PROSPECTUS

BTA Bank JSC

(a joint stock company incorporated in the Republic of Kazakhstan with registered number 39031900AO)

U.S.$2,082,371,783 Senior Notes due 2018 U.S.$384,848,130 Fully Accreted Principal Amount of Original Issue Discount Notes due 2021 EUR437,110,856 Fully Accreted Principal Amount of Original Issue Discount Notes due 2021 U.S.$496,631,368 7.20 per cent. Subordinated Notes due 2025 EUR28,237,359 6.75 per cent. Subordinated Notes due 2025 U.S.$5,221,494,216 aggregate initial Reference Amount of Recovery Units 14,140,464 Global Depositary Receipts each representing 500 Common Shares
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Application has been made by the Bank to list the New Notes and the GDRs on the official list of the Luxembourg Stock Exchange (the Listing) and to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange (the Admission). This Prospectus does not constitute a prospectus for the purposes of Prospectus Directive or the Luxembourg law dated 10 July 2005 on Prospectuses for Securities. It is expected that the Listing and Admission will become effective on or about 22 February 2011. The Listing and Admission apply to both Regulation S and Rule 144A New Notes and GDRs. The Terms and Conditions of the New Notes are set out in Schedule 1 (Terms and Conditions of the New Notes). The Terms and Conditions of the Regulation S GDRs are set out in Schedule 2 (Terms and Conditions of the Regulation S GDRs), and the Terms of Conditions of the Rule 144A GDRs are set out in Schedule 3 (Terms and Conditions of the Rule 144A GDRs). This Prospectus has been prepared purely for listing purposes. Investors should not base their investment decision on the information contained herein. The New Notes and GDRs are Securities of a specialist nature and should only be bought and traded by investors who are particularly knowledgeable in investment matters. See Risk Factors for a discussion of certain factors that should be considered in connection with an investment in the New Notes or the GDRs. Neither the New Notes nor the GDRs have been or will be registered under the Securities Act and may not be offered or sold within the United States (as defined in Regulation S) except to certain QIBs in reliance on Rule 144A or pursuant to another exemption from, or transaction not subject to, the registration requirements of the Securities Act. The New Notes were constituted by the New Notes Trust Deed between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the New Notes under the New Notes Trust Deed). The New Notes were delivered in book-entry form through the facilities of Euroclear and Clearstream and each series is represented by one or more global notes in registered form registered in the name of a common depositary for Euroclear and Clearstream, or a nominee thereof. New Notes distributed outside the United States in reliance on Regulation S to persons outside the United States who are not U.S. Persons are represented by interests in the respective Unrestricted Global Notes, in fully registered form, without interest coupons attached, registered in the name of a nominee of, and deposited with, a common depositary for Euroclear and Clearstream, Luxembourg. Each series of New Notes allocated to persons who are within the United States that are either QIBs or Accredited Investors (together, Eligible Investors) are represented by interests in Restricted Global Notes, in fully registered form, without interest coupons attached, registered in the name of a nominee of, and deposited with, a common depositary for Euroclear and Clearstream. Each Global Note (and any Note Certificates issued in exchange therefor) is subject to certain restrictions on transfer contained in a legend appearing on the face of such Global Note. The GDRs have been issued in global form and are evidenced by a Master Rule 144A GDR registered in the name of Cede & Co., as nominee for The Depository Trust Company (DTC), and a Master Regulation S GDR (together with the Master Rule 144A GDR, the Master GDRs) registered in the name of The Bank of New York Depository (Nominees) Limited, and deposited with The Bank of New York Mellon, London Branch, as common depositary for Euroclear and Clearstream. Ownership of Shares and the exercise of certain rights (including voting rights) are subject to certain legislative restrictions under Kazakhstan law. See Risk Factors Risks Relating to the New Notes, Shares and GDRs Restrictions apply to a holder of GDRs or Shares if it is incorporated or has Affiliates in a Prohibited Jurisdiction. See Issuance and Transfer Restrictions. Each GDR represents 500 Common Shares. The Common Shares have no par value. No person has been authorised by the Bank to give any information or make any representation other than those contained in this Prospectus and the accompanying documents and, if given or made, such information or representation must not be relied upon as having been so authorised. Terms used herein and not otherwise defined have the meaning ascribed to them in Key Terms and Definitions. 14 February 2011

IMPORTANT NOTICE THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY. NONE OF THE NEW NOTES OR GDRS SHALL BE SOLD, ISSUED OR TRANSFERRED IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. The New Notes and GDRs are subject to restrictions on transferability and resale and may not be transferred or resold except in accordance with the Securities Act and other applicable securities laws, pursuant to registration or an exemption therefrom. See Issuance and Transfer Restrictions. This Prospectus does not constitute a prospectus for the purposes of Article 5.3 of the Prospectus Directive. This Prospectus was prepared for the purpose of giving information with regard to the Bank, the New Notes and the GDRs which, according to the particular nature of the Bank, the New Notes and GDRs, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Bank and of the rights attaching to the New Notes and GDRs. The Bank having taken all reasonable care to ensure that such is the case, accepts responsibility for the information contained in this Prospectus. To the best of the knowledge of the Bank the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. This Prospectus does not constitute an offer of securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the New Notes and/or GDRs. Consequently this document is being distributed only to, and is directed at (a) persons who have professional experience in matters relating to investments falling within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order) or (b) high net worth entities falling within article 49(2)(a) to (d) of the Order, and other persons to whom it may be lawfully communicated, falling within article 49(1) of the Order (all such persons together being referred to as relevant persons). Any person who is not a relevant person should not act or rely on this Prospectus or any of its contents. Persons into whose possession this Prospectus may come are required by the Bank to inform themselves about and to observe such restrictions. The New Notes and GDRs are only available to persons in member states of the European Economic Area (the EEA) who are Qualified Investors within the meaning of Article 2(1)(e) of the Prospectus Directive, unless in any instance the Bank otherwise agrees. This Prospectus and its contents should not be acted upon or relied upon in any member state of the EEA by persons who are not Qualified Investors. The New Notes and GDRs referred to herein may only be distributed in the Republic of Kazakhstan to institutions or individuals in the Republic of Kazakhstan, including banks, brokers, dealer participants, pension funds and collective investments institutions, as well as central government, large international and supranational organisations, other institutional investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly invest in securities. Further information with regard to restrictions on offers, sales and deliveries of the New Notes and GDRs and the distribution of this Prospectus and other material relating to the New Notes and GDRs is set out under Issuance and Transfer Restrictions, Form of the New Notes and Provisions Relating to Such Notes in Global Form and Summary of the Provisions Relating to the GDRs While in Master Form. The distribution of this Prospectus and the distribution of the New Notes and GDRs may be restricted by law in certain jurisdictions. The Bank makes no representation that this Prospectus or the New Notes or GDRs may be lawfully distributed in any jurisdiction or assumes any responsibility for facilitating any such distribution. Accordingly, neither this Prospectus nor any other offering material may be distributed or published, and none of the New Notes or GDRs may be distributed, in any jurisdiction, except under circumstances that will result in compliance with all applicable laws and regulations. Persons into whose possession this Prospectus may come must inform themselves about,

(i)

and observe, any such restrictions on the distribution of this Prospectus and the distribution of the New Notes or GDRs. The information contained in this Prospectus has been prepared based upon information available to the Bank. To the best of the Banks knowledge, information and belief, the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The financial statements commencing at page F-1 have been prepared in accordance with IFRS. The Bank has taken all reasonable steps to ensure that this Prospectus contains the information reasonably necessary in the context of the issue of New Notes and the GDRs. None of the Banks legal, financial or tax advisers, the members of the Steering Committee, the Steering Committees legal, financial or tax advisers, the Trustee or the Trustees legal advisors have authorised the contents of this Prospectus or any part of it, nor do they accept any responsibility for the accuracy, completeness or reasonableness of the statements contained within it. None of the Banks legal, financial or tax advisers, the Trustee or the Trustees legal advisors have verified that the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information and each of those persons expressly disclaims any responsibility for such information. Nothing contained in this Prospectus shall be deemed to be a forecast, projection or estimate of the Banks future financial performance except where otherwise specifically stated. This Prospectus contains certain statements, statistics and projections that are, or may be, forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the Banks future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as intends, expects, anticipates, estimates and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although the Bank believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, future revenues being lower than expected; increasing competitive pressures in the industry; general economic conditions or conditions affecting demand for the products offered by the Bank in the markets in which it operates being less favourable than expected. The Management Board has approved the contents of this Prospectus.

(ii)

CONTENTS Page No. KEY TERMS AND DEFINITIONS.......................................................................................................1 PRESENTATION OF FINANCIAL AND OTHER INFORMATION ...............................................16 FORWARD-LOOKING STATEMENTS ............................................................................................19 EXCHANGE RATES AND EXCHANGE CONTROLS ....................................................................21 ENFORCEMENT OF FOREIGN JUDGMENTS ................................................................................23 SUMMARY..........................................................................................................................................24 RISK FACTORS ..................................................................................................................................52 DIVIDEND POLICY............................................................................................................................74 THE BANK ..........................................................................................................................................76 SELECTED CONDENSED CONSOLIDATED FINANCIAL DATA .............................................124 PRO FORMA FINANCIAL INFORMATION ..................................................................................130 MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.............................................................................................................133 MANAGEMENT AND CORPORATE GOVERNANCE.................................................................170 SELECTED STATISTICAL AND OTHER INFORMATION .........................................................191 ASSET AND LIABILITY MANAGEMENT ....................................................................................207 RELATED PARTY TRANSACTIONS.............................................................................................224 PRICE RANGE OF SHARES ............................................................................................................229 PRINCIPAL SHAREHOLDERS .......................................................................................................230 DESCRIPTION OF SHARE CAPITAL AND CERTAIN MATTERS OF KAZAKHSTAN LAW.232 THE BANKING SECTOR IN KAZAKHSTAN................................................................................249 TAXATION........................................................................................................................................255 ISSUANCE AND TRANSFER RESTRICTIONS.............................................................................258 FORM OF THE NEW NOTES AND PROVISIONS RELATING TO SUCH NOTES IN GLOBAL FORM.............................................................................................................................259 SUMMARY OF PROVISIONS RELATING TO THE GDRs WHILE IN MASTER FORM..........264 INFORMATION RELATING TO THE DEPOSITARY...................................................................268 THE RECOVERY ASSETS...............................................................................................................269 ADDITIONAL INFORMATION.......................................................................................................278 Schedule 1 TERMS AND CONDITIONS OF THE NEW NOTES...............................................281 Schedule 2 TERMS AND CONDITIONS OF THE REGULATION S GDRS .............................392 Schedule 3 TERMS AND CONDITIONS OF THE RULE 144A GDRS ......................................418 Schedule 4 INDEX TO FINANCIAL STATEMENTS......................................................................1

(iii)

KEY TERMS AND DEFINITIONS In this Prospectus: Accredited Investor means an accredited investor as defined in Rule 501(a) of Regulation D under the Securities Act; Advisers means Lazard Frres, UBS Limited, Deloitte, White & Case LLP, White & Case Kazakhstan LLP, White & Case LLC, Baker & McKenzie LLP, Baker & McKenzie CIS Limited, Field Fisher Waterhouse LLP, Lovells, Allen & Overy LLP, NautaDutilh N.V., NautaDutilh Avocats Luxembourg and their respective Affiliates and Subsidiaries and any other adviser to the Bank, its Subsidiaries, the Government, the NBK, the FMSA, Samruk-Kazyna or the Steering Committee appointed in relation to the Restructuring; Affiliate means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified; Agency Agreement means the paying agency agreement between the Bank, the Principal Paying and Transfer Agent, and the other agents named therein, dated 25 August 2010; Agreed Claim means a Claim, the amount of which is liquidated in amount and has either been agreed to by the Bank or otherwise been determined by the Supervisor in accordance with the provisions of the Restructuring Plan; Agricultural State Finance Programme means the KZT 120,000 million programme adopted by the Government in July 2008 aimed at ensuring the stability and development of the agricultural sector of the Kazakhstan economy; ALCO means the Banks Asset Liability Management Committee; Annual Financial Statements means the audited consolidated financial statements of the Bank as at and for the years ended 31 December 2009, 2008 and 2007 contained in this Prospectus; Approval Date means 28 May 2010, being the date of the Claimants Meeting at which the Restructuring Plan was approved by the Claimants; Approved Stock Exchange means a recognised stock exchange established in any member state of the European Economic Area; Associate means an entity more than 20 per cent. and less than 50 per cent. of whose equity capital is owned by the Bank, directly or indirectly through one or more intermediaries; Atlanta-Polis means JSC Insurance company Atlanta-Polis a joint stock company formed under the laws of Kazakhstan on 6 June 1995; Authorisation means an authorisation, consent, approval, resolution, licence, permit, exemption, filing, notarisation or registration (including the Banks licence and/or permits to carry out banking operations and other operations permitted by applicable legislation) required in connection with the business of the relevant person or in connection with the Restructuring, the Deeds of Covenant and/or Restructuring Documents; Bank means BTA Bank JSC; Bank Bonds means KZT 645 billion of the Banks bonds, each with a denomination of KZT 1,000, which the Bank sold to Samruk-Kazyna in exchange for all of the Samruk-Kazyna Bonds; Bank Group means the Bank and the Finance Subsidiaries; Banking Law means the law of the Republic of Kazakhstan on Banks and Banking Activity dated 31 August 1995, as amended;

Banking Licence means the licence and/or permits to carry out banking operations and other operations permitted by applicable legislation; Basel Accord means 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 Report means the report titled International Convergence of Capital Measurement and Capital Standards: A Revised Framework of the Basel Committee on Banking Supervision; BIS means the Bank for International Settlements; BIS Guidelines means the guidelines adopted by the Basel Committee on Banking Regulations and Supervision Practices of the Bank for International Settlements; Board of Directors or the Board means the board of directors of the Bank from time to time; Borrower means the Bank; BTA Armenia means CJSC BTA Bank, a closed joint stock company incorporated under the laws of the Republic of Armenia on 1 June 1991; BTA Belarus means JSC BTA (Belarus), a joint stock company formed under the laws of Belarus on 25 April 2002; BTA Finance Luxembourg means BTA Finance Luxembourg S.A. affiliated company of JSC BTA Bank, a wholly owned subsidiary of the Bank incorporated in Luxembourg; BTA Georgia means Joint Stock Company BTA Bank, a joint stock company incorporated under the laws of Georgia on 14 March 2000; BTA Insurance means BTA Insurance JSC Subsidiary company of BTA Bank, a joint stock company formed under the laws of Kazakhstan on 8 September 1998; BTA Ipoteka means JSC BTA Ipoteka Subsidiary Mortgage company of JSC BTA Bank, a joint stock company formed under the laws of Kazakhstan on 20 November 2000; BTA Kazan means Joint Stock Commercial Bank BTA-Kazan (Tatarstan) (open joint stock company), a joint stock company incorporated under the laws of the Russian Federation on 3 October 1992; BTA Kyrgyzstan means CJSC BTA Bank (Kyrgyzstan), a closed joint stock company formed under the laws of Kyrgyzstan on 2 December 1996; BTA/NBK Repo Transaction means any securities repurchase or resale agreement, securities borrowing agreement (or other agreement between the Bank and the NBK which is similar in legal and commercial effect to any of the foregoing) pursuant to which liquidity is made available by the NBK to the Bank against the SK Bonds; BTA Orix Leasing means JSC BTA Orix Leasing, a joint stock company incorporated under the laws of Kazakhstan on 31 August 2000; BTA Pension Fund means JSC Subsidiary of BTA Bank JSC Accumulative Pension Fund BTA Kazakhstan, previously known as JSC Pension Fund Kurmet Kazakhstan, a joint stock company formed under the laws of Kazakhstan and reregistered on 30 December 2005; BTA Russia means AMT Bank limited liability company, formerly known as BTA Bank limited liability company (Russia), which was formerly known as Slavinvestbank, a limited liability company incorporated under the laws of the Russian Federation on 10 May 1994;

BTA Securities means BTA Securities JSC, a joint stock company formed under the laws of Kazakhstan on 17 October 1997; BTA Ukraine means OJSC BTA Bank (Ukraine), formerly known as Ukrainian Credit and Trade Bank, an open joint stock company created under the laws of Ukraine on 10 December 1992; BTA Undertaking means the deed poll executed by the Bank on 19 August 2010; BTA Zabota means JSC Subsidiary insurance company of BTA Bank BTA Zabota, a joint stock company formed under the laws of Kazakhstan on 10 September 1996; BTA Zhizn means JSC Subsidiary Life Insurance company of BTA Bank BTA Zhizn, a joint stock company formed under the laws of Kazakhstan on 22 July 1999; BVI Proceedings means the legal proceedings initiated by the Bank as described in The Bank Asset Recovery BVI Proceedings; Change of Control means: (a) Samruk-Kazyna ceases to control the Bank (other than where it ceases to control the Bank (a) by transfer of control to a Permitted Transferee or (b) in connection with a Secondary Public Offering), where control of the Bank means: (i) the holding beneficially of more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or the power (whether by ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Bank; or

(ii)

(b)

Any person or group of persons acting in concert (other than where (a) such person or persons are Permitted Transferees or (b) in connection with a Secondary Public Offering) gains control of the Bank where control means the power (whether by ownership of shares, proxy, contract, agency or otherwise) to: (i) (ii) appoint or remove all, or the majority, of the directors or other equivalent officers of the Bank; or give directions with respect to the operating and/or financial policies of the Bank with which the directors or other equivalent officers of the Bank are obliged to comply;

provided that any agreement whereby management of the Bank is transferred to a third party (the manager) that does not, in conjunction with any acquisition of shares in the Bank by such manager or its Affiliates (whether or not occurring at the same time), cause the government of the Republic of Kazakhstan to cease to own more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), will not constitute a Change of Control if (a) the Trustee and the Creditor Directors have been provided with an opinion in form and substance satisfactory to them of independent legal advisers of recognised standing to the effect that the management agreement, in conjunction with any acquisition of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), does not cause the government of the Republic of Kazakhstan (directly or indirectly) to cease to control the Bank or to have majority economic risk and/or benefit in the Bank and continues to allow the government of the Republic of Kazakhstan (directly or indirectly) to retain the sole right to exercise its rights as majority shareholders (including in relation to the appointment of directors), (b) the terms of

the management agreement have been approved by a Qualified Majority, and (c) the manager is a Permitted Transferee; Charter means the current charter of the Bank; Chrysopa means Chrysopa Holdings BV, a Dutch company; Chrysopa Loan means the purported loan for U.S.$120 million from the Bank to Chrysopa on 1 August 2008 that is the subject of the Chrysopa Proceedings; Chrysopa Proceedings means the legal proceedings initiated by the Bank as described in The Bank Asset Recovery Chyrsopa Proceedings; CIS means the Commonwealth of Independent States; Civil Code means the General Part of the Civil Code of the Republic of Kazakhstan dated 27 December 1994 (as amended) and/or the Special Part of the Civil Code of the Republic of Kazakhstan dated 1 July 1999 (as amended); Claim means any amount which was claimed to be owed (actually or contingently) by a member of the Bank Group arising out of any Designated Financial Indebtedness; Claimant means any person who had a Claim; Claimants Meeting means the meeting of Claimants held on 28 May 2010; Clearing System means each or all of Euroclear, Clearstream and KDC; Clearstream means Clearstream Banking, socit anonyme, Luxembourg; Collection Account means the account established pursuant to the Recovery Units; Common Depositary means common depositary for Euroclear and Clearstream in its capacity as book-entry depositary for the Euronotes and any successor thereto; Common Shares means the common shares in the capital of the Bank (including, where appropriate, GDRs in respect thereof); Competition Agency means the Agency of the Republic of Kazakhstan for Protection of Competition; Construction State Finance Programme means the KZT 240 billion programme adopted by the Government on 6 October 2007 aimed at providing financing for the completion of unfinished facilities and creation of favourable living conditions for the population of Kazakhstan; Cooperation Agreement means the Agreement on Cooperation and Mutual Activity with respect to Questions of the Granting of Bank Loans by the National Bank No. 77NB dated as of 17 February 2009, as amended by an additional agreement No. 1/171 N.B. dated 3 March 2010, by and among the Bank, the NBK and the FMSA; Corporate Governance Code means the current corporate governance code of the Bank; Court means the Specialised Financial Court of the Regional Financial Centre of Almaty; Damu Fund means JSC Fund for Development of Entrepreneurship Damu; DBK means the Development Bank of Kazakhstan; Deed of Release means the deed entered into by the Bank on behalf of Claimants and Related Parties pursuant to the Restructuring Plan dated 27 August 2010;

Deeds of Undertaking means the BTA Undertaking and the Samruk-Kazyna Undertaking; Default means an Event of Default under any of the Restructuring Documents or any event or circumstance (as specified, in the case of each of the New Notes, in the relevant Annexes of Schedule 1 (Terms and Conditions of the New Notes) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the relevant Restructuring Documents or any combination of any of the foregoing) be an Event of Default; Definitive Holder means the registered holder of a Euronote in definitive form; Deposit Agreement means the deposit agreement dated 23 August 2010 between the Bank and the Depositary in relation to the GDRs; Depositary means The Bank of New York Mellon, incorporated in the United States of America; Deposited Shares means the Shares deposited with the Depositary; Designated Financial Indebtedness means the Financial Indebtedness of the Bank and/or its Finance Subsidiaries subject to the Restructuring amounting to KZT 2,441,988 million or U.S.$16,647 million; Development Organisation means any of Asian Development Bank, European Bank for Reconstruction and Development, International Bank for Reconstruction and Development, International Finance Corporation, Nederlandse Financierings Maatschappij voor Ontwikkelingslanden N.V. or Deutsche Investitions und Entwicklungsgesellschaft GmbH or any other development finance institution established or controlled by one or more states and any other person which is a, or is controlled by any, Kazakhstan governmental body acting on behalf of, or funded in relation to, the relevant Financial Indebtedness by one or more of the foregoing development finance institutions; Discounted Value has the meaning set out in Condition 8(f) of Annex 1 (Terms and Conditions of the Senior Dollar Notes) of Schedule 1 (Terms and Conditions of the New Notes); Distressed Assets Fund means the Distressed Assets Fund established by the Government for the purpose of purchasing the doubtful assets of commercial banks; Dollar OID Notes means original issue discount notes issued by the Bank denominated in U.S. Dollars the terms and conditions for which are set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 2 (Terms and Conditions of the Dollar OID Notes); Dollar Subordinated Notes means the subordinated notes issued by the Bank denominated in U.S. Dollars the terms and conditions for which are set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 4 (Terms and Conditions of the Dollar Subordinated Notes); Domestic Noteholders means holders of Tenge denominated securities issued by the Bank; EBRD means the European Bank for Reconstruction and Development; EEA means the European Economic Area; Euro or means the lawful currency of the Member States of the European Union that have adopted the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on the European Union and as further amended by the Treaty of Amsterdam; Euroclear means Euroclear Bank SA/NV; Euronoteholder means a person with the ultimate economic interest in any of the Euronotes and holding such interest through one of the Clearing Systems from time to time, unless specifically stated otherwise;

