OF MOODY’S INVESTORS SERVICE, INC., STANDARD & POORS RATINGS SERVICES, FITCH RATINGS LTD. OR CAPITAL INTELLIGENCE LTD. OR (B) PHYSICAL PERSONS WHO ARE PARTICIPANTS OR SHAREHOLDERS IN SUCH LEGAL ENTITIES MAY NOT DIRECTLY OR INDIRECTLY OWN SHARES. ACCORDINGLY, HOLDERS OF GLOBAL DEPOSITARY RECEIPTS FALLING UNDER (A) OR (B) ABOVE ARE NOT PERMITTED TO EXERCISE VOTING RIGHTS UNDER THE TERMS OF THE DEPOSIT AGREEMENT, CANNOT WITHDRAW THE SHARES FROM THE GLOBAL DEPOSITARY RECEIPTS AND CANNOT OWN SUCH SHARES. (iv) any offer, sale, pledge or other transfer made other than in compliance with the above stated restrictions shall not be recognised by the Bank in respect of the new Regulation S GDRs; and 8. the Bank and its affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. It is expected that delivery of the New GDRs will be made against payment therefore on or about the date specified above under “Details of the New GDR Offering — Settlement Procedure”. Pursuant to Rule 15c6-1 under the U.S. Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise.

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ADDITIONAL INFORMATION 1. The Group is not and has not been involved in any governmental, legal or arbitration proceedings (including any proceedings which are pending or threatened of which the Bank is aware) which may have or have had in the 12 months preceding the date of this document a significant effect on the financial position or profitability of the Group. 2. Except as disclosed in “Management’s Discussion and Analysis of Results of Operations and Financial Condition – Recent developments” and “The Banking Sector in Kazakhstan— Recent Developments”, there has been no significant change in the financial or trading position of the Group since 30 September 2008. 3. The Bank has not entered into any material contracts outside the ordinary course of its businesses which could result in it being under an obligation or entitlement that is material to their ability to issue the New Shares that will be represented by the New GDRs. 4. Copies of the following documents (and English translations thereof where the documents in question are not in English) may be inspected at, are available from and may be obtained free of charge upon request from the specified offices of White & Case LLP at 5 Old Broad Street, London EC2N 1DW during normal business hours on any weekday (public holidays excepted): ● a copy of this Prospectus, together with any supplement to this Prospectus; ● the Deposit Agreement; ● the Bank’s Charter; and ● the independent auditors’ report together with the audited consolidated financial statements of the Bank as at and for the three years ended 31 December 2007 and the unaudited condensed interim consolidated financial statements for the nine months ended 30 September 2008. 5. The Depositary is subject to regulation and supervision by the New York State Banking Department, the Federal Reserve Board and the Federal Deposit Insurance Corporation. 6. The Depositary will maintain the register of GDR holders at its New York offices or at the specified office of its agent. 7. In the event that certificates in definitive form are issued in respect of the GDRs, the Depositary will appoint an agent in the United Kingdom for so long as the GDRs are listed on the Official List and admitted to trading on the London Stock Exchange. 8. The total costs and expenses relating to the issue of the New GDRs, including the UKLA listing fee and professional fees and expenses are estimated to amount to approximately U.S.$650,000 and are payable by the Bank. 9. Deloitte LLP have audited the consolidated financial statements as at and for the years ended 31 December 2007, 2006 and 2005 in respect of which they have delivered an unqualified audit opinion. Deloitte LLP have also reviewed and delivered a review report on the unaudited condensed interim consolidated financial information for the nine months ended 30 September 2008. The Annual Financial Statements, Deloitte LLP’s audit reports with respect thereto, the Interim Financial Statements and Deloitte LLP’s review report with respect thereto are included in this Prospectus. Readers are advised that the financial information of the Bank set forth herein should be read together with the Annual Financial Statements and the Interim Financial Statements, together, in each case, with the notes thereto, contained in this Prospectus beginning on page F-1.

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INDEX TO FINANCIAL STATEMENTS Page Condensed Interim Consolidated Financial Information (Unaudited) for the nine F-2 months ended 30 September 2008 Review Report F-5 Condensed interim consolidated income statement F-7 Condensed interim consolidated balance sheet F-8 Condensed interim consolidated statement of changes in equity F-9 Condensed interim consolidated statement of cash flows F-11 Selected explanatory notes F-13 Consolidated Financial Statements for the year ended 31 December 2007 F-53 Independent Auditors’ Report F-56 Consolidated income statement F-58 Consolidated balance sheet F-59 Consolidated statement of changes in equity F-60 Consolidated statement of cash flows F-61 Notes to the consolidated financial statements F-63 Consolidated Financial Statements for the years ended 31 December 2006, 2005 and F-135 2004 Independent Auditors’ Report F-138 Consolidated income statement F-140 Consolidated balance sheet F-141 Consolidated statement of changes in equity F-142 Consolidated statement of cash flows F-144 Notes to the consolidated financial statements F-146

F-1

JOINT STOCK COMPANY KAZKOMMERTSBANK

Condensed Interim Consolidated Financial Information (Unaudited) For the nine months ended 30 September 2008

F-2 JOINT STOCK COMPANY KAZKOMMERTSBANK

TABLE OF CONTENTS

Page

STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2008 (UNAUDITED) 1

INDEPENDENT AUDITORS’ REPORT ON REVIEW OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION 2-3

CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2008 (UNAUDITED):

Condensed interim consolidated income statement 4

Condensed interim consolidated balance sheet 5

Condensed interim consolidated statement of changes in equity 6-7

Condensed interim consolidated statement of cash flows 8-9

Selected explanatory notes to the condensed interim consolidated financial information (unaudited) 10-49

F-3 F-4 F-5 F-6 F-7 F-8

JOINT STOCK COMPANY KAZKOMMERTSBANK

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2008 (UNAUDITED)

Share capital Treasury Share Investments Cumulative Property and Retained Total equity Minority Total shares premium available-for- translation equipment earnings1 attributable interest equity reserve sale fair value reserve1 revaluation to equity reserve/ reserve holders of (deficit) 1 the parent (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

31 December 2006 6,999 (4) 152,534 40 76 2,436 84,748 246,829 15,272 262,101

Unrealized loss on revaluation of available-for- sale investments - - - (144) - - - (144) - (144) Revaluation of property and equipment -----5,267-5,267- 5,267 Exchange differences on translation of foreign operations ----(54)-(3,361) (3,415) (7,494) (10,909)

Net loss recognized directly in equity - - - (144) (54) 5,267 (3,361) 1,708 (7,494) (5,786) Transfers (net of any related tax): Depreciation of property and equipment revaluation reserve -----(1,667) 1,667 - - - Profit from investments available for sale - - - 41 - - - 41 - 41

Net profit ------40,83640,8361,941 42,777

Total recognized income and expense - - - 41 - (1,667) 42,503 40,877 1,941 42,818 Share capital increase of ordinary shares issue 1 - 329 - - - - 330 - 330 Sale of treasury shares - 1 111 - - - - 112 - 112

30 September 2007 (unaudited) 7,000 (3) 152,974 (63) 22 6,036 123,890 289,856 9,719 299,575

6 F-9 F-10 F-11 F-12

JOINT STOCK COMPANY KAZKOMMERTSBANK

SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2008 (UNAUDITED)

1. ORGANIZATION

JSC Kazkommertsbank (the “Bank”, or “Kazkommertsbank”) is a joint stock bank, which has operated in the Republic of Kazakhstan since 1990. The Bank’s activities are regulated by the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and financial organizations (“FMSA”) in accordance with license № 48 and by the National Bank of the Republic of Kazakhstan (“NBRK”). The Bank’s primary business consists of commercial banking activities, operations with securities, foreign currencies and derivative instruments and originating loans and guarantees.

The registered office of the Bank is located at: 135Zh, Gagarin str., Almaty, Republic of Kazakhstan.

The Bank has 23 branches in the Republic of Kazakhstan.

Kazkommertsbank is the parent company of the banking group (the “Group”). The enterprises consolidated in the interim financial information are consistent with those presented in the consolidated financial statements for the year ended 31 December 2007.

Proportion or ownership interest/voting rights Name Country of 30 September 31 December Type of operation operation 2008 2007

JSC Kazkommerts Securities Republic of 100% 100% Securities market transactions Kazakhstan LLP Processing Company Republic of 100% 100% Payment card and related services Kazakhstan Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on International B.V. Netherlands international capital markets Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on Finance II B.V. Netherlands international capital markets Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on Capital II B.V. Netherlands international capital markets JSC OCOPAIM Grantum Asset Republic of 100% 100% Investment management of pension Management Kazakhstan assets LLP Kazkommertsbank RFCA Republic of 100% 100% Operations with financial instruments Kazakhstan on Regional financial centre of Almaty JSC Kazkommerts Life Republic of 100% 100% Life insurance Kazakhstan CJSC Kazkommertsbank Republic of 100% 100% Commercial bank Tajikistan Tajikistan JSC Kazkommertsbank Kyrgyz 93.58% 93.58% Commercial bank Kyrgyzstan Republic JSC Grantum APF Republic of 80.01% 80.01% Pension fund Kazakhstan JSC Insurance Company Republic of 100% 65% Insurance Kazkommerts-Policy Kazakhstan LLP Commercial bank Russia 100% 52.11% Commercial bank Moscommertsbank LLP Investment Company East Russia 50% 50% Securities market transactions Kommerts

10 F-13

On 22 April 2008, the Bank acquired 290,000 treasury shares of JSC “Life Insurance Company “Kazkommerts-Life” for KZT 290 million. The Bank’s capital share did not change.

On 28 April 2008, the Bank acquired 53,486 treasury shares (35%) of JSC “Insurance Company Kazkommerts-Policy” from the European Bank of Reconstruction and Development for KZT 1,630 million. The Bank’s capital share in JSC “Insurance Company Kazkommerts-Policy” increased to 100% upon acquisition.

An independent appraisal of the fair value of the assets acquired was not needed due to the fact that the fair value of most purchased assets and liabilities being available and easily definable. The fair value of the net assets purchased and the Bank’s interest in the definitive net fair value of net assets over the consideration paid, are as follows:

Book value as at Fair value as at 28 April 2008 28 April 2008 (KZT million) (KZT million) (unaudited) (unaudited) Assets Cash and balances with national (central) banks 12 12 Financial assets at fair value through profit or loss 1,495 1,495 Loans and advances to banks 3,487 3,487 Investments available-for-sale 1,362 1,362 Loans under reverse repurchase agreements 1,084 1,084 Property, equipment and intangible assets 171 171 Other assets 2,387 2,387

9,998 9,998 Liabilities Other liabilities 4,755 4,755

4,755 4,755

Net assets 5,243 5,243 Minority interest - Net assets acquired, being 35% 1,835 Purchase consideration (1,581) Excess of the Bank’s interest in fair value of net assets of JSC Insurance Company Kazkommerts-Policy over cash consideration paid 254 Net cash outflow on acquisition: JSC Insurance Company Kazkommerts-Policy purchase intergroup balances elimination 49 Purchase cash out-flows: Total paid in cash (1,630) Cash acquired, being 35% 4

Total (1,626)

The purchase consideration for JSC “Insurance Company “Kazkommerts-Policy” was determined as at 31 December 2007, while the actual transaction took place on 28 April 2008. The negative goodwill arose due to the change in the net assets between the date of the pricing and the date the transaction took place.

The income and profit of JSC “Insurance Company “Kazkommerts-Policy” from the beginning of the period till the date of acquisition, were accounted for as being attributable to minority interest. Prior to the date of acquisition, the Group consolidated JSC “Insurance Company “Kazkommerts-Policy” as it had a controlling interest in the Company.

11 F-14

On 19 May 2008, the Bank acquired 480,071 treasury shares of JSC Grantum APF within the parameters of a privileged acquisition program. The amount of the transaction of KZT 480 million comprised 80.01 per cent of total shares placed. The Bank’s share in the capital of JSC Grantum APF did not change.

On 27 May 2008, the Bank acquired the remaining share in LLP Commercial bank Moscommertsbank (“MKB”) capital – 47.89%. The transaction amount of KZT 5,484 million brought the Bank’s share in the MKB capital to 100% upon acquisition.

An independent appraisal of the fair value of the acquired assets was not needed due to the fact that the present value of most purchased assets and liabilities was available and easily definable. The fair value of the net assets purchased and the Bank’s interest in the definitive net fair value of MKB net assets over the consideration paid are as follows:

Book value as at Fair value as at 27 May 2008 27 May 2008 (KZT million) (KZT million) (unaudited) (unaudited) Assets Cash and balances with national (central) banks 8,731 8,731 Financial assets at fair value through profit or loss 7,071 7,071 Loans and advances to banks 14,947 14,947 Loans to customers 185,354 185,354 Loans under reverse repurchase agreements 13,371 13,371 Property, equipment and intangible assets 2,533 2,533 Other assets 1,687 1,687

233,694 233,694 Liabilities Loans and advances from banks 71,433 71,433 Customer accounts 34,371 34,371 Debt securities issued 86,192 86,192 Subordinated debt 16 16 Derivative financial instruments 1,082 1,082 Other liabilities 1,037 1,037

194,131 194,131

Net assets 39,563 39,563 Minority interest - Net assets acquired, being 47.89% 18,946 Purchase consideration (16,063) Excess of the Bank’s interest in fair value of net assets of LLP Commercial Bank Moscommertsbank over cash consideration paid 2,883 Net cash outflow on acquisition: LLP Commercial bank Moscommertsbank purchase intergroup balances elimination (10,579) Purchase cash outflows: Total paid in cash (5,484) Cash acquired, being 47.89% 4,181

Total (1,303)

The excess of the Bank’s interest in fair value of net assets was credited to “other income” in the consolidated income statement on the date of acquisition.

12 F-15

Negative goodwill has been recognised on the acquisition of 47.89% of the issued ordinary share capital of MKB due to the investment in MKB being considered a financial rather than strategic investment by the previous shareholders. As such the Bank was solely responsible for the development of MKB, including the enhancement of internal business processes and building brand recognition. In addition, the previous shareholders did not intend to make any additional capital contributions in MKB in light of worsening market conditions. As a result, the Bank acquired the remaining 47.89% of issued ordinary share capital of MKB at a price exceeding the initial investment of the previous shareholders, however, below the current fair value.

On 8 August 2008, the Bank acquired 50,000 treasury shares of JSC OCOPAIM Grantum Asset Management within the parameters of a privileged acquisition program. The amount of the transaction was KZT 500 million.

On 10 September 2008, the Bank has paid a premium on the existing shares held of Kazkommerts Capital II B.V. by contributing cash of KZT 132 million.

2. BASIS OF PRESENTATION

Accounting basis

The condensed interim consolidated financial information of the Group has been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”. Accordingly, certain information and disclosures normally required to be included in the notes to the annual financial statements have been omitted or condensed. The condensed interim consolidated financial information should be read in conjunction with the consolidated financial statements and with selective notes to the consolidated financial statements of the Group for the year ended 31 December 2007.

The condensed interim consolidated financial information has been prepared on the accrual basis of accounting under the historical cost convention, except for the revaluation of property and the measurement at fair value of investments available-for-sale, financial assets and liabilities at fair value through profit or loss, and derivative financial instruments.

The preparation of the condensed interim consolidated financial information in conformity with International Financial Reporting Standards (“IFRS”) requires management of the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities of the Group, and disclosure of contingent assets and liabilities at the date of the financial information, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that are particularly susceptible to change relate to the allowance for impairment of loans and receivables and determination of the fair value of financial instruments.

The condensed interim consolidated financial information reflects all adjustments that, in the opinion of management of the Group, are necessary for a fair presentation of the results of operations for the interim period. All such adjustments to the financial information are of a normal, recurring nature. Because the results from common banking activities are so closely related and responsive to changes in market conditions, the results for any interim period are not necessarily indicative of the results that can be expected for the year.

Functional currency

Items included in the financial statements of each entity of the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”). The reporting currency of this condensed interim consolidated financial information is the Kazakhstan tenge.

13 F-16

3. SIGNIFICANT ACCOUNTING POLICIES

In preparing this condensed interim consolidated financial information the Group has applied the same accounting policies and methods of computation as those applied in the annual consolidated financial statements of the Group for the year ended 31 December 2007.

Hedge accounting

From 1 January 2008, the Group implemented a hedge accounting policy to designate certain hedging instruments as cash flow hedges in accordance with IAS 39 “Financial Instruments: Recognition and Measurement”.

At inception of the hedge relationship, the Group documents the relationship between hedging instruments and hedged items, along with its risk management objectives and the way in which effectiveness will be assessed at inception and during the period of the hedge. Furthermore, at inception of the hedge and on an ongoing basis, the Group documents whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. If the hedge is not highly effective in offsetting changes in cash flows attributable to the hedged risk, consistent with the documented risk management strategy, hedge accounting is discontinued.

With cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the “Net gain on financial assets and liabilities at fair value through profit or loss” line of the consolidated income statement. Amounts deferred in equity are recycled in profit or loss in the same periods when the hedged item is recognised in profit or loss, in the same line of the consolidated income statement as the recognised hedged item. Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. On the discontinuance of hedge accounting (except where a forecast transaction is no longer expected to occur), any cumulative unrealized gain or loss recognised in equity is recognised in profit or loss when the hedged cash flow occurs or, if the forecast transaction results in the recognition of a financial asset or financial liability, in the same periods during which the asset or liability affects profit or loss. Where a forecast transaction is no longer expected to occur, the cumulative unrealised gain or loss is recognised in profit or loss immediately.

Reclassification of financial assets

On 13 October 2008, International Accounting Standards Board (the “IASB”) issued amendments to IAS 39 “Financial Instruments: Recognition and Measurement” and IFRS 7 “Financial Instruments: Disclosure” which permits certain reclassification of non-derivative financial assets (other than those designated as at fair value through profit or loss at initial recognition under the ‘fair value option’) out of the fair value through profit or loss category in particular circumstances. The amendments to IFRS 7 introduces additional disclosure requirements as the Group has reclassified financial assets in accordance with the amendments to IAS 39. The amendments are effective as of 13 October 2008 and due to rare market circumstances, in accordance with the amendment, the Group applied the reclassification retrospectively from 1 July 2008.

14 F-17

4. RECLASSIFICATIONS

Certain reclassifications have been made to the condensed interim consolidated financial information for the three and nine months ended 30 September 2007 to conform to the presentation for the three and nine months ended 30 September 2008. The current period presentation provides a better view of the consolidated financial position of the Group. These reclassifications include reclassifying of net gain on financial assets and liabilities at fair value through profit or loss and net gain on foreign exchange operations and precious metals operations. These reclassifications are not material in nature and have no impact on the financial results of the Group.

Nine months ended Nine months ended Effect on 30 September 2007 30 September 2007 financial As previously As reclassified statement’s line reported as per current report (KZT million) (KZT million) (KZT million) Net gain on financial assets and liabilities at fair value through profit or loss 15,084 15,266 182 Net loss on foreign exchange and precious metals operations and net realized gain on investments available-for-sale (11,519) (11,701) (182)

Three months ended Three months ended Effect on financial 30 September 2007 30 September 2007 statement’s line as As previously As reclassified per current report reported (KZT million) (KZT million) (KZT million) Net gain on financial assets and liabilities at fair value through profit or loss 8,493 6,914 (1,579) Net loss on foreign exchange and precious metals operations and net realized gain on investments available-for-sale (8,899) (7,320) 1,579

15 F-18

5. NET INTEREST INCOME

Three months Three months Nine months Nine months ended 30 ended 30 ended 30 ended 30 September September September September 2008 2007 2008 2007 (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) Interest income comprises: Interest income on assets recorded at amortized cost: - interest income on impaired assets 48,164 38,314 159,948 87,321 - interest income on unimpaired assets 47,716 47,337 124,861 130,643 Interest income on assets at fair value through profit or loss 1,039 1,596 3,817 6,628 Interest income on investments available-for-sale 380 31 422 65

Total interest income 97,299 87,278 289,048 224,657

Interest income on assets recorded at amortized cost comprises: Interest on loans to customers 92,130 83,780 274,966 210,107 Interest on loans and advances to banks 3,527 1,659 8,981 7,122 Interest on investments held to maturity 33 6 84 24 Amortization of discount on loans 190 206 778 711

Total interest income on financial assets recorded at amortized cost 95,880 85,651 284,809 217,964

Interest income on assets at fair value through profit or loss: Interest income on financial assets held-for-trading 1,039 1,596 3,817 6,628

Total interest income on assets at fair value through profit or loss 1,039 1,596 3,817 6,628

Interest income on investments available-for-sale 380 31 422 65

Total interest income 97,299 87,278 289,048 224,657

Interest expense comprises: Interest on liabilities recorded at amortized cost 48,066 45,880 138,279 122,511

Total interest expense 48,066 45,880 138,279 122,511

Interest expense on liabilities recorded at amortized cost comprise:

Interest on debt securities issued 17,490 17,917 53,469 47,600 Interest on customer accounts 19,527 14,821 53,538 37,429 Interest on loans and advances from banks 9,099 10,373 24,399 30,734 Interest on securitization program 1,299 2,320 4,887 5,529 Preference share dividends 150 163 451 462 Other interest expense 501 286 1,535 757

Total interest expense on liabilities recorded at amortized cost 48,066 45,880 138,279 122,511

Net interest income before provision for impairment losses on interest bearing assets 49,233 41,398 150,769 102,146

In the above disclosure, interest income on loans, which are categorized based on the Bank’s internal rating categories as watch, sub standard, doubtful and loss categories, as well as loans, which are overdue, but categorized as standard, is included in the line item “interest income on impaired assets”. The provision against these loans ranges from 2% to 100%.

16 F-19

6. ALLOWANCE FOR IMPAIRMENT LOSSES AND OTHER PROVISIONS

The movements in allowance for impairment losses on interest bearing assets were as follows:

Loans and Loans to Total advances to customers banks (KZT million) (KZT million) (KZT million)

30 June 2007 (unaudited) 892 100,780 101,672

Additional provision recognized 24 20,388 20,412 Write-off of assets - (322) (322) Recovery of assets previously written off - 70 70 Exchange rate difference (1) (79) (80)

30 September 2007 (unaudited) 915 120,837 121,752

30 June 2008 (unaudited) 1,076 178,253 179,329

(Recovery of provision)/additional provision recognized (772) 19,532 18,760 Write-off of assets - (28) (28) Exchange rate difference (7) (1,464) (1,471)

30 September 2008 (unaudited) 297 196,293 196,590

Loans and Loans to Total advances to customers banks (KZT million) (KZT million) (KZT million)

31 December 2006 857 73,936 74,793

Additional provision recognized 89 49,628 49,717 Write-off of assets - (730) (730) Recovery of assets previously written off - 78 78 Exchange rate difference (31) (2,075) (2,106)

30 September 2007 (unaudited) 915 120,837 121,752

31 December 2007 1,276 140,363 141,639

(Recovery of provision)/additional provision recognized (976) 57,636 56,660 Write-off of assets - (922) (922) Exchange rate difference (3) (784) (787)

30 September 2008 (unaudited) 297 196,293 196,590

17 F-20

The movements in insurance provisions and allowances for impairment losses on other assets were as follows:

Insurance Other assets Total provisions (KZT million) (KZT million) (KZT million)

30 June 2007 (unaudited) 3,274 161 3,435

Additional provision recognized 189 179 368 Write-off of assets - (127) (127) Recovery of assets previously written off - 19 19 Exchange rate difference - (1) (1)

30 September 2007 (unaudited) 3,463 231 3,694

30 June 2008 (unaudited) 3,912 525 4,437

Additional provision recognized 90 136 226 Write-off of assets - (42) (42) Exchange rate difference - 40 40

30 September 2008 (unaudited) 4,002 659 4,661

Insurance Other Total provisions assets (KZT million) (KZT million) (KZT million)

31 December 2006 2,703 117 2,820

Additional provision recognized 760 232 992 Write-off of assets - (156) (156) Recovery of assets previously written off - 37 37 Exchange difference - 1 1

30 September 2007 (unaudited) 3,463 231 3,694

31 December 2007 3,422 323 3,745

Additional provision recognized 580 377 957 Write-off of assets - (72) (72) Exchange difference - 31 31

30 September 2008 (unaudited) 4,002 659 4,661

Insurance provisions comprised:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Property 1,357 978 Life insurance 751 207 Accidents 717 487 Vehicles 393 785 Railway transport 276 - Civil liability for damage 121 91 Freight 54 462 Financial loss insurance 37 - Civil liability for owners of vehicles 33 241 Other 263 171 Total insurance provisions 4,002 3,422

18 F-21

Other insurance provisions include provisions for insurance of civil liability to passengers, liability of private notaries, auditors and audit organizations, ecological, medical, air and marine transport and others.

The movements in provision for guarantees and other off-balance sheet contingencies were as follows:

Guarantees and Guarantees and other off-balance other off-balance sheet sheet contingencies contingencies 2008 2007 (KZT million) (KZT million)

30 June 5,087 4,676

Additional provision recognized 2,237 534 Exchange difference (121) 53

30 September (unaudited) 7,203 5,263

Guarantees and Guarantees and other off-balance other off-balance sheet sheet contingencies contingencies 2008 2007 (KZT million) (KZT million) 1 January 7,216 4,055

Additional provision recognized 22 1,255 Exchange difference (35) (47)

30 September (unaudited) 7,203 5,263

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Insurance provisions 4,002 3,422 Reserves on guarantees and other off-balance sheet liabilities 7,203 7,216

11,205 10,638

19 F-22

7. NET (LOSS)/GAIN ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September 2008 2007 2008 2007 (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) Net (loss)/gain on financial assets and liabilities held-for-trading (29,797) 6,914 (30,182) 15,266 Total net (loss)/gain on financial assets and liabilities at fair value through profit or loss (29,797) 6,914 (30,182) 15,266 Net gain on operations with financial assets and liabilities held-for-trading comprise: Realized (loss)/gain on trading operations (142) (281) 12 (919) Unrealized (loss)/gain on fair value adjustment (3,072) (319) (3,051) 841 Hedge ineffectiveness 1,249 - (831) - Net (loss)/gain on operations with derivative financial instruments (27,832) 7,514 (26,312) 15,344 Total net (loss)/gain on financial assets and liabilities at fair value through profit or loss (29,797) 6,914 (30,182) 15,266

8. NET GAIN/(LOSS) ON FOREIGN EXCHANGE AND PRECIOUS METALS OPERATIONS

Dealing, net 1,096 (739) 5,574 1,066 Translation differences, net 27,735 (6,650) 9,161 (12,836)

Total net gain/(loss) on foreign exchange operations and precious metals 28,831 (7,389) 14,735 (11,770)

Translation differences for the nine months ended 30 September 2008 amounted to gain of KZT 9,161 million (30 September 2007: loss of KZT 12,836 million). This comprised gain/(loss) on the revaluation of liabilities and assets denominated in non-functional currencies such as the Japanese Yen, Euro, Pound and Singaporean dollar.

20 F-23

9. OTHER INCOME

Insurance premium 1,088 1,197 3,497 3,325 Income from purchase of subsidiaries - 1,386 3,137 1,386 Fines and penalties received 209 103 448 199 Income from repurchase of debt securities 110 - 110 - Net gain on disposal of fixed assets 1 22 22 33 Other 70 51 780 241

1,478 2,759 7,994 5,184

10. OPERATING EXPENSES

Staff costs 4,089 3,801 13,057 10,777 Operating lease payments 793 611 2,681 1,539 Depreciation and amortization 868 637 2,454 1,857 Property and equipment maintenance 757 430 1,678 894 Payments to the Individuals’ Deposit Insurance Fund 310 513 1,280 1,287 Advertising costs 383 375 1,079 876 Value added tax 303 279 581 608 Communications 183 192 579 494 Taxes, other than income tax 193 77 515 233 Bank card services 149 77 378 200 Security services 110 76 325 225 Business trips expenses 121 125 312 377 Consulting and audit services 84 157 265 279 Vehicle maintenance 74 74 219 204 Training 40 25 126 204 Printing and stationery 41 48 123 137 Charity and sponsorship expenses 5 37 98 76 Courier expenses 20 29 73 63 Representative expenses 42 12 68 39 Cash collection expenses 16 6 38 18 Expenses on periodicals 6 4 16 11 Legal services 1 4 10 14 Fines and fees 2 8 9 9 Other expenses 134 99 234 326

8,724 7,696 26,198 20,747

21 F-24

11. INCOME TAX

The Group provides for taxes based on the tax accounts maintained and prepared in accordance with the tax regulations of countries where the Group and its subsidiaries operate and which may differ from IFRS.

The Group is subject to certain permanent tax differences due to non-tax deductibility of certain expenses and a tax free regime for certain income.

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Temporary differences as at 30 September 2008 and 31 December 2007 relate mostly to different methods of income and expense recognition as well as to recorded values of certain assets.

Tax effect of temporary differences as at 30 September 2008 and 31 December 2007:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Deferred income tax assets: Unrealised loss on trading securities and derivatives 1,400 1,462 Loss on revaluation of securities 3,038 - Unrealised loss on revaluation of financial instruments treated as cash flow hedges 2,311 - Bonuses accrued 1,016 706 Other assets 278 136

Total deferred income tax assets 8,043 2,304

Deferred income tax liabilities: Allowance for losses on loans and advances to banks and customers 42,840 20,147 Property, equipment and intangible assets and accumulated depreciation 3,582 2,795 Unrealised gain on revaluation of financial instruments treated as cash flow hedges 648 - Investments in associates 917 946 Unrealised gain on trading securities and derivatives 1,060 7,714 Provision on guarantees and letters of credit 22 1,198

Total deferred income tax liabilities 49,069 32,800

Net deferred income tax liabilities 41,026 30,496

22 F-25

Relationships between tax expenses and accounting profit for the three and nine months ended 30 September 2008 and 2007 are explained as follows:

Profit before income tax 22,427 20,565 71,937 55,150

Tax at the statutory tax rate (30%) 6,728 6,169 21,581 16,545 Tax effect of permanent differences: (71) (1,474) 461 (4,172)

Income tax expense net of permanent differences 6,657 4,695 22,042 12,373

Current income tax expense 3,258 (89) 8,641 2,677 Deferred income tax expense 3,399 4,784 13,401 9,696

Income tax expense 6,657 4,695 22,042 12,373

Nine months Year ended ended 31 December 30 September 2007 2008 (unaudited) (KZT million) (KZT million) Deferred income tax liabilities 1 January 30,496 16,851 Change in property and equipment revaluation reserve -1,536 Deferred income tax expense 13,401 12,109 Change in available-for-sale reserve (560) - Change in hedging reserve (2,311) - Net deferred income tax liabilities 41,026 30,496

23 F-26

12. EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing the net income for the nine month period attributable to equity holders of the parent by the weighted average number of participating shares outstanding during the period.

