b) Problem statement and objectives.
In this paper we are going to assess the performance of ATF Bank during period from 2004 till 2011. This period of time will be divided into two parts. First 2004 till 2007 when ATF Bank was fully Kazakhstani bank, and second from 2008 till 2011, when Italian UniCredit Group become owner of ATF Bank. The main purpose of this paper is identify the difference in efficiency and profitability of ATF Bank between these two periods.
Till 2007 ATF Bank was the third largest Kazakh bank, with total assets of EUR 6.3 billion and a market share of 11.8 per cent. Additionally, Bank was present with own subsidiaries in the Republic of Kyrgyzstan, in the Republic ...view middle of the document...
ROE and ROA are widely used to assess the performance of firms, including commercial banks. Bank regulators and analysts have used ROA and ROE to assess industry performance and forecast trends in market structure as inputs in statistical models to predict bank failures and mergers and for a variety of other purposes where a measure of profitability is desired.
* The next is Earnings per share (Net income after taxes / Common equity shares outstanding). EPS represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock.
* Net Operating margin ((Total operating revenues - Total operating expenses)/Total Asset). This number is a measure of how profitably the company is operating.
* Net interest margin ((Interest income from loans and security investments - Interest expense on deposits and on other debt issues) / Total assets). Measures how large a spread between interest revenues and interest expenses management has been able to achieve by close control over earning assets and the pursuit of the cheapest sources of funding.
* Non interest margin ((Non interest revenues - non interest expenses) / Total assets) Measures the amount of noninterest revenues coming from deposit service charges, and other service fees the bank has been able to collect relative to the amount of noninterest cost incurred.
In order to calculate all above mentioned performance indicators we are goin to use the annual financial statement of the bank in 2004 – 2011 time period.
e) Significance of the issue
Background on Kazakhstani banking sector.
Since 1993, the Kazakh banking system has been formally arranged into two tiers, with the
National Bank of Kazakhstan (NBK) comprising the first tier and all commercial banks, both
private and state-owned, comprising the second tier.
NBK acts as a regulator of monetary and credit policy. NBK is accountable directly to the President of the Republic of Kazakhstan. The National Bank of Kazakhstan is an independent financial institution.
Its major objectives include control and prudential regulation of the banking sector and maintenance of a stable national currency. It is independent within the scope of its activity, identified by current legislation. Neither the Government, nor the Parliament or local authorities are authorized to interfere with the National Bank’s operations
The Kazakhstan banking system continues to be one of the strongest among the countries of the former Soviet Union. During the period of 1991-1993 Kazakhstan, as well as other CIS countries experienced the banking boom. In 1992, the number of banks grew from 155 (with 877 branches) to 204 (with 1023 branches). Many of these structures were created for just one type of transactions. An especially popular scheme was the attraction of state loans of several millions dollars with the initial malicious plan to go bankrupt.
At the start of 2001, there...