Euronotes means each of the notes issued by TuranAlem Finance; Euro OID Notes means original issue discount notes issued by the Bank denominated in Euro the terms and conditions for which are set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes); Euro Subordinated Notes means the subordinated notes issued by the Bank denominated in Euro the terms and conditions for which are set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 5 (Terms and Conditions of the Euro Subordinated Notes); Event of Default has the meaning set out in the relevant terms and conditions of the New Notes; Finance Lease means any lease or hire purchase contracts which would, in accordance with FMSA Methodology, be treated as a finance or capital lease; Finance Subsidiaries means BTA Finance Luxembourg, TuranAlem Finance and TuranAlem Finance (Russia); Financial Advisers means Lazard Frres and UBS Limited, financial advisers to the Bank in connection with the Restructuring; Financial Indebtedness means any obligation (whether incurred as principal or surety), whether present or future, actual or contingent, for or in respect of: (a) (b) (c) (d) (e) (f) moneys borrowed and debit balances at banks or other financial institutions; any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; the amount of any liability in respect of Finance Leases; receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under FMSA Methodology); any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition, or (ii) any liabilities of any member of the Group relating to any post-retirement benefit scheme; any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the final redemption or repayment date under the relevant New Notes or Recovery Units or are otherwise classified as borrowings under the FMSA Methodology); any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 90 days after the date of supply;

(g)

(h)

(i)

(j)

any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under the FMSA Methodology; and the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above;

(k)

Financial Statements means the Annual Financial Statements and the Unaudited Interim Financial Statements; Financing of Terrorism means the act of providing or collecting funds with the intention that they be used, or in the knowledge that they are to be used, in order to carry out terrorist acts; First Kazakh Securitisation Company means First Securitisation Company of Kazakhstan, a public limited company formed under the laws of The Netherlands on 8 December 2005; Fitch means Fitch Ratings Ltd.; FMSA means the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Markets and Financial Organisations; FMSA Agreement means the agreement between the Bank and the FMSA dated 30 June 2009, as amended; FMSA Asset Classification Rules means the rules of asset classification issued by FMSA, dated 25 December 2006; FMSA Guidance means Instruction about norm values and calculation methodology of prudential norms for second tier banks approved by Resolution of the Board of the Agency of the Republic of Kazakhstan for Regulation and Supervision of Financial Market and Financial Organisations dated 30 September 2005, #358, as amended, supplemented or updated from time to time; FMSA Methodology means unaudited IFRS adjusted to reflect the FMSAs requirements for preparation of financial statements for regulatory purposes; GBP or means pounds sterling, the lawful currency of the United Kingdom. GDP means the gross domestic product of Kazakhstan; GDR Holder means any person holding a GDR from time to time; GDRs means global depositary receipts relating to Deposited Shares; Global Note means either a Restricted Global Note or an Unrestricted Global Note; Government means the government of the Republic of Kazakhstan; Group means the Bank and each of its Subsidiaries from time to time; Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary; IFRS means the International Financial Reporting Standards in effect from time to time; IMF means the International Monetary Fund; IMF Charter means the charter of the International Monetary Fund; Industrial Innovation Programme means the programme of the Government proposed to be implemented over a five-year period beginning in 2010 aimed at developing new industries, industrial complexes and innovative products;

Information Memorandum means the Banks information memorandum dated 1 May 2010, as supplemented by the Banks supplemental information memorandum dated 19 May 2010 and as further supplemented by the Banks supplemental information memorandum dated 27 May 2010; Intermediary means any broker, dealer, bank, trust company or other nominee or custodian that holds Euronotes on behalf of beneficial owners; JPY means the Japanese Yen, the lawful currency of Japan; JSC Law means the Law of the Republic of Kazakhstan on Joint Stock Companies dated 13 May 2003, as amended; KASE means the Kazakhstan Stock Exchange; Kazakhstan means the Republic of Kazakhstan; KDIF means the Kazakhstan Deposit Insurance Fund; LCIA means the London Court of International Arbitration; LIBOR means the London Inter-Bank Offered Rate as determined by the British Bankers Association; Lux means Lux Investing Limited, a British Virgin Islands company; Management Board means the management board of the Bank from time to time; Material Subsidiary means at any relevant time a Subsidiary of the Bank: (a) whose total assets, pre-tax profits or gross revenues (or, where the Subsidiary in question prepares consolidated accounts, whose total consolidated assets or gross consolidated revenues, as the case may be) attributable to the Bank represent not less than five per cent. of the total consolidated assets or pre-tax profits or the gross consolidated revenues of the Bank, all as calculated by reference to the then latest audited accounts (or, if none, its then most recent management accounts or consolidated accounts, as the case may be) of such Subsidiary and the then latest audited consolidated accounts of the Group; or to which is transferred all or substantially all of the assets and undertaking of a Subsidiary which immediately prior to such transfer is a Material Subsidiary;

(b)

Minority Protection Expiry Date means the later of: (a) (b) the date falling three years after the Restructuring Date; and (if the GDRs are not so listed within six months of the Restructuring Date) the date on which the GDRs have been accepted for listing on an Approved Stock Exchange;

Model Insolvency Law means the 1997 UNCITRAL Model Law on Cross-Border Insolvency; Money Laundering means: (a) the conversion or transfer of property, knowing it derived from a criminal offence, for the purpose of concealing or disguising its illegal origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of its actions which assistance has led or would be likely to, in the opinion of any New Notes Trustee, lead to a sanction, fine or reprimand from a competent authority or finding of guilt or liability by a competent court;

(b)

the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property knowing that it is derived from a criminal offence; or the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence;

(c)

Moodys means Moodys Investors Service, Inc.; Mortgage State Finance Programme means the KZT 120 billion programme adopted by the Government in February 2009 aimed at reducing the current interest rate on mortgage loans to between 9 and 11 per cent., converting foreign currency loans into Tenge and extending loan maturities up to 20 years; NBK means the National Bank of Kazakhstan, the central bank of Kazakhstan; NBK Agreement means the agreement between Samruk-Kazyna and the NBK in relation to the BTA/NBK Repo Transactions dated as of 30 November 2009; Net Assets means total assets less total liabilities; New Notes means the Senior Notes, the OID Notes, the Subordinated Notes and the Recovery Units; New Notes Trustee means the trustee appointed under the provisions of a trust deed in respect of New Notes; New Notes Trust Deed means each of the trust deeds constituting the New Notes; non-Kazakhstan holders has the meaning as set out in Taxation; Non-Tenge New Notes means the OID Notes, the Senior Dollar Notes, the Recovery Units, the Euro Subordinated Notes and the Dollar Subordinated Notes; Note Certificates means Restricted Note Certificates and Unrestricted Global Note Certificates; Noteholder means a holder of any of the New Notes; NSA means Kazakhstans National Statistics Agency; OECD means the Organisation for Economic Co-operation and Development; OID Noteholder means a holder of OID Notes; OID Notes means the Dollar OID Notes and the Euro OID Notes; Participating Member State means any member state of the European Communities that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union; Permitted Security means: (a) (b) (c) any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group; any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group

in the ordinary course of trading and on the suppliers standard or usual terms and not arising as a result of any default or omission by any member of the Group; (d) (e) any Security entered into pursuant to any Restructuring Documents (including any Security granted in respect of the Collection Account and the RCTFF Collection Account); any Security arising pursuant to any agreement (or other applicable terms and conditions) which is standard or customary in the relevant market (and not for the purpose of raising credit or funds for the operation of any member of the Group other than on a short-term basis as part of its liquidity management activities), in connection with (i) contracts entered into simultaneously for sales and purchases at market prices of precious metals or securities, (ii) the establishment of margin deposits and similar securities in connection with interest rate and foreign currency hedging operations and trading in securities, or (iii) the foreign exchange dealings or other proprietary trading activities including, without limitation, Repos, of any member of the Group; any Security provided that at the same time or prior to the creation of such Security, the Bank provides prior-ranking Security or the benefit of such other Security in favour of the holders of the Senior Notes and OID Notes, in each case in form and substance satisfactory to the New Notes Trustee (acting on the instructions of an extraordinary resolution of holders of the Senior Notes and OID Notes); granted in favour of the Bank by any Material Subsidiary to secure Financial Indebtedness or other obligations owed by such Material Subsidiary to the Bank; arising in the ordinary course of the Banks or a Material Subsidiarys trading activities and which is necessary in order to enable the Bank or such Material Subsidiary to comply with any mandatory or customary requirement imposed on it by a banking or other regulatory authority in connection with the Banks or such Material Subsidiarys business; on property acquired (or deemed to be acquired) under a Finance Lease, or claims arising from the use or loss of or damage to such property, provided that any such encumbrance secures only rentals and other amounts payable under such lease; granted by the Bank in favour of a Development Organisation to secure Financial Indebtedness owed by the Bank to such Development Organisation pursuant to any loan agreement or other credit facility entered into between the Bank and such Development Organisation, provided that the amount of Financial Indebtedness so secured pursuant to this paragraph (j) shall not exceed in aggregate an amount in any currency or currencies equivalent to six per cent. of the Banks Net Assets calculated by reference to the most recent financial statements of the Bank prepared in accordance with FMSA Methodology; arising out of the refinancing, extension, renewal or refunding of any Financial Indebtedness secured by Security permitted by any of the above exceptions, provided that the Financial Indebtedness thereafter secured by such Security does not exceed the amount of the original Financial Indebtedness and such Security is not extended to cover any property not previously subject to such Security; not included in any of the above exceptions, in aggregate securing Financial Indebtedness with an aggregate principal amount at any time not exceeding U.S.$25 million (or its equivalent in other currencies) at that time; or any other Security to which the New Notes Trustee has given its prior written consent;

(f)

(g) (h)

(i)

(j)

(k)

(l)

(m)

Permitted Transferee means a person which: (A)(i) is a bank or other financial institution subject to financial regulation in Russia, China, Hong Kong, Singapore or an OECD country; or (ii) is a sovereign wealth fund from Russia, China, Hong Kong, Singapore or an OECD country or any other country which may otherwise be approved by a Qualified Majority of the Board; (B) has, in the case of

10

a bank or other financial institution, a minimum credit rating from S&P of at least BBB or equivalent from Moodys or Fitch; (C) has, in the case of a bank or other financial institution, a minimum paid up share capital and reserves of at least U.S.$7 billion or, in the case of a sovereign wealth fund, assets of at least U.S.$7 billion; and (D) is not affiliated with any of the present or former shareholders or managers of the Bank; PLN means the Polish Zloty, the legal currency of Poland; Preference Share means preference shares in the capital of the Bank; Principal Paying and Transfer Agent means The Bank of New York Mellon, London Branch (incorporated in the United States of America) or any successor principal paying and transfer agent; Proceeding means any process, action, or other legal proceeding (including, without limitation, any demand, arbitration, alternative dispute resolution, judicial review, adjudication, execution, seizure, distraint, forfeiture, re-entry, lien, enforcement of judgment or enforcement of any security); Pro Forma Financial Information means the unaudited pro forma financial information of the Bank as at 30 June 2010 as set out in Pro Forma Financial Information; Prospectus Directive means Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC and includes any relevant implementing measure in each relevant member state; QIBs means qualified institutional buyers, as defined in Rule 144A under the Securities Act; Qualified Majority means in relation to a decision of the Board, a majority of the Board including both of the directors appointed by the creditors of the Bank and at least one independent director; Quarterly Recovery Assets Management Report has the meaning given to it in Annex 6 (Terms and Conditions of the Recovery Units) of Schedule 1 (Terms and Conditions of the New Notes); RCTFF means the U.S.$698,186,047.18 revolving committed trade finance facility to be extended to the Bank by Claimants who are subject to participation in the RCTFF and to be used by the Bank for the funding of new trade finance transactions; RCTFF Agreement means the agreement setting out the terms of the RCTFF dated 25 August 2010; RCTFF Collection Account Pledges means the pledge agreements in respect of the collection accounts held in favour of the security trustee pursuant to the terms of the RCTFF Agreement; Recoveries has the meaning set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 6 (Terms and Conditions of the Recovery Units); Recovery Assets has the meaning set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 6 (Terms and Conditions of the Recovery Units); Recovery Assets Auditor means Deloitte LLP; Recovery Assets Opening Report has the meaning given to it in Annex 6 (Terms and Conditions of the Recovery Units) of Schedule 1 (Terms and Conditions of the New Notes); Recovery Programme has the meaning given to it in Annex 6 (Terms and Conditions of the Recovery Units) of Schedule 1 (Terms and Conditions of the New Notes); Recovery Sub-Committee means the sub-committee of the Management Board entitled the Strategy Committee on which shall sit a Creditor Director;

11

Recovery Units means the recovery units deliverable under the Restructuring Plan, the terms and conditions of which are set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 6 (Terms and Conditions of the Recovery Units); Redemption Date means the date on which any New Note is redeemed, either in whole or in part; Regulation D means Regulation D under the Securities Act; Regulation S means Regulation S under the Securities Act; Reinvestment Yield has the meaning set out in Condition 8(f) of Schedule 1 (Terms and Conditions of the New Notes), Annex 1 (Terms and Conditions of the Senior Dollar Notes); Related Party means any Affiliate of the Bank, any officer, director or manager of the Bank or its Affiliates, any member of the Management Board or supervisory board as at 31 December 2008 and the spouse, parents, siblings and children of any such person which is a natural person (and for these purposes Samruk-Kazyna and any entity owned by Samruk-Kazyna shall be treated as a Related Party) and any other person who is connected to any such person within the meaning of the Insolvency Act 1986; Repo means a securities repurchase or resale agreement or reverse repurchase and resale agreement, a securities borrowing agreement or any agreement relating to securities which is similar in effect to any of the foregoing and, for the purposes of this definition, securities means any capital stock, share, debenture or other debt or equity instrument, or other derivative, whether issued by any private or public company, any government or agency or instrumentality thereof or any supranational, international or multilateral organisation; Restricted Global Note means a permanent global note representing beneficial interest in Non-Tenge New Notes offered and issued to QIBs or Accredited Investors or subsequently sold in reliance on Rule 144A; Restricted Note Certificate means a note certificate in definitive form which may be issued by Euroclear or Clearstream, Luxembourg in exchange for a Restricted Global Note in accordance with the Conditions of the relevant New Notes; Restructuring means the overall restructuring and/or cancellation of certain of the debts and financial obligations of the Bank and the Finance Subsidiaries pursuant to, inter alia, the Restructuring Plan; Restructuring Documents means: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) The Restructuring Plan; The Information Memorandum; The Trust Deed and Agency Agreement in relation to the Non-Tenge New Notes; Cash Management Agreement; Bank Creditor Loan Agreements and related security documents (if any); RCTFF Agreement and the RCTFF Collection Account Pledges; The Deposit Agreement in respect of the GDRs; The SK Guarantee; The Deeds of Undertaking; The Deed of Release;

12

(xi) (xii) (xiii)

The Banks Charter; The Banks Corporate Governance Code; and Appointment letters and indemnities (from the Bank) for the Supervisor, the Adjudicator, the Independent Auditor, the Recovery Assets Auditor and the Creditor Directors;

Restructuring Law means the Law of the Republic of Kazakhstan dated 11 July 2009 On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Money Payments and Transfers, Accounting and Financial Reporting of Financial Organisations, Banking Activities, and activities of the National Bank of Kazakhstan; Restructuring Plan means the plan to restructure the Designated Financial Indebtedness between the Bank, the Claimants and the Related Parties which was approved at the Claimants Meeting; REUEL means REUEL Limited, a British Virgin Islands company; RIROil means RIROil Sarl (now known as TANIL Sarl), a Swiss Company; RUB or Russian Roubles means the lawful currency of the Russian Federation; Rule 144A means Rule 144A under the Securities Act; S&P means Standard & Poors Rating Services, a division of The McGraw Hill Companies; Samruk-Kazyna means JSC Sovereign Wealth Fund Samruk-Kazyna; Samruk-Kazyna Directors means the directors which Samruk-Kazyna appoints to the Board from time to time; Samruk-Kazyna Undertaking means the deed poll executed by Samruk-Kazyna on 20 August 2010 in connection with the Restructuring; Second Kazakh Securitisation Company means Second Securitisation Company of Kazakhstan, a public limited company formed under the laws of The Netherlands on 25 September 2007; Secondary Public Offering means any sale or public offering of any equity security (including any preference share) in the Bank or receipts or similar securities representing such equity securities by way of flotation, public placing, listing or other public offering on any recognised international exchange; Securities Act means the United States Securities Act of 1933, as amended; Senior Dollar Notes means the notes denominated in U.S. Dollars issued by the Bank as set out in Schedule 1 (Terms and Conditions of the New Notes), Annex 1 (Terms and Conditions of the Senior Dollar Notes); Sekerbank means Sekerbank T.A.S., a bank incorporated under the laws of Turkey; Senior Notes means the Senior Dollar Notes; Shareholder means a registered holder of Shares; Shares means the common shares of the Bank; SK Bonds means 4 per cent. bonds issued by Samruk-Kazyna in a total principal amount of KZT 645 billion, each with a denomination of KZT 1,000, and which Samruk-Kazyna issued in March 2009 and sold to the Bank in consideration for the issue by the Bank and sale to Samruk-Kazyna of the Bank Bonds with identification numbers KZP01Y06D392, KZP02Y07D398, KZP03Y08D394, KZP04Y09D390, KZP05Y10D395, KZP06Y11D391, KZP07Y12D397, KZP08Y13D393, KZP09Y14D399, KZP10Y15D394, KZP11Y06D391, KZP12Y07D397, KZP13Y08D393,

13

KZP14Y09D399, KZP15Y10D394, KZP19Y14D398 and KZP20Y15D393;

KZP16Y11D390,

KZP17Y12D396,

KZP18Y13D392,

SK Guarantee means the guarantee which Samruk-Kazyna issued to the NBK for a duration of no less than 10 years from the first BTA/NBK Repo Transaction in respect of the obligations of the Bank to the NBK under any BTA/NBK Repo transaction; SME means small and medium-sized enterprises with assets of no more than KZT 460 million, annual sales of no more than U.S.$25 million, no more than 250 employees and with a financing limit no higher than U.S.$10 million; SME State Finance Programme means the KZT 310,400 million programme (disbursed in four tranches) adopted by the Government in 2007 aimed at providing financing to SMEs for the acquisition of new, and the modernisation of existing, material assets, the provision of working capital and the refinancing of existing loans made to SMEs by the Bank or other credit organisations; State Finance Programmes means the SME State Finance Programme, the Mortgage State Finance Programme, the Construction State Finance Programme, the Agricultural State Finance Programme, Road Map for Business 2020, and other state finance programmes established by the Government; Steering Committee means the steering committee from time to time of certain Claimants, as at the date hereof consisting of The Royal Bank of Scotland N.V. (formerly known as ABN AMRO Bank N.V.) (supported by members of The Royal Bank of Scotland plcs Global Restructuring Group), Commerzbank Aktiengesellschaft, the D. E. Shaw Oculus International, Inc., Euler Hermes Kreditversicherungs AG (acting for and on behalf of the Federal Republic of Germany), Fortis Investment Management UK Limited, Gramercy Advisors LLC, The Bank of Singapore Limited (formerly ING Asia Private Bank Limited), KfW (representing its affiliates DEG Deutsche Investitions und Entwicklungsgesellschaft mbH and KfW IPEX Bank GmbH), Standard Chartered Bank, Export Import Bank of the United States and Wells Fargo Bank N.A; Subordinated Notes means Dollar Subordinated Notes and the Euro Subordinated Notes; Subsidiary: (a) an entity of which a person has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting capital or similar right of ownership (and control for this purpose means the power to direct the management and policies of the entity whether through the ownership of voting capital, by contract or otherwise); or an entity whose financial statements are, in accordance with applicable law and IFRS, consolidated with those of another person,

(b)

and for these purposes, when determining whether an entity is a Subsidiary of another, the registration of any shares in such Subsidiary in the name of any nominee or any other person holding security over such shares shall be ignored so that such entity is deemed to be the Subsidiary of the person who created that security or on whose behalf the nominee holds the relevant shares (as the case may be), and, in respect of the Bank, includes those entities listed in The Bank Subsidiaries and Associates of the Bank Subsidiaries; Supervisor means the supervisor appointed by the Bank, which shall initially be Watson, Farley & Williams LLP, or otherwise an independent third party considered fit and proper by the Bank and the Steering Committee, or failing agreement, an individual nominated by the LCIA, for the purpose of adjudicating disputed Claims; TARGET Day means day on which the Trans European Automated real-time Gross Settlement Express Transfer payment system which utilises a single shares platform (and which was launched on 19 November 2007) is open for the settlement of payments in Euro;

14

Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same); Tax Code refers to the code of the Republic of Kazakhstan on Taxes and Other Obligatory Payments to the Budget dated 10 December 2008, as amended; Temirbank means JSC Temirbank, a joint stock company formed under the laws of Kazakhstan on 26 March 1992; Tenge or KZT means the Kazakhstan Tenge, the lawful currency of Kazakhstan; Titan-Inkassatsiya means LLP Titan-Inkassatsiya, limited liability partnership, established under the laws of Kazakhstan on 22 August 2002; Treasury Transaction means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price; Trust Deed means the New Notes Trust Deed; Trustee means BNY Corporate Trustee Services Limited, or any successor trustee appointed in accordance with the provisions of the Trust Deed; TuranAlem Finance means TuranAlem Finance B.V., a wholly owned subsidiary of the Bank incorporated in the Netherlands; TuranAlem Finance (Russia) means LLP TuranAlem Finance, a limited liability company formed under the laws of the Russian Federation on 22 June 2004; UAH means the Ukrainian Grivna, the legal currency of the Ukraine; Ular-Umit means JSC Accumulative Pension Fund Ular-Umit, a joint stock company, incorporated under the laws of Kazakhstan on 23 January 1998; Unaudited Interim Financial Statements means the reviewed interim consolidated financial statements of the Bank for the six-month period ended 30 June 2010 contained in this Prospectus; United Kingdom means the United Kingdom of Great Britain and Northern Ireland; United States or the U.S. means the United States of America, its territories and possessions, any State of the United States of America and the District of Columbia; Unrestricted Global Note means a permanent global note representing beneficial interest in New Notes offered and issued in reliance on Regulation S; Unrestricted Note Certificate means a note certificate in definitive form which may be issued by Euroclear or Clearstream, Luxembourg in exchange for an Unrestricted Global Note in accordance with the Conditions of the relevant New Notes; Usarel means Usarel Investments Limited, a Cyprus company; U.S. Dollars, Dollars, $, USD or U.S.$ means United States Dollars, the lawful currency of the United States; U.S. GAAP means the generally accepted accounting principles in the United States; U.S. Person means a U.S. person as defined in Regulation S under the Securities Act; and Zhetysu means JSC Pension Asset Management company Zhetysu, a joint stock company, incorporated under the laws of Kazakhstan on 5 March 1998.