As described in note 24, dividend payments per ordinary shares cannot exceed the dividends per share on preference shares for the same period. Therefore, net profit for the period is allocated to the ordinary shares and the preference shares in accordance with their legal and contractual dividend rights to participate in undistributed earnings:

Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September 2008 2007* 2008 2007* (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) Basic and diluted earnings per share Net profit for the period attributable to equity holders of the parent 16,267 15,687 49,490 40,836 Less: additional dividends that would be paid on full distribution of profit to the preferred shareholders (2,780) (2,666) (8,463) (6,905) Net profit for the period attributable to ordinary shareholders 13,487 13,021 41,027 33,931 Weighted average number of ordinary shares for basic and diluted earnings per share 574,917,907 574,904,440 574,922,274 574,835,864 Earnings per share – basic and diluted (tenge) 23.46 22.65 71.36 59.03

*As restated, see note 24

13. CASH AND BALANCES WITH NATIONAL (CENTRAL) BANKS

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Cash on hand 39,867 41,082 Balances with the national (central) banks 143,186 127,066

183,053 168,148

Cash and cash equivalents for the purposes of the consolidated statement of cash flows are comprised of the following:

30 September 30 September 31 December 2008 2007 2007 (unaudited) (unaudited) (KZT million) (KZT million) (KZT million)

Cash and balances with national (central) banks 183,053 210,984 168,148 Loans and advances to banks in Organisation for Economic Co-operation and Development (“OECD”) countries (Note 23) with maturities less than 3 months 123,008 31,354 139,042 Less minimum reserve deposit with the NBRK (154,541) (185,731) (160,217) Less minimum reserve deposit with the CBR (2,306) (3,499) (2,430) Less minimum reserve deposit with the NBKR (216) (214) (197) Less minimum reserve deposit with the NB of Tajikistan (10) - -

148,988 52,894 144,346

24 F-27

As at 30 September 2008, cash and balances with national (central) banks included accrued interest income of KZT 11 million (31 December 2007: nil).

The balances with the Central Bank of Russian Federation (“CBR”) as at 30 September 2008 include KZT 5,238 million (31 December 2007: KZT 5,246 million, 30 September 2007: KZT 5,378 million), of which KZT 2,306 million (31 December 2007: KZT 2,430 million, 30 September 2007: KZT 3,499 million) represents the obligatory minimum reserve deposits required by the CBR. The Group is required to maintain the reserve balance at the CBR at all times.

The balances with the National Bank of the Republic of Kazakhstan (“NBRK”) as at 30 September 2008 include KZT 137,327 million, of which KZT 117,316 million represent balances with the NBRK (31 December 2007: KZT 121,476 million, 30 September 2007: KZT 163,990 million) and cash on hand of KZT 37,225 million (31 December 2007: KZT 38,741 million, 30 September 2007: KZT 21,741 million), totalling KZT 154,541 million (31 December 2007: KZT 160,217 million, 30 September 2007: KZT 185,731 million), which represent the minimum reserve deposits required by the NBRK.

The balances with the National Bank of the Kyrgyz Republic of (“NBKR”) as at 30 September 2008 include KZT 609 million (31 December 2007: KZT 344 million, 30 September 2007: KZT 335 million), of which KZT 216 million (31 December 2007: KZT 197 million, 30 September 2007: KZT 214 million) represents the minimum reserve deposits required by the NBKR at all times.

The balances with the National Bank of Tajikistan at 30 September 2008 include KZT 12 million (31 December 2007: nil, 30 September 2007: nil), of which KZT 10 million (31 December 2007: nil, 30 September 2007: nil) represents the minimum reserve deposits required by the National Bank of Tajikistan.

14. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss comprise:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Debt securities 43,516 130,271 Equity investments 4,778 15,647 Derivative financial instruments 20,477 42,858

68,771 188,776

Financial liabilities at fair value through profit or loss comprise:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million)

Derivative financial instruments 23,983 7,730

23,983 7,730

The financial assets and financial liabilities at fair value through profit or loss relate entirely to financial assets and financial liabilities held for trading.

25 F-28

30 September 31 December 2008 2007 (unaudited) Nominal Amount Nominal interest Amount interest rate rate % % (KZT million) (KZT million) Debt securities: Short-term NBRK notes 5.735-6.758% 14,726 4.50% 1,845 Bonds of Kazakhstani companies 8.00-16.50% 13,300 4.90-12.40% 22,684 Bonds of International financial institutions 6.50-18.25% 3,463 1.56-20.09% 87,336 Bonds of Russian companies 7.28-13.80% 3,386 7.28-13.80% 4,030 Bonds of Kazakhstani banks 6.00-12.00% 3,116 6.00-12.00% 4,151 Bonds of Russian banks 7.34-9.90% 2,219 7.34-8.25% 703 Eurobonds of Kazakhstani banks 7.875-8.125% 1,795 7.75-8.13% 2,900 State treasury bonds of the Ministry of Finance of Republic of Kazakhstan 4.05-6.44% 921 3.78-6.68% 926 Bonds of local executive bodies of the Russian Federation 7.25-8.70% 442 7.75-9.20% 607 Bonds of federal loan of the Ministry of Finance of the Russian Federation 9.00% 148 9.00-10.00% 343 Bonds of Russian investment funds - - 4,273 Eurobonds of OECD countries - 4.75% 253 Bonds of Atyrau local executive bodies - 8.50% 220

43,516 130,271

30 September 31 December 2008 2007 (unaudited) Ownership Amount Ownership Amount share share % (KZT million) % (KZT million) Equity investments: Shares of Russian companies 0.001- 0.5546% 3,584 0.00001-19.559% 7,565 GDR of Russian banks 0.017% 657 0.07% 652 Shares of Kazakhstani companies 0.00115 -0.24% 189 0.007-0.282% 701 GDR of Kazakhstani banks 0.08% 135 0.01% 80 Shares of Kazakhstani banks 0.028% 93 0.0007-0.043% 363 GDR of Russian companies 0.00002 -0.01% 64 - - Shares of Russian banks 0.00001% 25 0.00001% 19 Shares of foreign companies 0.0003% 25 - GDR of Kazakhstani companies 0.0007% 6 0.247% 3,771 ADR of Kazakhstani companies - - 0.654% 2,496

4,778 15,647

As at 30 September 2008, financial assets at fair value through profit or loss included accrued interest income on debt securities of KZT 742 million (31 December 2007: KZT 1,506 million).

As at 30 September 2008, financial assets at fair value through profit or loss included State treasury bonds of the Ministry of Finance of the Republic of Kazakhstan, bonds of Kazakhstani companies pledged under repurchase agreements with other banks and customers with fair value of KZT 1,534 million (31 December 2007: KZT 82,147 million). As at 30 September 2008, all of the

repurchase agreements are to be settled by October 2008 (31 December 2007: February 2008) (note 18).

26 F-29

30 September 2008 31 December 2007 (unaudited) Nominal Net fair value Nominal Net fair value value (KZT million) value (KZT million)

Derivative financial Assets Liabilities Assets Liabilities instruments Foreign exchange contracts Foreign exchange swap 455,206 17,000 (14,642) 381,001 25,724 (2,145) Interest rate swap 129,184 704 (7,012) 82,740 14,987 (5,133) Forward contracts 94,368 2,277 (2,249) 64,652 2,105 (381) Spot 22,907 20 (80) 74,996 19 (25) Options 24,079 452 - - - - Futures 3,832 24 - - - - Securities purchase/sale contracts Total return swap - - - 592 23 (46) 20,477 (23,983) 42,858 (7,730)

Included in the above are derivatives held for hedging purposes as follows:

30 September 2008 31 December 2007 (unaudited) Nominal Net fair value Nominal Net fair value value (KZT million) value (KZT million)

Cash flow hedging Assets Liabilities Assets Liabilities

Foreign exchange swap 189,970 10,430 (11,271) - - Interest rate swaps 18,301 115 (859) - - 10,545 (12,130) - -

The Group’s cash flow hedges relate to exposure to variability in the anticipated future cash flows on its financial liabilities.

To hedge the cash flows on financial liabilities with floating interest rates, the Group uses interest rate swap contracts to exchange the floating rates for fixed rates. As such, the Group converts its floating rate debt repayments to fixed rate debt repayments and minimizes the effect of change in interest rates on its future cash flows.

To hedge the foreign exchange risk on financial liabilities the Group uses cross-currency swap contracts to convert, partially or in-full, its repayments on foreign currency denominated liabilities to the functional currency of the subsidiary which issued these liabilities.

For the nine months ended 30 September 2008, hedge ineffectiveness recognized in net loss on financial assets and liabilities at fair value through profit or loss comprised cash flow hedging ineffectiveness of KZT 831 million (2007: Nil).

As at 30 September 2008, the aggregate amount of unrealized losses under foreign exchange swap contracts deferred in the hedging reserve relating to the exposures amounted to KZT 6,172 million (31 December 2007: Nil). The cash flows under these contracts will occur quarterly, for periods up to February 2017. These contracts are designated as hedge instruments to hedge the exchange rate risk arising from the future cash flows of the funds raised by the Group from international financial organizations in currencies other than tenge.

As at 30 September 2008, the aggregate amount of unrealized losses under interest rate swap contracts deferred in the hedging reserve relating to the exposures amounted to KZT 1,531 million (31 December 2007: nil). The cash flows under these contracts will occur biannually, for periods up to January 2018. These contracts are designated as hedge instruments to hedge the interest rate risk arising from the future cash flows of the funds raised by the Group from international financial organizations in currencies other than tenge.

As at 30 September 2008, the fair value of the hedging instruments is KZT (1,585) million.

27 F-30

15. INVESTMENTS AVAILABLE-FOR-SALE

Investments available-for-sale comprise:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Debt securities 11,341 3,034 Equity investments 5,382 2

16,723 3,036

30 September 31 December 2008 2007 (unaudited) Nominal interest Amount Nominal interest Amount rate rate % (KZT million) % (KZT million) Debt securities: Bonds of Kazakhstani companies 8.00-16.70% 6,533 8.00-12.20% 1,342 Bonds of the Ministry of Finance of the Republic of Kazakhstan 3.35-17.94% 2,825 3.75-11.08% 1,400 Bonds of Kazakhstani banks 8.50-12.00% 1,807 8.50-12.00% 290 Short-term notes of NBRK 3.14-5.60% 176 3.03% 2

11,341 3,034

30 September 31 December 2008 2007 (unaudited) Ownership share Amount Ownership share Amount % % (KZT million) (KZT million) Equity securities:

GDR of Kazakhstani companies 0.263% 2,268 - - ADR of Kazakhstani companies 0.646% 2,125 - - Shares of Kazakhstani companies 0.029-0.078% 527 - - Shares of Kazakhstani banks 0.020-1.33% 185 - - GDR of Kazakhstani banks 0.53-0.577% 277 - - Kazakhstan stock exchange - - 1.33% 2

5,382 2

As at 30 September 2008, investments available-for-sale included accrued interest income on debt securities of KZT 651 million (31 December 2007: KZT 168 million).

In October 2008 the International Accounting Standards Board issued amendments to IAS 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”) to permit the reclassification of financial assets out of the held-for-trading and available-for-sale categories, subject to certain restrictions. In accordance with these amendments, the Group reclassified certain debt and equity securities with total fair value as at 30 September 2008 of KZT 12,412 million from the held-for- trading category of financial assets at fair value through profit or loss into investments available-for- sale. Total fair value of debt and equity securities reclassified amounted to KZT 14,799 million as at the reclassification date.

28 F-31

The reclassifications were made for those securities for which there was no market existed in 2008 as a result of the world financial crisis. In the current situation the Group has revised its investment strategy and has the intention and ability to hold those securities for the foreseeable future. Those debt and equity securities which were reclassified are presented in the tables below. Reclassifications implemented before 1 November 2008 have been backdated to 01 July 2008, 01 August 2008 and 1 September 2008, as permitted by the revision to IAS 39.

On reclassification 30 September 2008 After reclassification (unaudited) Effective Fair Estimated Nominal Fair Movement in interest rate value cash flows value value investments % expected to be available-for-sale recovered reserve/(deficit) (KZT million) (KZT million) (KZT million) Debt securities (unaudited) (unaudited) (unaudited) Gains Losses Bonds of Kazakhstani banks 5.5054% 1,556 1,828 1,504 1,562 6 - Bonds of Kazakhstani companies 17.6453% 6,419 5,989 5,514 5,471 138 (1,086)

Total debt securities: 7,975 7,817 7,018 7,033 144 (1,086)

On reclassification 30 September 2008 After reclassification (unaudited) Ownership Fair value Nominal value Fair value Movement in investments share available-for-sale % reserve/(deficit) Equity securities (KZT million) (KZT million) (KZT million) (unaudited) (unaudited) (unaudited) Gains Losses GDR of Kazakhstani 0.06%- banks 0.08% 484 515 276 78 (286) Shares of Kazakhstani 0.0001%- banks 0.04% 286 369 183 67 (170) GDR of Kazakhstani companies 0.26% 3,232 2,454 2,268 36 (1,000) ADR of Kazakhstani companies 0.65% 2,201 735 2,125 68 (144) Shares of Kazakhstani 0.03%- companies 0.08% 621 790 527 4 (98)

Total equity securities: 6,824 4,863 5,379 253 (1,698)

Unrealized loss from fair value revaluation for the period from reclassification date to 30 September 2008 recognized in the condensed interim consolidated statement of changes in equity as a result of the reclassification of the debt and equity securities amounted to KZT 2,387 million which is included in the line “Unrealized loss on revaluation of available-for-sale investments”. This represents the amount that would have been recognized in operating profit had reclassification not occurred.

Unrealized loss from fair value revaluation on the debt and equity securities reclassified recognized in the condensed interim consolidated income statement for the period from 1 January 2008 to the reclassification date amounted to KZT 1,133 million. Unrealized gain from fair value revaluation on the debt and equity securities reclassified recognized in the condensed interim consolidated income statement for the period from 1 January 2007 to 30 September 2007 amounted to KZT 1,085 million.

From the date of reclassification to 30 September 2008, the Group did not have realized gains or losses on the reclassified securities, as there were no sales, maturities or impairment losses related to the reclassified financial assets. From the date of reclassification to 30 September 2008, the total

29 F-32

amount of interest income on debt securities reclassified comprised KZT 103 million and for the 9 months period ended 30 September 2008 comprised KZT 676 million.

16. LOANS AND ADVANCES TO BANKS

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Recorded as loans and receivables: Loans and advances to banks 237,667 173,759 Correspondent accounts with other banks 16,211 39,661 Loans under reverse repurchase agreements 12 679

253,890 214,099 Less allowance for impairment losses (297) (1,276)

253,593 212,823

Movements in allowances for impairment losses on loans and advances to banks for the nine months period ended 30 September 2008 and 2007 are disclosed in Note 6.

As at 30 September 2008 loans and advances to banks included accrued interest of KZT 1,099 million (31 December 2007: KZT 1,327 million).

As at 30 September 2008, and 31 December 2007, the Group had the following loans and advances to the banks, which individually exceeded 10% of the Group’s equity.

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Unicredit CAIB AT, VIENNA 54,932 -

54,932 -

The fair value of pledged assets and carrying value of loans under reverse repurchase agreements as at 30 September 2008 and 31 December 2007 comprised:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million)

Fair value of Carrying value Fair value of Carrying value collateral of loans collateral of loans Bonds of Ministry of Finance of the Republic of Kazakhstan 14 12 12 11 Shares of Russian companies - - 756 668

14 12 768 679

As at 30 September 2008, the guarantee deposit of KZT 2,397 million (31 December 2007: KZT 2,406 million) placed with JP Morgan Chase Bank London was included in loans and advances to banks as collateral for letter of credit.

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17. LOANS TO CUSTOMERS

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Accounted as loans given and accounts receivable: Originated loans 2,405,311 2,480,059 Net investments in finance lease 5,116 6,090 Loans under reverse repurchase agreements 39,517 20,549

2,449,944 2,506,698 Less allowance for impairment losses (196,293) (140,363)

2,253,651 2,366,335

As at 30 September 2008, accrued interest income included in loans to customers amounted to KZT 90,368 million (31 December 2007: KZT 66,827 million).

Movements in allowances for impairment losses for the nine months ended 30 September 2008 and 2007 are disclosed in Note 6.

The table below summarizes the amount of loans secured by type of collateral, rather than the fair value of the collateral itself:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Analysis by type of collateral: Loans collateralized by real estate 990,294 1,039,685 Loans collateralized by equipment 277,366 209,168 Loans collateralized by shares of the banks and other companies 219,787 226,603 Loans collateralized by guarantees of enterprises 176,596 176,004 Loans collateralized by mixed types of collateral 171,854 209,980 Loans collateralized by accounts receivable 94,495 86,872 Loans with collateral under the registration process (land, building, shares, guarantee, etc.) 65,858 152,707 Loans collateralized by inventories 62,646 41,014 Loans collateralized by cash or Kazakhstani Government guarantees 59,946 80,232 Loans collateralized by securities 7,094 3,675 Loans collateralized by guarantees of financial institutions 2,625 8,031 Unsecured loans 125,090 132,364

2,253, 2,366,

Mixed collateral consists of multiple types of collateral including real estate, guarantees and inventories. Loans are classified as being collateralized by mixed collateral where it is impractical to split this collateral into the categories disclosed above.

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30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Analysis by sector: Individuals 385,015 452,330 Trade 371,842 442,181 Housing construction 279,425 246,546 Commercial real estate construction 192,463 228,165 Real estate 162,424 165,825 Investments and finance 142,557 122,744 Hotel business 125,434 133,635 Transport and communication 104,691 106,576 Energy 72,851 66,179 Food industry 59,843 62,661 Agriculture 43,588 52,906 Machinery construction 40,583 43,935 Industrial and other construction 29,934 40,115 Production of construction materials 20,304 31,468 Mining and metallurgy 12,687 11,577 Medicine 6,265 4,239 Culture and art 2,414 4,945 Other 201,331 150,308 2,253,651 2,366,335

Loans to individuals represent following products:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Mortgage loans 210,717 247,478 Consumer loans 123,266 133,108 Business loans 30,259 42,817 Car loans 15,424 19,422 Other 5,349 9,505 385,015 452,330

As at 30 September 2008 and 31 December 2007, the Group granted loans to the borrowers, shown below, respectively, which individually exceeded 10% of the Group’s equity. Although loans to borrowers disclosed in 2007 may continue to be outstanding in 2008, only those borrowers which exceed 10% of equity are disclosed below.

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Korporatsiya “GAS” LLP 79,240 - Visor Solution Holding 55,565 43,122 Alibi Holding 45,701 48,327 Ken-Sary LLP - 69,714

180,506 161,163

As at 30 September 2008, a significant portion of loans to customers ((80.58%) (31 December 2007: 78.42%) of the total portfolio) is granted to companies operating in the Republic of Kazakhstan, which represents a significant geographical concentration.

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The fair value of collateral assets and carrying value of loans under reverse repurchase agreements as at 30 September 2008 and 31 December 2007, comprised:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Fair value of Carrying Fair value of Carrying collateral value of collateral value of loans loans Shares of Kazakhstani companies 24,437 19,024 614 636 Shares of Russian companies 12,465 7,380 15,998 15,081 Bonds of Russian companies 5,321 3,330 - - ADR of Kazakhstani companies 3,894 4,151 - - Bonds of Kazakhstani companies 2,660 3,110 2,534 2,871 Shares of Russian banks 2,188 1,290 499 480 Bonds of Kazakhstani banks 287 375 669 805 Bonds of the Ministry of Finance of the Republic of Kazakhstan 271 279 - - Shares of Kazakhstani banks 235 578 419 676

51,758 39,517 20,733 20,549

18. LOANS AND ADVANCES FROM BANKS

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million) Recorded at amortized cost: Correspondent accounts of other banks 23,968 72,028 Correspondent accounts of organizations that serve certain types of banking operations 296 5 Loans from banks and financial institutions, including: Syndicated loan from a group of banks maturing in December, 2008 and interest rate of 3.718% 8,257 33,147 Syndicated loan from a group of banks maturing in December, 2008 and interest rate of 3.40% 13,183 13,235 Syndicated loan from a group of banks maturing in December, 2009 and interest rate of 3.39% 36,043 36,255 Syndicated loan from a group of banks maturing in September, 2008 and interest rate of 5.815% - 72,834 Syndicated loan from a group of banks maturing in February, 2008 and interest rate of 5.51% - 54,838 Loan maturing in December, 2008 30 4,143 Loan maturing in June, 2014 36,207 40,138 Loans with other banks and financial establishments 220,655 284,267 Term deposits of banks 5,567 34,780 Loans under repurchase agreements 869 77,761 345,075 723,431

33 F-36

As at 30 September 2008, loans and advances from banks included accrued interest expense in the amount of KZT 3,532 million (31 December 2007: KZT 5,272 million).

As at 30 September 2008, loans with other banks and financial establishments for KZT 192,756 million (87% of total loans with other banks and financial establishments) (31 December 2007: KZT 247,667 million (87% of total loans with other banks and financial establishments)) consisted of 34 (31 December 2007: 45) banks and financial institutions of such countries as Great Britain, the Netherlands, Switzerland, Austria, Russia, Luxemburg, Korea, Kazakhstan, Germany, Belgium, Hong Kong, UAE and China. Maturities of these loans range from 1 day to 101 months (31 December 2007: 3 days to 101 months). Interest rates on loans with other banks and financial establishments varied from 2% to 10.5% (31 December 2007: from 2.33% to 10.16%).

As at 30 September 2008, included in loans and advances from banks are loans under repurchase agreements amounting to KZT 869 million (31 December 2007: KZT 77,761 million) with maturity in October 2008 (31 December 2007: in February 2008).

Fair value of collateral and carrying value of loans under repurchase agreements as at 30 September 2008 and 31 December 2007 are presented as follows:

30 September 31 December 2008 2007 (unaudited) (KZT million) (KZT million)

Fair value of Carrying Fair value of Carrying value of loans value of loans collateral collateral

Bonds of Kazakhstani companies 1,044 869 1,750 1,501 Bonds of international financial establishments - - 75,749 72,501 Bonds of Russian companies - - 2,064 1,489 Notes of the NBRK - - 843 802 Bonds of Ministry of Finance of the Republic of Kazakhstan - - 776 702 Bonds of local executive bodies of the Russian Federation - - 504 547 Bonds of Russian banks - - 249 219

1,044 869 81,935 77,761

In accordance with the contractual terms of the loans from certain OECD based banks and EBRD, the Group is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. In accordance with the terms of certain of those loans, the Group is also required to obtain the approval of the lender before distributing any dividends to the common shareholders other than dividend shares. Furthermore, certain of the Group’s outstanding financing agreements include covenants restricting the Group’s ability to create security interests over it’s assets. Should the Group default under these covenants, this could result in cross-accelerations and cross-defaults under the terms of the Group’s other financing arrangements.

As at 30 September 2008 and 31 December 2007, the Group was in compliance with the covenants of the various debt agreements the Group has with other banks and financial institutions.

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19. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Group is a party to financial instruments with off-balance sheet risk in order to meet the needs of its customers. These instruments, involving varying degrees of credit risk are not reflected in the balance sheet.

The Group’s maximum exposure to credit loss under contingent liabilities and credit commitments, in the event of non-performance or in the event of impairment by the other party where all counterclaims, collateral or security prove valueless, is represented by the contractual amounts of those instruments.

The Group’s uses the same credit control and management policies in undertaking off-balance sheet commitments as it does for on-balance operations.

As at 30 September 2008 the provision for losses on contingent liabilities amounted to KZT 7,203 million (31 December 2007: KZT 7,216 million).

The risk-weighted amount is obtained by applying credit conversion factors and counterparty risk weightings according to the principles employed by the Basle Committee on Banking Supervision.

As at 30 September 2008 and 31 December 2007, the nominal or contract amounts and risk-weighted amounts were:

30 September 2008 31 December 2007 (unaudited)

Nominal Risk Nominal Risk amount weighted amount weighted amount amount (KZT million) (KZT million) (KZT million) (KZT million) Contingent liabilities and credit commitments Guarantees issued and similar commitments 107,012 107,012 94,582 94,582 Letters of credit and other transaction related to contingent obligations 58,611 10,389 65,449 10,241 Commitments on loans and unused credit lines 13,093 13,093 10,382 10,382 Reimbursement liability 249 50 25,061 5,012 Commitments on loans sold to JSC Kazakhstan Mortgage Company with recourse 75 75 114 114

179,040 130,619 195,588 120,331

Capital commitments

As at 30 September 2008, capital commitments amounted to KZT 1,833 million (31 December 2007: KZT 2,789 million). Such capital commitments relate to the development of property, including the construction of a new office building.

Specific volatility in global and Kazakhstani financial markets

In recent months a number of major economies around the world have experienced volatile capital and credit markets. A number of major global financial institutions have either been placed into bankruptcy, taken over by other financial institutions and/or supported by government funding. As a consequence of the recent market turmoil in capital and credit markets both globally and in the Republic of Kazakhstan, notwithstanding any potential economic stabilization measures that may be put into place by the Government of the Republic of Kazakhstan, there exists economic uncertainties surrounding the continual availability, and cost, of credit both for the Group and its counterparties, the potential for economic uncertainties to continue in the foreseeable future and, as a consequence, the potential that assets may not be recovered at their carrying amount in the regular course of business, and a corresponding impact on the Group’s profitability.

35 F-38

Recoverability of financial assets

As a result of recent economic turmoil in capital and credit markets globally, and the consequential economic uncertainties existing as at balance sheet date, there exists the potential that assets may not be recovered at their carrying amount in the regular course of business.

As at 30 September 2008, the Group has financial assets amounting to KZT 2,593,351 million (as at 31 December 2007: KZT 2,771,345 million). The recoverability of these financial assets depends to a large extent on the efficacy of the fiscal measures and other measures and other actions, beyond the Group’s control, undertaken within various countries to achieve economic stability and recovery. The recoverability of the Group’s financial assets is determined based on conditions prevailing and information available as at balance sheet date. It is the management’s opinion that no additional provisions on financial assets is needed at present, based on prevailing conditions and available information.

20. SUBSEQUENT EVENTS

On 3 October and 24 November 2008, the Board of Directors of JSC “Pension Fund “Ular Umit” decided to issue additional 20,000 of common shares for the amount of KZT 110 thousand per share. On 5 November and 28 November 2008, the Bank paid KZT 1,086 million for 9,870 additional shares of the Fund in accordance with its prevailing purchase right. As a result the share of the Bank did not change and comprised 49.35% of ownership interest. The total amount of investment of the Bank in the share capital of JSC “Pension Fund “Ular Umit” at 28 November 2008 was KZT 2,172 million.

OJSC "Kazkommertsbank Kyrgyzstan" increased share capital by 20.5% (or KZT 71 million) through the placement of an additional 41,000 shares. On 24 October 2008, the Bank bought 38,368 shares of this new emission in accordance with its prevailing purchase right for KZT 163 million. The share of the Bank of 93.58% did not change.

On 9 December 2008, the Bank, JSC Central Asian Investment Company (“CAIC”) and the Government of the Republic of Kazakhstan, represented by the Ministry of Finance of the Republic of Kazakhstan, the NBRK, the FMSA and SamrukKazyna National Welfare Fund (“SamrukKazyna”) signed a Memorandum of Understanding (the “Memorandum”). In accordance with the Memorandum, the parties agreed to use all possibilities to provide additional financial resources to the real sector of economy and also cooperate on the stability of the financial system, including maintenance of adequate liquidity and loan portfolio quality. According to the Memorandum, SamrukKazyna will provide not less than KZT 35,952 million (equivalent of USD 300 million at the exchange rate as at balance sheet date) in total to the Bank. The shares will be placed in full compliance with the current legislation of the Republic of Kazakhstan, listing rules of Kazakhstan and London stock exchanges, pre-emptive rights of current holders of the Bank's shares and GDRs, and the terms and conditions of all international agreements to which the Bank is a party. In accordance with the Memorandum, SamrukKazyna's share will not exceed 25% of the total outstanding common stock of the Bank, and the Bank's major shareholders (CAIC, Mr. Subkhanberdin and the European Bank for Reconstruction and Development) will continue to maintain control of the Bank. SamrukKazyna will not participate in the day-to-day management of the Bank. It is expected that, in case the major shareholders will not execute their pre-emptive rights they will have an option to buy back SamrukKazyna's shares within a four-year period starting on the first anniversary of the Implementation Documents.

On 10 December 2008, amendments to the Tax Code were enacted. In accordance to the amendments, the corporate income tax rate effective on 1 January 2009 will decrease from 30% to 20%. The corporate income tax rate effective for the period from 1 January 2010 to 1 January 2011 will be 17.5%. This change in the corporate income tax rate will result in a significant effect on current and deferred tax assets and liabilities.

36 F-39

21. TRANSACTIONS WITH RELATED PARTIES

Related parties or transactions with related parties are assessed in accordance with IAS 24 “Related party disclosures”.

In considering each possible related party relationship, special attention is directed to the substance of the relationship, and not merely the legal form. Transactions between the Bank and its subsidiaries, which are related parties of the Bank, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below:

30 September 31 December 2007 2008 (unaudited) (KZT million) (KZT million) Related party Total category Related party Total category balances as per balances as per financial financial statements statements caption caption Loans to customers 1,140 2,449,944 895 2,506,698 - entities with joint control or significant influence over the entity 29 117 - key management personnel of the entity or its parent 1,111 778 Allowance for impairment losses 57 196,293 33 140,363 - entities with joint control or significant influence over the entity 1 17 - key management personnel of the entity or its parent 56 16 Investments in associates 2,413 2,413 3,222 3,222 - to associates 2,413 3,222 Customer accounts 4,619 1,096,229 5,495 895,083 -parent company 1,112 - - entities with joint control or significant influence over the entity 31 1,087 - associates 364 22 - key management personnel of the entity or its parent 3,085 4,385 - other related parties 27 1 Commitments on loans and unused credit lines 213 13,093 482 10,382 - key management personnel of the entity or its parent 213 482 Guarantees issued and similar commitments 18 107,012 18 94,582 - key management personnel of the entity or its parent 18 18

Included in the interim condensed consolidated income statement for the nine months ended 30 September 2008 and 2007 are the following amounts which arose due to transactions with related parties:

Nine months ended Nine months ended 30 September 2008 30 September 2007 (unaudited) (unaudited) (KZT million) (KZT million) - Related party Total category Related party Total category transactions as per transactions as per financial financial statements statements caption caption Interest income 123 289,048 14 224,657 Interest expense (333) (138,279) (143) (122,511) Operating expenses (676) (26,198) (547) (20,747) - Short-term employee benefits (676) (13,057) (547) (10,777) Provisions for impairment losses on interest bearing assets, other assets and insurance operations, guarantees and other off-balance sheet contingencies (7) (57,639) 19 (51,964) Share of results in associates (1,101) (1,101) 726 726

Key management personnel compensation for the nine months ended 30 September 2008 and 2007 is represented by short-term employee benefits.