15

PRESENTATION OF FINANCIAL AND OTHER INFORMATION Historical Financial and Other Information The Bank is required to maintain its books of account in Tenge in accordance with IFRS and with the relevant laws and regulations in Kazakhstan. The Bank is also required to submit certain compliance reports prepared in accordance with the regulations of the FMSA. The historical financial information of the Bank set forth herein has, unless otherwise indicated, been extracted without material adjustment from the Annual Financial Statements and the Unaudited Interim Financial Statements, prepared in accordance with IFRS. Ernst & Young LLP, independent auditors (acting as an auditor under licence No. 0000003, Type MFU-2, dated 15 July 2005 issued by the Ministry of Finance of Kazakhstan), 77/7, Al-Farabi Avenue, Esentai Tower, Almaty, 050060, Republic of Kazakhstan, have audited the Banks Annual Financial Statements and their audit report is included in this Prospectus. Ernst & Young LLP have also reviewed the Banks Unaudited Interim Financial Statements for the six months ended 30 June 2010 and their review report is included in this Prospectus. The audit report issued by Ernst & Young LLP in respect of the Annual Financial Statements for the years ended 31 December 2009, 2008 and 2007 and the review report issued by Ernst & Young LLP in respect of the Unaudited Interim Financial Statements for the six months ended 30 June 2010 each expressed an unqualified opinion, but the audit report did include emphasis of matter paragraphs (Note 2 of the 2009 Annual Financial Statements) in respect of a material uncertainty which exists in respect of the Banks ability continuing as a going concern. Due to internal control weaknesses experienced by the Bank in the past, financial information presented in this Prospectus should be assessed with caution. See Risk Factors Risks Relating to the Bank Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. Certain information presented in this Prospectus is prepared on the basis of FMSA Methodology. Such information is not audited and is not directly comparable with the information presented in accordance with IFRS. See Pro Forma Financial Information and Asset and Liability Management Provisioning Policy. In making an investment decision, readers of this Prospectus must rely upon their own examination of the Bank, the terms of the Restructuring and the financial information included in this Prospectus, and should consult their own professional advisers for an understanding of the differences between IFRS, FMSA Methodology and U.S. GAAP and how these differences might affect the financial information in this Prospectus. Pro Forma Financial Information The financial information set forth herein also includes the Pro Forma Financial Information. The Pro Forma Financial Information was prepared by the Bank on the basis of FMSA Methodology and IFRS, as indicated, to illustrate the effect of the Restructuring as if the Restructuring had been completed as at 30 June 2010 and is based on data derived from the Unaudited Interim Financial Statements and management accounts prepared on the basis of FMSA Methodology. The Pro Forma Financial Information is unaudited and presented on an unconsolidated basis, and it is presented for illustrative purposes only. The Banks management believes that the Pro Forma Financial Information may be useful in enabling investors to assess and understand the Banks financial position following the Restructuring. The Pro Forma Financial Information is based upon certain assumptions and adjustments which the Banks management believes are reasonable and necessary for a fair presentation of such information. While the Bank has used all reasonable efforts to ensure that the Pro Forma Financial Information is correct, accurate and complete as at the date of this Prospectus, no representation or warranty (express

16

or implied) is made as to the reliability, accuracy or completeness of the Pro Forma Financial Information. The assumptions and adjustments are based upon the Banks preliminary analysis and based upon currently available information. The Pro Forma Financial Information does not take into account the potential adverse impact of certain negative developments since 30 June 2010, such as additional loan loss provisions and further operational losses resulting from the deteriorating financial condition of the Bank and instability aggravated by the ongoing restructuring process. Readers of this Prospectus are cautioned that pro forma financial information is inherently unreliable and that the Pro Forma Financial Information is not necessarily indicative of how the Banks consolidated capitalisation, balance sheet or capital adequacy information as at 30 June 2010 would have been presented had the Restructuring actually been completed at that date, nor is it necessarily indicative of the Banks consolidated capitalisation, balance sheet or capital adequacy as at any future date. The unaudited Pro Forma Financial Information should be read in conjunction with the Financial Statements included elsewhere in this Prospectus. See Risk Factors Risks Relating to the Restructuring The Pro Forma Financial Information would likely differ materially if it were based on consolidated financial statements prepared in accordance with IFRS. Currency Translations Solely for the convenience of the reader, this Prospectus presents unaudited translations of certain Tenge amounts into U.S. Dollars at specified rates. Unless otherwise stated, any balance sheet data in U.S. Dollars is translated from Tenge at the applicable exchange rate on the date of such balance sheet (or, if no such rate was quoted on such date, the immediately preceding date) and any income statement data in U.S. Dollars is translated from Tenge into U.S. Dollars at the daily average exchange rate applicable to the period to which such income statement data relates, in each case calculated in accordance with the official exchange rates for U.S. Dollars on the KASE as reported by the NBK. Further details can be found in the section headed Exchange Rates and Exchange Controls. The Bank has translated the summary income statement and balance sheet information for the sixmonth period ended 30 June 2010 at the rate of U.S.$1.00 = KZT 147.55 and the years ended 31 December 2009 and 2008 into U.S. Dollars at the rate of U.S.$1.00 = KZT 148.46 and U.S.$1.00 = KZT 120.79, respectively. See Exchange Rates and Exchange Controls. As at 11 February 2011 (the latest practicable date prior to the date of this Prospectus), the official KZT/U.S.$ rate of exchange reported by the NBK was KZT 146.41 = U.S.$1.00. 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. Certain figures which appear in this Prospectus have been subject to rounding adjustments; accordingly, figures shown as totals in certain tables may not be the sum of the figures which precede them. Statistical and Market Information Certain statistical and market information presented in this Prospectus in the sections headed Risk Factors, The Bank, Managements Discussion and Analysis of Results of Operations and Financial Condition, Selected Statistical and Other Information and The Banking Sector in Kazakhstan on such topics as the Banks competitors, the Kazakhstan banking sector, the Kazakhstan economy in general and other related subjects represents the Banks calculations based on information and official data of the FMSA, the NBK, the NSA and other third party sources. Specifically, information related to the Banks industry ranking and market share is derived from figures published by the FMSA. 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. The Bank has relied on the accuracy of this information without independent verification. Readers of this Prospectus should note that some of the Banks estimates are based on such third party information.

17

Readers of this Prospectus are advised to consider this data with caution. Official data published by Kazakhstan governmental or regional agencies is substantially less complete and less thoroughly researched than that 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 itself in this Prospectus is, therefore, subject to uncertainty due to concerns about the completeness or reliability of available official and public information.

18

FORWARD-LOOKING STATEMENTS Certain statements included herein may constitute forward looking statements that involve a number of risks and uncertainties. Such forward looking statements can be identified by the use of forward looking terminology such as 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 Banks intentions, beliefs or current expectations concerning, amongst other things, the Banks 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. Investors should be aware that forward looking statements are not guarantees of future performance and that the Banks actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from those statements made in or suggested by the forward looking statements contained in this Prospectus. In addition, even if the Banks 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 Banks ability to successfully restructure its indebtedness; the stability of the banking sector in Kazakhstan; the state of the Banks retail, corporate and SME businesses; the quality and stability of its deposit base; future credit losses that the Bank may incur; 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 Banks loan portfolio.

Factors that could cause actual results to differ materially from the Banks expectations are contained in cautionary statements in this Prospectus and include, among other things, the following: overall economic and business conditions; effects of the global financial crisis and international economic conditions; the level of demand for the Banks services; deposit outflows; competitive factors in the industries in which the Bank and its customers operate; changes in Government regulations and in the Governments or Samruk-Kazynas policies regarding support for the banking sector in Kazakhstan; the timing, impact and other uncertainties of unrecognised guarantees and pledges, if any; the timing, impact and other uncertainties of unidentified related party transactions, if any;

19

changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations; results of litigation or arbitration; interest rate fluctuations and other changing conditions in the capital markets; exchange rate fluctuations; economic and political changes in international markets, including governmental changes; hostilities and restrictions on the ability to transfer capital across borders; and the impact of valuation of derivatives and property and equipment.

The sections of this Prospectus entitled Risk Factors, Managements Discussion and Analysis of Results of Operations and Financial Condition, and The Bank and Selected Statistical and Other Information contain a more complete discussion of the factors that could affect the Banks future performance and the industry in which it operates. In light of these risks, uncertainties and assumptions, the forward looking statements described in this Prospectus may not occur. The Bank is not obliged to, and does not undertake any obligation to, update or 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.

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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 with the rate being determined on the basis of market developments and the NBKs role in setting the exchange rate was limited to interventions in the domestic currency market in order to prevent exchange rate volatility caused by short-term changes in supply and demand. In April 1999, the NBK and the Government publicly announced that the NBK would cease to establish fixed exchange rates for the Tenge and permit the exchange rate to float freely, and that the NBK would continue to intervene in the foreign exchange market only where necessary to support the Tenge. This decision was supported by international financial organisations such as the IMF. As a result, the Tenge depreciated from a pre-announcement rate of KZT 88.00 per U.S. Dollar to a rate of approximately KZT 130.00 per U.S. Dollar by 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 as a result of export proceeds from oil, agricultural products and other commodities. On 4 February 2009, the NBK reduced its level of support for the Tenge/U.S. Dollar exchange rate from KZT 117 KZT 123 to 1 U.S. Dollar to KZT 150 to 1 U.S. Dollar (+/- 3 per cent.). 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 and to prevent a significant decrease of Kazakhstans gold and currency reserves. It was also intended to enhance export competitiveness. From 5 February 2010 a new exchange rate corridor began to operate. In light of the state of world trade and currency markets, and in order to make the setting of exchange rates more flexible, the NBK has indicated that it will widen the KZT corridor until 20 March 2011 to allow fluctuations from a base rate of KZT 150 to 1 U.S. Dollar of plus or minus 10 per cent. (i.e., up to KZT 165 to 1 U.S. Dollar or down to KZT 127.5 to 1 U.S. Dollar). The following table sets out year-end, high, average and low Tenge/U.S. Dollar official exchange rates for each year from 2002 through 2009, and period-end, high, average and low Tenge/U.S. Dollar official exchange rates for the six months period ended 30 June 2010 and each month thereafter, in each case as reported by the NBK:
Period ended 31 December 2002 31 December 2003 31 December 2004 31 December 2005 31 December 2006 31 December 2007 31 December 2008 31 December 2009 30 June 2010 31 December 2010 31 January 2011 Period end 155.60 144.22 130.00 133.77 127.00 120.30 120.79 148.46 147.55 147.50 146.87 High 155.60 155.89 143.33 136.12 133.85 127.00 120.87 151.40 148.46 148.46 147.50 Average(1) 153.28 149.52 136.05 132.86 126.10 122.56 120.29 147.59 147.24 147.34 147.08 Low 150.60 143.66 130.00 129.83 117.25 118.79 119.48 120.79 146.41 146.41 146.78

____________ Note: (1) The weighted average rate reported by the NBK for each month, as applicable, during the relevant period.

On 11 February 2011 (the latest practicable date prior to the date of this Prospectus), the official KZT/U.S.$ rate of exchange as reported by the NBK was KZT 146.41 per U.S.$1.00. The above rates may differ from the actual rates used in the preparation of the Financial Statements and other financial information appearing in this Prospectus. The inclusion of these exchange rates is not intended to suggest that the Tenge amounts actually represent such U.S. Dollar amounts or that such amounts could have been converted into U.S. Dollars at any particular rate, or at all.

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Exchange Controls Kazakhstan has accepted the conditions of paragraphs 2, 3 and 4 of Article VIII of the IMF Charter 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 law, all current account operations, including transfers of dividends, interest and other investment income, may be made without restriction. Only certain outflowing and inflowing 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 at liberalising 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, the new currency control rules substantially expanded the classes of Kazakhstan investors that can invest abroad and eased the requirements for international financing in Kazakhstan. Since 1 January 2007, when certain provisions of the Law on Currency Regulation and Currency Control came into effect, it has become unnecessary 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 the existence of such operations.

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ENFORCEMENT OF FOREIGN JUDGMENTS The Bank is a joint stock company organised under the laws of Kazakhstan and substantially all of its operations are located in the Kazakhstan. Most of its directors and executive officers reside in Kazakhstan and substantially all of the Banks 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 judgements of U.S. federal or state courts, including judgements predicated upon civil liabilities under the securities laws of the United States or any state or territory within the United States. The Non Tenge New Notes and the New Notes Trust Deed are governed by English law and provide that any claims, disputes or differences regarding their existence, termination or validity or any non contractual obligations arising out of or in connection with such documents shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration. The Trustee have an option to elect that such disputes shall be heard instead by the courts of England. Kazakhstan is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 and, to the extent that a foreign arbitral award is obtained, such award should generally be enforced by Kazakhstan courts (subject to conditions and qualifications provided in the Convention) upon compliance with civil procedures established by Kazakhstani laws on international commercial arbitration for the enforcement of foreign arbitration decisions. Kazakhstan 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 between Kazakhstan and the United States.

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SUMMARY This summary should be read as an introduction to the full text of this Prospectus. Any decision to invest in the New Notes or GDRs should be based on the consideration 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, be required to bear the costs of translating this Prospectus before the legal proceedings are initiated. The Bank The Bank was incorporated on 15 January 1997 as a closed joint stock company as part of the restructuring and merger between two state owned banks, Alem Bank and Turan Bank, pursuant to the decision of the Government and the NBK. On 30 December 2003, the NBK issued the Bank its current banking licence (No. N242). The registered office and the head office of the Bank are located at 97 Zholdasbekov Street, Samal 2 Microdistrict, Almaty 050051, Kazakhstan. On 24 January 2008, Bank TurenAlem JSC changed its name to BTA Bank JSC. On 24 January 2008, Bank TuranAlem JSC changed its name to BTA Bank JSC. The Bank was issued certificate No. 3903 1900 JSC from the Registration Committee of the Ministry of Justice of Kazakhstan. Background to the Restructuring In the period from 2004 to 2007, the Bank pursued an aggressive growth strategy and grew to be the second largest bank in Kazakhstan by total assets as at 31 December 2007. Following the general deterioration in the financial markets that commenced in the second half of 2007 and Kazakhstans credit rating downgrade in October 2007 by S&P from BBB to BBB-, the Bank became unable to refinance its international debt, which in turn reduced its ability to make loans to customers. In November 2008, the Government and the FMSA announced a proposal to recapitalise the Bank as part of a broader plan to stabilise the financial system of Kazakhstan. The plan involved Samruk-Kazyna, Kazakhstans sovereign wealth fund (which was created to improve the competitiveness and stability of the Kazakhstan economy and alleviate the possible effects of changes in world markets on the economic growth in Kazakhstan), providing financial support to struggling financial institutions. Following the adoption of the Restructuring Law in Kazakhstan, which came into effect in August 2009, the Bank submitted an application to the Court on 7 October 2009 to formally initiate the restructuring process under the Restructuring Law. The Banks application was approved by the Court on 16 October 2009, which resulted in an automatic stay of all relevant claims of the Banks creditors and protection of the Banks property from execution and attachment until completion of the Restructuring. The High Court of Justice of England and Wales on 18 December 2009 and the United States Bankruptcy Court for the Southern District of New York on 9 March 2010 each issued an order recognising the restructuring proceedings in the Court as the main foreign proceeding in respect of the Banks assets located in Great Britain and the United States, respectively, pursuant to the Model Insolvency Law. Completion of the Restructuring and Issue of the Entitlements The issue of the New Notes and GDRs took place on 25 August and 24 August 2010, respectively. Distribution of Entitlements under the Restructuring began on 26 August 2010 and the Distribution Agent confirmed on 3 September 2010 that all cash, New Notes and GDRs and any other deliverables in respect of Agreed Claims received from the Bank had been paid or distributed to the Claimants in consideration for the cancellation of their Claims pursuant to the Restructuring Plan, other than any

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Claim in relation to which settlement instructions were defective (including unmatched instructions), unlawful or incomplete. The FMSA resolved on 31 August 2010 to submit an application for termination of the Restructuring with the Court and, on the same day, the Court issued an order terminating the Restructuring on the basis of those submissions confirming the successful completion of all procedures set out in the Restructuring Plan. The completion of the Restructuring Plan has resulted in the Banks capital position improving by KZT 105,613 million. As a result, as at the date of this Prospectus the Bank is solvent. In addition, as at the date of this Prospectus, the Banks regulatory capital amounts to KZT 283,282 million, bringing the Bank into compliance with FMSA capital adequacy ratios. Strengths and Strategy The Bank believes that it has the following strengths: Extensive network; Highly skilled management and staff; One-stop-shop approach for clients; Salary card programmes; Advanced direct distribution channels for infrastructure; and Partnerships with money transfer businesses.

The Banks general strategies are as follows: Focus on increasing liquidity; Focus on core businesses and client segments; Strengthen corporate structure and governance; Improve risk management; Build on existing banking franchise; Strengthen treasury operations; Improve human resources and information technology; and Optimise the branch network.

Risk Factors An investment in the New Notes involves risks. These risks are briefly summarised below. Investors should carefully consider the detailed information set forth under Risk Factors carefully before deciding to invest in the New Notes. Risks Relating to the Bank Any failure to maintain the minimum capital adequacy ratios could lead to conservation or liquidation of the Bank; The Bank is controlled by Samruk-Kazyna, Kazakhstans sovereign wealth fund, whose interests may differ from the interests of the Bank, Noteholders or GDR Holders;

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Samruk-Kazyna may demand early repayment of funds allocated to the Bank through the State Finance Programmes if the Bank breaches conditions for the utilisation of the funds; Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future; Transactions with unidentified Related Parties may cause future losses; Declines in customer deposits, which are an important source of funding for the Group, have negatively affected and may continue to negatively affect the Groups funding base; Expected moderate growth of Kazakhstans GDP in 2011 could put increasing pressure on the ability of the Banks existing borrowers to repay their loans; Concentration of the Banks loan portfolio subjects it to risks from exposure to particular sectors of the Kazakhstan economy; Volatility in the real estate market in Kazakhstan has had and may continue to have an adverse effect on the Banks asset quality and collateral value; The continuing decline in value of the Groups loan portfolio is likely to lead to a gradual seasoning of the Groups loan portfolio which may increase the proportion of loan defaults; The Bank faces significant competition, which may increase in the future; Any failure of, interruption in, or breach of, the Banks information systems, or any failure to properly implement or update such systems, may have a material adverse effect on the Banks business, results of operations and financial condition; The Banks risk management strategies and techniques expose the Bank to a number of unidentified or unanticipated risks; The Banks credit dossiers have serious gaps and many documents are missing; The Banks success is dependent on the continued service of its key personnel and it may not be able to retain such personnel;

Risks Relating to Operating within the Kazakhstan Banking Sector It is not possible to predict the full impact on the Bank of the financial stability laws in Kazakhstan, which are currently in the early stages of implementation; Changes in the liquidity support for the Kazakhstan banking sector may have an adverse impact on the Bank; The ongoing crisis in the global financial markets and deterioration of general economic conditions have adversely affected the Banks results of operations and financial condition and could continue to cause them to decline; The Bank faces increased risks related to the devaluation of the Tenge; The lack of accurate statistical, corporate and financial information in Kazakhstan may limit the ability of the Bank to assess its credit risks accurately; Banking regulations in Kazakhstan are not as developed as in many Western countries and any further changes thereto might adversely affect the Banks business;

Risks Relating to Kazakhstan Kazakhstan is subject to the risks associated with emerging markets generally;

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The Kazakhstan corporate governance and disclosure laws which apply to the Bank are different from those generally applicable to corporations organised in the United States, the United Kingdom and other jurisdictions; The Bank may be subject to money laundering risks; The Banks financial position and its results of operations are substantially dependent on the legal, economic and political conditions prevailing in Kazakhstan; The Kazakhstan economy is highly dependent on oil exports and, as a result, is affected by oil price volatility; The Kazakhstan regulatory and tax regime, as well as the judicial system, are not fully developed and therefore are unpredictable; There are risks associated with the underdevelopment of Kazakhstans securities markets; Kazakhstans president, Nursultan Nazarbaev, has been in office since 1991 and, if he were to step down, Kazakhstan could become unstable;

Risks Relating to the Restructuring The Base Case Model should not be relied upon as a forecast; The Bank has historically been unable to fund its operations and the Banks substantial level of indebtedness following the Restructuring has significantly reduced available cash, impacted its ability to obtain additional financing and limited its flexibility; The Banks operations and financing activities will be restricted by covenants and undertakings in the Restructuring Documents; Some provisions of the Restructuring Documents may discourage or prevent a takeover of the Bank, even if a takeover would be beneficial to its shareholders; Adverse publicity relating to the Restructuring and the financial condition of the Bank may adversely affect the Banks customer relationships and the market perception of its business; Following the Restructuring, a significant percentage of the Banks outstanding common shares may be held by a small number of shareholders who may have conflicts of interest; The Pro Forma Financial Information would likely differ materially if it were based on financial statements prepared in accordance with IFRS; Certain amendments to the provisions of the Charter may not comply with the requirements of Kazakhstan law and shareholders of the post-restructured Bank may therefore not receive the protections afforded by the Charter described in this Prospectus; The Restructuring Law has not been tested widely and there can be no assurance that the Restructuring, effected under such legislation, will be recognised in all relevant foreign jurisdictions;

Risks relating to the New Notes, Shares and GDRs The large number of Shares eligible for public sale could cause the market price of the Shares to decline and make it difficult for the Bank to issue equity securities in the future; If no trading market develops for the GDRs, investors may experience difficulties in selling the GDRs;

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Due to the Banks recent financial condition (prior to the completion of the Restructuring) and the historical volatility in the price of shares in Kazakhstan banks, the market price of the New Notes and Shares is likely to be volatile; Shares and GDRs may be subject to market price volatility and the market price of the Shares and the GDRs may decline disproportionately in response to adverse developments that are unrelated to the Banks operating performance; Restrictions apply to a holder of GDRs or Shares if it is incorporated or has affiliates in a Prohibited Jurisdiction; A person acquiring more than 10.0 per cent. of the voting Shares or equivalent requires prior FMSA approval; Shareholders wishing to deposit Shares into the depositary facility and convert them into GDRs will require FMSA consent before making such deposit; Subordinated Notes may not rank junior to Senior Notes; The Bank may face litigation if the FMSA applies any of its compulsory restrictive measures to the Bank; There is a risk that holders of GDRs may be subject to drag-along rights in respect of the GDRs held by them; U.S. and some other non-Kazakhstan holders of the Banks Shares or GDRs may not be allowed to exercise pre-emptive rights; As the Shares 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.

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Summary Consolidated Financial Information The summary consolidated financial data presented below as at and for the six months ended 30 June 2010 and 2009 and the years ended 31 December 2009 and 2008 have been derived from, and should be read in conjunction with, the Financial Statements, including the notes thereto, contained elsewhere in this Prospectus.
For the six months ended 30 June 2010 (U.S.$ (KZT millions)(1) millions) Condensed income statement data Total interest income ...... Interest expense .............. Net interest (expense)/income before impairment charge ............................. Net interest (expense)/income............ Fees and commissions .... Non-interest income (loss) ............................... Non-interest income/(expense)............ (Loss)/income before income tax expense before taxes..................... Net (loss) after income tax expense ..................... For the six months ended 30 June 2009 (U.S.$ (KZT millions)(2) millions) For the years ended 31 December 2008 2009 (U.S.$ (KZT (U.S.$ (KZT millions)(3) millions) millions)(4) millions)

665 (789)

97,985 (116,193)

1,208 (869)

175,157 (125,969)

1,611 (1,746)

237,725 (257,663)

3,296 (1,732)

396,467 208,391

(124) (817) 31 320 (90) (556) (560)

(18,208) (120,284) 4,531 47,050 (13,231) (81,934) (82,452)

339 (2,126) 71 (2,069) (221) (4,345) (4,371)

49,188 (308,204) 10,343 (299,935) (32,038) (629,834) (633,572)

(135) (5,245) 133 (2,447) 12 (7,547) (7,552)

(19,938) (774,192) 19,650 (361,192) 1,826 (1,113,908) (1,114,534)

1,564 (7,533) 242 (1,081) (1,505) (9,877) (9,877)

188,086 (906,214) 29,155 (130,033) (181,025) (1,188,117) (1,188,050)

____________ Notes: (1) Translated at the average U.S. Dollar exchange rate for the year ended 30 June 2010, as reported by the NBK, of KZT 147.24 = U.S.$1.00. (2) Translated at the average U.S. Dollar exchange rate for the year ended 30 June 2009, as reported by the NBK, of KZT 144.94 = U.S.$1.00. (3) Translated at the average U.S. Dollar exchange rate for the year ended 31 December 2009, as reported by the NBK, of KZT 147.59 = U.S.$1.00. (4) Translated at the average U.S. Dollar exchange rate for the year ended 31 December 2008, as reported by the NBK, of KZT 120.29 = U.S.$1.00.

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As at 30 June 2010 (KZT (U.S.$ millions) millions)(1) Condensed Statement of Financial Position Data Trading securities............................................. 575 163 Available for sale investment securities........... Held-to-maturity investment securities ............ 49 5,072 Loans to customers .......................................... SK Bonds......................................................... 3,507 583 Investments in associates ................................. Property and equipment ................................... 62 1,787 Other items ...................................................... Total assets ..................................................... 11,798 Amounts due to the Government and central 2,549 banks............................................................. Amounts due to credit institutions ................... 5,427 Customer accounts and deposits from 4,625 customers...................................................... Debt securities issued....................................... 10,558 492 Other liabilities ................................................ 23,651 Total liabilities................................................ Total equity .................................................... (11,853)

As at 31 December 2009 (U.S.$ millions)(2) (KZT millions) 2008 (U.S.$ (KZT millions)(3) millions)

84,901 23,995 7,213 748,435 517,413 86,074 9,110 263,646 1,740,787 376,173 800,703 682,424 1,557,843 72,604 3,489,747 (1,748,960)

780 128 7,010 3,450 573 67 1,252 13,261 2,739 5,634 4,418 11,239 613 24,643 (11,382)

115,784 19,019 1,040,773 512,246 85,088 9,911 185,838 1,968,659 406,595 836,384 655,963 1,668,602 90,935 3,658,479 (1,689,820)

1,061 170 13,387 0 599 113 2,835 18,165 14 6,651 7,335 9,005 1,309 24,315 (6,149)

128,150 20,482 1,617,063 0 72,371 13,704 342,431 2,194,201 1,718 803,366 886,052 1,087,726 158,118 2,936,980 (742,779)

____________ Notes: (1) Translated at the U.S. Dollar exchange rate as at 30 June 2010, as reported by the NBK, of KZT 147.55 = U.S.$1.00. (2) Translated at the U.S. Dollar exchange rate as at 31 December 2009, as reported by the NBK, of KZT 148.46 = U.S.$1.00. (3) Translated at the U.S. Dollar exchange rate as at 31 December 2008, as reported by the NBK, of KZT 120.79 = U.S.$1.00.

As at or for the six months ended 30 June 2009 2010 Other data Return on average equity(1) (per cent.)...................................................... Net interest margin(2) (per cent.) ............................................................... Non performing loans / gross loans (per cent.)(3) ...................................... Risk weighted total capital adequacy ratio (per cent.) .............................. Risk weighted Tier I capital adequacy ratio (per cent.) ............................ N.A. -2.7% 66.6% -199.26% -189.92% N.A. 5.2% 47.5% -75.0% -70.5%

As at or for the years ended 31 December 2009 2008 N.A. -1.1% 64.6% -147.52% -140.45% N.A. 7.0% 34.3% -44.76% -40.95%

____________ Notes: (1) The ratio is not economically useful due to the Bank having negative equity in 2008, 2009 and 2010. (2) Net interest margin comprises net interest income before impairment charge as a percentage of average earning assets. (3) Non-performing loans comprise loans where past due payments exceed 90 days.

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Summary of the New Notes The following is an overview of certain information contained elsewhere in this Prospectus. It does not purport to be complete and is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus. Prospective investors should also carefully consider the information set out in Risk Factors prior to making an investment decision. Capitalised terms not otherwise defined in this overview have the same meaning as in the various terms and conditions of the New Notes (the Conditions). See Schedule 1 Terms and Conditions of the New Notes for a more detailed description of the New Notes. SENIOR DOLLAR NOTES Issuer ..................................................................... Notes Offered........................................................ Issue Date.............................................................. Maturity Date ........................................................ Interest .................................................................. BTA Bank JSC. U.S.$2,082,371,783 principal amount of senior Notes due 2018. 25 August 2010 (the Issue Date). 1 July 2018. 10.75 per cent. per annum from 1 July 2010 to 1 January 2013 and 12.5 per cent. per annum thereafter. Interest will be computed on the basis of a 360 day year of 12 30-day months, payable in U.S. Dollars and calculated as described below. Interest Payment Dates ......................................... The Bank will pay interest semi-annually in arrear on 1 January and 1 July of each year. The first payment of interest was made on 1 January 2011 for the period from and including 1 July 2010 to but excluding 1 January 2011. See Annex 1 (Terms and Conditions of the Senior Dollar Notes), Condition 6 (Interest). The Bank will redeem the Senior Dollar Notes in equal semi-annual instalments, on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2015 and the last such instalment being payable on 1 July 2018. Redemption may also take place by way of a call option or by way of a put option. See Schedule 1 (Terms and Conditions of the New Notes), Annex 1 (Terms and Conditions of the Senior Dollar Notes), Condition 8 (Redemption and Purchase). The Senior Dollar Notes may only be transferred in minimum principal amounts of U.S.$1 and integral multiples of U.S.$1. The obligations under the Senior Dollar Notes are unconditional, direct, unsubordinated, and unsecured (subject to a negative pledge undertaking) obligations of the Bank, and will at all times rank at least pari passu amongst

Redemption ...........................................................

Denominations ......................................................

Status.....................................................................

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themselves and pari passu in right of payment with all other present and future unsubordinated, unsecured obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. See Schedule 1 (Terms and Conditions of the New Notes) Annex 1 (Terms and Conditions of the Senior Dollar Notes), Condition 1 (Status). Negative Pledge .................................................... So long as any of the Senior Notes or the OID Notes remain outstanding (each as defined in the Trust Deed), the Bank will not create or permit to subsist any Security (other than Permitted Security) (each as defined in the Trust Deed) upon the whole or any part of its existing or future assets or revenues to secure any Financial Indebtedness (as defined in the Trust Deed) or guarantee of Financial Indebtedness unless, at the same time or prior thereto, the obligations of the Bank under the Senior Notes and the OID Notes are secured equally and rateably therewith or have the benefit of such other arrangements as may be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders or as the Trustee in its absolute discretion shall deem to be not materially less beneficial to holders of the Senior Notes and the OID Notes. The terms and conditions of the Senior Dollar Notes permit the acceleration of the Senior Dollar Notes following the occurrence of certain events of default. See Schedule 1 (Terms and Conditions of the New Notes) Annex 1 (Terms and Conditions of the Senior Dollar Notes), Condition 11 (Events of Default). All payments of principal and interest in respect of the Senior Dollar Notes by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions set out under Schedule 1 (Terms and Conditions of the New Notes) Annex

Events of Default ..................................................

Taxation and Additional Amounts........................

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1 (Terms and Conditions of the Senior Dollar Notes), Condition 9 (Taxation). Listing and Admission to Trading ........................ Application has been made to list the Senior Dollar Notes on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Senior Dollar Notes on the Kazakhstan Stock Exchange. The Senior Dollar Notes are governed by the laws of England. The Senior Dollar Notes have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532988770 XS0532989588 053298877 053298958

Governing Law ..................................................... Transfer Restrictions.............................................

Trustee .................................................................. Principal Paying Agent ......................................... ISIN (Reg S) ......................................................... ISIN (Rule 144A).................................................. Common Code (Reg S)......................................... Common Code (Rule 144A) .................................

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DOLLAR OID NOTES Issuer .................................................................... Notes Offered....................................................... BTA BANK JSC. U.S.$384,848,130 Fully Accreted Principal Amount of original issue discount notes due 2021. 25 August 2010. 1 July 2021. The Initial Principal Amount in respect of the Notes shall accrete by an amount of U.S.$9,503,999 on each Interest Payment Date. See Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 7 (Interest and Principal). 3.70 per cent. per annum from 1 July 2010 to 1 July 2017 and 3.30 per cent. per annum thereafter. Interest will be computed on the basis of a 360 day year of 12 30-day months, payable in U.S. Dollars and calculated as described below. Interest Payment Dates ........................................ The Bank will pay interest semi-annually in arrear on 1 January and 1 July of each year. The first payment of interest was made on 1 January 2011 and for the period from and including 1 July 2010 to but excluding 1 January 2011. See Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 7 (Interest and Principal). The Bank will redeem the Dollar OID Notes in eight semi-annual instalments, with the first such instalment being payable on the Interest Payment Date that falls in January 2018 and the remaining instalments being payable on each Interest Payment Date thereafter. Redemption may also take place at the Fully Accreted Principal Amount of the Dollar OID Notes for tax reasons, or at the Net Accreted Principal Amount of the Dollar OID Notes by way of a put option See Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 9 (Redemption and Purchase). The Dollar OID Notes shall be issued in a minimum denomination of U.S.$100 of Fully Accreted Principal Amount and may only be transferred in integral multiples of U.S.$1 of Fully Accreted Principal Amount in excess thereof. The obligations under the Dollar OID Notes are unconditional, direct, unsubordinated obligations of the Bank, and will at all times rank at least

Issue Date............................................................. Maturity Date ....................................................... Principal ...............................................................

Interest .................................................................

Redemption ..........................................................

Denominations .....................................................

Status....................................................................

34

pari passu amongst themselves and pari passu in right of payment with all other present and future unsubordinated, unsecured obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. See Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 2 (Status). Negative Pledge ................................................... So long as any of the Senior Notes and the Original Issue Discount Notes remain outstanding (each as defined in the Trust Deed), the Bank will not create or permit to subsist any Security (other than Permitted Security) (each as defined in the Trust Deed) upon the whole or any part of its existing or future assets or revenues to secure any Financial Indebtedness (as defined in the Trust Deed) or guarantee of Financial Indebtedness unless, at the same time or prior thereto, the obligations of the Bank under the Senior Notes and the Original Issue Discount Notes are secured equally and rateably therewith or have the benefit of such other arrangements as may be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders or as the Trustee in its absolute discretion shall deem to be not materially less beneficial to holders of the Senior Notes and the Original Issue Discount Notes. The Dollar OID Notes Conditions permit the acceleration of the Dollar OID Notes at their Net Accreted Principal Amount following the occurrence of certain events of default. See Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 12 (Events of Default). All payments of principal and interest in respect of the Dollar OID Notes by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions set out under Annex 2 (Terms and Conditions of the Dollar OID Notes), Condition 10 (Taxation).

Events of Default .................................................

Taxation and Additional Amounts.......................

35

Listing and Admission to Trading .......................

Application has been made to list the Dollar OID Notes on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Dollar OID Notes on the Kazakhstan Stock Exchange. The Dollar OID Notes are governed by the laws of England. The Dollar OID Notes have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532989828 XS0532990164 053298982 053299016

Governing Law .................................................... Transfer Restrictions............................................

Trustee ................................................................. Principal Paying Agent ........................................ ISIN (Reg S) ........................................................ ISIN (Rule 144A)................................................. Common Code (Reg S)........................................ Common Code (Rule 144A) ................................

36

EURO OID NOTES Issuer .................................................................... Notes Offered....................................................... BTA BANK JSC. EUR 437,110,856 Fully Accreted Principal Amount of original issue discount notes due 2021. 25 August 2010. 1 July 2021. The Initial Principal Amount in respect of the Notes shall accrete by an amount of EUR 10,794,651 on each Interest Payment Date. See Annex 3 (Terms and Conditions of the Dollar OID Notes), Condition 7 (Interest and Principal). 3.14 per cent. per annum from 1 July 2010 to 1 July 2017 and 2.74 per cent. per annum thereafter. Interest will be computed on the basis of a 360 day year of 12 30-day months, payable in EUR and calculated as described below. Interest Payment Dates ........................................ The Bank will pay interest semi-annually in arrear on 1 January and 1 July of each year. The first payment of interest was made on 1 January 2011 and for the period from and including 1 July 2010 to but excluding 1 January 2011. See Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes), Condition 7 (Interest and Principal). The Bank will redeem the Euro OID Notes in eight semi-annual instalments, with the first such instalment being payable on the Interest Payment Date that falls in January 2018 and the remaining instalments being payable on each Interest Payment Date thereafter. Redemption may also take place at the Fully Accreted Principal Amount of the Euro OID Notes for tax reasons or at the Net Accreted Principal Amount of the Euro OID Notes by way of a put option. See Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes), Condition 9 (Redemption and Purchase). The Euro OID Notes shall be issued in a minimum denomination of EUR 100 of Fully Accreted Principal Amount (as defined in the terms and conditions of the Euro OID Notes) and shall be transferable in integral multiples of EUR 1 of Fully Accreted Principal Amount in excess thereof.

Issue Date............................................................. Maturity Date ....................................................... Principal ...............................................................

Interest .................................................................

Redemption ..........................................................

Denominations .....................................................

37

Status....................................................................

The obligations under the Euro OID Notes are unconditional, direct and unsubordinated obligations of the Bank, and will at all times rank at least pari passu amongst themselves and pari passu in right of payment with all other present and future unsubordinated obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. See Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes), Condition 2 (Status). So long as any of the Senior Notes and the Original Issue Discount Notes remain outstanding (each as defined in the Trust Deed), the Bank will not create or permit to subsist any Security (other than Permitted Security) (each as defined in the Trust Deed) upon the whole or any part of its existing or future assets or revenues to secure any Financial Indebtedness (as defined in the Trust Deed) or guarantee of Financial Indebtedness unless, at the same time or prior thereto, the obligations of the Bank under the Senior Notes and the Original Issue Discount Notes are secured equally and rateably therewith or have the benefit of such other arrangements as may be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders or as the Trustee in its absolute discretion shall deem to be not materially less beneficial to holders of the Senior Notes and the Original Issue Discount Notes. The terms and conditions of the Euro OID Notes Conditions permit the acceleration of the Euro OID Notes at their Net Accreted Principal Amount following the occurrence of certain events of default. See Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes), Condition 12 (Events of Default). All payments of principal and interest in respect of the Euro OID Notes by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such

Negative Pledge ...................................................

Events of Default .................................................

Taxation and Additional Amounts.......................

38

withholding or deduction been required, subject to certain exceptions set out under Annex 3 (Terms and Conditions of the Euro Original Issue Discount Notes), Condition 10 (Taxation). Listing and Admission to Trading ....................... Application has been made to list the Euro OID Notes on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Euro OID Notes on the Kazakhstan Stock Exchange. The Euro OID Notes are governed by the laws of England. The Euro OID Notes have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532990248 XS0532990594 053299024 053299059

Governing Law .................................................... Transfer Restrictions............................................

Trustee ................................................................. Principal Paying Agent ........................................ ISIN (Reg S) ........................................................ ISIN (Rule 144A)................................................. Common Code (Reg S)........................................ Common Code (Rule 144A) ................................

39

RECOVERY UNITS Issuer .................................................................... Notes Offered....................................................... Currency Issue Date............................................................. Maturity Date ....................................................... BTA BANK JSC. U.S.$5,221,494,216 aggregate initial Reference Amount of Recovery Units. U.S. Dollars. 25 August 2010. 30 June 2020 or 30 June 2022. See Annex 4 (Terms and Conditions of the Recovery Units), Condition 9 (Valuation). The Bank will pay the Specified Percentages of the Recoveries to the secured Collection Account, to be paid on to the Noteholders as Recovery Payments. The Recovery Payments will contribute towards reducing a notional Reference Amount, and will stop at the earlier of the reduction of the Reference Amount to zero and the Settlement Date. See Annex 6 (Terms and Conditions of the Recovery Units), Condition 6(a) (Collection Account and Conversion) and Condition 7 (Recovery Payments). On the Valuation Date a valuation of the expected future Recoveries will be carried out and the principal amount will be adjusted to the lesser of the Reference Amount and the Residual Amount. See Annex 6 (Terms and Conditions of the Recovery Units), Condition 9 (Valuation). The Adjusted Principal Amount of the Units will be redeemed in full on the Settlement Date. See Annex 6 (Terms and Conditions of the Recovery Units), Condition 10 (Redemption and Purchase). Recovery Units shall be issued in integral multiples of one unit. Status prior to and including the earlier of the date when the Reference Amount is reduced to zero and the Settlement Date: the Units constitute direct, general, unconditional and, subject to and in accordance with the security provisions in the Trust Deed and Annex 6 (Terms and Conditions of the Recovery Units) Condition 2(c) (Security), Condition 6(b) (Preservation of Security Interests) and Condition 2(b) (Status of Adjusted Principal Amount), secured obligations of the Bank. The Units rank at all times without preference or priority pari passu among themselves. Status of Adjusted Principal Amount: provided that the Reference Amount has previously not

Recovery Payments..............................................

Adjustment of Principal .......................................

Redemption ..........................................................

Denominations ..................................................... Status....................................................................

40

been reduced to zero, payment of the Adjusted Principal Amount shall constitute an unconditional, unsubordinated and secured obligation of the Bank which will at all times rank at least pari passu among themselves and pari passu in right of payment with all other present and future unsubordinated obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. Security ................................................................ As continuing security for the payment of all sums due under the Units, and subject always to Annex 6 (Terms and Conditions of the Recovery Units) Condition 2(a) (Status Prior to and Including the Settlement Date), the Bank will, in favour of the Trustee, for itself and on trust for the Unit holders, in accordance with the terms of the Trust Deed, charge with full title guarantee and by way of a first fixed charge all monies held from time to time in the Collection Account and assign with full title guarantee all its right, title and interest in, to and under the Cash Management Agreement and the Collection Account and all sums derived therefrom. See Annex 6 (Terms and Conditions of the Recovery Units), Condition 2 (Status). The terms and conditions of the Recovery Units permit the acceleration of the Recovery Units following the occurrence of certain events of default. See Annex 6 (Terms and Conditions of the Recovery Units), Condition 13 (Events of Default). All payments of principal and Recovery Payments in respect of the Recovery Units by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes (including royalties), duties (including customs duties), assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions set out under Annex 6 (Terms and Conditions of the Recovery Units), Condition 11 (Taxation).

Events of Default .................................................

Taxation and Additional Amounts.......................

41

Listing and Admission to Trading .......................

Application has been made to list the Recovery Units on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Recovery Units on the Kazakhstan Stock Exchange. The Recovery Units are governed by the laws of England. The Recovery Units have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532995049 XS0532996799 053299504 053299679

Governing Law .................................................... Transfer Restrictions............................................

Trustee ................................................................. Principal Paying Agent ........................................ ISIN (Reg S) ........................................................ ISIN (Rule 144A)................................................. Common Code (Reg S)........................................ Common Code (Rule 144A) ................................

42

DOLLAR SUBORDINATED NOTES Issuer .................................................................... Notes Offered....................................................... Issue Date............................................................. Maturity Date ....................................................... Interest ................................................................. BTA BANK JSC. U.S.$496,631,368 7.20 per cent. principal amount of subordinated notes due 2025. 25 August 2010. 1 July 2025. 7.20 per cent. per annum from 1 July 2010 until 1 July 2025. Interest will be computed on the basis of a 360 day year of 12 30-day months, payable in U.S. Dollars and calculated as described below. Interest Payment Dates ........................................ The Bank will pay interest semi-annually in arrear on 1 January and 1 July of each year. The first payment of interest was made on 1 January 2011 and for the period from and including 1 July 2010. See Annex 4 (Terms and Conditions of the Dollar Subordinated Notes), Condition 6 (Interest). The Bank will redeem the Dollar Subordinated Notes in equal semi-annual instalments, on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2021 and the last such instalment being payable on 1 July 2025. See Annex 4 (Terms and Conditions of the Dollar Subordinated Notes), Condition 8 (Redemption and Purchase). The Dollar Subordinated Notes may only be transferred in minimum principal amounts of U.S.$1 and integral multiples of U.S.$1. It is the intention of the Bank that the Dollar Subordinated Notes be regarded as Tier 2 capital for the purposes of the FMSA Guidance. The obligations under the Dollar Subordinated Notes are unconditional, direct, subordinated, and unsecured obligations of the Bank, and will in case of (i) the bankruptcy in the Republic of Kazakhstan of the Bank; (ii) the Bank being granted (provisional) suspension of payments in the Republic of Kazakhstan; or (iii) dissolution of the Bank in the Republic of Kazakhstan rank: (A) subordinate and junior only to present and future indebtedness of the Bank which by or under its terms ranks senior, or does not rank subordinate to, any indebtedness or other obligations of the Bank; (B) pari passu amongst themselves and with any other present and future indebtedness which ranks by or under its own terms or otherwise pari passu with subordinated

Redemption ..........................................................