37 F-40

22. SEGMENT REPORTING

Business segments

The Group is organized on the basis of four main business segments:

• Retail banking – representing private banking services, private customer current accounts, savings, deposits, investment savings products, custody, credit and debit cards, consumer loans and mortgages. • Corporate banking – representing current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency products, guarantees and letters of credit and derivative products. • Investment banking – representing financial instruments trading, structured financing, and merger and acquisitions advice. • Other – representing insurance operations and other activities.

Transactions between the business segments are conducted on normal commercial terms and conditions. Funds are ordinarily reallocated between segments, resulting in funding cost transfers disclosed in operating income. Interest charged for these funds is based on the Group’s cost of capital. There are no other material items of income or expense between the business segments. Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue sharing agreements are used to allocate external customer revenues to a business segment on a reasonable basis.

38 F-41

Segment information about these businesses is presented below.

Retail Corporate Investment Other Unallocated Eliminations For the nine months banking banking banking ended 30 September 2008 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

External interest income 47,345 227,135 13,941 627 - - 289,048 Internal interest income 26,767 37,216 113,698 - 48,869 (226,550) - External interest expense (22,235) (32,702) (83,342) - - - (138,279) Internal interest expense (28,722) (113,089) (36,429) - (48,310) 226,550 - NET INTEREST INCOME BEFORE PROVISION FOR IMPAIRMENT LOSSES ON INTEREST BEARING ASSETS 23,155 118,560 7,868 627 559 - 150,769 Provisions for impairment losses on interest bearing assets (18,290) (39, 364) 994 - - - (56,660)

NET INTEREST INCOME 4,865 79,196 8,862 627 559 - 94,109

Net loss on financial assets and liabilities at fair value though profit or loss - - (30,015) (167) - - (30,182) Net gain on foreign exchange and precious metals operations 383 106 14,255 13 (22) - 14,735 Fee and commission income 5,049 8,844 1,982 - - - 15,875 Fee and commission expense (769) (464) (622) (620) (121) - (2,596) Net realized gain on investments available-for- sale - - 83 23 - - 106 Dividends received - - 156 18 - - 174 Other income 179 504 3,682 3,609 20 - 7,994 NET NON-INTEREST INCOME 4,842 8,990 (10,479) 2,876 (123) - 6,106

OPERATING INCOME 9,707 88,186 (1,617) 3,503 436 - 100,215

OPERATING EXPENSES (12,024) (9,876) (2,912) (1,344) (42) - (26,198)

PROFIT BEFORE OTHER OPERATING PROVISIONS AND RESULTS OF ASSOCIATES (2,317) 78,310 (4,529) 2,159 394 - 74,017 Provisions for impairment losses on other assets and insurance provisions - (334) (17) (606) - - (957) Provisions for guarantees and other off-balance sheet contingencies - (22) - - - - (22) Share of results of associates - - (1,101) - - - (1,101) OPERATING PROFIT BEFORE INCOME TAX (2,317) 77, 954 (5,647) 1,553 394 - 71,937

Income tax expense - - - - (22,042) - (22,042)

NET PROFIT (2, 317) 77, 954 (5,647) 1,553 (21,648) - 49,895

Segment assets 385,015 1,868,636 584,956 15,123 831,233 (850,340) 2,834,623

Segment liabilities 287,262 808,967 1,352,367 6,648 796,852 (809,162) 2,442,934

39 F-42

Retail Corporate Investment Other Unallocated Eliminations For the nine banking banking banking months ended 30 September 2007 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

External interest income 33,949 176,782 13,356 402 168 - 224,657 Internal interest income 21,747 26,767 105,262 - 49,002 (202,778) - External interest expense (16,882) (20,564) (85,412) 1 346 - (122,511) Internal interest expense (25,590) (99,224) (29,016) - (49,000) 202,830 -

NET INTEREST INCOME BEFORE PROVISION FOR IMPAIRMENT LOSSES ON INTEREST BEARING ASSETS 13,224 83,761 4,190 403 516 52 102,146 Provisions for impairment losses on interest bearing assets (6,618) (43,303) 204 - - - (49,717)

NET INTEREST INCOME 6,606 40,458 4,394 403 516 52 52,429

Net gain on financial assets and liabilities at fair value though profit or loss - - 15,244 22 - - 15,266 Net loss on foreign exchange and precious metals operations (306) 5,179 (16,495) (10) 18 (156) (11,770) Fee and commission income 8,403 6,420 2,233 831 - 17,887 Fee and commission expense (528) (319) (470) (426) (40) - (1,783) Net realized gain on investments available-for- sale - - 66 3 - - 69 Dividends received - - 127 9 - 136 Other income 108 317 2,361 2,385 13 - 5,184

NET NON-INTEREST INCOME 7,677 11,597 3,066 2,814 (9) (156) 24,989

OPERATING INCOME 14,283 52,055 7,460 3,217 507 (104) 77,418

OPERATING EXPENSE (7,922) (11,179) (840) (858) (52) 104 (20,747) PROFIT BEFORE OTHER OPERATING PROVISIONS AND RESULTS OF ASSOCIATES 6,361 40,876 6,620 2,359 455 - 56,671 Provision for impairment losses on other assets and insurance provisions - (66) (113) (813) - - (992) Provision for guarantees and other off-balance sheet contingencies - (1,255) - - - - (1,255) Share of results of associates - - 726 - - - 726

OPERATING PROFIT BEFORE INCOME TAX 6,361 39,555 7,233 1,546 455 - 55,150

Income tax expense - - - - (12,373) - (12,373)

NET PROFIT 6,361 39,555 7,233 1,546 (11,918) - 42,777

Segment assets and liabilities as at 31 December 2007

Segment assets 452,330 1,914,005 625,716 9,717 999,782 (1,004,318) 2,997,232

Segment liabilities 309,679 585,404 1,758,867 4,120 961,153 (971,706) 2,647,517

40 F-43

= 23. RISK MANAGEMENT POLICIES

Management of risks is fundamental to the Group’s business. The risk management functions include:

• Risks identification: The risks, which the Group is exposed to in its daily activities, are identified by the risk management system. • Measuring risks: The Group measures the risks using various methodologies, which include risk based profitability analysis, calculation of possible loss amounts, and utilization of specialized models. Measurement models and associated assumptions are periodically reviewed to ensure that the tools represent the risks adequately and reasonably. • Risk monitoring: Group’s policies and procedures determine the processes on mitigating and decreasing the risks and set the limits on various types of operations. Such limits are reviewed on a periodic basis specified by internal documents of the Group. • Risk reporting: Risk reporting is performed on a line of business and on a consolidated basis. This information is periodically presented to the management.

The main risks inherent to the Group’s operations are those related to:

• Credit risk; • Operational risk; • Liquidity risk; • Market risk.

The Group has opted to present geographical concentration, liquidity risk and currency risk as at 30 September 2008. The Group believes this information to be useful to users of this condensed interim consolidated financial information. The remaining risk management policies, which include credit risk, interest rate risk and operational risk are not significantly different from the Group’s risk management policies disclosed in the audited consolidated financial statements for the year ended 31 December 2007.

From 1 January 2008, the Group implemented a hedge accounting policy as part of its risk management strategy. Prior to this date, the Group opted not to designate its economic hedges as hedging relationships. The Group has designated cross currency swaps and interest swaps as hedging instruments against various currency and interest rate exposures, the details of which are disclosed in Note 14.

Geographical concentration

The relevant Credit Committees exercise control over the country risk and risk in the legislation and regulatory arena and assesses its influence on the Group’s activity. The Group sets country limits for all countries with ratings below A- according to the Standard and Poor’s classification.

The Management of the Group considers the main segment to be the Republic of Kazakhstan.

41 F-44

The geographical concentration of assets and liabilities is set out in tables below:

Kazakhstan CIS OECD countries Non-OECD 30 September 2008 countries Total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 159,277 8,378 15,083 315 183,053 Precious metals - - 271 - 271 Financial assets at fair value through profit or loss 3,862 1,685 62,981 243 68,771 Loans and advances to banks 52,356 35,907 165,330 - 253,593 Loans to customers 1,816,132 276,954 26,385 134,180 2,253,651 Investments available-for-sale 16,723 - - - 16,723 Investments held to maturity 594 19 - - 613 Investments in associates 2,413 - - - 2,413 Goodwill 2,405 - - - 2,405 Property, equipment and intangible assets 32,977 2,202 - - 35,179 Other assets 10,818 5,433 1,279 421 17,951

TOTAL ASSETS 2,097,557 330,578 271,329 135,159 2,834,623

LIABILITIES: Loans and advances from banks 29,267 16,297 291,942 7,569 345,075 Customer accounts 1,057,835 23,415 10,958 4,021 1,096,229 Financial liabilities at fair value through profit or loss 6,056 27 17,667 233 23,983 Debt securities issued - 50,550 651,909 334 702,793 Other borrowed funds 58 2 136,016 -136,076 Provisions 11,134 71 - -11,205 Deferred income tax liability 40,910 116 - -41,026 Dividends payable 452 5 - - 457 Other liabilities 14,792 2,531 1,026 218,351 Subordinated debt 29,754 - 79,011 -108,765

TOTAL LIABILITIES 1,190,258 93,014 1,188,529 12,159 2,483,960

NET POSITION 907,299 237,564 (917,200) 123,000

Kazakhstan CIS OECD countries Non-OECD 31 December 2007 countries Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 144,174 7,868 16,106 - 168,148 Financial assets at fair value through profit or loss 66,429 11,261 110,923 163 188,776 Loans and advances to banks 28,401 45,380 139,042 - 212,823 Loans to customers 1,855,687 303,936 46,011 160,701 2,366,335 Investments available-for-sale 3,036 - - - 3,036 Investments held to maturity 317 58 - - 375 Investments in associates 3,222 - - - 3,222 Goodwill 2,405 - - - 2,405 Property, equipment and intangible assets 31,974 2,285 - - 34,259 Other assets 10,211 3,239 4,312 91 17,853

TOTAL ASSETS 2,145,856 374,027 316,394 160,955 2,997,232

LIABILITIES: Loans and advances from banks 118,412 46,844 551,534 6,641 723,431 Customer accounts 770,799 32,548 82,248 9,488 895,083 Financial liabilities at fair value through profit or loss 3,078 37 4,445 170 7,730 Debt securities issued - 70,142 667,372 2,174 739,688 Other borrowed funds 12,928 2 136,004 - 148,934 Provisions 10,550 88 - - 10,638 Deferred income tax liability 30,486 10 - - 30,496 Dividends payable -2 -- 2 Other liabilities 9,309 1,679 2,851 6 13,845 Subordinated debt 29,125 - 79,041 - 108,166

TOTAL LIABILITIES 984,687 151,352 1,523,495 18,479 2,678,013

NET POSITION 1,161,169 222,675 (1,207,101) 142,476

42 F-45

Liquidity risk

Liquidity risk refers to the availability of sufficient funds to meet deposit withdrawals and other financial commitments of the Group associated with financial instruments as they actually fall due as a result of decrease possibilities of the Group to raise appropriate funds.

The ALMC controls these types of risks by means of maturity analysis prepared by the Department of Financial Control, determining the Group’s strategy for the next financial period. Current liquidity is managed by the Treasury Department through the deals in the money markets, placement of available funds in liquid securities within limits set by the ALMC.

With the purpose of managing the liquidity risk, the Group performs daily monitoring of future expected cash flows on clients’ and banking operations, which is a part of assets and liabilities management process.

The Group maintains the compliance of liquidity requirements, such as current and short-term liquidity ratios and foreign exchange liquidity limits, set by the regulatory bodies. In the management’s opinion limits described above are strict, and that measure guarantees maintaining appropriate liquidity level.

43 F-46

The following table shows how management monitors the liquidity and interest risks. The table is based on the time period to maturity or contractual repricing of the financial instruments.

Up to 1 month 1 month to 3 month to 1 year to Over 5 years Maturity 30 September 3 months 1 year 5 years undefined 2008 Total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 20,000 - - - - - 20,000 Financial assets at fair value through profit or loss 11,614 2,277 32,300 16,610 450 - 63,251 Loans and advances to banks 180,862 16,306 45,271 8,809 1,246 - 252,494 Loans to customers 164,728 153,668 431,150 850,993 562,744 - 2,163,283 Investments available-for-sale 176 119 916 4,241 5,241 - 10,693 Investments held to maturity 19 - - 105 469 - 593

Total interest bearing assets 377,399 172,370 509,637 880,758 570,150 - 2,510,314 Cash and balances with national (central) banks 163,042 - - - - - 163,042 Precious metals 271 - - - - - 271 Equity instruments in the financial assets at fair value through profit or loss - - - - - 4,778 4,778 Equity instruments in the investments available-for- sale - - - - - 5,379 5,379 Investments in associates - - - - - 2,413 2,413 Goodwill - - - - - 2,405 2,405 Property, equipment and intangible assets - - - - - 35,179 35,179 Accrued interest income on interest-bearing assets 34,994 28,291 19,851 9,594 161 - 92,891 Other assets 6,685 3,237 7,444 585 - - 17,951

TOTAL ASSETS 582,391 203,898 536,932 890,937 570,311 50,154 2,834,623

LIABILITIES: Loans and advances from banks 44,482 81,196 55,500 140,173 20,192 - 341,543 Customer accounts 323,889 198,426 306,980 246,646 3,113 - 1,079,054 Debt securities issued 2,998 827 37,161 336,186 301,997 - 679,169 Other borrowed funds - - 8,437 59,563 67,812 - 135,812 Subordinated debt - - - 3,297 103,255 - 106,552 Total interest bearing liabilities 371,369 280,449 408,078 785,865 496,369 - 2,342,130 Financial liabilities at fair value through profit or loss 2,297 3,350 3,761 14,499 76 - 23,983 Provisions 768 1,095 3,931 797 612 4,002 11,205 Deferred income tax liability 2,900 47 12,750 14,316 11,013 - 41,026 Dividends payable - 457 - - - - 457 Accrued interest expense on interest-bearing liabilities 11,759 10,611 21,821 2,552 65 - 46,808 Other liabilities 7,217 4,940 5,911 283 - - 18,351

TOTAL LIABILITIES 396,310 300,949 456,252 818,312 508,135 4,002 2,483,960

Liquidity gap 186,081 (97,051) 80,680 72,625 62,176

Interest sensitivity gap 6,030 (108,079) 101,559 94,893 73,781

Cumulative interest sensitivity gap 6,030 (102,049) (490) 94,403 168,184

Cumulative interest sensitivity gap as a percentage of total assets 0.21% (3.60%) (0.02%) 3.33% 5.93%

Contingent liabilities and credit commitments 11,926 3,372 42,848 99,689 7,150 6,852

44 F-47

Up to 1 month 1 month to 3 month to 1 year to Over 5 years Maturity 31 December 3 months 1 year 5 years undefined 2007 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Financial assets at fair value through profit or loss 10,459 129,347 31,817 - - - 171,623 Loans and advances to banks 158,420 26,415 6,918 18,572 1,171 - 211,496 Loans to customers 121,342 160,508 449,367 858,742 709,549 - 2,299,508 Investments available-for-sale - 3 179 1,535 1,147 - 2,864 Investments held to maturity - 24 34 104 208 - 370 Total interest bearing assets 290,221 316,297 488,315 878,953 712,075 - 2,685,861 Cash and balances with national (central) banks 168,148 - - - - - 168,148 Equity instruments - - - - - 15,649 15,649 Investments in associates - - - - - 3,222 3,222 Goodwill - - - - - 2,405 2,405 Property, equipment and intangible assets - - - - - 34,259 34,259 Accrued interest income on interest-bearing assets 34,227 19,371 10,687 5,219 331 - 69,835 Other assets 3,012 8,143 5,125 1,573 - - 17,853

TOTAL ASSETS 495,608 343,811 504,127 885,745 712,406 55,535 2,997,232

LIABILITIES: Loans and advances from banks 141,216 160,676 230,012 166,715 19,540 - 718,159 Customer accounts 320,227 127,509 203,474 225,057 2,300 - 878,567 Debt securities issued 1,964 11,060 35,288 280,996 389,255 - 718,563 Other borrowed funds - 585 - 43,231 104,498 - 148,314 Subordinated debt - - - 3,293 103,080 - 106,373 Total interest bearing liabilities 463,407 299,830 468,774 719,292 618,673 - 2,569,976 Financial liabilities at fair value through profit or loss 331 7,399 - - - - 7,730 Provisions 950 3,0221,770 1,471 3 3,42210,638 Deferred income tax liability 2,339 1,362 8,651 10,251 7,893 - 30,496 Dividends payable - 2 - - - - 2 Accrued interest expense on interest-bearing liabilities 7,111 20,614 14,321 1,445 1,835 - 45,326 Other liabilities 10,415 1,601 1,717 112 - - 13,845

TOTAL LIABILITIES 484,553 333,830 495,233 732,571 628,404 3,422 2,678,013

Liquidity gap 11,055 9,981 8,894 153,174 84,002

Interest sensitivity gap (173,186) 16,467 19,541 159,661 93,402

Cumulative interest sensitivity gap (173,186) (156,719) (137,178) 22,483 115,885

Cumulative interest sensitivity gap as a percentage of total assets (5.78%) (5.23%) (4.58%) 0.75% 3.87%

Contingent liabilities and credit commitments 208 66,057 69,709 45,883 - 6,515

45 F-48

The tables include the maturity dates for financial assets and financial liabilities, as they fall due. Based on prior experience, the Group considers it highly unlikely that all customer accounts seek repayment on maturity. Historically the majority of such deposits are rolled over. The Group is aware of the importance of maintaining the stability of these deposits. In order to achieve this it is essential that the Group ensures depositor confidence in the Group’s liquidity, by continuing to position itself as the depositor of choice in local markets and a leading financial institution in both the Republic of Kazakhstan and abroad. The Group does not use undiscounted contractual maturity information when managing its operations.

Currency risk

Currency risk is defined as the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Group is exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows.

The ALMC controls currency risk by management of the open currency position on the estimated basis of KZT devaluation and other macroeconomic indicators, which gives the Group an opportunity to minimize losses from significant currency rates fluctuations toward its national currency. The Treasury Department performs daily monitoring of the Group’s open currency position with the aim to match the requirements of regulatory bodies.

As at 30 September 2008, the Group’s exposure to foreign currency exchange rate risk is presented in the table below:

ASSETS: Cash and balances with national (central) banks 83,633 10,130 6,168 6,147 76,975 183,053 Precious metals - - - - 271 271 Financial assets at fair value through profit or loss 46,631 2,194 6,032 10,039 3,875 68,771 Loans and advances to banks 22,713 151,164 51,440 21,228 7,048 253,593 Loans to customers 810,187 1,330,245 14,867 97,095 1,257 2,253,651 Investments available-for-sale 12,053 4,670 - - - 16,723 Investments held to maturity 594 - - - 19 613 Investments in associates 2,413 - - - - 2,413 Goodwill 2,405 - - - - 2,405 Property, equipment and intangible assets 32,978 - - 2,041 160 35,179 Other assets 10,295 2,368 281 4,927 80 17,951

TOTAL ASSETS 1,023,902 1,500,771 78,788 141,477 89,685 2,834,623

LIABILITIES: Loans and advances from banks 14,483 294,866 13,314 21,602 810 345,075 Customer accounts 561,291 475,649 38,355 18,445 2,489 1,096,229 Financial liabilities at fair value through profit or loss 20,605 3,353 - - 25 23,983 Debt securities issued - 372,945 186,516 26,976 116,356 702,793 Other borrowed funds 6,522 129,554 - - - 136,076 Provisions 5,107 5,284 672 137 5 11,205 Deferred income tax liabilities 40,909 - - 112 5 41,026 Dividends payable 451 - - - 6 457 Other liabilities 13,325 1,469 34 3,484 39 18,351 Subordinated debt 29,179 79,586 - - - 108,765

TOTAL LIABILITIES 691,872 1,362,706 238,891 70,756 119,735 2,483,960

OPEN BALANCE SHEET POSITION 332,030 138,065 (160,103) 70,721 (30,050)

46 F-49

Derivative financial instruments and spot contracts

Fair value of derivative financial instruments and spot contracts are included in the currency analysis presented above. The following table presents further analysis of currency risk on derivative financial instruments and spot contracts as at 30 September 2008:

KZT USD EUR RUR Other 30 September CCY 2008 Total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) Accounts payable on forward contracts (93,129) (337,287) (190) (35,584) (107,210) (573,400) Accounts receivable on forward contracts 50,690 229,340 156,710 4,079 145,510 586,329

NET SPOT AND DERIVATIVE FINANCIAL INSTRUMENTS POSITION (42,439) (107,947) 156,520 (31,505) 38,300

As at 31 December 2007, the Group’s exposure to foreign currency exchange rate risk is presented in the table below:

KZT USD EUR RUR Other CCY 31 December 2007 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 57,840 46,588 3,465 6,171 54,084 168,148 Financial assets at fair value through profit or loss 59,371 97,047 8,445 17,896 6,017 188,776 Loans and advances to banks 12,968 125,370 56,086 11,527 6,872 212,823 Loans to customers 891,041 1,369,863 24,955 79,548 928 2,366,335 Investments available-for-sale 3,036 - - - - 3,036 Investments held to maturity 317 - - - 58 375 Investments in associates 3,222 - - - - 3,222 Goodwill 2,405 - - - - 2,405 Property, equipment and intangible assets 31,974 - - 2,146 139 34,259 Other assets 9,568 3,791 1,555 2,318 621 17,853

TOTAL ASSETS 1,071,742 1,642,659 94,506 119,606 68,719 2,997,232

LIABILITIES: Loans and advances from banks 31,993 576,394 22,682 14,721 77,641 723,431 Customer accounts 542,353 290,241 33,372 27,808 1,309 895,083 Financial liabilities at fair value through profit or loss 2,831 4,861 - 25 13 7,730 Debt securities issued - 363,358 194,526 57,120 124,684 739,688 Other borrowed funds 18,929 130,005 - - - 148,934 Provisions 7,235 2,528 804 60 11 10,638 Deferred income tax liabilities 30,486 - - - 10 30,496 Dividends payable - - - - 2 2 Other liabilities 8,934 1,389 1,149 1,670 703 13,845 Subordinated debt 28,929 79,237 - - - 108,166

TOTAL LIABILITIES 671,690 1,448,013 252,533 101,404 204,373 2,678,013

OPEN BALANCE SHEET POSITION 400,052 194,646 (158,027) 18,202 (135,654)

47 F-50

Derivative financial instruments and spot contracts

KZT USD EUR RUR Other 31 December CCY 2007 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) Accounts payable on spot and derivative contracts (200,473) (312,485) (1,240) (6,992) (605) (521,795) Accounts receivable on spot and derivative contracts 70,626 159,739 160,870 14,846 140,394 546,475 NET SPOT AND DERIVATIVE FINANCIAL INSTRUMENTS POSITION (129,847) (152,746) 159,630 7,854 139,789

24. RESTATEMENT OF EARNINGS PER SHARE

Basic and diluted earnings per share for the three months and nine months ended 30 September 2007 have been restated due to errors identified after the issuance of the consolidated financial statements. According to Kazakhstan legislation on Joint Stock Companies, dividend payments per ordinary shares cannot exceed the dividends per share on preference shares for the same period. The updated calculation of earnings per share reflects the additional dividends that would be paid to preference shareholders on full distribution of profits.

Nine months Nine months ended ended 30 September 30 September 2007 2007 (unaudited) (unaudited) (As previously (Restated) reported) Basic and diluted earnings per share Net profit for the nine month period attributable to equity holders of the parent 40,836 40,836 Less: additional dividends that would be paid on full distribution of profit to the preferred shareholders - (6,905) Net profit for the nine month period attributable to ordinary shareholders of the parent per consolidated income statement 40,836 33,931

Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share 574,835,864 574,835,864

Earnings per share – basic and diluted (tenge) 71.04 59.03

Three months Three months ended ended 30 September 30 September 2007 2007 (unaudited) (unaudited) (As previously (Restated) reported) Basic and diluted earnings per share Net profit for the three month period attributable to equity holders of the parent 15,687 15,687 Less: additional dividends that would be paid on full distribution of profit to the preferred shareholders - (2,666) Net profit for the three month period attributable to ordinary shareholders of the parent per consolidated income statement 15,687 13,021

Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share 574,904,440 574,904,440

Earnings per share – basic and diluted (tenge) 27.29 22.65

48 F-51

25. RESTATEMENT OF CASH FLOWS

The Group noted an error in the calculation of the change in minimum reserve deposits, net interest accruals, unrealized foreign exchange loss and acquisition of property, equipment and intangible assets in the cash flow statement. As such, the Group is restating the condensed interim consolidated statement of cash flows for the nine months period ended 30 September 2007 to correct these errors.

The table below shows the effects of the restatements described above:

Nine months ended Nine months ended 30 September 30 September 2007 2007 (unaudited) (unaudited) Restated As previously reported (KZT million) (KZT million) CASH FLOWS FROM OPERATING ACTIVITIES: Adjustments for:

Change in interest accruals, net 55,113 (6,742) Unrealized foreign exchange loss 11,356 7,701 Gain from acquisition of subsidiaries - 1,386 Cash inflow from operating activities before changes in operating assets and liabilities 195,747 131,623

Changes in operating assets and liabilities (Increase)/decrease in operating assets: Minimum reserve deposit with National Bank of the Republic of Kazakhstan (50,730) 3,900 Minimum reserve deposit with National Bank of the Kyrgyz Republic - (31) Financial assets at fair value through profit or loss 101,712 100,379 Loans and advances to banks 85,886 88,823 Loans to customers (797,614) (736,404) Increase/(decrease) in operating liabilities: Loans and advances from banks (55,311) (56,338) Cash outflow from operating activities before taxation (356,827) (304,565)

Net cash outflow from operating activities (358,553) (306,291)

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, equipment and intangible assets (14,223) (11,363) Proceeds on sale of property, equipment and intangible assets - 862 Gain from acquisition of subsidiaries 1,386 -

Net cash outflow from investing activities (28,518) (26,182)

NET DECREASE IN CASH AND CASH EQUIVALENTS (61,670) (7,072)

CASH AND CASH EQUIVALENTS, beginning of period 114,215 59,403

CASH AND CASH EQUIVALENTS, end of period 53,108 52,894

Interest paid by the Group in cash during the nine months ended 30 September 2007 97,659 97,196

49 F-52

JOINT STOCK COMPANY KAZKOMMERTSBANK

Consolidated Financial Statements For the Year Ended 31 December 2007 and Independent Auditors’ Report

F-53 JOINT STOCK COMPANY KAZKOMMERTSBANK

TABLE OF CONTENTS

Page

STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007 1

INDEPENDENT AUDITORS’ REPORT 2-3

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007:

Consolidated income statement 4

Consolidated balance sheet 5

Consolidated statement of changes in equity 6

Consolidated statement of cash flows 7-8

Notes to the consolidated financial statements 9-80

F-54 STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

The following statement, which should be read in conjunction with independent auditors’ responsibilities stated in the independent auditors’ report set out on pages 2-3, is made with a view to distinguishing the respective responsibilities of management and those of the independent auditors in relation to the consolidated financial statements of Joint Stock Company Kazkommertsbank and its subsidiaries (the “Group”).

Management is responsible for the preparation of the consolidated financial statements that present fairly the financial position of the Group as at 31 December 2007 and the results of its operations, cash flows and changes in equity for the year then ended, in accordance with International Financial Reporting Standards (“IFRS”).

In preparing the consolidated financial statements, management is responsible for:

• Selecting suitable accounting principles and applying them consistently; • Making judgements and estimates that are reasonable and prudent; • Stating whether IFRS have been followed; and • Preparing the consolidated financial statements on a going concern basis, unless it is inappropriate to presume that the Group will continue in business for the foreseeable future.

Management is also responsible for:

• Designing, implementing and maintaining an effective and sound system of internal controls, throughout the Group; • Maintaining proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Group, and which enable them to ensure that the consolidated financial statements of the Group comply with IFRS; • Maintaining statutory accounting records in compliance with legislation and accounting standards of the Republic of Kazakhstan; • Taking such steps as are reasonably available to them to safeguard the assets of the Group; and • Detecting and preventing fraud and other irregularities.

The consolidated financial statements for the year ended 31 December 2007 were authorised for issue on 28 February 2008 (25 March 2008 for the effects of the restatement discussed in note 40) by the Management Board of JSC Kazkommertsbank.

F-55

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of JSC Kazkommertsbank:

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of JSC Kazkommertsbank and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as at 31 December 2007, the consolidated income statement, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-56 Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2007, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

As discussed in note 40 the accompanying financial statements have been restated.

Andrew Weekes Engagement Partner Chartered Accountant Certificate of Public Practice 78586, Australia

Deloitte, LLP State license on auditing of the Republic of Kazakhstan Number 0000015, type MFU-2, given by Nurlan Bekenov the Ministry of Finance of the Republic of Kazakhstan General Director dated September 13, 2006 Deloitte, LLP

28 February 2008 (25 March 2008 as to the effects of the restatement discussed in note 40)

3 F-57 JOINT STOCK COMPANY KAZKOMMERTSBANK

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007

Notes Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million)

Interest income 4, 34 316,458 147,250 Interest expense 4, 34 (169,528) (83,115)

NET INTEREST INCOME BEFORE PROVISION FOR IMPAIRMENT LOSSES ON INTEREST BEARING ASSETS 146,930 64,135

Provisions for impairment losses on interest bearing assets 5 (69,956) (32,887)

NET INTEREST INCOME 76,974 31,248

Net gain on financial assets and liabilities at fair value though profit or loss 6 21,627 4,744 Net (loss)/gain on foreign exchange and precious metals operations 7 (18,605) 5,204 Fee and commission income 8 23,558 17,537 Fee and commission expense 8 (2,713) (1,672) Net realized gain on investments available-for-sale 41 29 Dividends received 145 83 Other income 9 6,919 3,042

NET NON-INTEREST INCOME 30,972 28,967

OPERATING INCOME 107,946 60,215

OPERATING EXPENSES 10, 34 (31,200) (19,053)

PROFIT BEFORE OTHER OPERATING PROVISIONS AND RESULTS OF ASSOCIATES 76,746 41,162

Provision for impairment losses on other transactions 5 (1,238) (383) Provision for guarantees and other off-balance sheet contingencies 5 (3,186) (1,548) Share of results of associates 20, 34 1,333 1,130

OPERATING PROFIT BEFORE INCOME TAX 73,655 40,361

Income tax expense 11 (15,904) (12,600)

NET PROFIT 57,751 27,761

Attributable to: Ordinary shareholders of the parent 46,468 20,626 Preference shareholders of the parent 9,495 5,359 Minority interest 1,788 1,776

EARNINGS PER SHARE Basic and diluted (KZT) 12 80.85 48.08

On behalf of the Management Board of the Bank:

The notes on pages 9-80 form an integral part of these consolidated financial statements.