Denominations .....................................................

Status....................................................................

43

indebtedness or other obligations of the Bank; and (C) senior to equity securities of the Bank and to any other present and future indebtedness which ranks by or under its own terms or otherwise, subordinate or junior to the Notes of the Bank. See Annex 5 (Terms and Conditions of the Dollar Subordinated Notes), Condition 1 (Status). Events of Default ................................................. The Dollar Subordinated Notes Conditions permit the filing of a petition for the winding up of the Bank following the occurrence of certain events of default. See Annex 4 (Terms and Conditions of the Dollar Subordinated Notes), Condition 11 (Events of Default). All payments of principal and interest in respect of the Dollar Subordinated Notes by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions set out under Annex 4 (Terms and Conditions of the Dollar Subordinated Notes), Condition 9 (Taxation). Application has been made to list the Dollar Subordinated Notes on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Dollar Subordinated Notes on the Kazakhstan Stock Exchange. The Dollar Subordinated Notes are governed by the laws of England. The Dollar Subordinated Notes have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to,

Taxation and Additional Amounts.......................

Listing and Admission to Trading .......................

Governing Law .................................................... Transfer Restrictions............................................

44

the registration requirements of the Securities Act. Trustee ................................................................. Principal Paying Agent ........................................ ISIN (Reg S) ........................................................ ISIN (Rule 144A)................................................. Common Code (Reg S)........................................ Common Code (Rule 144A) ................................ BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532990677 XS0532990750 053299067 053299075

45

EURO SUBORDINATED NOTES Issuer .................................................................... Notes Offered....................................................... Issue Date............................................................. Maturity Date ....................................................... Interest ................................................................. BTA BANK JSC. EUR28,237,359 6.75 per cent. principal amount of subordinated notes due 2025. 25 August 2010. 1 July 2025. 6.75 per cent. per annum from 1 July 2010 until 1 July 2025. Interest will be computed on the basis of a 360 day year of 12 30-day months, payable in EUR and calculated as described below. Interest Payment Dates ........................................ The Bank will pay interest semi-annually in arrear on 1 January and 1 July of each year. The first payment of interest was made on 1 January 2011 and for the period from and including 1 July 2010. See Annex 3 (Terms and Conditions of the Euro Subordinated Notes), Condition 6 (Interest). The Bank will redeem the Euro Subordinated Notes in equal semi-annual instalments, on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2021 and the last such instalment being payable on 1 July 2025. See Annex 3 (Terms and Conditions of the Euro Subordinated Notes), Condition 8 (Redemption and Purchase). The Euro Subordinated Notes may only be transferred in minimum principal amounts of EUR1 and integral multiples of EUR1. It is the intention of the Bank that the Euro Subordinated Notes be regarded as Tier 2 capital for the purposes of the FMSA Guidance. The obligations under the Euro Subordinated Notes are unconditional, direct, subordinated, and unsecured obligations of the Bank, and will in case of (i) the bankruptcy in the Republic of Kazakhstan of the Bank; (ii) the Bank being granted (provisional) suspension of payments in the Republic of Kazakhstan; or (iii) dissolution of the Bank in the Republic of Kazakhstan rank: (A) subordinate and junior only to present and future indebtedness of the Bank which by or under its terms ranks senior, or does not rank subordinate to, any indebtedness or other obligations of the Bank; (B) pari passu amongst themselves and with any other present and future indebtedness which ranks by or under its own terms or otherwise pari passu with subordinated indebtedness or other obligations of the Bank;

Redemption ..........................................................

Denominations .....................................................

Status....................................................................

46

and (C) senior to equity securities of the Bank and to any other present and future indebtedness which ranks by or under its own terms or otherwise, subordinate or junior to the Notes of the Bank. See Annex 3 (Terms and Conditions of the Euro Subordinated Notes), Condition 1 (Status). Events of Default ................................................. The Euro Subordinated Notes Conditions permit the filing of a petition for the winding up of the Bank following the occurrence of certain events of default. See Annex 3 (Terms and Conditions of the Euro Subordinated Notes), Condition 11 (Events of Default). All payments of principal and interest in respect of the Euro Subordinated Notes by the Bank shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, or any political subdivision or any authority thereof or therein having power to tax (together, Taxes), unless such withholding or deduction is required by law. If any such withholding or deduction is required by law, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain exceptions set out under Annex 5 (Terms and Conditions of the Euro Subordinated Notes), Condition 9 (Taxation). Application has been made to list the Euro Subordinated Notes on the Official List of the Luxembourg Stock Exchange and to admit them to trade on the Euro MTF market. Application will also be made to procure a secondary listing of the Euro Subordinated Notes on the Kazakhstan Stock Exchange. The Euro Subordinated Notes are governed by the laws of England. The Euro Subordinated Notes have not been, and will not be, registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S of the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the

Taxation and Additional Amounts.......................

Listing and Admission to Trading .......................

Governing Law .................................................... Transfer Restrictions............................................

47

registration requirements of the Securities Act. Trustee ................................................................. Principal Paying Agent ........................................ ISIN (Reg S) ........................................................ ISIN (Rule 144A)................................................. Common Code (Reg S)........................................ Common Code (Rule 144A) ................................ BNY Corporate Trustee Services Limited. The Bank of New York Mellon. XS0532990834 XS0532990917 053299083 053299091

48

SUMMARY OF THE GDRS The following is an overview of certain information contained elsewhere in this Prospectus. It does not purport to be complete and is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus. Prospective investors should also carefully consider the information set out in Risk Factors prior to making an investment decision. See Terms and Conditions of the Regulation S GDRs and Terms and Conditions of the Rule 144A GDRs for a more detailed description of the Regulation S GDRs and Rule 144A GDRs, respectively. The Bank............................................................. The Shares .......................................................... BTA Bank JSC. The Banks authorised share capital consists of 55,258,029,745 shares. These shares have the rights described under Description of Share Capital and Certain Requirements of Kazakhstan Legislation. The Banks issued and outstanding share capital immediately after admission will consist of Common Shares, all of which are fully paid. Each GDR represents 500 Common Shares. The Common Shares have no par value. The GDRs were issued by the Depositary pursuant to the Deposit Agreement. The GDRs are evidenced by the Master GDRs. Except in the limited circumstances described herein, definitive certificates will not be issued to holders in exchange for interests in the GDRs represented by the Master GDRs. Subject to the terms of the Deposit Agreements, interests in the Master Regulation S GDR may be exchanged for interests in the corresponding number of GDRs represented by the Master Rule 144A GDR, and vice versa. Transfer and Ownership Restrictions ...................................................... The Shares and the GDRs will be subject to certain restrictions on transfer; see Terms and Conditions of the Regulation S GDRs, Terms and Conditions of the Rule 144A GDRs, Summary of Provisions relating to the GDRs while in Master Form and Description of Share Capital and Certain Requirements of Kazakhstan Legislation. 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 global depositary receipts. See Risk Factors Risks Relating to the New Notes, Shares and GDRs Restrictions apply to a holder of GDRs or Shares if it is incorporated or has Affiliates in a Prohibited Jurisdiction.

The GDRs ...........................................................

49

Dividend Policy...................................................

The Bank does not expect to declare or pay dividends in the medium term on the Common Shares. There is no guarantee that any future dividends will be declared or paid on the Common Shares. The payment terms are stipulated in the Charter and the general terms are set out in the JSC Law. See Dividend Policy. Pursuant to and in accordance with the terms of the GDRs, holders of the GDRs are entitled to receive dividends as and when paid. See Terms and Conditions of the Regulation S GDRs Condition 10 (Distributions on Deposited Securities) and Terms and Conditions of the Rule 144A GDRs Condition 10 (Distributions on Deposited Securities). Application has been made to list 14,140,464 GDRs on the Official List of the Luxembourg Stock Exchange and to be admitted to trading on the Euro MTF. The Listing applies to the Regulation S GDRs and the Rule 144A GDRs. The GDRs have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold within the United States, except to qualified institutional buyers in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A or otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The transfer and resale of the GDRs is also subject to restrictions in the United Kingdom, the EEA, Kazakhstan and other jurisdictions. See Transfer Restrictions. The Regulation S GDRs have been accepted into the settlement systems of Euroclear and Clearstream and the Rule 144A GDRs have been accepted into DTCs book entry settlement system. The Master Regulation S GDR have been deposited with the Common Depositary and registered in the name of The Bank of New York Depository (Nominees) Limited. The Master Rule 144A GDR are held in book entry form and have been issued to DTC and registered in the name of Cede & Co., as nominee for DTC. Except in the limited circumstances described herein, investors may hold beneficial interests in the GDRs evidenced by the corresponding Master GDR only through DTC, Euroclear and

Listing and Market for the GDRs ....................

Selling Restrictions.............................................

Settlement Procedures .......................................

50

Clearstream whether directly or through DTC participants including Euroclear and Clearstream. See Transfer Restrictions. Transfers within and between DTC, Euroclear and Clearstream will be in accordance with their usual rules and operating procedures. Voting .................................................................. The Deposit Agreements contain arrangements allowing holders of the GDRs to vote the underlying Shares in accordance with Kazakhstan law, which restricts certain entities registered in, or with affiliated entities registered in, certain specified jurisdictions or individual shareholders participating in companies registered in such jurisdictions from voting. Holders of the Shares are entitled to one vote per Share at a shareholders meeting. See Risk Factors Risks Relating to the New Notes, Shares and GDRs Restrictions apply to a holder of GDRs or Shares if it is incorporated or has Affiliates in a Prohibited Jurisdiction and Terms and Conditions of the Regulation S GDRs Condition 12 (Voting of Shares) and Terms and Conditions of the Rule 144A GDRs Condition 12 (Voting of Shares)and Description of Share Capital and Certain Requirements of Kazakhstan Legislation General meetings and Description of Share Capital and Certain Requirements of Kazakhstan Legislation Disclosure of Beneficial Ownership. For information purposes only, the KASE trading symbol for the Common Shares is BTAS. Regulation S GDRs CUSIP: ..................................... ISIN: ......................................... Common Code.......................... Rule 144A GDRs CUSIP: ..................................... ISIN: ......................................... Common Code.......................... 05574Y100 US05574Y1001 053605729 05574Y209 US05574Y2090 053583709

General Information GDRs............................

51

RISK FACTORS In addition to other information in this Prospectus, investors should carefully consider the following risk factors. The risks and uncertainties described below are the principal risks relating to the Bank, the Restructuring, the Kazakhstan banking sector and other relevant matters, however, they are not the only risks the Bank faces. Additional risks and uncertainties that the Bank is not aware of or that the Bank currently believes are not material may also adversely affect the Banks business, financial condition or results of operations. If any of the risks or uncertainties described below come to fruition, the Banks business, financial condition or results of operations, among other things, could be materially and adversely affected. Investors should pay particular attention to the fact that the Bank is a company incorporated in the Republic of Kazakhstan and is subject to a legal and regulatory regime which in some respects may be different from that which prevails in other countries. The order in which these risk factors are presented does not necessarily reflect the likelihood of their occurrence or the magnitude of their potential impact on the Banks business, financial condition, or results of operations. Risks Relating to the Bank Any failure to maintain the minimum capital adequacy ratios could lead to conservation or liquidation of the Bank. The Bank is currently in compliance of the minimum capital adequacy ratios established by the FMSA. Following the completion of the Restructuring, the Banks Tier I and total capital adequacy ratios calculated in accordance with FMSA regulations are 10.8 per cent. and 14.9 per cent., respectively, as at 1 September 2010, compared to the minimum levels of 5.0 per cent. and 10.0 per cent. for Tier I and total capital, respectively, required under the FMSA regulations. As with any other Kazakh bank, any further deterioration in the quality of the Banks loan portfolio after the Restructuring and any consequent need to make impairment provisions may cause the Banks capital adequacy ratios to fall below the minimum levels. In the event that Samruk-Kazyna ceases to be at least a 10.0 per cent. shareholder in the Bank, the Bank may be subject to increased minimum Tier I and total capital adequacy ratios of 6.0 per cent. (increasing to 8.0 per cent. from 1 July 2012 and to 9.0 per cent. from 1 July 2013) and 12.0 per cent., respectively, in accordance with FMSA regulations. These minimum levels would further increase to 7.0 per cent. and 14.0 per cent. respectively, if the Bank does not have amongst its shareholders an individual holding at least 10.0 per cent. of the Banks shares. See The Banking Sector in Kazakhstan Banking Supervision Capital Adequacy for a discussion of the factors that may lead to increased minimum capital adequacy requirements. As with any other Kazakh bank, any failure to comply with the minimum capital adequacy ratios, whether because of the deterioration in the quality of the Banks loan portfolio or an increase in minimum capital adequacy requirements, could lead to sanctions and other measures being applied by the FMSA, including forcing the Bank into conservation or mandatory liquidation. The Bank is controlled by Samruk-Kazyna, Kazakhstans sovereign wealth fund, whose interests may differ from the interests of the Bank, Noteholders or GDR Holders. As the Banks majority shareholder with approximately 81.5 per cent. of the Banks share capital following the Restructuring, Samruk-Kazyna, Kazakhstans sovereign wealth fund, is able to affect certain corporate resolutions, operations and procedures, while complying with the requirements of the Charter and Corporate Governance Code adopted by the Bank pursuant to the Restructuring Plan. As the Governments sovereign wealth fund, with the goal of supporting and diversifying Kazakhstans economy, the interests of Samruk-Kazyna may conflict with the interests of the Banks other shareholders or Noteholders on specific issues 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

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Bank, the Banks other shareholders or the Noteholders. Although, as part of the Restructuring, amendments to the Charter have been introduced, the aim of which is to provide the Banks former creditors who have become Shareholders of the Bank with increased protection, some of the provisions that were incorporated in the Charter have never been tested under Kazakhstan law and the Bank gives no assurances that the applicable governmental and regulatory authorities will hold such provisions to be in compliance with Kazakhstan law. See Risks Relating to the Restructuring Certain provisions of the Charter may not comply with the requirements of Kazakhstan law and shareholders of the post-restructured Bank may therefore not receive the protections afforded by the Charter described in this Prospectus. In addition, being controlled by the Government may slow the Banks decision-making process and may subject the Bank to the risk of bureaucracy, corruption and inefficiencies commonly attributed to state-controlled companies. Furthermore, because Samruk-Kazyna is controlled by the Government, there is a risk that any change of administration in Kazakhstan may result in Samruk-Kazynas policies changing as well, and such new policies may conflict with the interests of the Bank, its shareholders and the Noteholders. For a description of the ownership of the Bank, see Principal Shareholders. Samruk-Kazyna may demand early repayment of funds allocated to the Bank through the State Finance Programmes if the Bank breaches conditions for the utilisation of the funds. The Group has been allocated significant funds by Samruk-Kazyna under the State Finance Programmes. The Group has received KZT 119,000 million of Government Funding under the State Finance Programmes and, as at 30 June 2010, the Group had utilised KZT 108,714 million, returned to the Government the unutilised amount of KZT 8,502 million and retained for future lending KZT 1,784 million pursuant to the State Finance Programmes. See The Bank State Finance Programmes. Under the State Finance Programmes, Samruk-Kazyna has the right to demand early repayment of funds allocated to the Bank if: (i) the Bank does not make timely repayments of debt or interest; (ii) the Bank does not use the proceeds in compliance with their stated purpose; (iii) the Banks credit rating is downgraded by Fitch, S&P or Moodys by two or more notches; (iv) the Bank infringes the FMSAs prudential requirements at least once in each of two consecutive months or its licence is suspended; (v) more than 10 per cent. of the shares in the Bank are sold or transferred and such transfer has a negative impact on the Banks financial condition; or (vi) the Bank reports negative financial results for two consecutive quarters. If early repayment is demanded as a result of a breach of the requirements of the Bank under any of the above State Finance Programmes, this could have a material adverse effect on the Banks business, financial condition, results of operations and prospects generally. Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. In early 2009, the newly appointed management of the Bank conducted a due diligence review of the Banks loan portfolio, which uncovered numerous suspicious transactions between the Group and entities believed to be affiliated with former management of the Bank. The Bank has uncovered a significant number of loans that at present appear to have been provided on preferred terms to companies connected with former management and for which the security provided was inadequate or non-existent. In addition, the Bank has uncovered numerous examples of purported loans being granted that do not appear to have gone through the proper approval process within the Bank. Furthermore, certain loan documentation, including collateral and associated agreements, primarily relating to financing of projects outside Kazakhstan, is no longer available and many loans were unlawfully transferred to new borrowers often offshore and no collateral was provided by the new borrowers, so the loans are unsecured. Under the previous management, the Bank had two regional credit committees, which were separate from the Banks main credit committee but nevertheless approved loans that were to be granted by the Bank. The Bank believes that many loans that were purportedly approved by these credit committees

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were granted applying practices which were wholly inadequate and which differed significantly from the practices typically used by the Banks main credit committee. A number of significant borrowers, primarily registered outside of Kazakhstan, stopped making payments in 2009 and the Bank has been unable to monitor the collateral (if any) or their financial performance. Many of these borrowers have also ceased to communicate with the Bank and some have unlawfully transferred the collateral secured by the loans. The Bank had also entered into derivatives contracts with certain offshore companies, which exposed the Bank to excessive credit risk and which during 2008 and 2009 have become uncollectible. These offshore counterparties have ceased to respond to the Banks inquiries. The Banks current management suspects that these contracts were entered into on behalf of the Bank through actions of the former management in contravention of the existing internal controls and in order to circumvent such controls. Therefore, the Banks current management has decided to fully provision against receivables on these derivative contracts as at 30 June 2010 and 31 December 2009 for KZT 5,475 million and KZT 2,922 million, respectively, compared to KZT 16,298 million as at 31 December 2008. For a complete discussion of internal control weaknesses, see The Bank Background to the Restructuring Factors Affecting Deterioration of Banks Loan Portfolio Internal Factors. Although the Bank has improved its systems to address the deficiencies in the internal control systems, there can be no assurance that such new systems will be effective and that the Bank will not suffer losses from the failure of these controls to detect or contain operational risks in the future. Similar to other Kazakhstan banks, the Bank is susceptible to, among other things, fraud by employees or outsiders, unauthorised transactions by employees and operational errors, including clerical or record keeping errors and errors resulting from faulty computer or telecommunications systems. Given the Banks high volume of transactions, errors may be repeated or compounded before they are discovered and rectified. In addition, the Banks IT systems do not fully support its operations and a number of transactions are not fully automated, which may further increase the risk that human error or employee tampering or manipulation will result in losses that may be difficult to detect. Consequently, the inadequacy of the Banks internal processes or systems may result in unauthorised transactions and errors not being detected. Further, the Banks insurance may not cover the Banks losses from such transactions or errors, which may have a material adverse effect on the Banks financial condition or results of operations. Transactions with unidentified Related Parties may cause future losses. Certain customers and counterparties of the Bank may not have been properly identified as related parties. The Bank was unable to obtain appropriate evidence as to whether certain entities are related parties as at 30 June 2010 and 31 December 2009 and cannot therefore be sure that all customers and counterparties that are related parties have been disclosed. Given the internal control weaknesses in the Bank, related party transactions with unusual terms not known as at the date of this Prospectus may be uncovered in the future and may have further adverse effects on the Banks financial condition and recovery prospects. Declines in customer deposits, which are an important source of funding for the Group, have negatively affected and may continue to negatively affect the Groups funding base. Following significant outflows of customer deposits between January 2009 and December 2009, the Group has experienced significant inflows of customer deposits since January 2010. The Groups retail deposits increased by 7.8 per cent. from KZT 183,977 million as at 31 December 2009 to KZT 198,255 million as at 30 June 2010. The Group has also experienced a significant inflow of private corporate and SME deposits (i.e., deposits from entities other than Samruk-Kazyna and its subsidiaries) during the same period. Such deposits increased by 12.23 per cent. from KZT 110,761 million as at 31 December 2009 to KZT 124,302 million as at 30 June 2010. The deposits by Samruk-Kazyna and its subsidiaries (which includes amounts deposited pursuant to the State Finance Programmes) decreased by 0.38 per cent. from KZT 361,225 million as at 31 December 2009 to KZT 359,867 million as at 30 June 2010 and the Groups total deposits increased by only

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4.03 per cent. from KZT 655,963 million as at 31 December 2009 to KZT 682,424 million as at 30 June 2010. If, however, retail and corporate deposits decrease and/or Samruk-Kazyna and/or its subsidiaries withdraw some or all of the deposits made by them with the Bank, the Group will face significant funding difficulties and may be unable to carry on its business as other sources of funding, both domestically and in the international markets, may not be readily available. Expected moderate growth of Kazakhstans GDP in 2011 could put increasing pressure on the ability of the Banks existing borrowers to repay their loans. Despite the relatively high growth of Kazakhstans GDP in 2010 (increase of 7 per cent. as compared with the increase in 2009 of 1.2 per cent., the situation of the banking sector remains difficult. There is limited demand for credit from the economy in general and there are no significant improvements in the quality of loan portfolios in the banking system. In 2011, the Government expects a growth in GDP in the range of 4.0 - 5.0 per cent. The slowing down in growth is in line with the trend in global economy and a result of the downsizing of government anti-crisis programmes and the continuing low domestic demand. In the prevailing circumstances, while the Bank expects that the economic situation will have a positive impact on the ability of certain of its borrowers to repay their loans, a large mass of its borrowers with overdue loans will be negatively affected, which could lead to an increase the Banks losses from non-performing loans which could adversely affect the Banks business, financial condition and prospects. Concentration of the Banks loan portfolio subjects it to risks from exposure to particular sectors of the Kazakhstan economy. As at 30 June 2010 and 31 December 2009, the Groups ten largest borrowers accounted for 16.0 per cent. and 15.0 per cent., respectively, of gross loans and advances compared to 14.0 per cent. as at 31 December 2008. Although the Groups level of concentration in its lending base is relatively low when compared with its competitors, the Bank will need to monitor the concentration of its loan portfolio and if it does not do this effectively, its credit exposure could increase, which would have a material adverse effect on the Banks business, results of operations and financial condition. Volatility in the real estate market in Kazakhstan has had and may continue to have an adverse effect on the Banks asset quality and collateral value. Real estate prices in Kazakhstan and Russia, which increased rapidly from 2002 to 2007, have dropped sharply since June 2007 in Kazakhstan and 2008 in Russia. Such volatility in the real estate market has had and may continue to have an adverse effect on the Banks business, financial condition, results of operations and prospects. As at 30 June 2010, of the loans to the Groups ten largest borrowers, 46.5 per cent. were made to borrowers in the real estate sector (civil construction and real estate operations). In addition, a substantial number of the Banks loans to customers are secured by real estate. As at 30 June 2010, 25.1 per cent. of net loans to customers of the Bank on an unconsolidated basis were collateralised by real estate. The recent declines in the price of real estate in Kazakhstan have increased the price volatility and consequently have made it difficult to value certain collateral held by the Bank. The collateral value ultimately realised by the Bank in the event of foreclosure of these customer loans will depend on the fair value as determined at that time and may be materially different from the current or estimated fair value. Also, the real estate market in Kazakhstan suffers from low liquidity and the Bank may be unable to liquidate its real estate collateral in a reasonably short time frame. As a result, in the event that a portion of the Banks loans to customers 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 Banks results of operations and financial condition.

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The continuing decline in value of the Groups loan portfolio is likely to lead to a gradual seasoning of the Groups loan portfolio which may increase the proportion of loan defaults. Because corporate banking relationships are relatively mature in Kazakhstan, the value of the Groups net loan portfolio decreased by 28.1 per cent. to KZT 748,435 million as at 30 June 2010 from KZT 1,040,773 million as at 31 December 2009, which in turn represented a decrease of 35.6 per cent. from KZT 1,617,063 million as at 31 December 2008. As the Groups loan portfolio is expected to continue to decline in value, it is likely to lead to a gradual seasoning of the Groups loan portfolio, with the concentration of older loans in the portfolio becoming more significant. There is some evidence that the likelihood of borrower default increases with the age of a loan. Therefore, as a result of the expected gradual seasoning of its loan portfolio, the Group could experience a further increase in the percentage of its loans which are non-performing after the Restructuring which could adversely affect the Banks business, financial condition, results of operations and prospects. 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 June 2010, there were 38 commercial banks in Kazakhstan (excluding Zhilstroysberbank), of which 19 were banks with foreign shareholders, including the subsidiaries of foreign banks. In addition, regulatory changes may make it easier for foreign banks to increase their market presence in Kazakhstan. As at 30 June 2010, the Banks net assets constituted 15.6 per cent. of the total assets of the banking system in Kazakhstan. There are relatively few large corporate customers that do not have established banking relationships, which means that competition is intense in the corporate sector. In the past, the Bank has faced competition primarily from banks which focus on the corporate banking market, including Kazkommertsbank and ATF Bank. According to the FMSA, as at 30 June 2010, the Bank was the second largest bank in Kazakhstan, as measured by the aggregate gross value of loans issued. As a result of the ongoing financial crisis, the Bank faces greater competition from other banks as larger banks in more stable financial positions will aim to increase their market shares in all sectors of the market. In particular, the Bank faces competition in attracting and retaining individual depositors. Any failure of, interruption in, or breach of, the Banks information systems, or any failure to properly implement or update such systems, may have a material adverse effect on the Banks business, results of operations and financial condition. The Banks information technology strategy focuses on the integration of its business needs and information technology capabilities, while maintaining cost effective and safe systems. In recent years, the Bank has built a highly productive and reliable technology environment, located in two data centres in Almaty. The Bank has also developed and implemented disaster recovery and backup strategy. The Bank is certified under ISO 27001, an international quality standard. The Bank relies heavily on information systems to conduct its business. However, it has currently suspended implementation of non-critical information technology projects and implemented a moratorium on the purchase of property and equipment. There can be no assurance that the Bank will resume implementation of these projects, that implementation of improved information technology systems, if resumed, will be developed according to schedule, that the new systems will address any shortcomings of the current systems or that they will be sufficient to meet the needs of the Banks rapidly growing and changing business. Due to the Banks financial condition, the Bank has stopped work on the implementation of the new core banking system. Despite the fact that the existing systems can handle the current volume of operations and have substantial reserves for processing as reflected in the Banks business plan for the period until 2014, there is a risk that competitors may develop their information technologies faster and more successfully than the Bank.

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Due to the degree of penetration of information technologies in the business processes of the Bank, any failure of, interruption in, or breach in security of, the Banks systems could result in failures or interruptions in the Banks risk management, deposit servicing and/or loan origination systems or errors in its accounting books and records. The occurrence of any failures or interruptions or the failure to properly implement or upgrade any of the Banks information technology systems could have a material adverse effect on the Banks business, results of operations or financial condition. Furthermore, the location of both of the Banks data centres in Almaty subjects the Bank to risk of loss due to destruction from earthquakes. The Banks risk management strategies and techniques expose the Bank to a number of unidentified or unanticipated risks. Although the Bank expects to invest substantial time and effort in improving and monitoring 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 in value of assets like these could lead to losses that the Bank has not anticipated. The Bank, like other commercial banks in Kazakhstan, is exposed to risks resulting from mismatches between interest rates on its interest bearing liabilities and interest earning assets as well as risks resulting from fluctuations in the prevailing foreign currency exchange rates. Between 2005 and 2008, the Group hedged its foreign currency and interest rate risks using cross currency swaps and interest rate swaps. As at 31 December 2008, the Group had cross currency swap transactions concluded with foreign banks with a total notional amount of KZT 136,115 million and interest rate swap transactions with foreign banks for a total notional amount of KZT 462,318 million. During 2009, nearly all of the Groups cross currency swap counterparties exercised their right to terminate the swaps early. During 2009 and the first half of 2010 interest rate swap contracts with a total notional amount of KZT 462,318 million were cancelled. The Banks foreign currency exchange exposure increased immediately after the early termination of the cross-currency swaps in 2009 to KZT 1,320,903 million and KZT 1,150,751 million as at 30 June 2010 and 31 December 2009, respectively compared to KZT 35,943 million as at 31 December 2008. Currently the Bank has significant exposure to foreign currency exchange rate fluctuations because it has not entered into new hedges. The Bank anticipates that following the completion of the Restructuring it will enter into transactions to hedge against foreign currency exchange risk in order to comply with the NBKs and the FMSAs requirements related to the open foreign currency position of the Bank as required by the terms and conditions of the New Notes. On 31 August 2010 the Bank completed the restructuring of U.S.$16.5 billion of financial indebtedness. Of this amount, the amount of floating interest rate obligations equalled U.S.$2 billion. As part of the Restructuring, the Bank cancelled all the existing notes including the floating rate notes and issued notes bearing fixed interest rates for the terms of such notes. The Banks credit dossiers have serious gaps and many documents are missing. Regulations of the FMSA and the Banks internal regulations set out certain requirements when creating credit dossiers in respect of borrowers of a bank. See Asset and Liability Management Lending Policies and Procedures Credit Dossiers. In the course of its due diligence, the Banks management has uncovered a significant number of purported loans that at present appear to have

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been provided on preferred terms to companies connected with former management of the Bank and for which the security provided was inadequate or nonexistent. In the Financial Statements for the year ended 31 December 2008 and the FMSA report provided in January 2009, the Bank and the FMSA, respectively, each noted that certain loan documentation, including collateral and associated agreements, primarily relating to financing of projects outside Kazakhstan, was no longer available. The Bank attributes many of these gaps and missing documents to fraud and to the fact that, prior to February 2009, the credit dossiers for transactions involving purported projects outside Kazakhstan had been compiled on behalf of the Bank by associate banks such as BTA Russia and BTA Ukraine. The Bank believes that there is a significant risk that, as these associate banks were and still are under the effective control of the previous management of the Bank, a number of documents may not become available to the Bank and that the veracity of documents which are or become available may be questionable. Furthermore, deficiencies exist in the credit dossiers compiled by the Bank itself. See The Bank Background to the Restructuring Factors Affecting Deterioration of Banks Loan Portfolio Internal Factors. These gaps in credit dossiers seriously impede the Banks ability to investigate and, if necessary, to issue claims relating to these purported loans. The Banks success is dependent on the continued service of its key personnel and it may not be able to retain such personnel. The Bank appointed new senior management in 2009 to oversee implementation of its strategy and its day-to-day operations. The banking industry is relatively new in Kazakhstan and there are a limited number of experienced banking managers in the country. 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 this increasingly competitive environment. The loss of the Banks senior management for any reason could have a material adverse effect on the Banks business, results of operations and financial condition. Risks Relating to Operating within the Kazakhstan Banking Sector It is not possible to predict the full impact on the Bank of the financial stability laws in Kazakhstan, which are currently in the early stages of implementation. On 23 October 2008, the Kazakhstan Parliament adopted the Law of the Republic of Kazakhstan on Introduction of Amendments and Addendums into certain Legislative Acts of the Republic of Kazakhstan Governing the Stability of the Financial System. The law introduced numerous amendments to the Banking Law, the JSC Law and the Securities Market Law. The main objectives of this new law are to improve mechanisms for the early detection of risks in the financial system, to provide powers to the Government to acquire shares in commercial banks that face financial problems and to generally improve the condition of financial institutions in Kazakhstan. The law also consolidates authority to oversee large second-tier Kazakhstan banks and provides additional mechanisms for supervising commitments made by banks and other financial institutions. Under the new law, in the event of (i) a breach by a bank of capital adequacy or liquidity ratios or (ii) two or more breaches by a bank in any 12-month period of any other prudential or other mandatory requirements, the Government may, with the agreement of the FMSA, acquire, either directly or through the national management holding company (currently, Samruk-Kazyna), the authorised shares of such bank to the extent necessary (but not less than 10 per cent. of the total amount of issued and outstanding shares of such bank, including those to be acquired by the Government or the national management holding company) to improve such banks financial condition and ensure compliance with prudential or other mandatory requirements. The new law provides that capital increases required in order to accomplish such an acquisition do not require approval of the shareholders or the management and the existing shareholders of an affected bank do not have pre-emptive rights in relation to the newly issued shares. Following such an acquisition, the state body authorised to manage state property, or the national management holding company, is

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authorised to appoint no more than 30 per cent. of the members of the board of directors and the management board of the affected bank. Should the financial status of the affected bank improve resulting in compliance with prudential norms, the Government may take measures to sell the acquired shares by way of a direct addressed sale or auction at the stock exchange. The financial system stability law is currently in the early stages of its implementation and it is not possible to predict its full impact on the Bank. Changes in the liquidity support for the Kazakhstan banking sector may have an adverse impact on the Bank. The NBK and the Government have taken steps, including the provision of short term liquidity support, to protect the Kazakhstan banking sector from the recent turmoil in the financial markets. Starting in the second half of 2008, the NBK adopted a number of measures aimed at providing additional liquidity to the banks. In particular, with effect from 3 March 2009, the minimum level at which second tier banks must maintain reserves has been decreased from 2.0 per cent. to 1.5 per cent. with respect to domestic liabilities and from 3.0 per cent. to 2.5 per cent. with respect to other liabilities. On 30 November 2009, the management board of the NBK reduced the obligatory reserve ratio requirement applicable to the Bank to zero per cent. for both internal and external liabilities. The reduced ratio will remain in effect until the Restructuring process is finalised. Additional measures taken include the deposit into local commercial banks, of temporary excess cash of national companies, enterprises and joint stock companies which are wholly or partially owned by the State or controlled by the NBK and the establishment by the Government of a Distressed Assets Fund to buy doubtful assets of commercial banks. If the NBK and the Government were to withdraw their liquidity support it would lead to decreased overall liquidity in the Kazakhstan banking sector. This decreased liquidity would likely result in an increase in the Banks funding costs which would adversely affect the Banks business, financial condition, results of business and prospects. The ongoing crisis in the global financial markets and deterioration of general economic conditions have adversely affected the Banks results of operations and financial condition and could continue to cause them to decline. The global economy and the global financial system have experienced a period of significant turbulence and uncertainty in recent years, particularly the 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 that of Kazakhstan, have sought to inject liquidity into banking systems and to recapitalise their banking sectors 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 that of Kazakhstan. These developments have already adversely affected the Banks earnings and profits. Continued general deterioration in the world economy, including plummeting production and services, business and consumer confidence, plunging pace of growth of household income, 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 Banks products and services, would lead to lower realisations as well as writedowns and impairments of investments and negative fair value adjustments of assets, and could materially and adversely impact the Banks operating results, financial condition and prospects.

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The Kazakhstan banking sector has been particularly affected by the lack of availability of international wholesale debt financing and the volatility of deposits. Kazakhstan banks have previously heavily relied on such financing and deposits 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 costs or if the Bank suffers from increased volatility of its deposit base, this could adversely affect the Banks business, financial condition, results of operations 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 partially or entirely outside the control of the Bank and may be exacerbated by the severity of the financial crisis. The Bank faces increased risks related to the devaluation of the Tenge. A large proportion of the Banks funding base is made up of borrowings in currencies other than Tenge whereas the vast majority of its income is in Tenge. While the proportion of the Banks funding base denominated in currencies other than Tenge has decreased following the Restructuring, it remains significant. On 4 February 2009, the NBK reduced its level of support for the Tenge/U.S. Dollar exchange rate from KZT 117 KZT 123 to 1 U.S. Dollar to KZT 150 to 1 U.S. Dollar (+/- 3 per cent.). 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. The devaluation of the Tenge was also intended to enhance the competitiveness of Kazakhstan goods in the export market. From 5 February 2010 a new exchange rate corridor began to operate. In light of the state of world trade and currency markets, and in order to make the setting of exchange rates more flexible, the NBK has indicated that it will widen the KZT corridor until 20 March 2011 to allow fluctuations from a base rate of KZT 150 to 1 U.S. Dollar of + 10 per cent. (i.e. up to KZT 165 to 1 U.S. Dollar) and -15 per cent. (i.e. down to KZT 127.5 to 1 U.S. Dollar). This policy decision makes the Tenge/U.S. Dollar exchange rate more difficult to predict in the immediate future and could lead to a further devaluation of the Tenge. This devaluation increased the cost of foreign borrowings for the Bank. Further, the devaluation of the Tenge will likely affect the Banks costs as the majority of the Banks funding base is denominated in U.S. Dollars, whereas income from its loan portfolio is typically denominated in Tenge. 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 denominated liabilities and by making it more difficult for Kazakhstan borrowers to service their U.S. Dollar loans. Any of these developments may have a material adverse effect on the Banks business, financial condition and results of operations. The lack of accurate statistical, corporate and financial information in Kazakhstan may limit the ability of the Bank to assess its credit risks accurately. Kazakhstans 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 Banks 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 make accurate credit assessments. Thus, the statistical, corporate and financial information, including annual financial statements and recognised debt rating reports, available to the Bank as well as other Kazakhstan banks relating to prospective and existing corporate borrowers or other clients

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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 accurately assessing the post-enforcement value of collateral may result in the Bank extending loans without the necessary collateral to support them. The First Credit Bureau is a private company that was created on 29 July 2004 by the Bank, Kazkommertsbank, Bank CenterCredit, Halyk Bank, Tsesna Bank, ATF Bank, Alliance Bank, Astana Finance and the Association of Financiers of Kazakhstan pursuant to the Law on Credit Bureaus and Credit History of Kazakhstan dated 6 July 2004. The First Credit Bureau manages a database containing the credit histories of individuals and legal entities in Kazakhstan. The FMSA requires all credit institutions to provide information about their borrowers to the First Credit Bureau. Commercial banks can then purchase information about potential or existing borrowers from the First Credit Bureau. The First Credit Bureau charges a case-by-case fee on each request made by a bank for information depending on the amount of detail requested by the bank with respect to the individual borrower. Although the FMSAs requirement to provide information to the First Credit Bureau should ensure that the Bureaus records are comprehensive and up to date, there can be no assurance that all banks do indeed comply with this requirement or that the information is ultimately accurate and reliable. Banking regulations in Kazakhstan are not as developed as in many Western countries and any further changes thereto might adversely affect the Banks business. The Bank operates in a highly regulated environment. However, like most of Kazakhstans legislation regarding business activities, Kazakhstans laws regarding banks and banking activities have been adopted only relatively recently and are subject to change, which could 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 Banks ability to provide a full range of banking and financial services, thus materially and adversely affecting the Banks financial condition or results of operations. In addition, readers of this Prospectus 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, GDR Holders, Shareholders and Noteholders 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 Kazakhstans capital adequacy regulations. These regulations limit the total amount of foreign borrowings which a bank may incur to a multiple of such banks regulatory capital. Although the Bank fully complies with those particular regulations as of the date hereof, this limitation on the Banks ability to access foreign lenders and the international capital markets may adversely affect the Banks ability to secure adequate financing in the future. See The Banking Sector in Kazakhstan. The future implementation by the FMSA of the recommendations of the Basel II Report may impose constraints on the Banks business which may materially and adversely affect the Banks business and financial condition or results of operations. See The Banking Sector in Kazakhstan Banking Supervision. Risks Relating to Kazakhstan Kazakhstan is subject to the risks associated with emerging markets generally. Emerging markets such as Kazakhstan 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 that of Kazakhstan are subject to rapid change and that the information contained in this Prospectus may become outdated relatively quickly. Accordingly, investors should

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exercise particular care in evaluating the risks involved and must decide for themselves whether, in light of those risks, their decision is appropriate. Investors are urged to consult with their own legal and financial advisers before making any decision with respect to an investment in the Notes or GDRs. In addition, the availability of credit to entities operating within the emerging markets is significantly influenced by the level of investor confidence in such markets as a whole and as such any factors that affect investor 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. The Kazakhstan corporate governance and disclosure laws which apply to the Bank are different from those generally applicable to corporations organised in the United States, the United Kingdom and other jurisdictions. The Banks governance is regulated by the laws governing companies incorporated in Kazakhstan and by the Banks Charter and Corporate Governance Code. The Banks corporate governance policies were not particularly sophisticated in the past, which contributed to deficiencies in the Banks internal control and credit system. See Risks Relating to the Bank Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. 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 those 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 disclosure requirements under Kazakhstan law, these requirements are less stringent than the comparable requirements in the United States, the United Kingdom and certain other jurisdictions and, therefore, there is less information publicly available about the Bank than would be required if the Bank were organised in the United States, the United Kingdom or certain other jurisdictions. The Government has stated that it intends to continue to reform the corporate governance regulations with a view towards increasing disclosure and transparency in the corporate sector in order to promote growth and stability. However, the Government may not continue to pursue such a policy in the future or such policy, if continued, may not ultimately prove to be successful. It is not possible to predict the effect of future legislative developments on the Bank. The Bank adopted a Corporate Governance Code as part of the Restructuring and the Corporate Governance Code includes provisions on the role and responsibilities of the members of the Board of Directors, their selection procedures and the monitoring of their performance, the Banks internal controls and risk management and the Banks disclosure and reporting obligations to its shareholders. The Bank will also arrange for an annual audit of the Banks corporate affairs and governance policies by an independent auditor and has agreed to remedy any identified non-compliance within six months of the date of such audit report. In addition, the Shareholders of the Bank appointed to the Board of Directors two directors nominated by the Steering Committee. While the planned improvements should bring the Banks corporate governance standards closer to those in the United States and the United Kingdom, there can be no assurance that such amended governance standards will prove to be effective or that they will be implemented in a proper manner.