4 F-58 JOINT STOCK COMPANY KAZKOMMERTSBANK

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007

Notes 31 December 31 December 2007 2006 (KZT million) (KZT million)

ASSETS: Cash and balances with national (central) banks 13 168,148 209,005 Precious metals 14 - 807 Financial assets at fair value through profit or loss 15 188,776 322,618 Loans and advances to banks 16 212,823 197,191 Loans to customers 17, 34 2,366,335 1,678,840 Investments available-for-sale 18 3,036 2,628 Investments held to maturity 19 375 357 Investments in associates 20, 34 3,222 1,755 Goodwill 21 2,405 2,405 Property, equipment and intangible assets 22 34,259 15,681 Other assets 23 17,853 10,569

TOTAL ASSETS 2,997,232 2,441,856

LIABILITIES AND EQUITY LIABILITIES: Loans and advances from banks 25 723,431 884,301 Customer accounts 26, 34 895,083 687,806 Financial liabilities at fair value through profit or loss 24 7,730 3,554 Debt securities issued 27 739,688 424,162 Other borrowed funds 28 148,934 68,814 Provisions 5 10,638 6,758 Deferred income tax liabilities 11 30,496 16,850 Dividends payable 2 1 Other liabilities 29 13,845 8,587

2,569,847 2,100,833 Subordinated debt 30 108,166 78,922

Total liabilities 2,678,013 2,179,755

EQUITY: Equity attributable to equity holders of the parent: Share capital 6,998 6,995 Share premium reserve 152,855 152,534 Property and equipment revaluation reserve 6,020 2,436 Reserves 140,794 84,864

Total equity attributable to equity holders of the parent 306,667 246,829

Minority interest 12,552 15,272

Total equity 319,219 262,101

TOTAL LIABILITIES AND EQUITY 2,997,232 2,441,856

On behalf of the Management Board of the Bank:

The notes on pages 9-80 form an integral part of these consolidated financial statements.

5 F-59 JOINT STOCK COMPANY KAZKOMMERTSBANK

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007

Share Treasury Share Invest- Cumu- Property Retained Total Minority Total сapital shares premium ments lative and equip- earnings1 equity interest equity reserve available- translation ment attri- for-sale reserve1 revaluation butable fair value reserve to equity reserve/(de holders of ficit) 1 the parent (KZT (KZT (KZT (KZT (KZT (KZT (KZT (KZT (KZT (KZT million) million) million) million) million) million) million) million) million) million)

31 December 2005 5,000 (4) 15,902 1 3 1,520 58,873 81,295 6,976 88,271

Unrealized gain on revaluation of available-for-sale investments - - - 68 - - - 68 - 68 Revaluation of property and equipment - - - - - 1,355 - 1,355 - 1,355 Deferred income tax recognized on revaluation of property and equipment - - - - - (407) - (407) - (407) Exchange differences on translation of foreign operations - - - - 73 - (142) (69) 6,520 6,451 Net income recognized directly in equity - - - 68 73 948 (142) 947 6,520 7,467 Transfers (net of any related tax): Depreciation of property and equipment revaluation reserve - - - - - (32) 32 - - - Gain on sale of available-for-sale investments - - - (29) - - - (29) - (29) Net profit ------25,985 25,985 1,776 27,761 Total recognized income and expense - - - (29) - (32) 26,017 25,956 1,776 27,732 Share capital increase of: - ordinary shares 2,000 - 136,890 - - - - 138,890 - 138,890 Purchase of treasury shares (1) - (258) - - - - (259) - (259)

31 December 2006 6,999 (4) 152,534 40 76 2,436 84,748 246,829 15,272 262,101 Unrealized loss on revaluation of available-for-sale investments - - - (151) - - - (151) - (151) Revaluation of property and equipment - - - - - 5,239 - 5,239 - 5,239 Deferred income tax recognized on revaluation of property and equipment - - - - - (1,536) (36) (1,572) - (1,572) Exchange differences on translation of foreign operations - - - - (18) - 12 (6) (4,508) (4,514) Net income recognized directly in equity - - - (151) (18) 3,703 (24) 3,510 (4,508) (998) Transfers (net of related tax): Depreciation of property and equipment revaluation reserve - - - - - (119) 119 - - - Loss on sale of available-for-sale investments - - - 41 - - - 41 - 41 Net profit 55,963 55,963 1,788 57,751 Total recognized income and expense - - - 41 - (119) 56,082 56,004 1,788 57,792 Share capital increase of: - ordinary shares 1 - 153 - - - - 154 - 154 Sale of treasury shares - 2 168 - - - - 170 - 170

31 December 2007 7,000 (2) 152,855 (70) 58 6,020 140,806 306,667 12,552 319,219

1 The amounts included within the Investments available-for-sale fair value reserve/(deficit), Cumulative translation reserve and Retained earnings, in the above table, are included within “Reserves” in the consolidated balance sheet.

The notes on pages 9-80 form an integral part of these consolidated financial statements.

6 F-60 JOINT STOCK COMPANY KAZKOMMERTSBANK

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2007

Notes Year ended Year ended 31 December 31 December 2007* 2006* (KZT million) (KZT million)

CASH FLOWS FROM OPERATING ACTIVITIES: Profit before income tax 73,655 40,361 Adjustments for: Provision for impairment losses on interest bearing assets 5 69,956 32,887 Provision for impairment losses on other transactions 5 1,238 383 Provision for guarantees and other off-balance sheet contingencies 5 3,186 1,548 Amortization of discount on investments held to maturity (9) (7) Amortization of discount on debt securities issued 278 156 Income from acquisition of subsidiaries 1,555 - Depreciation and amortization 10 2,519 1,833 Change in interest accruals, net (7,190) (10,215) Unrealized foreign exchange (gain)/loss 13,409 2,993 Share of results of associates 20 (1,333) (1,130) Net gain on sale of property, equipment and intangible assets (26) (17) Net change in fair value of financial assets and liabilities at fair value though profit or loss (31,905) 1,024 Cash inflow from operating activities before changes in operating assets and liabilities 125,333 69,816

Changes in operating assets and liabilities (Increase)/decrease in operating assets: Minimum reserve deposit with National Bank of the Republic of Kazakhstan 29,414 (162,542) Minimum reserve deposit with Central Bank of Russian Federation (718) (1,071) Minimum reserve deposit with National Bank of the Kyrgyz Republic (15) (66) Precious metals 14 807 (807) Financial assets at fair value through profit or loss 173,811 (174,314) Loans and advances to banks 88,295 (82,872) Loans to customers (701,115) (892,293) Other assets (5,749) (2,573) Increase/(decrease) in operating liabilities: Loans and advances from banks (171,383) 399,210 Customer accounts 164,344 422,316 Other borrowed funds 79,756 18,200 Other liabilities (5,380) 1,950

Cash outflow from operating activities before taxation (222,600) (405,046)

Income tax paid (2,259) (3,800)

Net cash outflow from operating activities (224,859) (408,846)

7 F-61 JOINT STOCK COMPANY KAZKOMMERTSBANK CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2007

Notes Year ended Year ended 31 December 31 December 2007* 2006* (KZT million) (KZT million) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, equipment and intangible assets (16,261) (7,715) Proceeds on sale of property, equipment and intangible assets 1,362 460 Proceeds on sale of investments available-for-sale 6,295 4,516 Purchase of investments available-for-sale (6,946) (6,845) Proceeds on maturity of investments held to maturity 842 251 Purchase of investments held to maturity (848) (40) Purchase of investments in associates (134) (200) Purchase of subsidiaries, net of cash of entities acquired (1,525) -

Net cash outflow from investing activities (17,215) (9,573)

CASH FLOWS FROM FINANCING ACTIVITIES: Issue of ordinary share capital 154 138,890 Proceeds from sale/(repurchase) of own shares 170 (259) Proceeds from debt securities issued 321,632 120,254 Repayment of debt securities issued (23,944) (7,096) Proceeds from subordinated debt 33,919 28,809 Repayment of subordinated debt (4,878) (3,129) Dividends paid (603) (636)

Net cash inflow from financing activities 326,450 276,833

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 84,376 (141,586)

CASH AND CASH EQUIVALENTS, beginning of period 13 59,403 200,271

Effect of changes in foreign exchange rate on cash and cash equivalents 567 718

CASH AND CASH EQUIVALENTS, end of period 13 144,346 59,403

*As restated, see note 40.

Interest paid and received by the Group in cash during the year ended 31 December 2007 amounted to KZT 143,935 million (2006: KZT 74,881 million) and KZT 282,461 million (2006: KZT 128,164 million)

On behalf of the Management Board of the Bank:

The notes on pages 9-80 form an integral part of these consolidated financial statements.

8 F-62 JOINT STOCK COMPANY KAZKOMMERTSBANK

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2007

1. ORGANISATION

JSC Kazkommertsbank (the “Bank”, or “Kazkommertsbank”) is a joint stock bank and operates in the Republic of Kazakhstan since 1990. The Bank’s activities are regulated by the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and financial organizations (“FMSA”) in accordance with the license № 48 and by the National Bank of the Republic of Kazakhstan (“NBRK”). The Bank’s primary business consists of commercial banking activities, operations with securities, foreign currencies and derivative instruments, originating loans and guarantees.

The registered office of the Bank is located at: 135Zh, Gagarin str., Almaty, Republic of Kazakhstan.

The Bank has 25 branches in the Republic of Kazakhstan, and a representative office in Dushanbe (Tajikistan).

Kazkommertsbank is a parent company of the banking group (the “Group”) which consists of the following enterprises consolidated in the financial statements:

Proportion or ownership interest/voting rights Name Country of 2007 2006 Type of operation operation JSC Kazkommerts Securities Republic of 100% 100% Securities market transactions Kazakhstan LLP Processing Republic of 100% 100% Payment card and related Company Kazakhstan services Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on International B.V. Netherlands international capital markets Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on Finance II B.V. Netherlands international capital markets Kazkommerts Kingdom of 100% 100% Raising funds for the Bank on Capital II B.V. Netherlands international capital markets JSC OCOPAIM Grantum Asset Republic of 100% 100% Investment management of Management Kazakhstan pension assets LLP Kazkommertsbank RFCA Republic of 100% - Operations with financial Kazakhstan instruments on Regional financial centre of Almaty JSC Kazkommerts Life Republic of 100% 100% Life insurance Kazakhstan CJSC Kazkommertsbank Republic of 100% - Commercial bank Tajikistan Tajikistan JSC Kazkommertsbank Kyrgyz 93.58% 93.58% Commercial bank Kyrgyzstan Republic JSC Grantum APF Republic of 80.01% 80.01% Pension fund Kazakhstan JSC Insurance Company Republic of 65% 65% Insurance Kazkommerts-Policy Kazakhstan LLP Commercial bank Russia 52.11% - Commercial bank Moscommertsbank LLP Investment Company East Russia 50% - Securities market transactions Capital

9 F-63 JSC Kazkommerts Securities is a joint stock company and has operated under the laws of the Republic of Kazakhstan since 1997. The company’s primary business consists of trading with securities, including broker and dealing operations, consulting in investments and corporate finances, organization of security issuances, allocation and underwriting of securities, and purchase and sale of securities in the capacity of the agent. The company has license № 0401200324 dated 27 November 2000 issued by the National Bank of the Republic of Kazakhstan. In 2005 the company received a license for investment portfolio management № 0403200363 dated 30 September 2005 issued by the National Bank of the Republic of Kazakhstan.

LLP Processing Company is a limited liability partnership and has operated under the laws of the Republic of Kazakhstan since 9 July 2004. The company is registered with the Ministry of Justice of the Republic of Kazakhstan under № 64313-1910-ТOO. The Company’s primary business is to provide payment card processing.

Kazkommerts International BV is a limited liability partnership (B.V.) and has operated under the laws of the Kingdom of the Netherlands since 1 October 1997. The Company was established for the primary purpose of raising funds for the Bank in foreign capital markets. The company has license №24278506 dated 1 October 1997 issued by the Chamber of Commerce of the Netherlands for raising funds, including the issuance of bonds and other securities and entering into agreements regarding those activities.

Kazkommerts Finance II BV is a limited liability partnership (B.V.) and has operated under the laws of the Kingdom of the Netherlands since 13 February 2001. The Company was established for the primary purpose of raising funds for the Bank at foreign capital markets. The company has license №24317181 dated 13 February 2001 issued by the Chamber of Commerce of the Netherlands for conducting separate types of banking and other types of operations.

Kazkommerts Capital II BV is a limited liability partnership (B.V.) and has operated under the laws of the Kingdom of the Netherlands since 11 April 2000. The Company was established for the primary purpose of raising funds for the Bank in foreign capital markets. The company has license №24305284 dated 11 April 2000 issued by the Chamber of Commerce of the Netherlands for conducting operations.

JSC OCOPAIM Grantum Asset Management (“Grantum PAMC”) is a joint stock company and has operated under the laws of the Republic of Kazakhstan since 1998. The company’s primary business is investment management of pension funds. The company has license № 0412200149 dated 18 August 2004 on investment management of pension funds issued by the FMSA, license № 0403200199 dated 18 August 2004 on management of investment portfolio issued by the FMSA, license № 0402200216 dated 18 August 2004 on broker and dealer activity without right to custody activities issued by the FMSA.

On 11 January 2007, LLP Kazkommertsbank RFCA started its operations. The Company received a license, № 0401201454, dated 2 March 2007 from the FMSA.

JSC Kazkommerts Life is a joint stock company and has operated under the laws of the Republic of Kazakhstan. The company’s primary business consists of life insurance. The company has a license on life insurance services № 42-1/1 dated 28 December 2006 issued by the FMSA.

On 29 May 2007, the Board of Directors of the Bank decided to establish a wholly-owned subsidiary bank, CJSC Kazkommertsbank Tajikistan. The Bank received an approval from the FMSA #93 on 6 September 2007 for the creation of a subsidiary bank in Tajikistan. On 22 November 2007 and 25 December 2007 the Bank transferred cash to fun the capital of CJSC Kazkommertsbank Tajikistan in the amount of KZT 604 million and KZT 602 million, respectively. As at 31 December 2007, CSJC Kazkommertsbank Tajikistan had yet to receive its operating license.

JSC Kazkommertsbank Kyrgyzstan is a joint stock bank and has operated under the laws of the Kyrgyz Republic since 1991. The Bank’s operations are regulated by the National Bank of the Kyrgyz Republic according to license № 010. The Bank’s primary business consists of commercial banking activities, acceptance of deposits from individuals, transfer of payments, issuance of loans, operations with foreign exchange and derivative instruments, originating loans and guarantees.

10 F-64 Grantum APF is a joint stock company and has operated since 1998 under the laws of the Republic of Kazakhstan. The company’s primary business consists of the receipt of pension contributions of depositors and making pension payments to recipients under the laws of the Republic of Kazakhstan. The company operates based on a state license on the receipt of pension contributions and making pension payments № 0000019 dated 22 January 2004, issued by the FMSA.

JSC Insurance Company Kazkommerts-Policy is a joint stock company and operates under laws of the Republic of Kazakhstan since 1996. The company’s primary business consists of insurance of property, cargoes, auto insurance, civil liability insurance of vehicle owners, insurance of other civil liabilities and reinsurance. The company has licenses on voluntary insurance services № 13-8/1 DOS dated 1 July 2005 and on obligatory insurance services № 13-8/1 OS dated 1 July 2005 issued by the National Bank of the Republic of Kazakhstan.

LLP Investment Company East Capital operates on the securities market. The main activities of LLP Investment Company East Capital are broker dealer activities and depository services. The company has a license on depository activities operations #177-08298-000100 dated 08 February 2005, license on brokerage services №177-08289-100000 dated 08 February 2005, license on dealer services №177-08292-010000 dated 08 February 2005 and License on securities management №177-08295-001000 dated 08 February 2005. At the date of acquisition the estimated fair value of the net assets of LLP Investment Company East Capital approximated their carrying values.

Acquisitions

On 24 July 2007 the Bank acquired a 52.11% ownership interest in the share capital of LLP Moscommertsbank. Prior to this date, the Bank consolidated LLP Moscommertsbank as the Bank had control enabled by the trust management agreements with LLP Moscomertsbank’s shareholders. The Bank also entered into an agreement for trust management of the remaining 47.89%. Due to the nature of the assets acquired, management has estimated that the fair value of the net assets of LLP Moscommertsbank approximated their carrying values.

11 F-65

The purchase price on acquisition of LLP Moscommertsbank has been allocated as follows:

Book value at Fair value at 24 July 2007 24 July 2007 KZT million KZT million (unaudited) (unaudited) Assets Cash and balances with national (central) banks 6,705 6,705 Financial assets at fair value through profit or loss 14,250 14,250 Loans and advances to banks 4,414 4,414 Loans to customers 181,533 181,533 Loans under reverse repurchase agreements 13,693 13,693 Property, equipment and intangible assets 1,673 1,673 Other assets 1,961 1,961

224,229 224,229 Liabilities Loans and advances from banks 47,405 47,405 Customer accounts 29,752 29,752 Debt securities issued 109,440 109,440 Subordinated debt 19 19 Securities purchased under repurchase agreements 336 336 Derivative financial liabilities 13 13 Other liabilities 561 561

187,526 187,526

Net assets 36,703 36,703 Minority interest (17,577)

Share of net assets acquired, being 52.11% 19,126 Purchase consideration (17,740)

Excess of the Bank’s interest in fair value of net assets of LLP Moscommertsbank over cash consideration paid 1,386

Purchase consideration consists of the following: Elimination of intercompany balances with LLP Moscommertsbank on acquisition 11,525 Net cash outflow on acquisition: Cash consideration paid 6,215 Less: cash and cash equivalents acquired, being 52.11% (3,494)

Total (2,721)

The purchase price was agreed in 2006, however, the acquisition did not occur in 2007. The negative goodwill resulted from a change in the net asset value between these dates.

On 4 October 2007, the Bank acquired 50% of the ownership interest of LLP Investment Company East Capital for KZT 146 million. In accordance with IAS 27 “Consolidated and Separate Financial Statements”, the Bank has opted to consolidate its interest in LLP Investment Company East Capital as under the requirements of IFRS, it is of the opinion that it exerts sufficient control over the operations of the company, as the Bank has control over the Board of Directors of LLP Investment Company East Capital.

12 F-66 The purchase price on acquisition of LLP Investment Company East Capital has been allocated as follows:

Book value at Fair value at 4 October 2007 4 October 2007 (KZT million) (KZT million) (unaudited) (unaudited) Assets Cash and balances with national (central) banks 2,684 2,684 Loans to customers 2,271 2,271 Property, equipment and intangible assets 166 166 Other assets 9,014 9,014 14,135 14,135 Liabilities Loans and advances from banks 6,025 6,025 Other liabilities 7,481 7,481 13,506 13,506 Net assets 629 629

Minority interest (314)

Share of net assets acquired, being 50.00 % 315 Purchase consideration (146) Excess of the Bank’s interest in fair value of net assets of LLP Investment Company East Capital over cash consideration paid 169 Net cash inflow on acquisition: Cash consideration paid (146) Less: cash and cash equivalents acquired, being 50.00% 1,342 Total 1,196

Negative goodwill on acquisition of LLP Investment Company East Capital, recognized through consolidated income statement, arose due to the fact that LLP Investment Company East Capital is attributable to the access to resources available to LLP Investment Company East Capital under the combination. These resources include affiliation to the Kazkommerts brand, access to the branch system of the Bank and LLP Commercial bank Moscommertsbank and to the financing through the Bank.

The excess of the Bank’s interest in fair value of net assets of LLP Investment Company East Capital and LLP Commercial bank Moscommertsbank is credited to the consolidated income statement on the dates of acquisition.

Shareholders

As at 31 December 2007 and 2006, the following shareholders owned the issued ordinary shares of the Bank:

31 December 2007 31 December 2006

Number of Direct ownership, Number of Direct ownership, shares % shares % JSC Central-Asian Investment Company * 184,679,013 32.13% 184,679,013 32.13% European Bank of Reconstruction and Development 48,597,741 8.45% 48,597,741 8.45% Subkhanberdin N.S. (direct) 72,570,672 12.62% 72,570,672 12.63% The Central Depository ** 268,227,096 46.66% 268,154,766 46.66% Including the Bank of New York 256,589,812 44.63% 260,780,242 45.37% Other shareholders 775,299 0.14% 758,506 0.13%

Total 574,849,821 100% 574,760,698 100%

13 F-67 Amount of ordinary shares is calculated net of the treasury shares.

* JSC Central-Asian Investment Company (“CAIC”) is one of the entities through which the Directors and Management Board members own shares of the Bank. As at 31 December 2007, CAIC held 184,679,013 shares of the Bank (2006: 184,679,013 shares). As at 31 December 2007 this issued share capital was owned by the following: Subkhanberdin N.S. 87.21% (2006: 44.77%), Zhusupova N.A. 12.79% (2006: 12.79%) and others nil (2006: 42.44%). As at 31 December 2007, Subkhanberdin N.S. owns 40.64% (2006: 27.01%) of the ordinary share capital of the Group through direct and indirect ownership as a result of his holdings in CAIC, and Zhusupova N.A. owns 4.11% (2006: 4.11%) through indirect ownership.

** The Central Depository is the nominal holder of the shares; shares under nominal holding with the Bank of New York reflect the number of the issued Global Depositary Receipts (“GDRs”). Due to the nature of GDRs, information on the owners is undisclosed. As such, according to the legislation of the Republic of Kazakhstan those shares are recognized as non-voting shares. Owners of GDRs have the option to disclose their information to the Central Depository at any time. On disclosure of the ownership information those shares would be considered to be voting.

These consolidated financial statements were authorized for issue by the Bank’s Management Board on 28 February 2008 (25 March 2008 for the effects of the restatement discussed in note 40).

2. BASIS OF PRESENTATION

Accounting basis

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

These consolidated financial statements are presented in millions of Kazakhstan tenge (“KZT”), unless otherwise indicated. These consolidated financial statements have been prepared under the historical cost convention, except for the measurement at fair value of certain financial instruments and measurement of land and buildings at revalued amounts according to International Accounting Standard (“IAS”) No. 16 “Property, Plant and Equipment”.

Kazkommertsbank and its subsidiaries maintain their accounting records in accordance with IFRS. These consolidated financial statements have been prepared based on the accounting records of the Bank and its subsidiaries. The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that are particularly susceptible to change relate to the provisions for impairment losses and the fair value of financial instruments.

Functional currency

Items included in the financial statements of each entity of the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the “functional currency”). The reporting currency of the consolidated financial statements is the Kazakhstan tenge.

14 F-68 3. SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Bank and entities controlled by the Bank for the year ended 31 December 2007. Control is achieved where the Bank has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Bank.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The difference, if any, between the carrying amount of minority interest and the amount received on its purchase is recognized in equity attributable to the equity holders of the parent.

In translating the financial statements of a foreign subsidiary into the presentation currency for incorporation in the consolidated financial statements, the Group follows a translation policy in accordance with IAS 21 “The Effects of Changes in Foreign Exchange Rates” (“IAS 21”) and performs the following procedures:

• Assets and liabilities, both monetary and non-monetary, of the foreign entity are translated at closing rate; • Income and expense items of the foreign entity are translated at exchange rates at the dates of transactions; • Equity items of the foreign entity are translated at exchange rates at the dates of transactions; • All resulting exchange differences are classified as equity until the disposal of the investment; • On disposal of the investment in the foreign entity related exchange differences are recognized in the consolidated income statement.

Business combinations

The assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognized as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the consolidated income statement in the period of acquisition.

The minority interest is initially measured at the minority’s proportion of the fair values of the assets, liabilities and contingent liabilities recognized. The equity attributable to equity holders of the parent and net income attributable to minority shareholders’ interests are shown separately in the consolidated balance sheet and income statement, respectively.

The Group accounts for increases in ownership of a controlled entity by revaluing all identified assets and liabilities of the subsidiary to fair value at the date of exchange in proportion to the amounts attributable to the additional interest acquired. Goodwill is recognized for any excess of the cost of the increase over the Group’s interest in the net fair value of the identifiable assets and liabilities.

For a business combination involving an entity or business under common control, all assets and liabilities of the subsidiary are measured at the carrying values recorded in the stand-alone financial statements of the subsidiary. The difference between the carrying value of the acquired share in net assets of the subsidiary and the cost of acquisition are recorded directly in equity attributable to the equity holders of the parent.

15 F-69 Investments in associates

An associate is an entity over which the Group is in a position to exercise significant influence, but is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those entities

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting.

Investments in associates are carried in the consolidated balance sheet at cost and adjusted for goodwill and for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of associates in excess of the Group’s interest in those associates are not recognized.

Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable assets, liabilities and contingent liabilities of the associate at the date of acquisition is recognized as goodwill. The goodwill is included in the carrying amount of the investment and is assessed for impairment as part of the investment. Any deficiency of the cost of acquisition below the Group’s share of the fair values of the identifiable assets, liabilities and contingent liabilities of the associate at the date of acquisition (i.e. discount on acquisition) is credited in the consolidated income statement in the period of acquisition.

Where a Group company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Details of the Group’s investments in associates, including summarized financial information of the associates, as at and for the years ended 31 December 2007 and 2006 are presented below:

As at and for the year ended 31 December 2007:

Name of associated Ownership Fair value of Total assets of Total liabilities of Revenue of Net profit company interest investments in associated associated associated associates company company company

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

JSC APF Ular Umit 49.35% 1,752 3,840 342 5,143 1,805 JSC OCOPAIM Zhetysu 50.00% 1,433 2,909 12 1,522 902 LLP First Credit Bureau 18.40% 37 227 7 170 77

As at and for the year ended 31 December 2006:

Name of associated Ownership Fair value of Total assets of Total liabilities of Revenue of Net profit Company interest investments in associated associated associated associates company company company

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

JSC APF Ular Umit 41.18% 725 2,568 778 3,469 806 JSC OCOPAIM Zhetysu 50.00% 993 1,995 10 1,483 823 LLP First Credit Bureau 18.40% 37 146 3 19 (37)

16 F-70 On 1 November 2006 the Group acquired 50% share in JSC OCOPAIM Zhetysu. As at 31 December 2007 and 2006, the Group has not consolidated JSC OCOPAIM Zhetysu as the Bank does not have the power to govern the financial and operating policies of the company so as to obtain benefits from its activities. This is attributable to there being no representatives of the Group on the Board of Directors.

On 17 July 2007, the Bank acquired 327 ordinary shares of JSC APF Ular Umit, which relates to 8.175% of the share capital of the сompany. After the acquisition the Bank's interest in the share capital of JSC APF Ular Umit was 49.35%.

Goodwill

Goodwill arising on the acquisition of a subsidiary or jointly controlled entity represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment loss. The Group’s policy for goodwill arising on the acquisition of an associate is described under ‘Investments in associates’ above.

The Group tests goodwill for impairment at least annually. An impairment loss recognized for goodwill is not reversed in a subsequent period.

If the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the Group:

(a) Reassesses the identification and measurement of the Group’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the combination; and (b) Recognizes immediately in consolidated income statement any excess remaining after that reassessment.

On disposal of an investment, the amount of goodwill attributable is included in the determination of the profit or loss on disposal.

Recognition and measurement of financial instruments

The Group recognizes financial assets and liabilities on its consolidated balance sheet when it becomes a party to the contractual obligation of an instrument. Regular way purchases and sales of financial assets and liabilities are recognized using settlement date accounting. Regular way purchases of financial instruments that will be subsequently measured at fair value between trade date and settlement date are accounted for in the same way as for acquired instruments.

Financial assets and liabilities are initially recognized at fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss transaction costs that are directly attributable to acquisition or issue of the financial asset or financial liability. The accounting policies for subsequent re-measurement of these items are disclosed in the respective accounting policies set out below.

Cash and balances with national (central) banks

Cash and balances with national (central) banks include cash on hand and unrestricted balances on correspondent and time deposit accounts with the National Bank of the Republic of Kazakhstan, Central Bank of the Russian Federation, and National Bank of Kyrgyz Republic with original maturity within 90 days.

17 F-71 For the purposes of determining cash flows, cash and cash equivalents includes advances to banks in countries included in the Organization for Economic Co-operation and Development (“OECD”), except for margin deposits for operations with plastic cards, which may be converted to cash within a short period of time. The minimum reserve deposit required by the Central Bank of the Russian Federation, the National Bank of the Republic of Kazakhstan and the National Bank of the Kyrgyz Republic are not included in cash equivalents.

Precious metals

Assets and liabilities denominated in precious metals are translated at the current rate computed based on the second fixing of the London Metal Exchange rates using the KZT/USD exchange rate effective at the date. Changes in the bid prices are recorded in net gain/(loss) on foreign exchange and precious metals operations.

Loans and advances to banks

In the normal course of business, the Group maintains advances or deposits for various periods of time with other banks. Loans and advances to banks with a fixed maturity term are subsequently measured at amortized cost using the effective interest rate method, and are carried net of an allowance for impairment. Those that do not have fixed maturities are carried at cost. Loans and advances to banks are carried net of any allowance for impairment losses.

Financial assets and liabilities at fair value through profit or loss

Financial assets and liabilities at fair value through profit or loss represent derivative instruments or securities (1) acquired principally for the purpose of selling them in the near future, (2) which are a part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent and actual pattern of short-term profit taking or (3) which are designated by the Group at fair value through profit or loss upon initial recognition. A financial asset other than a financial asset held for trading may be designated at fair value through profit or loss upon initial recognition if: (1) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or (2) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or (3) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition and Measurement” permits the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.

Financial assets at fair value through profit or loss are initially recorded and subsequently measured at fair value. Fair value adjustment on financial assets and liabilities at fair value through profit or loss is recognized in the consolidated income statement for the period. The Group does not reclassify financial instruments in or out of this category while they are held.

The Group enters into derivative financial instruments to manage currency and liquidity risks and for trading purposes. These instruments include forwards on foreign currency, precious metals and securities. Derivative financial instruments entered into by the Group are not designated as hedges and do not qualify for hedge accounting.

Derivative financial instruments

In the normal course of business, the Group enters into various derivative financial instruments including forwards, swaps and options. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each balance sheet date. The fair values are estimated based on quoted market prices or pricing models that take into account the current market and contractual prices of the underlying instruments and other factors. Derivatives are carried as assets when their fair value is positive and as liabilities when it is negative. Derivatives are included in financial assets and liabilities at fair value through profit or loss in the consolidated balance sheet. Gains and losses resulting from these instruments are included in Net gain/loss from financial assets and liabilities at fair value through profit or loss in the consolidated income statement.

18 F-72 Derivative instruments embedded in other financial instruments are treated as separate derivatives if their risks and characteristics are not closely related to those of the host contracts and the host contracts are not carried at fair value with unrealized gains and losses reported in consolidated income statement. An embedded derivative is a component of a hybrid (combined) financial instrument that includes both the derivative and a host contract, with the effect that some of the cash flows of the combined instrument vary in a similar way to a stand-alone derivative.