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The Bank may be subject to money laundering risks. The existence of black and grey market economies in Kazakhstan (typical in developing countries), inconsistent legislation and the lack of administrative guidance on its interpretation increase the risk of Kazakhstans financial institutions being used as vehicles for money laundering. The Parliament of Kazakhstan has recently adopted the Law of the Republic of Kazakhstan On the Prevention of Legalisation (Laundering) of Illegal Income and Terrorism Financing No. 191-IV dated 28 August 2009. This law became effective on 8 March 2010. The new law identifies various types of transactions that will be subject to financial monitoring and establishes thresholds for each of them, such as (i) exchanges of cash equalling or exceeding the equivalent of KZT 7 million, (ii) withdrawing funds from, or crediting funds to, bank accounts equalling or exceeding the equivalent of KZT 7 million, (iii) insurance payments equalling or exceeding the equivalent of KZT 7 million, (iv) transactions in securities or immovable property equalling or exceeding the equivalent of KZT 45 million, and (v) receiving funds, including in electronic form, through the proceeds of betting, gambling in a gaming establishment or lottery equal to or more than the equivalent of KZT 1 million. Banks, pension funds, insurance and reinsurance companies and certain other financial institutions and individuals are obliged to monitor any such transactions entered into by their clients by conducting due diligence as outlined in the law with respect both to the clients and the transaction. If it is not possible to conduct such due diligence, the financial institution must prevent their clients from entering into such a transaction. The law requires any transaction above certain thresholds to be reported to an authorised state body within 24 hours. The Bank has implemented measures aimed at preventing it from being used as a vehicle for money laundering, including know your client policies and the adoption of anti-money laundering and compliance procedures in all its branches. In particular, the Bank has created an office for the introduction of a financial monitoring and internal control system whose task is to develop an appropriate program to verify clients and other persons participating in bank operations, and a procedure for working with foreign public officials, to identify suspicious operations and operations requiring financial monitoring, and to provide training to employees of the Bank on anti-money laundering and financial terrorism issues. The Bank is currently not establishing business relationships with non-resident banks that do not have constantly active management bodies in the countries in which they are registered, is not opening accounts for potential clients who do not submit the necessary identification documents, and is closely monitoring relationships with residents of countries that have not fulfilled the Financial Action Task Force recommendations in full. However, there can be no assurance that attempts to launder money through the Bank will not be made or that anti-money-laundering measures implemented by the Bank will be effective. If the Bank were associated with money laundering, albeit only through the failure of its anti-money laundering measures, or if it were unable to comply with all of the relevant laws and internal policies regarding financial assistance or money laundering, it could be subject to significant fines as well as harm to its reputation, and its business, financial condition and results of operations may be materially and adversely affected. The Banks financial position and its results of operations are substantially dependent on the legal, 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 undergone significant changes as it has 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

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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. In September 2003, Kazakhstan signed an agreement with Ukraine, Russia and Belarus for the creation of a single economic zone, which was expected to result in common economic policies, harmonisation of legislation implementing such policies and the creation of a single commission on trade and tariffs. However, in practice this agreement has proved difficult to implement, particularly since the first half of 2008, when Ukraines joining of the World Trade Organisation effectively precluded it from joining this single economic zone. Negotiations nevertheless continued on integrating the policies and legislation of the CIS countries and in 2009, Kazakhstan, Russia and Belarus created a customs union. The aim of this customs union is to create a free customs area within which member countries would enjoy free movement of goods, services, capital and labour. The member countries also intend to harmonise their fiscal, credit and currency policies to support further economic integration with the CIS countries and to assure continued access to export routes. However, should access to export routes be materially impaired, this could adversely affect the economy of Kazakhstan. Moreover, adverse economic factors in the markets of such member countries may adversely affect Kazakhstans economy. Although Kazakhstan has in the recent past enjoyed relative political 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, increasing by 13.5 per cent. in 2001, 9.8 per cent. in 2002, 9.3 per cent. in 2003, 9.6 per cent. in 2004, 9.7 per cent. in 2005, 10.7 per cent. in 2006 and 8.9 per cent. in 2007. In 2008, GDP increased by only 3.3 per cent. According to NSA data, GDP increased by 1.2 per cent. in 2009. 2010 saw certain positive economic signs: for instance, the GDP growth in 2010 according to preliminary data of the NSA was 7.0 per cent. compared to 1.2 per cent. in 2009. However, the Kazakhstan economy remains heavily dependent upon the prices of commodities on world markets, which are currently volatile. Inflation in 2010 was 7.1 per cent. The positive trend in the economy is supported by increase in consumer demand, which in turn is supported by an increase in salaries, social benefits and pensions during 2010 which stimulates spending. Although the condition of the financial market in Kazakhstan was expected to gradually improve throughout 2010, there is unlikely, given the lingering economic and financial risks, to be a sharp increase in the credit activity of banks or a material improvement in the quality of their credit portfolio, and the further development of the economy of Kazakhstan will depend on a variety of factors. Were the economic situation to deteriorate further, consequences would include higher unemployment, reduced corporate profitability, increased corporate insolvency rates, increased personal insolvency rates and increased interest rates. 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 value of the collateral securing many of the Banks loans and increasing writedowns, and negatively affect the ability and willingness of companies and individuals to place deposits with domestic banks, including the Bank. The Kazakhstan economy is highly dependent on oil exports and, as a result, is affected by oil price volatility. Countries in the Central Asian region, including Kazakhstan, whose economies and state budgets rely in part on the export of oil, oil products and other commodities as well as the import of capital equipment and significant foreign investments in infrastructure projects, could be adversely affected

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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 addition, any fluctuations in the value of the U.S. Dollar relative to other currencies may cause volatility in 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 sharp drop in world prices for oil and other commodities since mid-2008 has had a negative impact on the growth prospects of the Kazakhstan economy. The national budget for 20112013 initially projected revenues on the basis of world oil prices of U.S.$65 per barrel. Although oil prices have recovered for the time being, there can be no assurance that further revisions of the national budget will not be required in light of continuing oil price volatility. The Kazakhstan regulatory and tax regime, as well as the judicial system, are not fully developed and therefore are unpredictable. Although a large volume of legislation has come into force since early 1995 (including new tax codes in January 2002 and 2009 and laws relating to foreign arbitration in 2004, 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 in 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 numerous ambiguities in Kazakhstans commercial legislation, in particular in 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 in jurisdictions with a more developed tax system. Although the Bank has obtained a letter from the Kazakhstan tax authorities with respect to the tax treatment of certain aspects of the Restructuring, such tax rulings are non-binding on the Kazakhstan tax authorities and, therefore, there can be no assurance that such authorities will not change the tax treatment of the Restructuring and the structure of the New Notes or GDRs in a way that might adversely affect the interests of the Bank and of its creditors. There are risks associated with the underdevelopment of Kazakhstans 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 the procedures for settlement, clearance and registration of securities transactions may therefore be subject to legal uncertainties, technical difficulties and delays. Although significant developments have occurred in recent years, 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, as in the United States, the United Kingdom and the other Western European countries, and existing laws and regulations may be applied inconsistently.

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Kazakhstans president, Nursultan Nazarbaev, has been in office since 1991 and, if he were to step down, Kazakhstan could become unstable. Kazakhstans president, Nursultan Nazarbaev, has been in office since Kazakhstan became an independent sovereign state in 1991. Under President Nazarbaevs leadership, the foundations of a market economy have taken hold, including the privatisation of state assets, liberalisation of capital controls, tax reforms and pension system development. President Nazarbaev was re-elected for his most recent term of office in December 2005. In May 2007, Kazakhstans Parliament voted to amend Kazakhstans constitution to allow President Nazarbaev to run in an unlimited number of elections. While this amendment will allow President Nazarbaev to seek re-election at the end of his current term, there is no guarantee that he will remain in office. Should he not complete his current term of office or should a new president be elected at the next election, Kazakhstans political situation and economy could become unstable and the investment climate in Kazakhstan could deteriorate, which would have a material adverse effect on the Banks business, results of operations and financial condition. Conversely, although President Nazarbaevs remaining in office may contribute to stability in Kazakhstan, the constitutional amendment in May 2007 has raised some concerns regarding the democratic nature of reforms. A lack of confidence in Kazakhstans government could threaten the countrys economic stability, which could have a material adverse effect on the Banks business, results of operations and financial condition. Risks Relating to the Restructuring The Base Case Model should not be relied upon as a forecast. The Base Case Model is a tool used by the Bank for illustrative modelling purposes, and no amounts included in it or derived from it should be construed as a forecast by the Bank or any other person of any results of the Bank. The Bank accepts no responsibility for the Base Case Model or the Original Business Plan, and investors should not form any decisions based upon either of these documents. The Bank has historically been unable to fund its operations and the Banks substantial level of indebtedness following the Restructuring has significantly reduced available cash, impacted its ability to obtain additional financing and limited its flexibility. The Bank historically has not been able to fund its operations and debt payment obligations and has therefore incurred substantial indebtedness. Following the Restructuring (as a result of which as at the date of this Prospectus, the Bank is solvent and meets the minimum capital adequeacy ratios established by the FSMA), on a pro forma consolidated basis, the Bank and its subsidiaries have approximately KZT 622,468 million (or approximately U.S.$4.219 million) of indebtedness outstanding as at 30 June 2010. See Pro Forma Financial Information. The Banks substantial consolidated level of indebtedness, and associated interest payment obligations, will: limit its cash flow available for general corporate purposes, including any acquisitions; limit its ability to obtain necessary financing for working capital, capital expenditure or business opportunities and to implement its business strategies; limit its flexibility in reacting to competitive and other changes; expose it to the risk that a decrease in net cash flows due to economic developments or adverse developments in its business could make it difficult or impossible to meet senior debt payment obligations; and expose it to risks inherent in interest rate fluctuations.

Although interest payments will be significantly reduced after partial cancellation of the existing financial indebtedness of the Bank as a result of the Restructuring, it is possible that the Bank may continue to incur losses and may not achieve or sustain sufficient cash flow in the future for the payment of interest, principal and the meeting of expenditure needs or other purposes. If the Banks

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cash flow is not sufficient to meet its expenses, debt payment obligations and other requirements, the Bank may be forced to raise cash or reduce expenses by doing one or more of the following: delaying or reducing expenditures necessary to maintain its business and meet increased competition; disposing of some of its assets, possibly on unfavourable terms; revising or delaying the implementation of its strategic plans; forgoing business opportunities; or if necessary, restructuring or refinancing its indebtedness prior to original maturity.

The Bank could also be forced to seek additional equity capital, which could dilute the interests of the holders of its common shares. The Bank cannot be sure that any of the above actions would be sufficient to fund its operations in the future. The Banks operations and financing activities will be restricted by covenants and undertakings in the Restructuring Documents. The Restructuring Documents entered into by the Bank contain a number of significant restrictions and covenants that limit ability of the Bank and its subsidiaries to: dispose of businesses or assets; enter into joint ventures, acquisitions, mergers and to incorporate subsidiaries; engage in intra-group lending or guarantees and related party lending or similar transactions; obtain new borrowings; pay dividends on common shares unless agreed conditions are satisfied; and enter into major transactions unless concluded at fair value and subject to certain conditions.

The Bank is required to comply with specified financial ratios and performance covenants contained in the Restructuring Documentation. There are also significant restrictions on the Banks activities which could affect the Banks ability to operate its business and may limit its ability to take advantage of potential business opportunities as they arise. In the event the Banks regulatory capital decreases, the Bank may, in common with other Kazakh banks, become in breach of the capital adequacy ratios applicable to it, which in turn could threaten the Banks ability to operate and trigger events of default under the terms of the New Notes. The Banks ability to comply with the covenants and undertakings in the Restructuring Documents will depend on a number of factors, including its operating performance and the level of interest rates, as well as other factors that it may have failed to anticipate or that are beyond its control. If the Bank is unable to comply with the covenants and undertakings in the Restructuring Documents, the Claimants could impose additional restrictions on the Bank or accelerate repayment of all amounts due under the New Notes. If its indebtedness is accelerated, the Bank may not be able to repay its debt or borrow sufficient funds to refinance that debt. In addition, any default under its New Notes, or agreements governing its other existing or future indebtedness, is likely to lead to an acceleration of indebtedness under any other debt instruments or loans that contain cross-acceleration or cross-default provisions. If the indebtedness under the New Notes is accelerated, the Bank is unlikely to have sufficient assets to repay amounts due, or any other indebtedness then outstanding. Any failure to repay or refinance its existing or future indebtedness would adversely affect the value of the GDRs.

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Some provisions of the Restructuring Documents may discourage or prevent a takeover of the Bank, even if a takeover would be beneficial to its shareholders. The Restructuring Documents include a number of provisions protecting the Banks shareholders and creditors if changes are made to the Banks shareholding structure after the Restructuring. Such provisions include granting a put option to holders of the Senior Notes and OID Notes if a Relevant Event (as defined in the terms and conditions of the OID Notes) occurs, granting tag-along rights to the Restructuring Creditors holding the Banks equity after the Restructuring and granting drag-along rights to Samruk-Kazyna. Such protections may have the effect of preventing an acquisition or merger in which the Bank is acquired and may discourage potential equity investors from investing in the Banks shares. Adverse publicity relating to the Restructuring and the financial condition of the Bank may adversely affect the Banks customer relationships and the market perception of its business. Adverse publicity relating to the Restructuring and the financial condition of the Bank may make it difficult to convince customers to maintain relationships with the Bank and to attract new customers, which could materially adversely affect the Banks business. Ongoing negative publicity may also have a long-term negative effect on the Banks brand name, which could make it more difficult for the Bank to market its products and services in the future. Following the Restructuring, a significant percentage of the Banks outstanding common shares may be held by a small number of shareholders who may have conflicts of interest. Following the Restructuring, it is anticipated that some of the Claimants will become significant shareholders of the Bank. As a result of these relationships, if conflicts arise between the interests of these significant shareholders and the interests of the Banks other shareholders, directors nominated by the affected significant shareholders may not be disinterested. These shareholders may also from time to time make significant investments in other banks operating in Kazakhstan. This may result in conflicts of interest. Actions these shareholders take relating to those investments may conflict with the interests of the Bank and the Banks other shareholders. The Pro Forma Financial Information would likely differ materially if it were based on financial statements prepared in accordance with IFRS. The Pro Forma Financial Information has been prepared based on the Banks historical unconsolidated management accounts, adjusted for selected IFRS accounting policies, and based on certain assumptions to reflect the effect of the Restructuring as if it had taken place on 30 June 2010. Management may not have identified all adjustments to the management accounts used in the preparation of the Pro Forma Financial Information necessary to address differences in the Banks accounting policies and rules applied in the preparation of such management accounts from IFRS accounting policies and principles. In addition, not all of the assumptions made in order to prepare the Pro Forma Financial Information may prove to be correct. Although the management believes that the Pro Forma Financial Information may be useful in enabling investors to assess and understand the financial position of the Bank, readers of this Prospectus should read such information with due regard to the limitations inherent in its preparation and analysis of financial information prepared on a non-IFRS basis should only be used as a complement to, and in conjunction with, the financial information presented in accordance with IFRS. See Presentation of Financial and Other Information. Certain amendments to the provisions of the Charter may not comply with the requirements of Kazakhstan law and shareholders of the post-restructured Bank may therefore not receive the protections afforded by the Charter described in this Prospectus. As part of the proposed restructuring process, amendments to the Charter were introduced, the aim of which is to provide Claimants who become shareholders of the post-restructured Bank with increased protection. Although the amendments to the Charter were approved by the FMSA and reviewed by

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the Ministry of Justice, some of the provisions that were incorporated into the Charter have never been tested under Kazakhstan law and the Bank gives no assurances that the applicable governmental and regulatory authorities will hold such provisions to be in compliance with Kazakhstan law. Therefore, certain protections which the Bank is seeking for its shareholders may not be available under the Charter. See Management and Corporate Governance Management and Corporate Governance Following the Restructuring Charter and Description of Share Capital and Certain Matters of Kazakhstan Law Charter. The Restructuring Law has not been tested widely and there can be no assurance that the Restructuring, effected under such legislation, will be recognised in all relevant foreign jurisdictions. Prior to July 2009, there was no law in Kazakhstan which would allow for creditor claims of Kazakhstan finance institutions to be restructured without the consent of all affected creditors. Creditors not wishing to participate in a restructuring had the ability to set off their claims against a banks assets or bring litigation in any jurisdiction where any of those assets were located. A compulsory restructuring arrangement may not bind foreign creditors whose debt is governed by foreign law in respect of assets held in certain jurisdictions outside of Kazakhstan unless the Restructuring is recognised in the relevant jurisdictions, or such creditors filed a Claim Form and thereby expressly agreed to be bound by the terms of the Restructuring Plan. There is therefore a risk that a creditor that did not file a Claim Form in the Restructuring may assert its claim against assets in a jurisdiction in which the Restructuring is not recognised. It is essential that a bank which makes international currency payments obtains protection from its creditors internationally. The Restructuring Law was designed to be capable of international recognition in countries (such as the United Kingdom and the United States) which have adopted legislation based on the Model Insolvency Law and the Banks Restructuring has, as at the date of this Prospectus, been recognised by the courts of the United Kingdom, the United States, Ukraine and Russian Federation. However, there can be no assurance that the Restructuring of the Bank will be recognised by any other court abroad. If the Restructuring is not capable of international recognition in all applicable jurisdictions, the Banks business may be limited in those jurisdictions. As a result, the Banks business could be affected and the Bank may be limited to transactions within Kazakhstan and in those jurisdictions where the Restructuring has been recognised. Risks relating to the New Notes, Shares and GDRs The large number of Shares eligible for public sale could cause the market price of the Shares to decline and make it difficult for the Bank to issue equity securities in the future. Following the Restructuring the creditors owned 18.5 per cent. of the Shares (in the form of Shares or GDRs). Most of these creditors are not in the business of holding equity on a long-term basis. Sales by these shareholders of a substantial number of Shares may significantly reduce the market price of the Shares. Moreover, the perception that these shareholders might sell significant amounts of Shares could depress the trading price of the Shares for a considerable period of time after the Restructuring. Sales of these Shares, and the possibility of such sales, could make it more difficult for the Bank to sell equity or equity-related securities in the future at a time and price that the Bank considers appropriate. If no trading market develops for the GDRs, investors may experience difficulties in selling the GDRs. There is no assurance that any active trading market for the GDRs will develop or, if developed, can be sustained. The liquidity of any market for the GDRs will depend on the number of holders of GDRs, the interest of securities dealers in marking a market in the GDRs, trading of the Shares on the KASE and certain other factors. If there is an illiquid market for the GDRs, GDR holders may experience difficulties selling the GDRs at a profit or at all.

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Due to the Banks recent financial condition and the historical volatility in the price of shares in Kazakhstan banks, the market price of the New Notes and Shares is likely to be volatile. As a result of a number of factors, including the Banks recent financial condition (prior to the successful completion of the Restructuring) and its participation in markets that have experienced historical price volatility, the market price for the Banks shares has historically been volatile and the market price for the New Notes, Shares and GDRs is also likely to be volatile, perhaps even more so than the stock market in general or the market for shares of other Kazakhstan banks. Investors may not be able to sell their New Notes and Shares at the desired terms or at attractive prices as a result of such volatility. Factors that could cause volatility in the market price for the New Notes, Shares and GDRs in the future may include, among other things: actual or anticipated variations in the Banks operating results; new products or services, whether the Banks or those of its competitors; changes in financial estimates by analysts covering the Bank; changes in the market valuations of other Kazakhstan banks; large increases or decreases in capital commitments; additions to, or departures of, its key personnel; and issues of Shares by the Bank.

Due to the Banks troubled financial history and its participation in historically volatile markets, these factors may negatively affect the market price for the New Notes, Shares and GDRs to a greater extent than they would affect securities of other companies, in some cases regardless of the Banks actual operating performance. Shares and GDRs may be subject to market price volatility and the market price of the Shares and the GDRs may decline disproportionately in response to adverse developments that are unrelated to the Banks operating performance. Publicly traded securities from time to time experience significant price and volume fluctuations that may not be related to the operating performance of the companies that issued them. Factors including oil and gas prices, developments in the construction sector, increased competition, fluctuations in the Banks operating results, the regulatory environment, availability of reserves, general market conditions, natural disasters and war may have an adverse effect on the market price of the Shares and the GDRs. Restrictions apply to a holder of GDRs or Shares if it is incorporated or has affiliates in a Prohibited Jurisdiction. Ownership of Shares is subject to certain legislative restrictions under Kazakhstan law. Specifically (i) legal entities registered in any of the jurisdictions listed in Disclosure of Beneficial Ownership or which have affiliates registered in such jurisdictions, or (ii) natural persons who are participants or shareholders in such legal entities, may not directly or indirectly own voting shares in the capital of a Kazakhstan bank unless such Kazakhstan bank is a subsidiary of a foreign bank having a credit rating of not lower than A from certain rating agencies. Accordingly Shareholders falling under (i) or (ii) may not be able to own, hold or dispose of the Shares. In addition, GDRs Holders falling under (i) or (ii) are not entitled to vote through the Depositary at meetings of shareholders and cannot exchange GDRs into shares. Although the Bank has been advised that such restrictions would not prevent a GDRs Holder registered in any such jurisdiction (or which has an affiliate registered in such jurisdiction) from holding GDRs and exercising or benefiting from other rights (including the right to receive dividends and pre-emptive rights in respect of the GDRs), the Shares corresponding to the GDRs held by

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persons registered in any such jurisdiction (or which has an affiliate registered in any such jurisdiction) may not be voted at any general meeting of the Bank. There is also no guarantee that the FMSA or any other relevant authority such as a Kazakhstan court will not take a view that persons registered in any such jurisdiction (or which has an affiliate registered in any such jurisdiction) should be prohibited from holding GDRs or that such holders should be restricted from exercising or benefiting from other shareholder rights. See Description of Share Capital and Certain Requirements of Kazakhstan Legislation Disclosure of Beneficial Ownership. A person acquiring more than 10.0 per cent. of the voting Shares or equivalent requires prior FMSA approval. Any natural person or legal entity becoming a major shareholder or, for legal entities, a bank holding company in relation to the Bank must obtain prior written permission from the FMSA. A major shareholder or bank holding company means a person directly or indirectly owning or holding 10.0 per cent. or 25.0 per cent., respectively, of the voting shares of a bank or who can otherwise influence the decisions of such bank on the basis of an agreement or otherwise as set out in the FMSA regulations. Any person acquiring 10.0 per cent. or more of the voting shares of a bank is considered an affiliate of such bank and must disclose its identity to such bank. Information about the identity of an affiliate is publicly available information. A major shareholder of a bank also assumes certain obligations including (i) an obligation to support the bank in remedying any financial problems the bank may incur, (ii) an obligation to obtain a credit rating, and (ii) ongoing reporting obligations. Shareholders wishing to deposit Shares into the depositary facility and convert them into GDRs will require FMSA consent before making such deposit. 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 such Shares back into GDRs) will require the consent of the FMSA for such deposit. There is no minimum shareholding threshold and minority shareholders will therefore also require the FMSAs consent in order to be able to deposit Shares into the depositary facility and receive GDRs. Although the FMSA does not have formal grounds to refuse such consent if application is made in a proper form, there is no guarantee that the FMSA consent will be granted or granted in a timely manner and without cost to the shareholder. Moreover, the limitation on the convertibility of Shares into GDRs or the difficulties associated with it may create a pricing differential between the Shares and the GDRs. In particular, former holders of GDRs who have converted their GDRs into Shares may see the value of their investment decline compared to the value it would have retained had the Shares been kept in GDR form. Subordinated Notes may not rank junior to Senior Notes Kazakhstan legislation neither expressly permits nor prohibits contractual subordination of general unsecured creditors in bankruptcy. In practice, it is not uncommon for commercial banks to issue subordinated instruments, which are treated as Tier I or Tier II instruments for capital adequacy purposes in accordance with the FMSA Guidance. Although, to the Banks knowledge, the FMSA has not in the past sought to challenge such treatment, the ranking of such subordinated debt has not been tested in bankruptcy proceedings or by the courts in the Republic of Kazakhstan. Therefore, it is unclear as to how the Subordinated Notes would be treated in bankruptcy proceedings by a liquidator and/or Kazakhstan court. If they are treated equally with other unsecured debt, including senior debt, this could materially adversely affect the interests of senior unsecured creditors under the Senior Notes. In addition, the Banks debt is denominated primarily in U.S. Dollars. The Banks assets are primarily in Tenge. Due to the limited access to hedging instruments in the market in Kazakhstan, the

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Bank may need the NBKs help in hedging. See Risk Factors Risks Relating to the Bank The Bank is exposed to foreign currency exchange risk and significant exposure to foreign currency exchange rate fluctuations following the early termination of its swap transactions. As a condition precedent to the Restructuring, the NBK has delivered a confirmation that it will treat the Bank no less favourably than other second-tier banks in Kazakhstan. See Schedule 12 (Conditions Precedent to the Restructuring Plan Becoming Effective). Despite this confirmation, any change in the NBKs policy or support may lead to an increase in the Banks funding costs or to the Bank being unable to comply with its regulatory requirements or currency positions and obligations under the New Notes, which would adversely affect the Banks business, financial condition, results of business and prospects. The Bank may face litigation if the FMSA applies any of its compulsory restrictive measures to the Bank. The FMSA may apply a number of compulsory restrictive measures to second tier banks (commercial banks) in financial distress or in breach of prudential or other mandatory regulations. See The Banking Sector in Kazakhstan Financial Stability and Restructuring Reforms and The Banking Sector in Kazakhstan The FMSAs Compulsory Measures under the Banking Law for a detailed description of such measures. Were the FMSA to apply any such measures the Banks shareholders, including investors holding the Shares in the form of GDRs could bring claims against the Bank and seek redress against the FMSAs actions. Irrespective of the merit of such claims, if such shareholders claims are successful, the Banks financial position may be negatively affected. There is a risk that holders of GDRs may be subject to drag-along rights in respect of the GDRs held by them. The Deposit Agreement contains drag-along rights exercisable by Samruk-Kazyna in respect of the GDRs issued pursuant to the Restructuring. If Samruk-Kazyna elects to exercise such rights, the Depositary will forward to the holders notice of Samruk-Kazynas intention to do so. In order to prevent Samruk-Kazynas drag-along rights being exercised against it, each holder that was not a Claimant or that does not want to be subject to the exercise of the drag-along rights must provide evidence to the Bank that the GDRs held by it were not received pursuant to the Restructuring. Samruk-Kazyna will be able to enforce its drag-along rights against any GDR in respect of which the relevant holder has been unable to provide such evidence to the Bank within 14 days of receipt of the notice from the Depositary. Holders are therefore strongly advised to make themselves thoroughly acquainted with the contents of any notice received by them from the Depositary and follow the instructions set out in such notice within the time periods prescribed therein. See Terms and Conditions of theRegulation S GDRs and Terms and Conditions of the Rule 144A GDRs. U.S. and some other non-Kazakhstan holders of the Banks 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 is required to offer all holders of existing Shares pre-emptive rights to subscribe for and purchase the number of Shares in the new issue so as to maintain the relevant shareholders existing ownership interest in the Bank. U.S. holders of Shares or GDRs may not be able to receive or trade new Shares or otherwise exercise pre-emptive rights in respect of the new Shares unless a registration statement under the 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 the Shares or GDRs are not able to receive, trade 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 may be diluted where other shareholders of the Bank exercise their respective rights and purchase the Shares or the GDRs. Similar restrictions may apply to shareholders or GDR holders in other countries.