Securities repurchase and reverse repurchase agreements and lending transactions

In the normal course of business the Group enters into sale and purchase back agreements (“repos”) and securities purchased under agreements to resell (“reverse repos”). Repos and reverse repos are utilized by the Group as an element of its treasury management.

A repo is an agreement to transfer a financial asset to another party in exchange for cash or other consideration and a concurrent obligation to reacquire the financial assets at a future date for an amount equal to the cash or other consideration exchanged plus interest. These agreements are accounted for as financing transactions. Financial assets sold under repos are retained in the consolidated financial statements and the consideration received under these agreements is recorded as a collateralized deposit received within balances due to banks and customer accounts.

Assets purchased under reverse repos are recorded in the consolidated financial statements as cash placed on deposit which is collateralized by securities and other assets and are classified within balances due from banks and loans to customers.

In the event that assets purchased under reverse repos are sold to third parties, the results are recorded with the gain or loss included in net gains/(losses) on respective assets. Any related income or expense arising from the pricing difference between purchase and sale of the underlying assets is recognized as interest income or expense in the consolidated income statement.

The Group enters into securities repurchase agreements and securities lending transactions under which it receives or transfers collateral in accordance with normal market practice. Under standard terms for repurchase transactions in the Republic of Kazakhstan and other CIS states, the recipient of collateral has the right to sell or repledge the collateral, subject to returning equivalent securities on settlement of the transaction, only if the counterparty fails to meet its obligations per the agreement on the lending transaction.

As at 31 December 2007 the fair value of securities transferred as collateral under loans under repurchase agreements amounted to KZT 82,147 million (2006: KZT 262,008 million).

As at 31 December 2007 securities received as collateral under reverse repurchase agreements amounted to KZT 21,501 million (2006: KZT 96,117 million).

Loans to customers

Loans to customers are non-derivative assets with fixed or determinable payments that are not quoted in an active market other than those classified in other categories of financial assets.

Loans to customers granted by the Group with fixed maturities are initially recognized at fair value plus initial direct costs and fees that are integral to the interest rate. For loans issued at lower than market terms the difference between the nominal amount of consideration given and the present value of future cash flows discounted at market rate at inception is recognized in the consolidated income statement in the period the loan is issued as losses on origination of assets. Subsequently, the carrying amount of such loans is adjusted for amortization of the losses on origination and the related income is recorded as interest income using the effective interest rate method. Loans to customers that do not have fixed maturities are carried at cost. Loans to customers are carried net of any allowance for impairment losses.

19 F-73 Write off of loans and advances

Loans and advances to banks and customers are written off against the allowance for impairment losses when deemed uncollectible. Loans and advances are written off after management has exercised all possibilities available to collect amounts due to the Group and after the Group has sold all available collateral. Subsequent recoveries of amounts previously written off are reflected as an offset to the charge for impairment of financial assets in the consolidated income statement in the period of recovery.

Allowance for impairment losses

Assets carried at amortised cost

The Group accounts for impairment losses of financial assets when there is objective evidence that a financial asset or group of financial assets is impaired. Impairment losses are measured as the difference between carrying amounts and the present value of expected future cash flows, including amounts recoverable from guarantees and collateral, discounted at the financial asset’s original effective interest rate. Such impairment losses are not reversed unless in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, such as recoveries, in which case the previously recognised impairment loss is reversed by adjustment of an allowance account.

Derecognition of financial assets and liabilities

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized where:

• the rights to receive cash flows from the asset have expired; • the Group has transferred its rights to receive cash flows from the asset, or retained the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; and • the Group either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial asset is derecognized when it has been transferred and the transfer qualifies for derecognition. A transfer requires that the Group either: (a) transfers the contractual rights to receive the asset’s cash flows; or (b) retains the right to the asset’s cash flows but assumes a contractual obligation to pay those cash flows to a third party. After a transfer, the Group reassesses the extent to which it has retained the risks and rewards of ownership of the transferred asset. If substantially all the risks and rewards have been retained, the asset remains on the consolidated balance sheet. If substantially all of the risks and rewards have been transferred, the asset is derecognized. If substantially all the risks and rewards have been neither retained nor transferred, the Group assesses whether or not is has retained control of the asset. If it has not retained control, the asset is derecognized. Where the Group has retained control of the asset, it continues to recognize the asset to the extent of its continuing involvement. Financial liabilities A financial liability is derecognized when the obligation is discharged, cancelled, or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the consolidated income statement.

20 F-74 Finance leases

Financial leases are leases that transfer substantially all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than the form of the contract. The lease classified as finance lease if:

• The lease transfers ownership of the asset to the lessee by the end of the lease term; • The lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than the fair value at the date the option becomes exercisable such that, at the inception of the lease, it is reasonably certain that the option will be exercised; • The lease term is for the major part of the economic life of the asset even if title is not transferred; • At the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset; and • The leased assets are of a specialized nature such that only the lessee can use them without major modifications being made.

The Group as a lessor presents finance leases as loans and initially measures them in the amount equal to net investment in the lease. Subsequently the recognition of finance income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment in the finance lease.

Investments held to maturity

Investments held to maturity are debt securities with determinable or fixed payments. The Group has the positive intent and ability to hold them to maturity. Such securities are carried at amortized cost, using the effective interest rate method, less any allowance for impairment. Amortized discounts are recognized in interest income over the period to maturity using the effective interest method.

Investments available-for-sale

Investments available-for-sale represent debt and equity investments that are intended to be held for an indefinite period of time. Investments available for sale are initially recorded at fair value and subsequently are measured at fair value, with such re-measurement recognized directly in equity, except for impairment losses, foreign exchange gains or losses and interest income accrued using the effective interest method, which are recognized directly in the consolidated income statement. When sold, the gain/loss previously recorded in equity is recycled through the consolidated income statement.

Dividends received on equity investments are included in dividend received in the consolidated income statement.

When there is objective evidence that such securities have been impaired, the cumulative loss previously recognized in equity is removed from equity and recognized in the consolidated income statement for the period. Reversals of such impairment losses on debt instruments, which are objectively related to events occurring after the impairment, are recognized in the consolidated income statement for the period. Reversals of such impairment losses on equity instruments are not recognized in the consolidated income statement.

Property, equipment and intangible assets

Property and equipment, except for buildings and other real estate and construction, and intangible assets are carried at historical cost less accumulated depreciation. Buildings and other real estate and construction are carried at market value. Depreciation on assets under construction and those not placed in service commences from the date the assets are ready for their intended use.

21 F-75 Depreciation of property, equipment and intangible assets is charged on the carrying value of property and equipment and is designed to write off assets over their useful economic lives. Depreciation is calculated on a straight line basis at the following annual prescribed rates:

Buildings and other real estate 1-10% Furniture and equipment 4-50% Intangible assets 15-50%

Leasehold improvements are amortized over the life of the related leased asset. Expenses related to repairs and renewals are charged when incurred and included in operating expenses unless they qualify for capitalization.

The carrying amounts of property, plant and equipment and intangible assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts. The recoverable amount is the higher of fair value less costs to sell and value in use, where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. An impairment is recognized in the respective period and is included in operating expenses. After the recognition of an impairment loss the depreciation charge for property, equipment and intangible assets is adjusted in future periods to allocate the assets’ revised carrying value, less its residual value (if any), on a systematic basis over its remaining useful life.

Land and buildings held for use in supply of services, or for administrative purposes, are stated in the consolidated balance sheet at their revalued amounts, being the fair value at the date of revaluation, determined from market-based evidence by an appraisal undertaken by professional independent appraisers, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date.

Any revaluation increase arising on the revaluation of such land and buildings is credited to the property and equipment revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognized as an expense, in which case the increase is credited to the consolidated income statement to the extent of the decrease previously charged. A decrease the in carrying amount arising on the revaluation of such land and buildings is charged as an expense to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Depreciation on revalued buildings is charged to consolidated income statement. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the property and equipment revaluation reserve is transferred directly to retained earnings.

Taxation

Income tax expense represents the sum of the current and deferred tax expense.

The current tax expense is based on taxable profit for the year. Taxable profit differs from net profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s current tax expense is calculated using tax rates that have been enacted during the reporting period.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

22 F-76 Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized. Deferred tax is charged or credited in the consolidated income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred income tax assets and deferred income tax liabilities are offset and reported net on the consolidated balance sheet if:

• The Group has a legally enforceable right to set off current income tax assets against current income tax liabilities; and • Deferred income tax assets and the deferred income tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Countries where the Group operates also have various other taxes, which are assessed on the Group’s activities. These taxes are included as a component of operating expenses in the consolidated income statement.

Loans and advances from banks, customer accounts, debt securities issued and other borrowed funds

Loans and advances from banks, customer accounts, debt securities issued and other borrowed funds are initially recognized at fair value less transaction costs. Subsequently, amounts due are stated at amortized cost and any difference between net proceeds and the redemption value is recognized in the consolidated income statement over the period of the borrowings using the effective interest method.

Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the obligation can be made.

Financial guarantee contracts issued and letters of credit

Financial guarantee contracts and letters of credit issued by the Group provide for specified payments to be made in order to reimburse the holder for a loss incurred such that payments are made when a specified debtor fails to make payment when due under the original or modified terms of a debt instrument. Such financial guarantee contracts and letters of credit issued are initially recognized at fair value. Subsequently they are measured at the higher of (a) the amount recognized as a provision in accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”; and (b) the amount initially recognized less, where appropriate, cumulative amortization of initial premium revenue received over the financial guarantee contracts or letter of credit issued.

Contingencies

Contingent liabilities are not recognized in the consolidated balance sheet but are disclosed unless the possibility of any outflow in settlement is remote. A contingent asset is not recognized in the consolidated balance sheet but disclosed when an inflow of economic benefits is probable.

23 F-77 Share capital and share premium reserve

Share capital is recognized at historic cost. Share premium reserve represents the excess of contributions over the nominal value of the shares issued. Gains and losses on sales of treasury stock are charged or credited to share premium reserve.

External costs directly attributable to the issue of new shares, other than on a business combination, are deducted from equity net of any related income taxes.

Dividends on ordinary shares are recognized in equity as a reduction in the period in which they are declared. Dividends that are declared after the balance sheet date are treated as a subsequent event under IAS 10 “Events after the Balance Sheet Date” (“IAS 10”) and disclosed accordingly.

Preference shares

Preference shares having a prescribed dividend amount are considered to be compound financial instruments in accordance with the substance of the contractual arrangement and accordingly the liability and equity components are presented separately in the consolidated balance sheet. On initial recognition the equity component is assigned the residual amount after deducting from the initial carrying amount of the instrument as a whole the fair value determined for the liability component. The fair value of the liability component on initial recognition is estimated by discounting expected future cash flows at a market interest rate for a comparable debt instrument. Subsequently the liability component is measured according to the same principles used for subordinated debt, and the equity component is measured according to the same principles used for share capital.

Retirement and other benefit obligations

In accordance with the requirements of the legislation of the countries in which the Group operates certain percentages of pension payments are withheld from total disbursements to staff to be transferred to pension funds, such that a portion of salary expense is withheld from the employee and instead paid to a pension fund on behalf of the employee. This expense is charged in the period in which the related salaries are earned. Upon retirement all retirement benefit payments are made by the pension funds as selected by employees. The Group does not have any pension arrangements separate from the state pension system of the countries in which the Group operates. In addition, the Group has no post-retirement benefits or other significant compensated benefits requiring accrual.

Recognition of income and expense

Interest income and expense are recognized on an accrual basis using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.

Once a financial asset or a group of similar financial assets has been written down (partly written down) as a result of an impairment loss, interest income is thereafter recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

Interest income also includes income earned on investments in securities. Other income is credited to the consolidated income statement when the related transactions are completed.

Loan origination fees are deferred, together with the related direct costs, and recognized as an adjustment to the effective interest rate of the loan. Where it is probable that a loan commitment will lead to a specific lending arrangement, the loan commitment fees are deferred, together with the related direct costs, and recognized as an adjustment to the effective interest rate of the resulting loan. Where it is unlikely that a loan commitment will lead to a specific lending arrangement, the loan commitment fees are recognized in the consolidated income statement over the remaining period of the loan commitment. Where a loan commitment expires without resulting in a loan, the loan commitment fee is recognized in the consolidated income statement on expiry. Loan servicing fees are recognized as revenue as the services are provided. Loan syndication fees are recognized in the consolidated income statement when the syndication has been completed. All other commissions are recognized when services are provided.

24 F-78 Underwriting income and expenses

Underwriting income includes net written insurance premiums and commissions earned on ceded reinsurance reduced by the net change in the unearned premium reserve, claims paid, the provision of insurance losses and loss adjustment expenses, and policy acquisition cost.

Net written insurance premiums represent gross written premiums less premiums ceded to reinsurers. Upon inception of a contract, premiums are recorded as written and are earned on a pro rata basis over the term of the related policy coverage. The unearned premium reserve represents the portion of the premiums written relating to the unexpired terms of coverage and is included within other assets in the accompanying consolidated balance sheet.

Losses and loss adjustments are charged to the consolidated income statement as incurred.

Commissions earned on ceded reinsurance contracts are recorded to the consolidated income statement at the date the reinsurance contract is written and deemed enforceable.

Policy acquisition costs, comprising commissions paid to insurance agents and brokers, which vary with and are directly related to the production of new business, are deferred, recorded in the accompanying consolidated balance sheet within other assets, and are amortized over the period in which the related written premiums are earned and is reviewed for impairment in circumstances where its carrying amount may not be recoverable. If the asset is greater than the recoverable amount it is written down immediately. All other costs are recognized as expenses when incurred

Reserve for insurance losses and loss adjustment expenses

The reserve for insurance losses and loss adjustment expenses is included in the consolidated balance sheet within reserves and is based on the estimated amount payable on claims reported prior to the balance sheet date, which have not yet been settled, and an estimate of incurred but not reported claims relating to the reporting period.

Due to the absence of prior experience, the reserve for incurred but not reported claims (“IBNR”) is determined by applying current government guidance as provided by the FMSA. Under this guidance, the IBNR reserve is calculated as being equal to the expected loss ratio for each line of business times the value of coverage, less the losses actually reported.

The methods for determining such estimates and establishing the resulting reserves are continuously reviewed and updated. Resulting adjustments are reflected in current income.

Reinsurance

In the ordinary course of business, the Group cedes reinsurance. Such reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from legal risks and provide additional capacity for growth.

Reinsurance assets include balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses, and ceded unearned premiums. Amounts receivable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. Reinsurance is recorded gross unless a right of offset exists and is included in the accompanying consolidated balance sheets within other assets.

Reinsurance contracts are assessed to ensure that underwriting risk, defined as the reasonable possibility of significant loss, and timing risk, defined as the reasonable possibility of a significant variation in the timing of cash flows, are transferred by the Group to the reinsurer.

The Group regularly assesses its reinsurance assets for impairment. A reinsurance asset is impaired if there is objective evidence that the Group may not receive all amounts due to it under the terms of the contract and that event has a reliably measurable impact on the amounts that the Group will receive from the reinsurer.

25 F-79 Foreign currency translation

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). In preparing the financial statements of the individual entities, monetary assets and liabilities denominated in currencies other than the entity’s functional currency (foreign currencies) are translated at the appropriate spot rates of exchange rates prevailing at the balance sheet date. Transactions in currencies other than the functional currency are accounted for at the exchange rates prevailing at the date of the transaction. Profits and losses arising from these translations are included in net gain on foreign exchange operations.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are expressed in KZT using exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and recognized in the Group’s foreign currency translation reserve. Such exchange differences are recognized in the consolidated income statement in the period in which the foreign operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Rates of exchange

The exchange rates used by the Group in the preparation of the consolidated financial statements as at year end are as follows:

31 December 31 December 2007 2006

KZT/1 US Dollar 120.30 127.00 KZT/1 Euro 177.17 167.12 KZT/1 Kyrgyz Som 3.43 3.36 KZT/1 Russian Rouble 4.92 4.82

Offsetting of financial assets and liabilities

Financial assets and liabilities are offset and reported net on the consolidated balance sheet when the Group has a legally enforceable right to set off the recognized amounts and the Group intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. In accounting for a transfer of a financial asset that does not qualify for derecognition, the Group does not offset the transferred asset and the associated liability.

Fiduciary activities

The Group provides trustee services to its customers. Also the Group provides depositary services to its customers, which include transactions with securities on their depository accounts. Assets accepted and liabilities incurred under the fiduciary activities are not included in the Group’s consolidated financial statements. The Group accepts the operational risk on these activities, but the Group’s customers bear the credit and market risks associated with such operations.

Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment) or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Segments with a majority of revenue earned from sales to external customers and whose revenue, result or assets are ten per cent or more of all the segments are reported separately. Geographical segments of the Group have not been reported separately within these consolidated financial statements since the management of the Group believes that the main segment is the Commonwealth of Independent States, including the Republic of Kazakhstan, (CIS), which is characterized by similar risks and profitability. In addition, over 90% of the Group’s operations are conducted within the CIS.

26 F-80 Areas of significant management judgment and sources of estimation uncertainty

The preparation of the Group’s consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amount of income and expenses during the period ended. Management evaluates its estimates and judgments on an ongoing basis. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The following estimates and judgments are considered important to the portrayal of the Group’s financial condition. Allowance for impairment of loans and receivables The Group regularly reviews its loans and receivables to assess for impairment. The Group’s loan impairment provisions are established to recognize incurred impairment losses in its portfolio of loans and receivables. The Group considers accounting estimates related to allowance for impairment of loans and receivables a key source of estimation uncertainty because (i) they are highly susceptible to change from period to period as the assumptions about future default rates and valuation of potential losses relating to impaired loans and receivables are based on recent performance experience, and (ii) any significant difference between the Group’s estimated losses and actual losses would require the Group to record provisions which could have a material impact on its financial statements in future periods. The Group uses management’s judgment to estimate the amount of any impairment loss in cases where a borrower has financial difficulties and there are few available sources of historical data relating to similar borrowers. Similarly, the Group estimates changes in future cash flows based on past performance, past customer behavior, observable data indicating an adverse change in the payment status of borrowers in a group, and national or local economic conditions that correlate with defaults on assets in the group. Management uses estimates based on historical loss experience for assets with credit risk characteristics and objective evidence of impairment similar to those in the group of loans and receivables. The Group uses management’s judgment to adjust observable data for a group of loans or receivables to reflect current circumstances not reflected in historical data. The allowances for impairment of financial assets in the consolidated financial statements have been determined on the basis of existing economic and political conditions. The Group is not in a position to predict what changes in conditions will take place in Kazakhstan and what effect such changes might have on the adequacy of the allowances for impairment of financial assets in future periods. The carrying amount of the allowance for impairment of loans to customers as at 31 December 2007 is KZT 140,363 million (2006: KZT 73,936 million).

Valuation of Financial Instruments

Financial instruments that are classified at fair value through profit or loss or available for sale, and all derivatives, are stated at fair value. The fair value of such financial instruments is the estimated amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. If a quoted market price is available for an instrument, the fair value is calculated based on the market price. When valuation parameters are not observable in the market or cannot be derived from observable market prices, the fair value is derived through analysis of other observable market data and the use of discounted cash flow pricing models. Where market-based valuation parameters are not directly observable, management will make a judgment as to its best estimate of that parameter in order to determine a reasonable reflection of how the market would be expected to price the instrument. In exercising this judgment, a variety of tools are used including proxy observable data, historical data, and extrapolation techniques. The best evidence of fair value of a financial instrument at initial recognition is the transaction price unless the instrument is evidenced by comparison with data from observable markets. Any difference between the transaction price and the value based on a valuation technique is not recognized in the consolidated income statement on initial recognition. Subsequent gains or losses are only recognized to the extent that it arises from a change in a factor that market participants would consider in setting a price.

27 F-81 The Group considers that the accounting estimate related to valuation of financial instruments where quoted markets prices are not available is a key source of estimation uncertainty because: (i) it is highly susceptible to change from period to period because it requires management to make assumptions about interest rates, volatility, exchange rates, the credit rating of the counterparty, valuation adjustments and specific feature of the transactions and (ii) the impact that recognizing a change in the valuations would have on the assets reported on its consolidated balance sheet as well as its profit/(loss) could be material. Had management used different assumptions regarding the interest rates, volatility, exchange rates, the credit rating of the counterparty and valuation adjustments, a larger or smaller change in the valuation of financial instruments where quoted market prices are not available would have resulted that could have had a material impact on the Group’s reported net income. The Group uses quoted market prices from independent information sources, for all its financial assets and liabilities recorded at fair value, with the exception of derivative financial instruments, which are valued using a valuation model based on market data. The carrying amount of derivatives at fair value is as follows as at 31 December 2007 and 2006:

31 December 31 December 2007 2006 Derivative assets 42,858 7,087 Derivative liabilities (7,730) (3,554)

Adoption of new and revised standards

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the “IASB”) and the International Financial Reporting Interpretations Committee (the “IFRIC”) of the IASB that are relevant to its operations and effective for reporting periods beginning on 1 January 2007. The adoption of these new and revised Standards and Interpretations has not resulted in significant changes to the Group’s accounting policies that have affected the amounts reported for the current or prior years.

IFRS 7 – During 2007, the Group adopted IFRS 7 “Financial Instruments: Disclosure” (“IFRS 7”). The standard replaces IAS 30 “Disclosures in the Financial Statements of Banks and Similar Financial Institutions” and the disclosure provisions in IAS 32 “Financial Instruments: Disclosure and Presentation”. IFRS 7 requires disclosure of the significance of financial instruments for an entity’s financial position and performance and of qualitative and quantitative information about exposure to risks arising from financial instruments. Adoption of IFRS 7 did not affect the classification and measurement of the Group’s financial instruments in the consolidated financial statements. The required disclosures are included in these financial statements.

Amendment to IAS 1 – “Capital Disclosures” - On 18 August 2005, the IASB issued an amendment to IAS 1 which requires certain disclosures to be made regarding the entity’s objectives, policies and processes for managing capital. Additional information was disclosed in the consolidated financials statements for the current and comparative reporting periods as required by amended IAS 1

Standards and interpretations issued and not yet adopted

At the date of authorization of these financial statements, other than the Standards and Interpretations adopted by the Group in advance of their effective dates, the following Interpretations were in issue but not yet effective.

IFRS 8 – The IASB issued IFRS 8 “Operating Segments” in December 2006. This will replace IAS 14 “Segment Reporting” for accounting periods beginning on or after 1 January 2009. IFRS 8 requires segmental analysis reported by an entity to be based on information used by management. Management is currently assessing the impact of the adoption of IFRS 8.

The IASB issued a revised IAS 23 “Borrowing Costs” in March 2007. Entities are required to capitalize borrowing costs attributable to the development or construction of intangible assets or property, plant or equipment. The standard is effective for accounting periods beginning on or after 1 January 2009 and is not expected to have a material effect on the Group.

28 F-82 Amendment to IAS 1 “Presentation of Financial Statements” – On 6 September 2007, the IASB issued an amendment to IAS 1 which changes the way in which non-owner changes in equity are required to be presented. It also changes the titles of primary financial statements as they will be referred to in IFRS but does not require that these be renamed in an entity’s financial statements. The Group does not expect the adoption of the amendment to IAS 1 to have an impact on the financial statements. The amendment to IAS 1 is effective for periods beginning on or after 1 January 2009. IFRIC 11 “IFRS 2 – Group and Treasury Share Transactions” - On 30 November 2006 IFRIC issued IFRIC 11 which requires that treasury share transactions are treated as equity- settled, and share-based payments involving equity instruments of the parent should be treated as cash-settled. The Group does not expect the adoption of IFRIC 11 to have a material impact on the Group’s income statement or financial position. IFRIC 11 is effective for periods beginning on or after 1 March 2007. IFRS 3 “Business Combinations” – The IASB published IFRS 3 and related revisions to IAS 27 “Consolidated and Separate Financial Statements” following the completion in January 2008 of its project on the acquisition and disposal of subsidiaries. They are effective for accounting periods beginning on or after 1 July 2009 but may be adopted together for accounting periods beginning on or after 1 January 2007.

Restatements

The Group has restated its financial statements for an error in the calculation of change in net interest accruals in the operating activities section of the consolidated cash flow statement. See the details of the restatement in note 40.

29 F-83

4. NET INTEREST INCOME

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million) Interest income comprises: Interest income on assets recorded at amortized cost: - interest income on impaired assets 137,299 50,099 - interest income on unimpaired assets 170,594 90,017 Interest income on assets at fair value through profit or loss 8,380 7,099 Interest income on investments available-for-sale 185 35

Total interest income 316,458 147,250

Interest income on assets recorded at amortized cost comprises: Interest on loans to customers 297,608 132,830 Interest on loans and advances to banks 9,312 6,994 Interest on investments held to maturity 31 49 Amortization of discount on loans 942 243

Total interest income on financial assets recorded at amortized cost 307,893 140,116

Interest income on assets at fair value through profit or loss: Interest income on financial assets held-for-trading 8,380 7,099

Total interest income on assets at fair value through profit or loss 8,380 7,099

Interest income on investments available for sale 185 35

Total interest income 316,458 147,250

Interest expense comprises: Interest on liabilities recorded at amortized cost 169,528 83,115 Interest expense on liabilities at fair value through profit or loss - -

Total interest expense 169,528 83,115

Interest expense on liabilities recorded at amortized cost comprise: Interest on debt securities issued 64,111 40,263 Interest on customer accounts 51,542 18,157 Interest on loans and advances from banks 43,789 19,609 Preference share dividends 604 636 Interest expense on securitization program 7,947 3,744 Other interest expense 1,535 706

Total interest expense on financial liabilities recorded at amortized cost 169,528 83,115

Net interest income before provision for impairment losses on interest bearing assets 146,930 64,135

30 F-84

5. ALLOWANCE FOR IMPAIRMENT LOSSES AND OTHER PROVISIONS

The movements in allowance for impairment losses on interest bearing assets were as follows:

Loans and Loans to Total advances to customers banks (KZT million) (KZT million) (KZT million)

31 December 2005 1,245 42,162 43,407

(Recovery of provision)/additional provision recognized (390) 33,277 32,887 Write-off of assets - (909) (909) Recoveries of assets previously written off - 121 121 Exchange rate difference 2 (715) (713)

31 December 2006 857 73,936 74,793

Additional provision due to acquisition of LLP IC East Capital - 46 46 Additional provision recognized 459 69,451 69,910 Write-off of assets - (724) (724) Recoveries of assets previously written off - 81 81 Exchange rate difference (40) (2,427) (2,467)

31 December 2007 1,276 140,363 141,639

Total provisions for impairment losses on insurance provision and guarantees and other off-balance sheet contingencies comprise:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Insurance provisions 3,422 2,703 Provisions on guarantees and other off-balance sheet contingencies 7,216 4,055

10,638 6,758

The movements in insurance provisions and allowances for impairment losses on other transactions were as follows:

Insurance Other Total provisions assets (KZT million) (KZT million) (KZT million)

31 December 2005 2,345 131 2,476

Additional provision recognized 358 25 383 Write-off of assets - (39) (39) Recoveries of assets previously written off - 4 4 Exchange difference - (4) (4)

31 December 2006 2,703 117 2,820

Additional provision recognized 889 349 1,238 Write-off of assets (170) (187) (357) Recoveries of assets previously written off - 44 44

31 December 2007 3,422 323 3,745

31 F-85 Insurance provisions comprised: 31 December 31 December 2007 2006 (KZT million) (KZT million)

Property 978 997 Vehicles 785 664 Civil liability for owners of vehicles 241 215 Life insurance 207 - Civil liability for damage 91 63 Other 1,120 764

Total insurance provisions 3,422 2,703

Other insurance provisions include provisions for insurance of civil liability of passengers, private lawyers, auditors and audit organizations, ecological, medical, air and marine transport and others.

The movements in provision for guarantees and other off-balance sheet contingencies were as follows: Guarantees and other off-balance sheet contingencies (KZT million)

31 December 2005 2,589

Additional provision recognized 1,548 Exchange difference (82)

31 December 2006 4,055

Additional provision recognized 3,186 Exchange difference (25)

31 December 2007 7,216

6. NET GAIN ON FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million)

Net gain on financial assets and liabilities held-for-trading 21,627 4,744

Total net gain on financial assets and liabilities at fair value through profit or loss 21,627 4,744

Net gain on operations with financial assets and liabilities held-for- trading comprise: Realized loss on trading operations (61) (280) Unrealized gain on fair value adjustment 965 1,500 Net gain on operations with derivative financial instruments 20,723 3,524

Total net gain on financial assets and liabilities at fair value through profit or loss 21,627 4,744

32 F-86 7. NET (LOSS)/GAIN ON FOREIGN EXCHANGE AND PRECIOUS METALS OPERATIONS

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million)

Dealing, net 508 4,236 Translation differences, net (19,113) 968

(18,605) 5,204

8. FEE AND COMMISSION INCOME AND EXPENSE

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million) Fee and commission income: Cash operations 6,681 4,896 Documentary operations 5,069 3,393 Foreign exchange and securities operations 3,892 2,492 Plastic cards operations 3,036 1,890 Settlements 2,986 2,018 Encashment operations 248 170 Other 1,646 2,678

Total fee and commission income 23,558 17,537

Fee and commission expense: Plastic cards services 1,107 692 Insurance activity 787 474 Foreign exchange and securities operations 337 131 Correspondent bank services 164 107 NBRK computation center services 97 81 Documentary operations 29 48 Other 192 139

Total fee and commission expense 2,713 1,672

9. OTHER INCOME

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million)

Insurance income 4,134 2,451 Negative goodwill 1,555 - Fines and penalties received 288 89 Income from sale of property, equipment and intangible assets 48 28 Other 894 474

6,919 3,042

33 F-87 10. OPERATING EXPENSES

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million)

Staff costs 15,980 9,154 Depreciation and amortization 2,519 1,833 Lease 2,400 1,134 Payments to the Individuals’ Deposit Insurance Fund 1,742 402 Advertising costs 1,519 1,038 Property and equipment maintenance 1,392 945 Value added tax 1,208 640 Communications 707 476 Business trip expenses 524 323 Taxes, other than income tax 424 176 Bank cards services 383 207 Consulting and audit services 382 136 Security services 326 204 Vehicle maintenance 325 210 Training and information services 240 177 Stationery and blanks 184 92 Charity and sponsorship expenses 102 98 Mail and courier expenses 90 56 Business development expenses 62 49 Legal services 30 20 Cash collection expenses 26 15 Subscription expenses 19 10 Penalties and fines 11 1,028 Other materials 77 62 Other expenses 528 568

31,200 19,053

11. INCOME TAX

The Group is subject to certain permanent tax differences due to non-tax deductibility of certain expenses and a tax free regime for certain income.

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Temporary differences as at 31 December 2007 and 2006 relate mostly to different methods of income and expense recognition as well as to recorded values of certain assets.

34 F-88 Tax effect of temporary differences as at 31 December 2007 and 2006:

31 December 31 December 2007 2006 (KZT millions) (KZT million)

Deferred income tax assets: Bonuses accrued 706 325 Unamortized commission for loans issued - 191 Provision for unearned premium, net of reinsurance - 123 Unrealized revaluation of securities - 863 Unrealized revaluation of investments in associates 1,462 10 Other assets 136 34

Total deferred income tax assets 2,304 1,546

Deferred income tax liabilities: Allowance for losses on loans and advances to banks and customers 20,147 13,662 Unrealized gain on trading securities and derivatives 7,714 1,772 Property and equipment, accrued depreciation 2,795 1,583 Investments in associates 946 201 Provision on guarantees and letters of credit 1,198 1,167 Other liabilities - 11

Total deferred income tax liabilities 32,800 18,396

Net deferred income tax liabilities 30,496 16,850

Relationships between tax expenses and accounting profit for the years ended 31 December 2007 and 2006 are explained as follows: 31 December 31 December 2007 2006 (KZT million) (KZT million)

Profit before income tax 73,655 40,361

Tax at the statutory tax rate (30%) 22,097 12,108 Tax effect of permanent differences: Tax exempt interest income on mortgage loans and financial leasing (3,406) (1,954) Tax exempt interest income and other related income on state and quoted securities listed with “A” and “B” ratings (1,184) (705) Other tax exempt income (340) 213 Provisions on loans to related parties and financial leasing 155 477 Non deductible interest expense 308 974 Dividends on preferred shares 181 191 Other non deductible expenditures 498 1,016 Tax effect on income of subsidiaries taxed at different rates (681) (553)

Income tax expense net of permanent differences 17,628 11,767

Decrease of deferred tax expense (727) (621) (Decrease)/increase of income tax expense on declarations for prior periods (997) 1,454

Income tax expense 15,904 12,600

Current income tax expense 3,795 4,447 Deferred income tax expense 12,109 8,153

Income tax expense 15,904 12,600

35 F-89

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million) Deferred income tax liabilities 1 January 16,851 8,290 Decrease in property and equipment revaluation reserve 1,536 407 Deferred income tax expense 12,109 8,153

Net deferred income tax liabilities 30,496 16,850

12. EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing the net income for the year attributable to equity holders of the parent by the weighted average number of participating shares outstanding during the year.

As described in note 31, dividend payments per ordinary shares cannot exceed the dividends per share on preference shares for the same period. Therefore, net profit for the period is allocated to the ordinary shares and the preference shares in accordance with their legal and contractual dividend rights to participate in undistributed earnings:

Year ended Year ended 31 December 31 December 2007 2006 (KZT million) (KZT million) Basic and diluted earnings per share Net profit for the year attributable to equity holders of the parent 55,963 25,985 Less: additional dividends that would be paid on full distribution of profit to the preferred shareholders (9,495) (5,359)

Net profit for the year attributable to ordinary shareholders 46,468 20,626

Weighted average number of ordinary shares for basic and diluted earnings per share 574,828,600 428,947,990

Earnings per share – basic and diluted (tenge) 80.85 48.08

13. CASH AND BALANCES WITH NATIONAL (CENTRAL) BANKS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Cash on hand 41,082 31,100 Balances with the national (central) banks 127,066 177,905

168,148 209,005

36 F-90 Cash and cash equivalents for the purposes of the consolidated statement of cash flows are comprised of the following:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Cash and balances with national (central) banks 168,148 209,005 Loans and advances to banks in Organisation for Economic Co-operations and Development (“OECD”) countries (Note 39) 139,042 41,923 Less minimum reserve deposit with the NBRK (160,217) (189,631) Less minimum reserve deposit with the CBR (2,430) (1,712) Less minimum reserve deposit with the NBKR (197) (182)

144,346 59,403

The balances with the Central Bank of Russian Federation (“CBR”) as at 31 December 2007 include KZT 5,246 million (2006: KZT 4,660 million), of which KZT 2,430 million (2006: KZT 1,712 million) represents the obligatory minimum reserve deposits required by the CBR. The Group is required to maintain the reserve balance at the CBR at all times.

The balances with the National Bank of the Republic of Kazakhstan (“NBRK”) as at 31 December 2007 include KZT 121,476 million (2006: 172,564 million) and cash on hand of KZT 38,741 million (2006: KZT 17,067 million), totaling KZT 160,217 million (2006: KZT 189,631 million), which represent the minimum reserve deposits required by the NBRK.

The balances with the National Bank of the Kyrgyz Republic of (“NBKR”) as at 31 December 2007 include KZT 344 million (2006: KZT 681 million), of which KZT 197 million (2006: KZT 182 million) represents the minimum reserve deposits required by the NBKR at all times.

14. PRECIOUS METALS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Precious metals - 807

- 807

The precious metals balance held by the Group relates solely to gold bullion. As at 3 January 2007, the Bank disposed of all its holdings of precious metals.

15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Debt securities 130,271 309,405 Equity investments 15,647 6,126 Derivative financial instruments 42,858 7,087

188,776 322,618

The financial assets at fair value through profit or loss relate entirely to financial assets held for trading.

37 F-91

31 December 31 December 2007 2006 Nominal Amount Nominal Amount interest rate % interest rate % (KZT million) % (KZT million)

Debt securities: Bonds of international financial organizations 1.56-20.09% 87,336 1.10-17.5% 217,362 Bonds of Kazakhstani companies 4.90-12.40% 22,684 8.00-11.30% 18,230 Bonds of Russian investment funds - 4,273 - - Bonds of Kazakhstani banks 6.00-12.00% 4,151 6.80-10.90% 14,126 Bonds of Russian companies 7.28-13.80% 4,030 7.95-13.80% 4,808 Eurobonds of Kazakhstani banks 7.75-8.13% 2,900 7.88-9.00% 5,584 Short-term NBRK notes 4.50% 1,845 5.04% 34,895 State treasury bonds of the Ministry of Finance of Republic of Kazakhstan 3.78-6.68% 926 3.78-6.68% 998 Bonds of Russian banks 7.34-8.25% 703 7.20-8.25% 513 Bonds of local executive bodies of the Russian Federation 7.75-9.20% 607 7.20-10.90% 1,496 Bonds of federal loan of the Ministry of Finance of the Russian Federation 9.00-10.00% 343 6.30-10.00% 1,392 Eurobonds of OECD countries 4.75% 253 3.60% 8,233 Bonds of Atyrau local executive bodies 8.50% 220 8.50% 240 Eurobonds of the Ministry of Finance of the Republic of Kazakhstan - - 11.13% 1,052 Bonds of Development Bank of Kazakhstan - - 6.50-7.125% 476

130,271 309,405

Ownership 31 December Ownership 31 December share 2007 share 2006 % (KZT million) % (KZT million)

Equity investments: 0.00001%- Shares of Russian companies 19.559% 7,565 0.0001%-0.12% 74 GDR of Kazakhstani companies 0.247% 3,771 0.10% 1,148 ADR of Kazakhstani companies 0.654% 2,496 0.57% 2,342 Shares of Kazakhstani companies 0.007%-0.282% 701 0.016%-0.391% 2,498 GDR of Russian banks 0.07% 652 - - Shares of Kazakhstani banks 0.0007%-0.043% 363 0.003%-0.013% 64 GDR of Kazakhstani banks 0.01% 80 - - Shares of Russian banks 0.00001% 19 - -

15,647 6,126

As at 31 December 2007, financial assets at fair value through profit or loss included accrued interest income on debt securities of KZT 1,506 million (2006: KZT 1,816 million).

As at 31 December 2007, financial assets at fair value through profit or loss included short term-notes NBRK notes, bonds of federal loan of the Ministry of Finance of the Russian Federation, bonds of Kazakhstani and Russian companies pledged under repurchase agreements with other banks and customers with fair value of KZT 82,147 million (2006: KZT 262,008 million). As at 31 December 2007 all of the repurchase agreements are to be settled by February 2008 (2006: January 2007).

38 F-92

31 December 2007 31 December 2006 Nominal Net fair value Nominal Net fair value value (KZT million) value (KZT million)

Derivative financial Assets Liabilities Assets Liabilities instruments Foreign exchange contracts Foreign exchange swap 381,001 25,724 (2,145) 88,919 4,072 (865) Forward contracts 64,652 2,105 (381) 72,480 728 (129) Interest rate swap 82,740 14,987 (5,133) 68,840 2,284 (2,544) Spot 74,996 19 (25) 11,977 3 (11)

Securities purchase/sale contracts Securities swap 592 23 (46) - - Forward contracts - - 610 - (4)

Gold purchase/sale contracts Spot on gold - - 807 - (1)

42,858 (7,730) 7,087 (3,554)

16. LOANS AND ADVANCES TO BANKS

31 December 31 December 2007 2006 (KZT million) (KZT million) Recorded as loans and receivables: Loans and advances to banks 173,759 122,266 Correspondent accounts with other banks 39,661 30,277 Loans under reverse repurchase agreements 679 45,505

214,099 198,048 Less allowance for impairment losses (1,276) (857)

212,823 197,191

Movements in allowances for impairment losses on loans and advances to banks for the years ended 31 December 2007 and 2006 are disclosed in Note 5.

As at 31 December 2007, loans and advances to banks included accrued interest of KZT 1,327 million (2006: KZT 860 million).

As at 31 December 2007 and 2006, the Group had no loans and advances to the banks, which individually exceeded 10% of the Group’s equity. As at 31 December 2007, maximum exposure on individual bank amounted to KZT 32,091 million (2006: KZT 25,505 million).

39 F-93 The fair value of collateral and carrying value of loans under reverse repurchase agreements as at 31 December 2007 and 2006 comprised:

31 December 31 December 2007 2006 (KZT million) (KZT million) Fair value of Carrying Fair value of Carrying collateral value of collateral value of loans loans

Shares of Russian companies 756 668 - - Bonds of the Ministry of Finance

of the Republic of Kazakhstan 12 11 4,763 4,339 Bonds of Kazakhstani companies - - 6,127 5,042 Notes of the NBRK - - 26,318 25,010 Bonds of Kazakhstani banks - - 8,667 7,100 Shares of Kazakhstani companies - - 4,940 3,254 Shares of Kazakhstani banks - - 817 760

768 679 51,632 45,505

As at 31 December 2007, a guarantee deposit in the amount of KZT 2,406 million (2006: KZT 2,540 million) placed in JP Morgan Chase Bank London was included in loans and advances to banks as collateral for letters of credit.

17. LOANS TO CUSTOMERS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Recorded as loans and receivables: Originated loans 2,480,059 1,713,183 Net investments in finance lease 6,090 4,573 Loans under reverse repurchase agreements 20,549 35,020

2,506,698 1,752,776 Less allowance for impairment losses (140,363) (73,936)

2,366,335 1,678,840

As at 31 December 2007, accrued interest income included in loans to customers amounted to KZT 66,827 million (2006: KZT 33,106 million).

Movements in allowances for impairment losses on loans to customers for the years ended 31 December 2007 and 2006 are disclosed in Note 5.

40 F-94 The table below summarizes the amount of loans secured by type of collateral, rather than the fair value of the collateral itself:

31 December 31 December 2007 2006 (KZT million) (KZT million) Analysis by type of collateral: Loans collateralized by real estate 1,039,685 429,701 Loans collateralized by guarantees of enterprises 176,004 219,410 Loans collateralized by shares of the banks and other companies 226,603 199,680 Loans collateralized by mixed types of collateral 209,980 168,269 Loans collateralized by equipment 209,168 127,966 Loans with collateral under the registration process (property, land, shares, guarantees, etc.) 152,707 160,300 Loans collateralized by accounts receivable 86,872 106,318 Loans collateralized by cash or Kazakhstani Government guarantees 80,232 51,414 Loans collateralized by inventories 41,014 69,070 Loans collateralized by guarantees of financial institutions 8,031 46,104 Loans collateralized by securities 3,675 6,183 Unsecured loans 132,364 94,425

2,366,335 1,678,840

31 December 31 December 2007 2006 (KZT million) (KZT million) Analysis by sector: Individuals 452,330 261,708 Trade 442,181 310,842 Housing construction 246,546 183,380 Commercial real estate construction 228,165 201,298 Real estate 165,825 103,101 Hotel business 133,635 47,260 Investments and finance 122,744 87,724 Transport and communication 106,576 43,342 Energy 66,179 46,302 Food industry 62,661 53,069 Agriculture 52,906 38,931 Machinery construction 43,935 23,134 Industrial and other construction 40,115 68,904 Production of construction materials 31,468 34,145 Mining and metallurgy 11,577 23,708 Culture and art 4,945 568 Medicine 4,239 2,467 Other 150,308 148,957 2,366,335 1,678,840

Loans to individuals comprise the following products:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Mortgage loans 247,478 148,346 Consumer loans 133,108 74,987 Car loans 19,422 15,672 Other 52,322 22,703 452,330 261,708

41 F-95 As at 31 December 2007 and 2006, the Group granted loans to the borrowers, shown below, respectively, which individually exceeded 10% of the Group’s equity. Although loans to borrowers disclosed in 2006 may continue to be outstanding in 2007, only those borrowers which exceed 10% of equity are disclosed below.

31 December 31 December 2007 2006 (KZT million) (KZT million)

LLP Ken-Sary 69,714 - Alibi Holding 48,327 34,823 Visor Solution Holding 43,122 - Jeilan Limited Holding - 35,641 KUAT Holding - 34,524 Mayberry Financial Services S.A. - 33,194 Ordabasy Corporation - 33,580

161,163 171,762

As at 31 December 2007 a significant part of loans ((78.42%) (2006: 70.34%) of the total portfolio) is granted to companies operating on the territory of the Republic of Kazakhstan, which represents a significant geographical concentration.

The fair value of collateral and carrying value of loans under reverse repurchase agreements as at 31 December 2007, comprised:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Fair value Carrying Fair value Carrying of collateral value of loans of collateral value of loans

Shares of Kazakhstani companies 15,998 15,081 6,686 5,803 Bonds of Kazakhstani companies 2,534 2,871 3,000 3,112 Bonds of Kazakhstani banks 669 805 1,362 1,914 Shares of Russian banks 499 480 958 875 Shares of Kazakhstani banks 419 676 521 585 Shares of Kazakhstani companies 614 636 30,640 21,574 Bonds of Russian companies - - 1,318 1,157 Total securities purchased under reverse repurchase agreements 20,733 20,549 44,485 35,020

The components of net investment in finance lease as at 31 December 2007 and 2006 are as follows:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Minimum lease payments 8,037 5,606 Less: unearned finance income (1,947) (1,033)

Net investment in finance lease 6,090 4,573

Current portion 1,681 2,004 Long-term portion 4,409 2,569

Net investment in finance lease 6,090 4,573

42 F-96 The value of future minimum lease payments received from the customer under finance lease as of 31 December 2007 and 2006 comprised:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Not later than one year 2,264 2,368 From one year to five years 5,185 3,176 More than 5 years 588 62

Total value of future minimum lease payments 8,037 5,606

18. INVESTMENTS AVAILABLE-FOR-SALE

31 December 31 December 2007 2006 Nominal Amount Nominal Amount interest rate interest rate % (KZT million) % (KZT million)

Debt securities: Bonds of the Ministry of Finance of the Republic of Kazakhstan 3.75-11.08% 1,400 3.75-6.68% 442 Bonds of Small Business Development Fund 9.00% 332 9.00% 334 Bonds of Kazexportastyk Holding 11.00% 306 9.90-10.20% 304 Bonds of Kazakhstan Mortgage Company 7.90-12.20% 245 6.90-8.89% 271 Bonds of TuranAlem Bank 12.00% 187 10.50% 198 Bonds of Astana-Finance 11.90% 117 11.20% 121 Bonds of Karazhanbasmunai 11.20% 117 10.50% 124 Bonds of KazTransCom 8.00% 111 8.00% 124 Bonds of Kazakhaltyn 9.80% 114 10.50% 120 Bonds of ATF Bank 8.50% 96 8.50-9.00% 106 Bonds of CenterCredit Bank 9.00-9.50% 7 9.00% 7 Short-term notes of NBRK 3.03% 2 1.95% 355 Bonds of Khimfarm - - 10.00% 120

3,034 2,626

Ownership 31 December Ownership 31 December share 2007 share 2006 % (KZT million) % (KZT million) Equity securities: Kazakhstan Stock Exchange 1.33% 2 1.33% 2

2 2

Total investments available-for-sale 3,036 2,628

As at 31 December 2007 interest income on debt securities amounting to KZT 168 million (2006: KZT 39 million), was accrued and included in investments available-for-sale.

43 F-97 19. INVESTMENTS HELD TO MATURITY

31 December 31 December 2007 2006 Nominal Amount Nominal Amount interest rate (KZT million) interest rate (KZT million) % %

Debt securities: Bonds of CenterCredit Bank 8.50-10.00% 117 8.50-9.00% 117 Bonds of Halyk Bank 7.30-7.75% 109 7.75% 109 Bonds of ATF Bank 8.50-9.80% 91 8.50% 92 Bonds of the Ministry of Finance of the Kyrgyz Republic 5.24-7.07% 58 6.95% 39

375 357

As at 31 December 2007 interest income on debt securities amounting to KZT 5 million (2006: KZT 6 million), was accrued and included in investments available-for-sale.

20. INVESTMENTS IN ASSOCIATES

The movements of investments in associates are accounted for in the consolidated financial statements using the equity method and comprise:

2007 2006 (KZT million) (KZT million)

1 January 1,755 425 Purchase cost 134 200 Share of results of associates 1,333 1,130

31 December 3,222 1,755

21. GOODWILL

Goodwill arising as a result of business acquisition relates to expected income from business expansion from the distribution of products on new markets, raising long-term funds and expected combined activity.

Goodwill arising as a result of a business acquisition is distributed to the companies that generate cash flows.

Companies that generate cash flows 31 December 31 December 2007 2006 (KZT million) (KZT million)

JSC Grantum APF 1,281 1,281 JSC OCOPAIM Grantum Asset Management 1,124 1,124

2,405 2,405

As at 31 December 2007 and 2006 there was no evidence that the goodwill that arose on the acquisition of JSC Grantum APF and JSC OCOPAIM Grantum Asset Management has been impaired.

44 F-98 Based on the results of internal estimation, the value of the shares of JSC Gratnum APF and JSC OCOPAIM Grantum Asset Management increased from the acquisition dates and management believe there is no impairment to goodwill. Goodwill was determined by applying a discounted future cash flow analysis. Discount rates of 16.45% (31 December 2007) and 14% (31 December 2006) were applied for future cash flows based on the budgeted amounts. The management of the Group used the following assumptions for future cash flows:

• Economic development of the Republic of Kazakhstan; • Stable legislation in relation to obligatory pension payments and as a result the continued growth of the pension system; • Stable customer base (high salary customers); • Favourable population indicators ( expanding younger population); and • Possibility to sell several by-products.

22. PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS

Buildings Furniture and Intangible Construction Other Total and other equipment assets in equipment real estate progress (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) At primary/revalued cost

31 December 2005 3,983 7,827 1,184 38 712 13,744

Additions 1,564 3,220 345 2,081 505 7,715 Revaluation increase 1,315 - - - - 1,315 Disposals (44) (271) (1) - (144) (460) Net foreign currency exchange differences - (15) 1 - 28 14

31 December 2006 6,818 10,761 1,529 2,119 1,101 22,328

Additions 2,162 5,492 1,630 6,116 861 16,261 Revaluation increase 5,245 - - - - 5,245 Disposals (233) (658) (11) - (460) (1,362) Net foreign currency exchange differences 6 121 1 - 105 233

31 December 2007 13,998 15,716 3,149 8,235 1,607 42,705

Accumulated depreciation 31 December 2005 59 4,026 706 - 291 5,082

Charge for the year 70 1,432 224 - 107 1,833 Written off upon revaluation - 1 - - - 1 Written off upon disposal (33) (145) (1) - (103) (282) Net foreign currency exchange differences 1 4 1 - 7 13

31 December 2006 97 5,318 930 - 302 6,647

Charge for the year 131 1,784 324 - 280 2,519 Written off upon disposal (94) (476) (10) - (181) (761) Net foreign currency exchange differences - 29 1 - 11 41

31 December 2007 134 6,655 1,245 412 8,446

Net book value 31 December 2007 13,864 9,061 1,904 8,235 1,195 34,259

31 December 2006 6,721 5,443 599 2,119 799 15,681

45 F-99 As at 31 December 2007 property, equipment and intangible assets of the Group included completely depreciated and amortized assets on initial cost amounting to KZT 3,497 million (2006: KZT 2,008 million), of which KZT 3,384 million pertain to the Bank (2006: KZT 1,947 million).

Buildings and other real estate are revalued on a regular cyclical basis, the last valuation was conducted on 30 June 2007 (2006: 16 June 2006). The valuation was conducted by a local independent appraisal company. The methods of valuation used include: the cost approach, the benchmark (comparative) approach, the profit method and comparison of the property to observable prices in an active market. These prices are obtained through publications and current market data, and are adjusted based on the experience of the valuer.

The carrying value of the buildings as at 31 December 2007 amounted to KZT 13,319 million (2006: KZT 6,356 million). If the buildings were accounted for at historical cost restated according to inflation indices less accumulated depreciation and impairment losses, their carrying value would be KZT 2,993 million (2006: KZT 1,614 million).

Intangible assets include software, patents and licenses.

23. OTHER ASSETS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Prepayments and other debtors 9,970 4,968 Prepaid expenses 3,992 3,232 Tax settlements, other than income tax 2,632 86 Insurance agreement accounts receivable 1,196 1,220 Income tax receivable 386 1,180

18,176 10,686 Less allowance for impairment losses (323) (117)

17,853 10,569

Movements in allowances for impairment losses for the years ended 31 December 2007 and 2006 are disclosed in Note 5.

24. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

31 December 31 December 2007 2006 (KZT million) (KZT million)

Derivative financial instruments 7,730 3,554

7,730 3,554

Derivative financial instruments are disclosed in Note 15. Derivative financial instruments are used by the Group for trading purposes and to provide economic hedges against exposures to fluctuations in foreign currency exchange rates and interest rates. Although the above-mentioned hedges may be effective from an economic standpoint, they do not receive hedge accounting treatment and as such, changes in the market value of these instruments are recorded in the consolidated income statement

46 F-100 25. LOANS AND ADVANCES FROM BANKS

31 December 31 December 2007 2006 (KZT million) (KZT million) Recorded at amortized cost: Correspondent accounts of other banks 72,028 46,273 Correspondent accounts of organizations that serve certain types of banking operations 5 - Loans from banks and financial institutions, including: Syndicated loan from a group of banks with maturity of February 2008 and interest rate of 5.51% 54,838 107,377 Syndicated loan from a group of banks with maturity of December 2007 and interest rate of 5.813% - 88,481 Syndicated loan from a group of banks with maturity of September 2008 and interest rate of 5.815% 72,834 - Syndicated loan from a group of banks with maturity of December 2008 and interest rate of 6.26% 33,147 61,044 Syndicated loan from a group of banks with maturity of December 2008 and interest rate of 5.43% 13,235 - Syndicated loan from a group of banks with maturity of December 2009 and interest rate of 6.14% 36,255 37,809 Loan with maturity of September 2008 4,143 4,933 Loan with maturity of December 2014 40,138 2,371 Loans with other banks and financial establishments 284,267 276,779 Deposits with banks 34,780 8,382 Loans under repurchase agreements 77,761 250,852

723,431 884,301

As at 31 December 2007 loans and advances from banks included accrued interest expenses of KZT 5,272 million (2006: KZT 3,391 million).

As at 31 December 2007 loans with other banks and financial institutions for KZT 247,667 million (87.00% of total loans with other banks and financial establishments) (31 December 2006: KZT 262,938 million or 95.00% of total loans with other banks and financial establishments) consisted of 45 (2006: 34) banks and financial institutions of such countries as Russia, Great Britain, the Netherlands, Czech Republic, the USA, Switzerland, Kuwait, Austria, Luxemburg, Korea, Kazakhstan, Kyrgyzstan, Germany, Canada, Belgium, Spain and Singapore. Maturities of these loans range from 3 days to 101 months (2006: 1 month to 67 months). Interest rates on loans with other banks and financial establishments varied from 2.33% to 10.16% (2006: from 0.5% to 10.412%).

As at 31 December 2007 included in loans and advances to banks are loans under repurchase agreements of KZT 77,761 million (2006: KZT 250,852 million) with maturities in February 2008 (2006: January 2007).

47 F-101 The fair value of collateral and carrying value of loans under repurchase agreements as at 31 December 2007 and 2006 are presented as follows:

31 December 31 December 2007 2006 (KZT million) (KZT million)

Fair value of Carrying Fair value of Carrying collateral value of loans collateral value of loans

Bonds of international financial establishments 75,749 72,501 208,837 204,549 Bonds of Russian companies 2,064 1,489 - - Bonds of Kazakhstani companies 1,750 1,501 13,151 10,952 Notes of the National Bank of the Republic of Kazakhstan 843 802 24,944 24,942 Bonds of the Ministry of Finance of the Republic of Kazakhstan 776 702 - - Bonds of local executive bodies of the Russian Federation 504 547 - - Bonds of Russian banks 249 219 - - Eurobonds of countries, members of OECD - - 7,946 8,408 Bonds of Kazakhstani banks - - 2,485 2,001

81,935 77,761 257,363 250,852

During 2007 the Group simultaneously placed with and received short-term funds from banks in different currencies for total amount of KZT 301,892 million (2006: KZT 448,375 million).

26. CUSTOMER ACCOUNTS

31 December 31 December 2007 2006 (KZT million) (KZT million) Recorded at amortized cost:

Loans and time deposits 718,761 425,822 Demand deposits 176,121 257,600 Loans under repurchase agreements 201 4,384

895,083 687,806

As at 31 December 2007 customer accounts included accrued interest expense of KZT 16,516 million (2006: KZT 7,466 million).

As at 31 December 2007 customer accounts were pledged as a guarantee for issued letters of credit and other transactions relating to contingent liabilities of KZT 2,750 million (2006: KZT 2,542 million).

48 F-102 As at 31 December 2007 the customer accounts of KZT 335,853 million or 37.52% (2006: KZT 250,184 million or 36.37%), were due to 10 customers, which represents significant concentration.

31 December 31 December 2007 2006 (KZT million) (KZT million) Analysis by sector: Individuals 309,679 196,072 Chemical and petrochemical industry 168,778 167,466 Investments and finance 146,763 52,076 Transport and communication 56,345 30,209 Trade 39,867 52,364 Construction 36,592 75,750 Individual services 30,752 36,608 Education 27,261 2,170 Agriculture 25,766 20,232 Distribution of electricity, gas and water 16,683 3,352 Mining and metallurgy 8,402 7,724 Health care 6,830 965 Food industry 2,444 1,568 Real estate 1,704 11,266 Light industry 1,077 3,592 Machinery construction 904 689 Hotel business 694 4,972 Culture and art 612 1,031 Public organizations and unions 592 680 Energy 1 1 Other 13,337 19,019

895,083 687,806

As at 31 December 2007 customer accounts included loans under repurchase agreements amounting to KZT 201 million (2006: KZT 4,384 million).

The fair value of collateral and carrying value of loans under repurchase agreements as at 31 December 2007 and 2006 are presented as follows:

31 December 31 December 2007 2006 (KZT million) (KZT million) Fair value Carrying Fair value Carrying of collateral value of of collateral value of loans loans

Bonds of Kazakh companies 212 201 - - Bonds of Russian companies - - 2,477 2,304 Shares of Russian companies - - 1,551 1,515 Bonds of local executive bodies of the Russian Federation - - 617 565

Total securities sold under repurchase agreements 212 201 4,645 4,384

49 F-103 27. DEBT SECURITIES ISSUED

Currency Maturity Annual 31 December 31 December date coupon rate 2007 2006 % (KZT million) (KZT million)

Recorded at amortized cost: Eurobonds of Kazkommerts International B.V.: Issued in May 2007 with zero coupon USD May 2008 - 30,075 - Issued in July 2007 at the price of 100% JPY July 2009 2.212% 26,775 - Tranche A issued in November November 2004 at the price of 98.967% USD 2009 7.000% 40,949 42,786 Issued in March, 2006 at the price of 99.993% EUR March 2011 5.125% 53,151 48,465 Issued in February 2007 at the February price of 99.962% GBP 2012 7.625% 84,049 - Issued in April 2003 at the price of 97.548% USD April 2013 8.500% 41,420 43,729 Issued in April 2004 at the price of 99.15% USD April 2014 7.875% 47,337 50,165 Issued in November 2005 at the November price of 98.32% USD 2015 8.000% 60,150 63,246 Issued in November 2006 at the November price of 98.282% USD 2016 7.500% 60,150 63,500 Issued in February 2007 at the February price of 99.277% EUR 2017 6.875% 132,877 - Tranche A, issued in May 2002 and placed at the price of 99.043% USD May 2007 10.125% - 17,594 Tranche B, issued in November 2002 and placed at the price of 107.00% USD May 2007 10.125% - 6,350 February Other Eurobonds of Kazkommerts SGD and 2009 – April 4.250%- International B.V. USD 2013 12.850% 59,450 46,388 636,383 382,223 Including /(less): Discount on debt securities issued (6,289) (5,023) Accrued interest on debt securities issued 19,897 6,385 Total issued Eurobonds of Kazkommerts International B.V. 649,991 383,585 Issued bonds of the Bank - 3,036 Accrued expenses on issued bonds of the Bank - 97 Issued promissory notes of January LLP Moscommertsbank at the price 2008 – June 3.000%- of 88.00-100.00% 2013 12.110% 78,370 36,982 Accrued interest expense on issued promissory notes of LLP Moscommertsbank 1,198 462 Issued bonds of Moscow Stars B.V. at December 6.870%- the price of 99.00% 2034 10.370% 10,099 - Accrued interest on bonds of Moscow Stars B.V. 30 -

739,688 424,162

As at 31 December 2007 accrued interest expense is included in debt securities issued amounting to KZT 21,125 million (2006: KZT 6,944 million).

50 F-104 Eurobonds were issued by Kazkommerts International B.V., a subsidiary of the Bank, and were guaranteed by the Bank. For Eurobonds with a maturity of April 2013, the coupon is paid on 16 April and 16 October, for Eurobonds with a maturity of April 2014, the coupon is paid on 7 April and 7 October, for Eurobonds with a maturity of November 2009, the coupon is paid on 3 May and 3 November, for Eurobonds with a maturity of November 2015, the coupon is paid on 3 May and 3 November, for Eurobonds with a maturity of March 2011, the coupon is paid on 23 March, for Eurobonds with a maturity of November 2016, the coupon is paid on 29 May and 29 November, for Eurobonds with a maturity of February 2017, the coupon is paid on 13 February, for Eurobonds with a maturity of February 2012, the coupon is paid on 13 February, for Eurobonds with a maturity of May 2008, the coupon is paid on 16 May, for Eurobonds with a maturity of July 2009, the coupon is paid on 8 January, 8 April, 8 July and 8 October and for Eurobonds with a maturity of December 2012, the coupon is paid on 18 June and 18 December.

On 18 July 2007, Eurobonds were issued by Moscow Stars B.V. with a maturity of December 2034, the first interest payment was due on 16 August 2007 and subsequent interest is to be paid on the 15th of each month. Moscow Stars BV is the special purpose vehicle created for securitization of mortgage loans, and it is consolidated into the financial statement of MKB in accordance with SIC 12 “Consolidation – Special Purpose Entities”.

The Group is obligated to comply with financial covenants in relation to the debt securities disclosed above. These covenants include stipulated capital ratios, debt to equity ratios and various other financial performance ratios. The Group has not breached any of these covenants in the years ending 31 December 2007 and 2006.

28. OTHER BORROWED FUNDS

Currency Maturity Interest rate 31 December Interest rate 31 December % 2007 % 2006 (KZT million) (KZT million)

Kazkommerts DPR Company USD March 2017 6.06 – 7.52% 113,581 6.59 – 7.95% 56,792 Funding by the Small Business Development Fund KZT December 2014 11.10% 12,264 - - Moore's Creek KZT February 2009 7.56% 6,588 - - DEG-Deutsche Investitions MBH USD January 2014 6.24 – 8.64% 6,207 7.88 – 8.86% 6,559 Societe Generale Financial Corp USD September 2017 5.30 – 7.66% 5,593 - - NLB InterFinanz AG USD August 2010 8.19% 1,858 - - Private Export Funding Corporation USD March 2011 5.03 – 5.65% 1,660 5.65 – 5.97% 1,160 Funding of agricultural equipment purchasing by Export Development Canada USD March 2011 5.41% 603 5.64 – 6.04% 990 Deere Credit USD May 2012 5.20 – 5.28% 251 5.75 – 5.8% 480 Intesa Soditic Trade Finance LTD USD August 2009 7.28% 249 6.86% 2,545 Funding by the Ministry of Finance of the Republic of Kazakhstan and by the Ministry of Kyrgyz Republic KZT September 2011 0.50% 78 0.50 – 5.81% 156 Funding by Ministry of Finance of Kyrgyz Republic USD July 2015 1.50% 2 1.50% 2 Funding by the Ministry of Finance of the Republic of Kazakhstan and by the Ministry of Kyrgyz Republic EUR - - - 5.00% 104 Funding of agricultural equipment purchasing by Atlantik Forfaiting AG USD - - - 9.53% 26

148,934 68,814

As at 31 December 2007 accrued interest expense of KZT 620 million (2006: KZT 255 million) is included in other borrowed funds.

51 F-105 On 8 December 2005, the Bank launched the inaugural future flow securitization of diversified payment rights for USD 300 million with floating interest rate and three year grace period on repayment of principal debt in the framework of the future payment inflow securitization program and circulation period of 7 years. The transaction is a true-sale securitization of the Bank’s dollar-denominated present and future diversified payment rights (SWIFT USD MT100 series) to Kazkommerts DPR Company (special purpose vehicle created in the Cayman Islands). Kazkommerts DPR Company is operated by Maples Finance Limited, which is incorporated in the Cayman Islands. Allocation was made in three series 2005A in the amount of USD 200 million, 2005B and 2005C in the amount of USD 50 million each. Two latter tranches were allocated by private offering, and Series 2005A was insured by the specialized financial company AMBAC, the rate of which amounted to 3-month LIBOR plus 0.29%.

On 7 June, 2006 the Bank, in the framework of the future payment inflow securitization program, allocated additional series of bonds 2006A and 2006В, insured by the specialized financial companies AMBAC and FGIC. The sum of the given bonds amounted to USD 100 million each, with a maturity of 7 years, a three year grace period of the principal debt and an interest rate of 3-month LIBOR plus 0.25 %.

On 12 April 2007, the Bank, in the framework of the future a payment inflow securitization program, allocated three additional series of bonds: 2007A in the amount of USD 150 million, 2007B in the amount of USD 250 million and 2007С in the amount of USD 100 million. The bonds were issued with a maturity of 10 years, a three year grace period of the principal debt and floating interest rates. The insurers of the bonds issue are specialized financial companies FGIC (2007A series), MBIA (2007B series) and ADB (2007C series). The interest rate on each series is 3-month LIBOR plus the following spreads: 2007A plus 0.20%, 2007B plus 0.20% and 2007C plus 0.16%. The bonds are issued through Kazkommerts DPR Company.

The Group is not liable for any downgrades in the credit rating of the insurers and there are no requirements for the Group to early repay the notes issued in case of further downgrades of the insurers or the notes itself.

29. OTHER LIABILITIES

31 December 31 December 2007 2006 (KZT million) (KZT million)

Taxes payable, other than income tax 7,276 2,992 Payable to employees 2,851 1,576 Accounts payable on re-insurers 682 616 Advances received 62 144 Other 2,974 3,259

13,845 8,587

52 F-106 30. SUBORDINATED DEBT

Currency Maturity Interest 31 December 31 December date rate 2007 2006 (year) % (KZT million) (KZT million)

Indexed subordinated bonds KZT 2009 7.00% 3,315 3,479 Subordinated debt of Citigroup GMD AG & Co USD 2014 8.19% 12,260 12,943 Subordinated debt of Kazkommerts Finance II B.V. USD 2016 9.64% 24,864 26,239 Subordinated bonds KZT 2017 7.50% 20,411 12,639 Subordinated debt of Kazkommerts Finance II B.V. USD 2017 9.54% 30,035 - Debt component of preference shares KZT - - 5,221 5,758 Perpetual debt of Kazkommerts Finance II B.V. USD - 9.25% 12,060 12,715 International subordinated bonds USD - 2,537 Subordinated bonds USD 2007 5.50% - 42 Subordinated bonds of MKB USD 2016 10.00% - 2,570

108,166 78,922

In the event of bankruptcy or liquidation of the Bank repayment of this debt is subordinate to the repayments of the Bank’s liabilities to all other creditors.

As at 31 December 2007 accrued interest expenses included in subordinated debt amounted to KZT 1,793 million (2006: KZT 1,677 million).

31. SHARE CAPITAL

As at 31 December 2007 the Group’s share capital comprised the following:

Authorized Authorized but Repurchased Issued share capital not issued share capital share capital share capital (KZT million) (KZT million) (KZT million) (KZT million)

Ordinary shares 7,750 (2,000) (1) 5,749 Preferred shares 1,250 - (1) 1,249

9,000 (2,000) (2) 6,998

During 2007, 200,000,000 ordinary shares with a nominal value of KZT 10 and total amount of KZT 2,000 million were authorized for issue by the shareholders. As at 31 December 2007, these shares remain unpaid.

As at 31 December 2006 the Group’s share capital comprised the following:

Authorized Authorized but Repurchased Issued share capital not issued share capital share capital share capital (KZT million) (KZT million) (KZT million) (KZT million)

Ordinary shares 5,750 (1) (1) 5,748 Preferred shares 1,250 - (3) 1,247

7,000 (1) (4) 6,995

53 F-107 The preference shares have a nominal value of KZT 10 and carry no voting rights, unless preference dividends are not paid, but rank ahead of the ordinary shares in the event of liquidation of the Bank. The annual dividend is determined by the preference shares issuance rules in the amount of USD 0.04 per share. According to Kazakhstan legislation on Joint Stock Companies, additional dividend payments on the preference shares cannot be less than the dividends paid on common shares. These shares are not redeemable.

During 2007, dividends declared on preference shares amounted to KZT 604 million (2006: KZT 636 million). In 2007 and 2006 dividends on ordinary shares of the Bank have not been declared.

In 2006, the Group increased the nominal value of its share capital by KZT 2,000 million, through the following: a) on 21 July 2006, the Bank completed the placement of 96,500,000 ordinary shares of the Bank at the price of KZT 200 per share on the local market; b) in November 2006, the shareholders of the Bank (JSC Central-Asian Investment Company, Subkhanberdin N.S. and EBRD) conducted the placement of 45,714,706 global depositary receipts (“GDR”), each representing two shares at the price of USD 18.50 per one GDR; c) in December 2006, the Bank issued shares to existing shareholders of the Bank in the amount of 103,500,000 ordinary shares at the price of USD 9.25 per share denominated in a tenge equivalent amount through an initial public offering on the local market.

The table below provides a reconciliation of the number of shares outstanding as of 31 December 2007 and 2006:

Preference Ordinary shares shares Number of Number of shares shares

31 December 2005 124,671,145 374,991,445 Issue of shares - 200,000,000 Sale of treasury shares and repurchase of own shares 84,025 (230,747)

31 December 2006 124,755,170 574,760,698 Issue of shares - 49,272 Sale of treasury shares 166,557 39,851

31 December 2007 124,921,727 574,849,821

During 2007, the Bank made additional contributions to the share capital of subsidiary companies. The Bank contributed KZT 50 million to the share capital of JSC Kazkommerts RFCA, which amounted to 100% of the issued ordinary share capital of the Company. In addition, the Bank contributed KZT 1,206 million to the share capital of CJSC Kazkommertsbank Tajikistan, which amounted to 100% of the ordinary share capital.

Share premium reserve represents an excess of contributions received over the nominal value of shares issued.

The Group’s distributable profit among shareholders reserves is limited to the amount of its reserves as disclosed in its statutory accounts. Non-distributable reserves are represented by a reserve fund, which is created as required by Kazakhstan regulations, in respect of general banking risks, including future losses and other unforeseen risks or contingencies. The reserve has been created in accordance with the regulations of the Republic of Kazakhstan that provide for the creation of a reserve for these purposes of not less than 5% from non-classified assets recorded in its statutory accounts.

54 F-108 32. COMMITMENTS AND CONTINGENCIES

The Group’s uses the same credit control and management policies in undertaking off-balance sheet commitments as it does for on-balance operations.

As at 31 December 2007 provision for losses on contingent liabilities amounted to KZT 7,216 million (2006: KZT 4,055 million).

The risk-weighted amount is obtained by applying credit conversion factor and counterparty risk weightings according to the principles employed by the Basle Committee on Banking Supervision.

As at 31 December 2006 the credit risk on contingent liabilities and credit commitments was covered by collateral of KZT 87,740 million (2006: KZT 79,221 million). The collateral includes real estate, deposits and various other financial assets.

As at 31 December 2007 and 2006, the nominal or contract amounts and risk-weighted amounts were:

31 December 2007 31 December 2006

Nominal Risk Nominal Risk amount weighted amount weighted amount amount (KZT million) (KZT million) (KZT million) (KZT million) Contingent liabilities and credit commitments Guarantees issued and similar commitments 94,582 94,582 91,683 91,683 Letters of credit and other transaction related to contingent obligations 90,510 15,253 92,413 17,982 Commitments on loans and unused credit lines 10,382 10,382 10,921 10,921 Commitments on loans sold to JSC Kazakhstan Mortgage Company with recourse 114 114 131 131

195,588 120,331 195,148 120,717

Capital commitments

As at 31 December 2007, capital commitments amounted to KZT 2,789 million (2006: 5,866 million).

Operating lease commitments

There were no material rental commitments outstanding as at 31 December 2007 and 2006.

Fiduciary activities

In the normal course of its business the Group enters into agreements with limited rights on decision making with clients for the management of assets in accordance with specific criteria established by clients. The Group may be liable for losses or actions aimed at appropriation of the clients’ funds if such funds or securities are not returned to the client. The maximum potential financial risk of the Group at any given moment is equal to the volume of the clients’ funds plus/minus any unrealized income/loss on the client’s position. The management believes that the potential financial risk on securities held on behalf of the customers is not inherent to the Group.

55 F-109 The Group also provides depositary services to its customers. As at 31 December 2007 and 2006 the Group had customer securities in its nominal holder accounts totaling:

- on broker and dealer operations 5,203,455,006 deals totaling KZT 94,829 million (2006: 41,579,742 deals totaling KZT 4,713 million). - on custodial operations 720,874,948 deals totaling KZT 20,929 million (2006: 726,520,661 deals totaling KZT 15,765 million).

Legal proceedings

From time to time and in the normal course of business, claims against the Group are received from customers and counterparties. Management is of the opinion that no material unaccrued losses will be incurred and accordingly no provision has been made in these consolidated financial statements.

Currently there are claims against the commercial banks from individuals in relation to hiding of additional commissions, obtained by loan agreements. In connection to this the NBRK issued instructions, which prescribe the requirement to disclose effective interest rates on loans to individuals. The management of the Bank believes that these claims do not have legal perspectives and from the moment of the instructions became effective the related points with effective interest rate were included to the loan agreements with customers.

Taxation

Commercial legislation of the countries where the Group operates, including tax legislation, may allow more than one interpretation. In addition, there is a risk of tax authorities making arbitrary judgments of business activities. If a particular treatment, based on management’s judgment of the Group’s business activities, was to be challenged by the tax authorities, the Group may be assessed additional taxes, penalties and interest.

Such uncertainty may relate to the valuation of financial instruments, valuation of provision for impairment losses and the market pricing of deals. Additionally such uncertainty may relate to the valuation of temporary differences on the provision and recovery of the provision for impairment losses on loans to customers and receivables, as an underestimation of the taxable profit. The management of the Group believes that it has accrued all tax amounts due and therefore no allowance has been made in the consolidated financial statements.

Operating environment

The Group’s principal business activities are within the Republic of Kazakhstan. Laws and regulations affecting the business environment in the Republic of Kazakhstan are subject to rapid changes and the Group’s assets and operations could be at risk due to negative changes in the political and business environment.

33. SUBSEQUENT EVENTS

On 25 January 2008, LLP Investment Company East Capital officially changed its name to LLP Investment Group East Kommerts.

On 19 February 2008, at the Meeting of the Board of Directors the decision to make an additional contribution to the share capital of JSC Kazkommerts Life through issue of 290,000 ordinary shares for total amount of KZT 290 million was made.

On 19 February 2008, at the Meeting of the Board of Directors the decision to make an additional contribution to the share capital of JSC OCOPAIM Grantum Asset Management through issue of 50,000 ordinary shares for total amount of KZT 500 million was made.

56 F-110

34. TRANSACTIONS WITH RELATED PARTIES

Related parties or transactions with related parties are assessed in accordance with IAS 24 “Related party disclosures”.

31 December 2007 31 December 2006 (KZT million) (KZT million) Related party Total category Related party Total category balances as per financial balances as per financial statements statements caption caption

Loans to customers 895 2,506,698 2,052 1,752,776 - entities with joint control or significant influence over the entity 117 114 - key management personnel of the entity or its parent 778 1,938 - other related parties - -

Allowance for impairment losses 33 140,363 50 73,936 - entities with joint control or significant influence over the entity 17 15 - key management personnel of the entity or its parent 16 35 - other related parties - -

Investments in associates 3,222 3,222 1,718 1,755 - to associates 3,222 1,718

Customer accounts 5,495 895,083 8,326 687,806 - entities with joint control or significant influence over the entity 1,087 92 - associates 22 1,050 - key management personnel of the entity or its parent 4,385 7,062 - other related parties 1 122

Provision for guarantees and other off- balance sheet contingencies - 7,216 356 4,055 - key management personnel of the entity or its parent - 1 - other related parties - 355

Commitments on loans and unused credit lines 482 10,382 651 10,921 - entities with joint control or significant influence over the entity - 215 - key management personnel of the entity or its parent 482 431 - other related parties - 5

Guarantees issued and similar commitments 18 94,582 7,142 91,683 - key management personnel of the entity or its parent 18 30 - other related parties - 7,112

57 F-111 Included in the consolidated income statement for the year ended 31 December 2007 and 2006 are the following amounts which arose due to transactions with related parties:

Year ended Year ended 31 December 2007 31 December 2006 (KZT million) (KZT million) Related party Total category Related party Total category as transactions as per financial transactions per financial statements statements caption caption

Interest income 67 316,458 130 147,250

Interest expense (438) (169,528) (258) (83,115)

Operating expenses (621) (31,200) (500) (19,053)

Short-term employee benefits 621 15,980 500 9,154

Provision on impairment losses on interest bearing assets, other transactions and guarantees and off balance sheet contingencies (365) (74,380) (354) (34,818)

Share of results of associates 1,333 1,333 1,130 1,130

Key management personnel compensation for the year ended 31 December 2007 and 31 December 2006 is represented by short-term employee benefits.

35. SEGMENT REPORTING

Business segments

The Group is organized on the basis of three main business segments:

• Retail banking – representing private banking services, private customer current accounts, savings, deposits, investment savings products, custody, credit and debit cards, consumer loans and mortgages. • Corporate banking – representing direct debit facilities, current accounts, deposits, overdrafts, loan and other credit facilities, documentary credits, foreign currency and derivative products. • Investment banking – representing financial instruments trading, structured financing, and merger and acquisitions advice. • Other – representing insurance operations and other activities.

Transactions between the business segments are on normal commercial terms and conditions. Funds are ordinarily reallocated between segments, resulting in funding cost transfers disclosed in operating income. Interest charged for these funds is based on the Group’s cost of capital. There are no other material items of income or expense between the business segments. Internal charges and transfer pricing adjustments have been reflected in the performance of each business. Revenue sharing agreements are used to allocate external customer revenues to a business segment on a reasonable basis.

58 F-112 Segment information about these businesses is presented below.

Retail Corporate Investment Other Unallocated Eliminations As at and for banking banking banking the year ended 31 December 2007 (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

External interest income 55,333 240,792 19,564 582 187 - 316,458 Internal interest income 30,263 36,407 145,703 - - (212,373) - External interest expenses (25,115) (28,243) (116,724) - 554 - (169,528) Internal interest expenses (36,922) (135,632) (39,819) - - 212,373 - Net interest income before provision for impairment losses on interest bearing assets 23,559 113,324 8,724 582 741 - 146,930 Provisions for impairment losses on interest bearing assets (9,904) (59,918) (134) - - - (69,956) NET INTEREST INCOME 13,655 53,406 8,590 582 741 - 76,974 Net gain on financial assets and liabilities at fair value though profit or loss - - 21,627 - - - 21,627 Net loss on foreign exchange and precious metals operations 2,240 747 (21,592) -- -- - (18,605) Fee and commission income 8,567 12,229 2,899 (104) (33) - 23,558 Fee and commission expense (1,009) (513) (388) (791) (12) - (2,713) Net realized gain on investments available-for-sale - - 41 - - - 41 Dividends received - - 143 2 - - 145 Other income 209 1,843 707 4,145 15 - 6,919

NET NON-INTEREST INCOME 10,007 14,306 3,437 3,252 (30) - 30,972

OPERATING INCOME 23,662 67,712 12,027 3,834 711 - 107,946

OPERATING EXPENSES (15,986) (10,763) (2,681) (1,194) (576) - (31,200)

PROFIT BEFORE OTHER OPERATING PROVISIONS AND RESULTS OF ASSOCIATES 7,676 56,949 9,346 2,640 135 - 76,746 Provision for insurance and impairment losses on other transactions - - - (1,009) (229) - (1,238) Provision for guarantees and other off-balance sheet contingencies - (3,084) (102) - - - (3,186) Share of results of associates - - 1,333 - - - 1,333

OPERATING PROFIT BEFORE INCOME TAX 7,676 53,865 10,577 1,631 (94) - 73,655

Income tax expense - - - - (15,904) - (15,904)

NET PROFIT 7,676 53,865 10,577 1,631 (15,998) - 57,751

Segment assets 452,330 1,914,005 625,716 9,717 999,782 (1,004,318) 2,997,232

Segment liabilities 309,679 585,404 1,758,867 4,120 961,153 (971,706) 2,647,517

59 F-113 Retail Corporate Investment Other Unallocated Eliminations As at and for banking banking banking the year ended 31 December 2006 (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

External interest income 19,119 112,603 14,594 309 625 - 147,250 Internal interest income 10,879 14,777 61,125 13 40,026 (126,820) - External interest expenses (8,038) (10,033) (64,442) 13 (615) - (83,115) Internal interest expenses (10,236) (60,338) (16,203) (13) (39,393) 126,183 - Net interest income before provision for impairment losses on interest bearing assets 11,724 57,009 (4,926) 322 643 (637) 64,135 Provisions for impairment losses on interest bearing assets (4,224) (28,282) (388) 7 - - (32,887)

NET INTEREST INCOME 7,500 28,727 (5,314) 329 643 (637) 31,248

Net gain on financial assets and liabilities at fair value though profit or loss - - 4,739 5 - - 4,744 Net gain on foreign exchange and precious metals operations 636 390 4,178 2 (2) - 5,204 Fee and commission income 5,263 10,062 2,921 - - (709) 17,537 Fee and commission expense (562) (482) (689) (566) (81) 708 (1,672) Net gain on investments available-for-sale - - 29 - - - 29 Dividends received - - 83 - - - 83 Other income 16 467 9 2,596 25 (71) 3,042

NET NON-INTEREST INCOME 5,353 10,437 11,270 2,037 (58) (72) 28,967

OPERATING INCOME 12,853 39,164 5,956 2,366 585 (709) 60,215

OPERATING EXPENSES (6,782) (9,893) (1,159) (852) (1,076) 709 (19,053)

PROFIT BEFORE OTHER OPERATING PROVISIONS AND RESULTS OF ASSOCIATES 6,071 29,271 4,797 1,514 (491) - 41,162 Provision for insurance and impairment losses on other transactions - - (52) (331) - - (383) Provision for guarantees and other off-balance sheet contingencies - (2,022) 474 - - - - (1,548) Share of results of associates - - 1,130 - - - 1,130

OPERATING PROFIT BEFORE INCOME TAX 6,071 27,249 6,349 1,183 (491) - 40,361

Income tax expense - - - - (12,600) - (12,600)

NET PROFIT 6,071 27,249 6,349 1,183 (13,091) - 27,761

Segment assets 261,708 1,417,132 765,227 8,244 764,773 (775,228) 2,441,856

Segment liabilities 196,072 491,734 1,485,791 3,351 745,026 (759,069) 2,162,905

60 F-114 Geographical segments

Segment information for the main geographical segments of the Group is set out below for the years ended 31 December 2007 and 2006.

Kazakhstan CIS OECD Non-OECD 31 December Countries Countries 2007 Total

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

Interest income 290,137 26,134 187 - 316,458 Interest expense (87,918) (14,682) (66,928) - (169,528) Provision on impairment losses on interest bearing assets (65,904) (4,052) - - (69,956) Net gain on financial assets and liabilities at fair value through profit or loss 20,343 1,284 - - 21,627 Net loss on foreign exchange and precious metals operations (18,862) 256 1 - (18,605) Fee and commission income 21,740 1,818 - - 23,558 Fee and commission expense (2,341) (327) (45) - (2,713) Net realized gain on investments available-for-sale 41 - - - 41 Dividends received 119 26 - - 145 Other income 5,956 963 - - 6,919

OPERATING INCOME 163,311 11,420 (66,785) - 107,946

Kazakhstan CIS OECD Non-OECD 31 December Countries Countries 2006 Total

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

Interest income 137,070 9,555 625 - 147,250 Interest expense (37,973) (5,134) (40,008) - (83,115) Provision on impairment losses on interest bearing assets (31,284) (1,603) - - (32,887) Net gain on financial assets and liabilities at fair value through profit or loss 4,831 (87) - - 4,744 Net gain on foreign exchange and precious metals operations 4,746 461 (3) - 5,204 Fee and commission income 15,738 1,799 - - 17,537 Fee and commission expense (1,553) (38) (81) - (1,672) Net realized gain on investments available-for-sale 29 - - - 29 Dividends received 83 - - - 83 Other income 2,776 266 - - 3,042

OPERATING INCOME 94,463 5,219 (39,467) - 60,215

External operating income has been allocated based on domicile of the company within the Group.

61 F-115 36. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in forced or liquidation sale. The estimates presented herein are not necessarily indicative of the amounts the Group could realize in a market exchange from the sale of its full holdings of a particular instrument.

The following methods and assumptions are used by the Group to estimate the fair value of financial instruments not carried at fair value.

Loans and advances to and from banks – for assets and liabilities maturing within one month, the carrying amount approximates fair value due to the relatively short-term maturity of these financial instruments. For the assets and liabilities maturing in over one month, the fair value in relation to repurchase and reverse repurchase agreements was estimated as the fair value of collateral pledged and received. For all other loans and advances the carrying value approximates the fair value.

Debt securities issued – market values have been used, where available, to determine the fair value of debt securities traded on an active market.

Subordinated debt – market values have been used, where available, to determine the fair value of subordinated bonds issued and perpetual debt of Kazkommerts Finance 2 B.V.

The fair value of financial assets and liabilities where the fair value does not approximate the carrying amount in the consolidated balance sheet of the Group are presented below:

31 December 2007 31 December 2006 Carrying Fair value Carrying Fair value value value (KZT million) (KZT million) (KZT million) (KZT million)

Loans and advances to banks 212,823 212,912 197,191 203,318 Loans and advances from banks 723,431 727,605 884,301 890,812 Debt securities issued 739,688 615,520 424,162 434,851 Subordinated debt 108,166 106,688 78,922 79,928

Financial assets and liabilities at fair value through profit or loss and investments available-for-sale are carried at fair value in the consolidated balance sheet. The carrying amounts of cash and balances with national (central) banks, investments held to maturity and customer accounts approximates fair value due to the short-term nature of such financial instruments. It was not practicable to the Group to estimate the fair value of its loans to customers and other borrowed funds.

37. REGULATORY MATTERS

Quantitative measures established by regulation to ensure capital adequacy require the Group to maintain minimum amounts and ratios of total and tier 1 capital to risk weighted assets.

Capital adequacy requirements are set by the FMSA and controlled using the principles, methods and factors identified by the Basle Committee on Banking Supervision.

62 F-116

31 December 31 December Change 31 December 31 December Change 2007 2006 2006 2005 (KZT (KZT (KZT (KZT (KZT (KZT million) million) million) million) million) million) Composition of regulatory capitala: Tier 1 capital: Share capital (ordinary shares) 5,749 5,748 1 5,748 3,750 1,998 Share premium reserve 152,855 152,534 321 152,534 15,902 136,632 Retained earnings 84,843 58,763 26,080 58,763 40,481 18,282 Current income 55,963 25,985 29,978 25,985 18,392 7,593 Minority interest 12,552 15,272 (2,720) 15,272 6,976 8,296 Goodwill (2,405) (2,405) - (2,405) (2,405) - Innovation instruments 11,900 12,546 (646) 12,546 13,286 (740)

Total qualifying tier 1 capital 321,457 268,443 53,014 268,443 96,382 172,061

Property and equipment revaluation reserve 5,981 2,458 3,523 2,458 1,519 939 Share capital (preferred shares) 1,249 1,247 2 1,247 1,247 - Subordinated debt b 86,617 52,997 33,620 52,997 28,495 24,502

Total qualifying tier 2 capital 93,847 56,702 37,145 56,702 31,261 25,441

Total capital 415,304 325,145 90,159 325,145 127,643 197,502

Ratio of tier 1 capital adequacy 11.72% 12.37% (0.65)% 12.37% 10.36% 2.01%

Capital adequacy ratio 15.15% 14.98% (0.17)% 14.98% 13.73% 1.26%

a According to the principles applied by Basle Committee

b As at 31 December 2007 and 2006 the Group included in the computation of total capital for capital adequacy purposes the subordinated debt received, which is limited to 50% of Tier 1 capital. In the event of bankruptcy or liquidation of the Bank, repayment of this debt is subordinate to the repayments of the Bank’s liabilities to all other creditors.

During year 2007 and 2006 the Group complied with all set capital requirements.

The capital adequacy ratio was calculated according to the principles employed by the Basle Committee by applying the following risk estimates to the assets and off-balance sheet commitments net of allowances for losses:

Estimation Description of position

0% Cash and balances with national (central) banks 0% State debt securities 20% Loans and advances to banks for up to 1 year 100% Loans to customers 100% Guarantees 50% Obligations and commitments on unused loans with the initial maturity of over 1 year 100% Other assets

63 F-117

38. CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of debt, which includes subordinated debt disclosed in Note 31, and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the consolidated statement of changes in equity.

The Management Board of the Bank reviews its capital structure on quarterly basis. Based on the recommendations of the Management Board by making decisions on the Board of Directors or shareholders meeting, the Group balances its overall capital structure through new share issues, issues of new debt or the redemption of existing debt, and the payment of dividends.

The Group’s overall capital risk management policy remains unchanged from 2006.

39. RISK MANAGEMENT POLICIES

Management of risks is fundamental to the Group’s business. The risk management functions include:

The main risks inherent to the Group’s operations are those related to:

• Credit risk; • Operational risk; • Liquidity risk; • Market risk;

Credit risk

The Group is exposed to credit risk which is the risk that a counterparty to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

Risk management and monitoring is performed within set limits by the Credit Committees and Board of the Group. Risk management coordination is performed by the risk management specialist or Risk Management Department. Daily risk management is performed by the Head of the Credit Departments or Credit Divisions of branches and subsidiaries.

While considering loan applications of corporate borrowers, the related Credit Committees take into account the analysis and conclusions of risk management, collateral valuation, legal and security departments. For the purpose of credit risk analysis, certain of the Group divisions use rating models which are based on assumptions and methodologies utilized by the international rating agencies.

64 F-118 While considering loan application of individuals and small businesses, the Group uses a standardized decision making approach on granting the loans. The approach includes the application of standard terms and criteria, which are set by the relevant credit committees. The standardized approach to evaluate the creditworthiness of the borrower includes the use of scoring models for some types of products. The scoring models result in a more efficient application process, decreased operating expenses as well as decreased operational risks, due to the removal of significant amounts of subjectivity.

The Group determines the level of credit risk it undertakes by setting limits on the amount of risk accepted in relation to one borrower, or groups of borrowers, and to industry and geographical segments. Limits on the level of credit risk by a borrower and a product, by industry sector and by region are approved by the Credit Committee. The exposure to any individual borrower is further restricted by sub-limits covering on and off-balance sheet exposures which are set by the Credit Committee.

Operational risk

The Group is exposed to operational risk which is the risk of losses that can be a result of any system inefficiencies or breaks of internal processes, systems, presence of human error or effect of any external negative factor. At present times the Group uses following tools to manage the operational risk, which comply with the best world banking practices.

• Risk self assessment (“RSA”); • New processes, products and system assessments (“ORAP”); • Operational losses database (“CLD”); • Key operational risk controls (“KORC”); and • Key risk indicators (“KRI”).

The operational risk management tools allow the Group to identify those banking activities that are most vulnerable to operational risks, to evaluate and monitor losses of the Group arising from operational risk and to set relevant controls. They are also used to develop preventive and detective tools as well as measures for decreasing the level of risk.

Maximum exposure

The Group’s maximum exposure to credit risk varies significantly and is dependent on both individual risks of certain financial assets and general market economy risks.

The following table presents the maximum exposure to credit risk of financial assets and commitments. For financial assets the maximum exposure equals to a carrying value of those assets prior to any offset or collateral. For financial guarantees and other commitments the maximum exposure to credit risk is the maximum amount the Group would have to pay if the guarantee was called on or in the case of commitments, if the loan amount was called on. The information in relation to financial guarantees and other contingent liabilities is disclosed in Note 32.

65 F-119

31 December 2007 Maximum Offset Net exposure after Collateral Net exposure exposure offset pledged1 after offset and collateral (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) Financial assets at fair value through profit or loss 188,776 - 188,776 - 188,776 Loans and advances to banks 212,823 (15,038) 197,785 (799) 196,986 Loans to customers 2,366,335 (40,867) 2,325,468 (1,604,068) 721,400 Investments available-for- sale 3,036 - 3,036 - 3,036 Investments held to maturity 375 - 375 - 375

31 December 2006 Maximum Offset Net exposure Collateral Net exposure after exposure after offset pledged1 offset and collateral (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) Financial assets at fair value through profit or loss 322,618 - 322,618 - 322,618 Loans and advances to banks 197,191 (49,055) 148,136 (45,869) 102,267 Loans to customers 1,678,840 (9,081) 1,669,759 (1,108,429) 561,330 Investments available-for- sale 2,628 - 2,628 - 2,628 Investments held to maturity 357 - 357 - 357

1 A description of the collateral presented on loans to customers is included in Note 17.

As at 31 December 2007 loans and advances to banks also include loans under reverse repurchase agreements in amount of KZT 679 million (2006: KZT 45,505 million).

As at 31 December 2007 loans to customers include loans under reverse repurchase agreements in amount of KZT 20,549 million (2006: KZT 35,020 million).

As at 31 December 2007 financial assets at fair value through profit or loss also include securities collateralized under repurchase agreements with total fair value of KZT 82,147 million (2006: KZT 262,008 million).

In instances where one party to a financial instrument fails to fully or partially discharge a credit obligation, the Group has the right to ensure fulfillment of these obligations through the:

• joint sale of the pledged assets; • transfer of ownership rights on pledged assets in accordance with the established law; • disposal of pledged assets through extrajudicial procedures through a tendering process; and • exercising of the charge on pledged assets through judicial procedures;

Where there is a joint sale of the pledged assets, the Group normally uses a tripartite agreement with the borrower and acquirer of the pledged assets. Under this agreement the acquirer of the pledged assets has an obligation to repay the full amount of the outstanding debt; the borrower has an obligation to transfer the right of ownership of the assets to the acquirer, and the Group releases the obligation from the borrower and removes the pledge over the assets.

Per certain collateral agreements, the Group has the right to dispose of assets pledged through extra judicial procedures. These procedures include the sale of assets through a tendering process. The sale of property takes approximately 3 months. The sale of assets pledged under mortgage loan agreements is performed through tenders organized by a person empowered to act on the behalf of the Group.

The Group exercises the charge on pledged assets through judicial procedures if it is impossible or inefficient to use alternative methods or where the seizure of assets pledged is required in order to protect the rights on the Group.

66 F-120 Financial assets are graded according to the current credit rating of international rating agencies. The highest possible rating is AAA. Investment grade of the financial assets have ratings from AAA to BBB. Financial assets which have ratings lower than BBB are classified as a speculative grade.

The following table details the credit ratings of financial assets held by the Group:

AAA AA A BBB

The banking industry is generally exposed to credit risk through its financial assets and contingent liabilities. Main credit risk exposure of the Group is concentrated within the Republic of Kazakhstan. The exposure is monitored on a regular basis to ensure that the credit limits and credit worthiness guidelines established by the Group’s risk management policy are not breached.

The Group enters into numerous transactions where the counterparties are not rated by international rating agencies. The Group has developed internal models, which allow it to determine the rating of counterparties, which are comparable to ratings of international rating agencies. These models include rating models for corporate customers and scoring models for individuals and small business.

Rating model

The Group has developed an internal rating model, based on the principles and methods used by international rating agencies for the assessment of credit risk of corporate borrowers. The rating of corporate borrower is based on an analysis of the financial ratios of the borrower, and an analysis of the market and industry sector, in which the borrower operates. The model also takes into consideration various qualitative factors, such as management efficiency and borrower’s market share.

The quality of the internal rating model is examined on a regular basis through an assessment of both its effectiveness and validity. The Group revises the model when deficiencies are identified.

Scoring models

The Group uses scoring models as a statistical tool to assess the future creditworthiness of new and existing borrowers of the Group. Scoring models are applied for assessment of the credit risk of individuals and small business enterprises.

67 F-121 The scoring models interpret socio-demographic and financial indicators, behavioural variables, the credit history of borrowers and historic data from external sources, such as Credit Bureau reports. Each of the parameters inserted into scoring model has a numeric value, the sum of which represents the borrower’s internal credit score (rating). The assigned score reflects the probability of default of the borrower.

The scoring models standardize and automate the process of decision making and decrease the operating expenses and operational risks of the Group. The scoring model is also used in the internal management decision making process as it permits the forecasting of profits and losses of the credit departments. The scoring model is assessed on a continual basis for its effectiveness and validity.

The Group applies internal rating and scoring methodologies to specific corporate loans and groups of retail and small business loans, which incorporate various underlying master scales that are different from that used by international rating agencies. The scoring methodologies are tailor-made for specific products and are applied at various stages over the life of the loan. As a result, it is not possible to make a cross-product score comparison which would agree to the outstanding balance of loans to customers per the consolidated balance sheet. As such, more detailed information is not being presented.

The following table details the carrying value of assets that are impaired and the ageing of those that are past due but not impaired in KZT million:

Financial assets past due but not 31 December 2007 impaired Neither 0-3 3-6 6 Greater Financial Total past due months months months than assets that nor to 1 year 1 year have been impaired impaired Financial assets at fair value through profit or loss 188,776 - - - - - 188,776 Loans and advances to banks 188,806 - - - - 24,017 212,823 Loans to customers 940,145 5,064 - - - 1,421,126 2,366,335 Investments available-for-sale 3,036 - - - - - 3,036 Investments held to maturity 375 - - - - - 375

Financial assets past due but not 31 December 2006 impaired Neither 0-3 3-6 6 Greater Financial Total past due months months months than assets that nor to 1 year one year have been impaired impaired Financial assets at fair value through profit or loss 322,618 - - - - - 322,618 Loans and advances to banks 182,422 - - - - 14,769 197,191 Loans to customers 956,110 2,624 - - - 720,106 1,678,840 Investments available-for-sale 2,628 - - - - - 2,628 Investments held to maturity 357 - - - - - 357

In the table above, loans to customers are classified as impaired when provided for under the Group’s internal policies. Provision rate on these loans ranges from 2% to 100%. As at 31 December 2007, of the KZT 1,421,126 million (2006: KZT 720,106 million) of impaired loans to customers, KZT 1,265,283 million (2006: KZT 615,012 million) are classified as satisfactory and for which the provision rate is 5%.

Geographical concentration

The relevant Credit Committees exercise control over the risk in the legislation and regulatory arena and assesses its influence on the Group’s activity. The Group sets country limits for all countries with ratings below A- according to the Standard and Poor’s classification.

The Management of the Group considers the main segment to be the Republic of Kazakhstan.

68 F-122 The geographical concentration of assets and liabilities is set out in tables below:

Kazakhstan CIS OECD countries Non-OECD 31 December countries 2007 Total

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 144,174 7,868 16,106 - 168,148 Financial assets at fair value through profit or loss 66,429 11,261 110,923 163 188,776 Loans and advances to banks 28,401 45,380 139,042 - 212,823 Loans to customers 1,855,687 303,936 46,011 160,701 2,366,335 Investments available-for-sale 3,036 - - - 3,036 Investments held to maturity 317 58 - - 375 Investments in associates 3,222 - - - 3,222 Goodwill 2,405 - - - 2,405 Property, equipment and intangible assets 31,974 2,285 - - 34,259 Other assets 10,211 3,239 4,312 91 17,853

TOTAL ASSETS 2,145,856 374,027 316,394 160,955 2,997,232

LIABILITIES: Loans and advances from banks 118,412 46,844 551,534 6,641 723,431 Customer accounts 770,799 32,548 82,248 9,488 895,083 Derivative financial instruments 3,078 37 4,445 170 7,730 Debt securities issued - 70,142 667,372 2,174 739,688 Other borrowed funds 12,928 2 136,004 - 148,934 Provisions 10,550 88 - - 10,638 Deferred income tax liability 30,486 10 - - 30,496 Dividends payable - 2 - - 2 Other liabilities 9,309 1,679 2,851 6 13,845 Subordinated debt 29,125 - 79,041 - 108,166

TOTAL LIABILITIES 984,687 151,352 1,523,495 18,479 2,678,013

NET POSITION 1,161,169 222,675 (1,207,101) 142,476

Kazakhstan CIS OECD countries Non-OECD 31 December countries 2006 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Cash and balances with national (central) banks 189,711 6,814 12,480 - 209,005 Precious metals - - 807 - 807 Financial assets at fair value through profit or loss 84,385 8,295 229,938 - 322,618 Loans and advances to banks 63,574 91,693 41,924 - 197,191 Loans to customers 1,180,864 228,282 64,396 205,298 1,678,840 Investments available-for-sale 2,628 - - - 2,628 Investments held to maturity 318 39 - - 357 Investments in associates 1,755 - - - 1,755 Goodwill 2,405 - - - 2,405 Property, equipment and intangible assets 14,706 975 - - 15,681 Other assets 7,443 1,355 1,742 29 10,569

TOTAL ASSETS 1,547,789 337,453 351,287 205,327 2,441,856

LIABILITIES: Loans and advances from banks 63,345 70,923 722,778 27,255 884,301 Customer accounts 642,492 22,603 20,321 2,390 687,806 Derivative financial instruments 983 4 2,565 2 3,554 Debt securities issued 3,322 37,216 383,396 228 424,162 Other borrowed funds 260 2 68,552 - 68,814 Provisions 6,393 149 1 215 6,758 Deferred income tax liability 16,749 101 - - 16,850 Dividends payable 1 - - - 1 Other liabilities 6,766 595 1,174 52 8,587 Subordinated debt 21,909 2,570 54,443 - 78,922

TOTAL LIABILITIES 762,220 134,163 1,253,230 30,142 2,179,755

NET POSITION 785,569 203,290 (901,943) 175,185

69 F-123 Tangible assets (cash on hand, precious metals, premises and equipment) and other capital expenditure and thus depreciation are concentrated within the Republic of Kazakhstan for both the year ending 31 December 2007 and 2006.

Liquidity risk

The following table shows how management monitors the liquidity and interest risks. The table is based on the time period to maturity or contractual repricing of the financial instruments and it does not reconcile to the consolidated balance sheet as a result of deferred tax liabilities being excluded.

70 F-124

Total interest bearing assets 290,221 316,297 488,315 878,953 712,075 - 2,685,861 Cash and balances with national (central) banks 168,148 - - - - - 168,148 Equity instruments - - - - - 15,649 15,649 Investments in associates - - - - - 3,222 3,222 Goodwill - - - - - 2,405 2,405 Property, equipment and intangible assets - - - - - 34,259 34,259 Accrued interest income on interest-bearing assets 34,227 19,371 10,687 5,219 331 - 69,835 Other assets 3,012 8,143 5,125 1,573 - - 17,853

TOTAL ASSETS 495,608 343,811 504,127 885,745 712,406 55,535 2,997,232

Up to 1 month 1 month to 3 month to 1 year to Over 5 years Maturity 31 December 3 months 1 year 5 years undefined 2007 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) LIABILITIES: Loans and advances from banks 141,216 160,676 230,012 166,715 19,540 - 718,159 Customer accounts 320,227 127,509 203,474 225,057 2,300 - 878,567 Debt securities issued 1,964 11,060 35,288 280,996 389,255 - 718,563 Other borrowed funds - 585 - 43,231 104,498 - 148,314 Subordinated debt - - - 3,293 103,080 - 106,373

Total interest bearing liabilities 463,407 299,830 468,774 719,292 618,673 - 2,569,976

Derivative financial instruments 331 7,399 - - - - 7,730 Provisions 950 3,022 1,770 1,471 3 3,422 10,638 Deferred income tax liability 2,339 1,362 8,651 10,251 7,893 - 30,496 Dividends payable - 2 - - - - 2 Accrued interest expense on interest-bearing liabilities 7,111 20,614 14,321 1,445 1,835 - 45,326 Other liabilities 10,415 1,601 1,717 112 - - 13,845

TOTAL LIABILITIES 484,553 333,830 495,233 732,571 628,404 3,422 2,678,013

Liquidity gap 11,055 9,981 8,894 153,174 84,002

Interest sensitivity gap (173,186) 16,467 19,541 159,661 93,402

Cumulative interest sensitivity gap (173,186) (156,719) (137,178) 22,483 115,885

Cumulative interest sensitivity gap as a percentage of total assets (5.78%) (5.23%) (4.58%) 0.75% 3.87%

Contingent liabilities and credit commitments 208 66,057 69,709 45,883 - 6,515

71 F-125

Up to 1 month 1 month to 3 month to 1 year to Over 5 years Maturity 31 December 3 months 1 year 5 years undefined 2006 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS: Financial assets at fair value through profit or loss 32,171 217,265 64,627 613 - - 314,676 Loans and advances to banks 152,190 21,099 21,722 27 1,293 - 196,331 Loans to customers 108,530 136,764 317,916 619,350 463,174 - 1,645,734 Investments available-for-sale 473 - 557 1,207 350 - 2,587 Investments held to maturity - - 39 22 290 - 351

Total interest bearing assets 293,364 375,128 404,861 621,219 465,107 - 2,159,679 Cash and balances with national (central) banks 209,005 - - - - - 209,005 Precious metals 807 - - - - - 807 Equity investments 6,128 6,128 Investments in associates - - - - - 1,755 1,755 Goodwill - - - - - 2,405 2,405 Property, equipment and intangible assets - - - - - 15,681 15,681 Accrued interest income on interest-bearing assets 29,322 5,013 1,427 59 6 - 35,827 Other assets 4,142 2,319 3,993 115 - - 10,569

Total assets 536,640 382,460 410,281 621,393 465,113 25,969 2,441,856

Up to 1 month 1 month to 3 month to 1 year to Over 5 years Maturity 31 December 3 months 1 year 5 years undefined 2006* Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) LIABILITIES: Loans and advances from banks 336,544 111,831 51,564 379,901 1,070 - 880,910 Customer accounts 355,322 116,990 105,051 78,489 24,488 - 680,340 Debt securities issued 4,288 661 33,589 142,960 235,720 - 417,218 Other borrowed funds - - 262 6,804 61,493 - 68,559 Subordinated debt - - 41 5,988 71,216 - 77,245

Total interest bearing financial liabilities 696,154 229,482 190,507 614,142 393,987 - 2,124,272 Derivative financial instruments 73 2,554 927 - - - 3,554 Provisions 712 378 1,306 1,640 18 2,704 6,758 Deferred income tax liabilities 11,003 5,831 16 - - - 16,850 Preferred shares dividends 1 - - - - - 1 Accrued interest expense on interest-bearing liabilities 5,962 5,738 7,266 735 32 - 19,733 Other liabilities 2,518 3,395 2,654 20 - - 8,587

Total liabilities 716,423 247,378 202,676 616,537 394,037 2,704 2,179,755

Liquidity gap (179,783) 135,082 207,605 4,856 71,076

Interest sensitivity gap (402,790) 145,646 214,354 7,077 71,120

Cumulative interest sensitivity gap (402,790) (257,144) (42,790) (35,713) 35,407

Cumulative interest sensitivity gap as a percentage of total assets (16.50)% (10.53)% (1.75)% (1.46)% 1.45% Contingent liabilities and credit commitments - 41,922 76,833 67,571 587 4,180

72 F-126 The tables include the maturity dates for financial assets and financial liabilities, as they fall due. Based on prior experience, the Group considers it highly unlikely that all customer accounts seek repayment on maturity. Historically the majority of such deposits are rolled over. The Group is aware of the importance of maintaining the stability of these deposits. In order to achieve this it is essential that the Group ensures depositor confidence in the Group’s liquidity, by continuing to position itself as the depositor of choice in local markets and a leading financial institution in both the Republic of Kazakhstan and abroad. The Group does not use undiscounted contractual maturity information when managing its operations.

Market risk

Market risk covers interest rate risk, currency risk and other pricing risks to which the Group is exposed.

In year 2007 the Group started to use the market risk sensitivity analysis. Methodology presents separate analysis for each type of market risks which the Group is exposed to and reflects the effect of change on equity and income statement in a risk variable, which was reasonable as at reporting date.

The Group uses VaR (“Value-at-Risk”) model to assess the price risk but it has opted to disclose only the sensitivity analysis.

Interest rate risk

Interest rate risk is the risk of the losses as the result of changes in the future cash flow of a financial instrument fluctuation because of changes in market interest rates.

The Group is exposed to changes in interest rates through its placement of funds with both fixed and floating interest rates. The Group attempts to mitigate this risk through having corresponding assets and liabilities with fixed and floating interest rates.

The ALMC manages interest rate and market risks by matching the Group’s interest rate position, so as to ensure the Group maintains a positive interest margin. Although a significant portion of the Group’s assets are placed with a fixed interest rate, the credit agreements entered into by the Group contain provisions which permit the Group to change interest rates in the credit agreements. The Department of Financial Control monitors the results of the financial activity of the Group and continually assesses the vulnerability of the Group to changes in interest rates.

The following table presents an analysis of interest rate risk. Effective interest rates are presented by categories of financial assets and liabilities to determine interest rate exposure and effectiveness of the interest rate policy used by the Group.

31 December 2007 31 December 2006 % % % % % % in KZT in USD in other in KZT in USD in other currencies currencies ASSETS: Financial assets at fair value through profit or loss 9.39 4.99 5.07 6.54 4.95 11.00 Loans and advances to banks 6.54 6.73 3.98 1.97 8.26 2.51 Loans to customers 14.16 13.69 14.27 13.56 12.20 12.89 Investments available-for-sale and held to maturity 9.04 - 6.30 8.13 9.21 7.05

LIABILITIES: Loans and advances from banks 6.93 6.61 3.73 3.01 6.44 4.65 Customer accounts 7.83 7.77 4.22 5.44 4.20 4.41 Debt securities issued - 7.98 6.66 7.00 8.13 5.55 Other borrowed funds 9.84 6.29 - 1.95 6.9 5.00 Subordinated debt 7.50 8.67 - 7.50 8.32 -

73 F-127 The Group uses derivative financial instruments to mitigate the results of changes in interest rates and control the interest rate margin by types of products. Management monitors the interest rate margin of the Group and believes that the Group is not exposed to significant risk of change in interest rates and related cash flow interest rate risk.

Interest rate risk sensitivity analysis

The Risk Management Department periodically estimates the Group’s sensitivity to changes in market interest rates and its influence on the Group’s profitability, and if necessary, the Risk Management Department suggests decreasing the relevant risk levels. The management of the Group considers the suggestions and amends the further activity of the Group. At the moment the Group uses a range of 100 basis points, which has been determined as a “reasonably possible change in the risk variable” by management in relation to the sensitivity of its financial instruments.

The following table presents the sensitivity of the consolidated income statement, all other parameters assumed to be constant.

Impact on consolidated profit before tax: 31 December 2007 31 December 2006 (KZT million) (KZT million) + 100 bp - 100 bp + 100 bp - 100 bp Assets: Financial assets at fair value through profit or loss Bonds (1,338) 1,423 (2,685) 2,870 Derivative financial instruments 947 (958) - - Instruments with floating rates: Loans and advances to banks 18 (18) - - Loans to customers 566 (566) 427 (427) Investments held-to-maturity Instruments with floating rates 3 (3) 3 (3)

Liabilities: Instruments with floating rates: Loans and advances from banks (3,030) 3,030 (1,596) 1,596 Debt securities issued (5,621) 5,621 (4,218) 4,218 Subordinated debt - - (127) 127

Net effect on profit before tax (8,455) 8,529 (8,196) 8,381

Sensitivity of the consolidated income statement represents fluctuations due to changes in interest rates on interest income for the period of one year, estimated on the basis of interest-bearing instruments of the trading portfolio, and assets and liabilities with floating interest rates.

74 F-128 Possible losses from a change in interest rates by 100 basis points, with other criteria assumed to be constant, comprise 3% from consolidated equity of the Group, which complies with acceptable Group’s level of risk, and does not lead to the further changes in the strategy and policy of the Group.

The sensitivity of equity to possible changes in interest rates as at 31 December 2007 and 2006 has been calculated. If there were to be a change in interest rates of 100 basis points, this would result in a movement of 3% of total equity of the Group, which complies with acceptable levels of risk established by the Group. This sensitivity does not consider the tax effect in the overall impact to equity.

31 December 2007 31 December 2006 100 bp -100 bp 100 bp -100 bp Assets (KZT million) (KZT million) (KZT million) (KZT million) Investments available-for-sale Bonds (73) 76 (60) 63

Net effect on profit before tax (8,455) 8,529 (8,196) 8,381 Change in equity (8,528) 8,605 (8,256) 8,444

The management of the Group periodically monitors the interest rate margin of the Group and believes that the Group is not exposed to significant risk of the fluctuations in interest rates and correspondent risk of changes in cash flows.

Currency risk

75 F-129 As at 31 December 2007 the Group’s exposure to foreign currency exchange rate risk is presented in the table below:

KZT USD EUR RUR Other CCY 31 December 2007 Total

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS:

Cash and balances with national (central) banks 57,840 46,588 3,465 6,171 54,084 168,148 Financial assets at fair value through profit or loss 59,371 97,047 8,445 17,896 6,017 188,776 Loans and advances to banks 12,968 125,370 56,086 11,527 6,872 212,823 Loans to customers 891,041 1,369,863 24,955 79,548 928 2,366,335 Investments available-for-sale 3,036 - - - - 3,036 Investments held to maturity 317 - - - 58 375 Investments in associates 3,222 - - - - 3,222 Goodwill 2,405 - - - - 2,405 Property, equipment and intangible assets 31,974 - - 2,146 139 34,259 Other assets 9,568 3,791 1,555 2,318 621 17,853

TOTAL ASSETS 1,071,742 1,642,659 94,506 119,606 68,719 2,997,232

Total liabilities 671,690 1,448,013 252,533 101,404 204,373 2,678,013

OPEN BALANCE SHEET POSITION 400,052 194,646 (158,027) 18,202 (135,654)

Derivative financial instruments and spot contracts

Fair value of derivative financial instruments and spot contracts are included in the currency analysis presented above and the following table presents further analysis of currency risk on derivative financial instruments and spot contracts as at 31 December 2007:

KZT USD EUR RUR Other 31 December CCY 2007 Total

(KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

Accounts payable on spot and derivative contracts (200,473) (312,485) (1,240) (6,992) (605) (521,795) Accounts receivable on spot and derivative contracts 70,626 159,739 160,870 14,846 140,394 546,475

NET SPOT AND DERIVATIVE FINANCIAL INSTRUMENTS POSITION (129,847) (152,746) 159,630 7,854 139,789

76 F-130 As at 31 December 2006 the Group’s exposure to foreign currency exchange rate risk is presented in the table below:

KZT USD EUR RUR Other 31 December CCY 2006 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) ASSETS : Cash and balances with national (central) banks 189,718 10,548 2,707 5,198 834 209,005 Precious metals - - - - 807 807 Financial assets at fair value through profit or loss 76,500 228,059 9,621 8,290 148 322,618 Loans and advances to banks 76,647 90,338 15,061 14,154 991 197,191 Loans to customers 525,052 1,117,469 13,683 22,014 622 1,678,840 Investments available-for-sale 2,625 3 - - - 2,628 Investments held to maturity 318 - - - 39 357 Investments in associates 1,755 - - - - 1,755 Goodwill 2,405 - - - - 2,405 Property, equipment and intangible assets 14,706 - - 847 128 15,681 Other assets 6,518 2,540 399 1,074 38 10,569

TOTAL ASSETS 896,244 1,448,957 41,471 51,577 3,607 2,441,856

LIABILITIES : Loans and advances from banks 171,762 669,690 24,801 17,574 474 884,301 Customer accounts 387,384 262,057 20,855 16,487 1,023 687,806 Derivative financial instruments 1,310 2,239 - 5 - 3,554 Debt securities issued 3,133 354,654 50,149 7,823 8,403 424,162 Other borrowed funds 156 68,554 104 - - 68,814 Provisions 3,691 1,954 1,108 1 4 6,758 Deffered income tax liabilities 16,749 - - 85 16 16,850 Dividends on preferred shares 1 - - - - 1 Other liabilities 6,677 1,396 48 423 43 8,587 Subordinated debt 21,770 57,152 - - - 78,922

Total liabilities 612,633 1,417,696 97,065 42,398 9,963 2,179,755

OPEN BALANCE SHEET POSITION 283,611 31,261 (55,594) 9,179 (6,356)

Derivative financial instruments and spot contracts

KZT USD EUR RUR Other 31 December CCY 2006 Total (KZT million) (KZT million) (KZT million) (KZT million) (KZT million) (KZT million)

Accounts payable on spot and derivative contracts (66,282) (102,482) (3,482) (1,263) - (173,509) Accounts receivable on spot and derivative contracts 41,725 61,288 61,333 3,046 9,920 177,312

NET SPOT AND DERIVATIVE FINANCIAL INSTRUMENTS POSITION (24,557) (41,194) 57,851 1,783 9,920

77 F-131 Currency risk sensitivity analysis

The Group estimates the possible effect of a 10% fluctuation in foreign currency rates on the consolidated income statement and consolidated equity based on the sensitivity analysis of the internally prepared open currency position report, which includes derivative financial instruments.

The analysis is based on the calculation of the impact of possible fluctuations in US dollar, Euro and Russian Rouble currency rates on the consolidated income statements and consolidated equity. This is due to the fact that as at 31 December 2007 these were the main currencies in which the Group had open positions. A 10% fluctuation is determined as a “reasonably possible change in the risk variable” by the management of the Group. All other parameters were assumed to be constant. Negative and positive amounts in the table reflect the potential probable effect on the consolidated income statement and consolidated equity of such fluctuations.

A change of 10% represents the level of probable fluctuations in foreign exchange rates that are used within the Group for reporting purposes to key management. The sensitivity analysis includes open foreign currency positions as at the reporting dates, for which a 10% movement in foreign currency exchange rates as compared to the existing year end rates are used.

31 December 2007 31 December 2007 (KZT million) (KZT million) KZT/USD KZT/EURO KZT/RUB KZT/USD KZT/EURO KZT/RUB 10% -10% 10% -10% 10% -10% 10% -10% 10% -10% 10% -10%

Impact on profit or loss 4,190 (4,190) 160 (160) 2,606 (2,606) (994) 994 (226) 226 1,096 (1,096)

Impact on equity ------

Limitations of sensitivity analysis

The above tables demonstrate the effect of a change in a key risk factor while all other things held constant. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger impacts should not be extrapolated from these results.

The sensitivity analyses do not take into consideration that the Group’s assets and liabilities are actively managed. Additionally, the financial position of the Group may vary depending on any actual market movements, since the Group’s financial risk management strategy aims to manage the exposure to market fluctuations. In instances where there are significant or unexpected changes in market conditions, management actions could include selling investments, changing investment portfolio allocation and taking other protective action. Consequently, the actual impacts of a change in the risk factors may be different from those shown above.

Other limitations in the above sensitivity analyses include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with a fair degree of certainty certainty; and the assumption that all interest rates move in an identical fashion.

Price risks

The Group is exposed to price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. Equity investments do not form a significant part of the Group’s investment portfolio.

78 F-132

40. RESTATEMENT OF CASH FLOWS

As discussed in note 3, subsequent to the issue on 28 February 2008 of the consolidated financial statements for the year ended 31 December 2007, the Group noted an error in the calculation of the change in net interest accruals in the cash flow statement. As such, the Group is restating the financial statements to correct this error for the year ended 31 December 2007 dated 25 March 2008.

The table below shows the effects of the restatement for the year ended 31 December 2007:

Year ended 31 Year ended 31 December 2007 December 2007 Previously Restated reported (KZT million) (KZT million) Changes in operating assets and liabilities Change in interest accruals, net (58,305) (7,190)

Cash flow from operating activities before changes in operating assets and liabilities 74,218 125,333

(Increase)/decrease in operating assets: Loans to customers (701,158) (701,115)

Increase/(decrease) in operating liabilities: Loans and advances from banks (167,423) (171,383) Customer accounts 182,218 164,344 Other borrowed funds 80,486 79,756

Cash outflow from operating activities before taxation (251,194) (222,600)

Net cash outflow from operating activities (253,453) (224,859)

Proceeds from debt securities issued 349,993 321,632 Proceeds from subordinated debt 34,152 33,919

Net cash inflow from financing activities 355,044 326,450

79 F-133 The table below shows the effects of the restatement for the year ended 31 December 2006:

Year ended 31 Year ended 31 December 2006 December 2006 Previously Restated reported (KZT million) (KZT million) Changes in operating assets and liabilities Change in interest accruals, net 25,966 (10,215) Net change in fair value of financial assets and liabilities at fair value through profit or loss 10,015 1,024

Cash flow from operating activities before changes in operating assets and liabilities 114,988 69,816

(Increase)/decrease in operating assets: Financial assets at fair value through profit or loss (183,617) (174,314) Loans and advances to banks (84,218) (82,872) Loans to customers (928,684) (892,293)

Increase/(decrease) in operating liabilities: Loans and advances from banks 401,197 399,210

Cash outflow from operating activities before taxation (404,981) (405,046)

Net cash outflow from operating activities (408,781) (408,846)

Purchase of investments available for sale (6,910) (6,845)

Net cash outflow from investing activities (9,638) (9,573)

80 F-134 F-135 F-136 F-137 F-138 F-139 F-140 F-141 F-142 F-143 F-144 F-145 F-146 F-147 F-148 F-149 F-150 F-151 F-152 F-153 F-154 F-155 F-156 F-157 F-158 F-159 F-160 F-161 F-162 F-163 F-164 F-165 F-166 F-167 F-168 F-169 F-170 F-171 F-172 F-173 F-174 F-175 F-176 F-177 F-178 F-179 F-180 F-181 F-182 F-183 F-184 F-185 F-186 F-187 F-188 F-189 F-190 F-191 F-192 F-193 F-194 F-195 F-196 F-197 F-198 F-199 F-200 F-201 F-202 F-203 F-204

THE BANK JSC Kazkommertsbank 135 “Zh” Gagarin Avenue Almaty 050060 Kazakhstan AUDITORS OF THE BANK Deloitte LLP 240 V Furmanov Street Almaty 050059 Kazakhstan DEPOSITARY

The Bank of New York Mellon 101 Barclay Street New York, New York 10296 U.S.A.