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As the Shares 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 are subject to currency fluctuation risk and currency exchange risk since the Shares are quoted in Tenge on the KASE. Dividends on the Shares will be payable in Tenge, and then converted into U.S. Dollars for distribution to GDR holders. Any depreciation in the Tenge may result in a decreased value of the Shares or a decreased value of dividend payments in respect of the Shares and GDRs. There can be no assurance that such depreciation will not occur in the future.

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DIVIDEND POLICY The Bank does not expect to declare or pay dividends on its Common Shares in the medium term. There is no guarantee that any future dividends will be declared or paid. The Bank has not declared or paid dividends for any of the last three financial years. Under the terms of the New Notes, the Bank has agreed not to (i) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital) other than a Permitted Dividend; (ii) repay or distribute any dividend or share premium reserve; (iii) pay or allow any member of the Group to pay any management, advisory or other fee than the SK Guarantee Fee) to or to the order of any of the Shareholders of the Bank; or (iv) other than in accordance with the covenants, redeem, repurchase, retire or repay any of its share capital or resolve to do so; Permitted Dividend means a dividend or distribution by the Bank to its Shareholders: (a) (b) at any time after the New Notes have been irrevocably repaid in full; or at any time after the date falling four years after the Restructuring Date up to and including the date falling seven years after the Restructuring Date provided that: (i) (ii) (iii) (iv) the Bank has positive operating cashflow post debt service for the year; the Banks tier II capital (as shown in its most recently delivered financial statements) is above 15 per cent.; the aggregate distribution does not exceed 25 per cent. of cumulative net income or 25 per cent. of net operating cash flow after debt service; at the same time as the Bank pays such distribution, it prepays the Senior Notes and the OID Notes in the same amount in aggregate as such distribution (such payment to be applied between the Senior Notes and the OID Notes pro rata to their face value on the Restructuring Date (and in the case of the Senior Notes at the applicable redemption price and in the case of the OID Notes at their fully accreted value against its last repayment instalment); and no Default has occurred and is continuing on both the date the dividend is declared and when it is paid; or

(v) (c)

at any time after the date falling seven years after the Restructuring Date provided that: (i) (ii) (iii) (iv) the Bank has positive operating cashflow post debt service for the year; the Banks tier II capital (as shown in its most recently delivered financial statements) is above 15 per cent.; the aggregate distribution does not exceed 50 per cent. of cumulative net income or 50 per cent. of net operating cash flow after debt service; and no Default has occurred and is continuing on both the date the dividend is declared and when it is paid.

Holders of the GDRs will be entitled to receive dividends paid on Shares represented by GDRs in accordance with the terms of the Deposit Agreement. Cash dividends on the Shares will be paid to the Depositary in Tenge and, except as otherwise described under the Deposit Agreements, will be converted by the Depositary into U.S. Dollars and distributed, net of the Depositarys fees, taxes, if any, and expenses to the holders of such GDRs.

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Under the JSC Law the holders of the Shares have a right to claim any dividends from the Bank that have been paid but not collected by them. Accordingly, there is no time limit after which any entitlement to dividends lapses. Except as provided by the rights and restrictions attached to any class of Shares, the holders of the 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.

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THE BANK History The Bank is one of the leading commercial banks operating in Kazakhstan, offering a full range of traditional corporate and retail banking products and services including deposit taking, lending, issuing of letters of credit, funds transfers, custodial services, issuing of payment cards and related services, foreign currency exchange, issuing of guarantees, cash operations, trust operations, collection operations, transactions with precious metals, leasing, broker dealer transactions, clearing operations and safe keeping operations. The Bank also provides pension fund services and is engaged in certain insurance activities. The Group is one of the leading banking groups in the CIS and has bank-partners in Russia, Ukraine, Belarus, Georgia, Armenia and Turkey. In addition, the Bank maintains representative offices in Russia, Ukraine, China, the United Arab Emirates and the United Kingdom. The Bank has one of the most advanced branch-office networks in the Republic of Kazakhstan and, as at 30 June 2010, operates 22 branches and 227 cash offices, 960 automated teller machines and 160 self-service terminals. As at 30 June 2010, the Bank serviced 1,380,743 retail customers and 207,260 corporate customers. The Bank has four principal business segments: Corporate Business (consisting of the Department of Analysis and Corporate Business Development, the Department of Credit Analysis of Corporate Business, the Department of Client Relations of Corporate Business, the Division of Corporate Clients Attraction, the Department of CIS countries financing); SME Business (consisting of the Department of Small and Medium Business); Retail Business (consisting of the Department of Channel Sales and Plastic Cards, the Department of Retail Marketing and the Department of Retail Sales); and Investment Activities (consisting of the Treasury, the Section of Monitoring Treasury Operations, the Division of Operations with Capital and Custody Services, the Banks Representative Offices, the Division of Islamic Banking and Representative Office in Dubai (UAE), the Division of International Business Analysis, the Division of External Borrowing, the Division of International Activities Monitoring, the Department for Working with Investors and Financial Institutions, the Division of Structured and Trade Financing, Global Treasury Directorate, the Directorate of Investment and Capital and Work with Regional Banks).

In addition, the Bank also has various departments providing global support services including accounting, monitoring and control, asset restructuring, problem loans, and credit and operational risk and collateral monitoring, among others. History The Bank was incorporated on 15 January 1997 as a closed joint stock company as part of the restructuring and merger between two state-owned banks, Alem Bank and Turan Bank, pursuant to the decision of the Government and the NBK. On 30 December 2003, the NBK issued the Bank its current banking licence (No. N242). The registered office and the head office of the Bank are located at 97 Zholdasbekov Street, Samal 2 Microdistrict, Almaty 050051, Kazakhstan. On 24 January 2008, Bank TuranAlem JSC changed its name to BTA Bank JSC. The Bank was issued certificate No. 3903-1900-JSC from the Registration Committee of the Ministry of Justice of Kazakhstan.

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Background to the Restructuring Sequence of Significant Events before Samruk-Kazynas Acquisition From 20 May 2005 to 2 February 2009, Mukhtar Ablyazov was the chairman of the Board of Directors of the Bank. Mr. Ablyazov replaced Mr. Yerzhan Tatishev, who had been chairman of the Board of Directors from 1997 until 19 December 2004, when he was killed in a hunting accident. Mr. Ablyazov had been Minister for Energy, Industry and Trade in the Government from 1998 until he was imprisoned in May 2002. He was pardoned by President Nazarbayev in May 2003 after serving ten months of his sentence. Following his pardon, he moved to Moscow where he founded and became chairman of the Eurasia Industrial and Investment Group of companies, which appears at that time to have included Eurasia Real Estate, Eurasia Logistics (a logistics warehouse complex developer in Russia, Kazakhstan and Ukraine), Eurasia Capital (a fund management firm) and others. In May 2005, Mr. Ablyazov returned to Kazakhstan. As chairman of the Board of Directors, Mr. Ablyazov exercised management control over the Bank and was responsible for establishing and overseeing procedures within the Bank to avoid any conflicts of interest arising between shareholders, the Board of Directors and employees of the Bank and for settling any conflicts of interest on issues which other bodies within the Bank were unable to handle. The Bank understands that, during the period that he was the chairman of the Board of Directors, Mr. Ablyazov beneficially owned a significant portion of the shares of the Bank through intermediary companies, including Drey Associates Limited, Strident Energy Limited and InvestCapital Company LLC. See Principal Shareholders The Banks Shareholders Prior to the Restructuring. There is no legal evidence of Mr. Ablyazovs ownership directly or indirectly in the Bank. Therefore, Mr. Ablyazovs beneficial interest in the Bank was not disclosed by Mr. Ablyazov or the Bank in the Banks consolidated financial statements for the years 2006, 2007 or 2008. In August 2008, the Government approached four banks the Bank, Halyk Bank, Kazkommertsbank and Alliance Bankwhich the Government viewed as systemic in the Kazakhstan financial system, to understand and address the financial difficulties facing these banks in light of the global financial crisis. In the autumn of 2008, Samruk-Kazyna, Kazakhstans sovereign wealth fund, commenced negotiations with the Bank regarding the terms of a possible capital injection by Samruk-Kazyna into the Bank to support its liquidity following reports that the Bank was unable to meet withdrawal requests of customers and that the Bank failed to participate in rights offerings of two of its important subsidiaries, BTA Russia and BTA Ukraine. In October 2008, the Government and the FMSA announced a proposal to recapitalise the Bank as part of a broader plan to stabilise the financial system of Kazakhstan. On 9 November 2008, the Bank, the NBK, the FMSA, Samruk-Kazyna and the Government (represented by the Ministry of Finance) entered into a memorandum of understanding pursuant to which the parties declared their intention to coordinate their efforts to stabilise the economy of Kazakhstan, use all reasonable endeavours to provide additional financial resources to the Kazakhstan economy and assist in the stabilisation of the financial system, including the maintenance by the Bank of an adequate level of liquidity and quality of the credit portfolio. At this time, Samruk-Kazyna was considering injecting approximately KZT 212,000 million into the Bank in exchange for 25 per cent. of the Banks share capital. At the same time that Samruk-Kazyna was negotiating the memorandum of understanding with the Bank, the FMSA was conducting an independent due diligence review of the Banks business and operations. The FMSA issued a report dated 22 January 2009, which indicated that the Bank had violated applicable banking legislation and incurred substantial risks through the actions of the Management Board and Board of Directors. The FMSA report specifically identified deficiencies in the credit dossiers prepared by the Bank, breaches of capital adequacy requirements and risky lending practices, particularly in respect of loans to persons resident outside of Kazakhstan. The report suggested downgrading KZT 294,803 million of loans classified as prime loans to certain categories

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of problem loans and KZT 189,441 million of category 1 problem loans to more impaired categories of problem loans. In addition, the FMSA sent a letter to the Bank dated 27 February 2009 in which it identified certain key issues relating to the Bank that it recommended be addressed, including (i) checking legal compliance issues and security taken, and assessing non-recovery risk, in relation to credits granted to non-residents of Kazakhstan, (ii) taking steps to save originals of security documentation kept at the Banks premises and to compile an inventory of all property of the Bank, and (iii) examining the Banks stamps and headed paper and authorising key personnel as the only officers of the Bank authorised to use them. During late 2008 and early 2009, Samruk-Kazyna conducted its own independent analysis of the financial condition of the Bank in order to assess the value of the Banks shares. In connection with this review, and following the release of the January 2009 FMSA report, Samruk-Kazyna re-evaluated the potential net losses of the Bank and determined that it was necessary to acquire a supermajority interest in the Bank in return for the approximately KZT 212,000 million that it was prepared to inject into the capital of the Bank. In light of the increasing deterioration in the Banks financial position, the FMSA instructed the Bank to increase its loan loss provisions to 24.9 per cent. by 1 February 2009. This increase would have caused the Bank to breach its capital adequacy requirements and so, on 2 February 2009, the Government accepted the recommendation of the FMSA to recapitalise the Bank pursuant to Articles 17 and 17-2 of the Banking Law through Samruk-Kazyna. On 2 February 2009, Samruk-Kazyna acquired a controlling shareholding in the Bank through the Banks issuance of 25,246,343 new common shares constituting 75.1 per cent. of the Banks total share capital for cash consideration of KZT 212,095 million. The Group incurred a net loss amounting to KZT 1,188,050 million (approximately U.S.$9.8 billion) during the year ended 31 December 2008. Factors Affecting Deterioration of the Banks Loan Portfolio The investigation of the Bank by the FMSA and Samruk-Kazyna prior to Samruk-Kazynas investment into the Bank, and the Banks internal due diligence conducted following the acquisition and the appointment of the new management team, has revealed a number of internal and external factors that the Bank believes led to the deterioration of the Banks loan portfolio. Internal Factors The Bank has uncovered a significant number of purported loans that at present appear to have been provided on preferred terms to companies connected with former management and for which the security provided was inadequate or non-existent. In addition, the Bank has uncovered numerous examples of purported loans being granted that do not appear to have gone through the proper approval process within the Bank. Credit committee decisions, as well as related documentation, reflecting the actual terms of the purported loans were often (but not always) marked FOR SAFE DEPOSIT, which meant that they remained outside the proper filing system and were not provided to the auditors in the usual way. In some instances, a different version of each such decision, which, for example, might wrongly suggest that security had been taken before drawdown of a loan, was then put on file. The Bank indicated in the Financial Statements for the year ended 31 December 2008 that the quality of the loan portfolio had significantly deteriorated as a result of circumstances and actions taken before the current management of the Bank was appointed by Samruk-Kazyna. The Bank indicated that certain loan documentation, including collateral and associated agreements, primarily relating to financing of projects outside Kazakhstan, was no longer available. In addition, the Bank noted, many loans were often transferred to new borrowers offshore and no collateral was provided by the new borrowers, so the loans were unsecured. The Bank attributes many of these gaps and missing documents to fraud and to the fact that, prior to February 2009, the credit dossiers for transactions outside Kazakhstan had been compiled on behalf of the Bank (to the extent that they were compiled)

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by associate banks such as BTA Russia and BTA Ukraine. The Bank believes that there is a significant risk that, as these associate banks were and still are under the effective control of the previous management of the Bank, a number of documents may not become available to the Bank, and that the veracity of documents which are or become available may be questionable. The January 2009 FMSA report criticised the Banks previous management for lending to borrowers in offshore jurisdictions without identifying the ultimate beneficiaries, and for granting working capital loans including those for non-residents of Kazakhstan, despite the absence of current assets, business plans, the Banks preliminary decisions to substantiate profitability and legitimacy of granting working capital loans, or any documents to confirm the intended use of the borrowed funds. The Bank believes that, in respect of some of these borrowers, former management used multi-layered credit schemes under which one company (usually offshore) would act as the borrower, then forward the loaned funds to a project manager (often a resident of Russia, Ukraine or another country), and a third person would provide security. Such schemes have made it more difficult for the Bank to file legal proceedings and have necessitated engaging law enforcement bodies in various countries to assist in returning the funds. See Asset Recovery. Furthermore, the Bank has noted that the Bank had two regional credit committees, which were separate from the Banks main credit committee but nevertheless approved loans that were to be granted by the Bank. The Regional Credit Committee for Russia was set up in March 2006, purportedly to consider and approve financing for projects falling within the geographical boundaries of Russia. A separate Regional Credit Committee for non-Russian (non-Kazakh) CIS projects was set up two years later. Mr. Ablyazov was the Chairman of both regional committees. While the appointments to these committees required the approval of the Banks Management Board and Board of Directors, decisions of the Russian Regional Credit Committee did not require further approval from either. In its January 2009 report, the FMSA criticised the procedures followed by the regional committees, indicating that the Banks compliance reports indicated that it was impossible to establish whether or not there were insider relations between the borrower and the Bank, which prevented the Bank from confirming that such loans complied with the requirements of Kazakhstan law. The January 2009 FMSA report specifically indicated that Mr. Ablyazovs role on the Russian Regional Credit Committee and Board of Directors was bound to involve a conflict of interest and contradicted corporate management principles. The Bank believes that the loans purportedly approved by the Russian Regional Credit Committee were granted based on practices which were wholly inadequate and which differed significantly from the practices typically used by the Banks main credit committee. A number of significant borrowers, primarily registered outside of Kazakhstan, stopped making payments in 2009 and the Bank has been unable to monitor the collateral or their financial performance. Many of these borrowers have also ceased to communicate with the Bank and some have unlawfully transferred the collateral secured by the loans. During 2008, the Bank placed certain available-for-sale securities with a carrying amount of KZT 35,402 million with a custodian in an offshore jurisdiction. The securities consisted of AAA-rated bonds. In May 2008, at the direction of the former management of the Bank, the securities were transferred from the account of the existing custodian to a custodian account held by a different custodian. Subsequent to 31 December 2008, the Bank received a statement from the custodian indicating that by January 2009, these securities had been disposed of at the direction of the former management of the Bank. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and the FMSA. Management of the Bank believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities were fully written off as at 31 December 2008. The Bank is actively investigating the circumstances surrounding the transfer of these securities to third parties and is currently considering its options.

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The Bank also was party to derivatives contracts with certain offshore companies, which exposed the Bank to excessive credit risk and have become uncollectible. The offshore counterparties have ceased to respond to the Banks inquiries. The current management suspects that these contracts were entered into on behalf of the Bank through actions of the former management in contravention of then-existing internal controls and in order to circumvent such controls. The current management decided to fully provision against receivables on these derivative contracts as at 31 December 2008 for KZT 16,298 million. The quality of the loan portfolio continued to deteriorate as a result of the fact that, as part of the restructuring process, the Bank ceased any further financing of investment projects requiring significant capital injection. This led to a temporary suspension of the operational and investment activities of a number of the Banks customers, and thereby resulted in a deterioration of the quality of some of the loans to those clients. In addition, the significant increase of time spent on legal work in Kazakhstan and abroad influenced the expected timing of completion of the Banks work on the recovery of problem loans and the sale of collateral. External Factors The Bank, like many other banks around the world, suffered from the global financial crisis beginning in August 2007. During the period from 2004 to 2007, the Banks total assets increased more than four-fold, its loan portfolio increased about five-fold and its deposits increased more than two-fold. For the year ended 31 December 2007, the Banks net profit equalled KZT 48,683 million. The Bank also expanded its branch network from 22 branches and 189 cash offices as at 31 December 2004 to 22 branches and 289 cash offices as at 31 December 2007. The Banks growth from 2004 to 2007 was primarily funded by short-term bank borrowings and debt securities issues in the international capital markets, and was aided by the ready availability of credit. The proportion of funding through customer deposits remained relatively low. Following Kazakhstans credit rating downgrade in October 2007 by S&P from BBB to BBB- and the general deterioration in the financial markets since August 2007, the Bank became unable to refinance its international debt, which in turn adversely affected its ability to make loans. In light of the global economic crisis, international lenders reduced their exposure to developing countries, including the Kazakhstan banking sector, which led to increased costs of funds. In connection with this, Kazakhstan banks, including the Bank, decreased lending activities to preserve liquidity in order to service their international debt. At the beginning of the financial crisis in August 2007, the Bank was rated BB by S&P, BB+ by Fitch and Ba1 by Moodys. Since then, as a result of the Banks rapidly deteriorating financial condition, suspension of repayments and its initiation of negotiations with the creditors concerning the Restructuring, the Banks credit ratings have been downgraded a number of times. Between March and April 2009, the ratings agencies downgraded the Banks short- and long-term counterparty credit ratings in stages as follows: S&Ps from BB to D; Fitch from BB to RD; and Moodys from Ba1 to Caa3. As at the date of this Prospectus, the Bank has been upgraded by S&P from a D long-term credit rating to B- long-term credit rating by S&P. Fitch upgraded the Banks long-term issuer default rating from RD to B-, its short term issuer default rating from RD to B and its individual rating from F to E. Moodys has also put the Banks credit ratings under review. Sequence of Significant Events Following Samruk-Kazynas Acquisition As part of the efforts to restore the stability of the Bank, Samruk-Kazyna appointed Mr. Dunayev and Mr. Saidenov on 2 February 2009 to the Board of Directors. On 6 March 2009, the shareholders of the Bank replaced the remaining members of the Board of Directors, except Mr. Talvite. See Management and Corporate Governance Current Management and Corporate Governance Board of Directors. All of the members of the Management Board were replaced between March 2009 and March 2010, except Mr. Zhumakhmetov, and most of the members of the Banks management team were replaced in 2009 as well. See Management and Corporate Governance

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Current Management and Corporate Governance Management Board and Management and Corporate Governance Management Team. In order to provide additional liquidity to the Bank, Samruk-Kazyna agreed to issue the SK Bonds and sell them to the Bank in exchange for the Bank Bonds. On 17 February 2009, the Bank, the NBK and the FMSA entered into the Cooperation Agreement pursuant to which the Bank is entitled to obtain from the NBK refinancing loans and special purpose loans. In March 2009, the Bank issued the Bank Bonds within the first and second obligation programs in the amounts of KZT 300,000 million and KZT 345,000 million, respectively. See Selected Statistical and Other Information Debt Securities. On 13 March 2009, two agreements were entered into by Samruk-Kazyna and the Bank: one for the sale by Samruk-Kazyna to the Bank of 300 million SK Bonds for a consideration of KZT 300 billion, the other for the sale by the Bank to Samruk-Kazyna of 300 million Bank Bonds for a consideration of KZT 300 billion. On 18 March 2009, two further agreements were entered into: one for the sale of KZT 345 million SK Bonds for consideration of KZT 345 billion, the other for the sale by the Bank to Samruk-Kazyna of 345 million Bank Bonds for KZT 345 billion. In addition to the KZT 212,095 million capital injection mentioned above, the Government has provided additional liquidity support in the form of deposits and pursuant to loans under the State Finance Programmes. As at 30 June 2010, the Group had received liquidity support in the amounts of KZT 374,918 million from the NBK under five BTA/NBK Repo Transactions against delivery of the SK Bonds, KZT 289,762 million in deposits of Samruk-Kazyna, KZT 105,873 million under the State Finance Programmes. Samruk-Kazyna issued the SK guarantee in favour of the NBK in connection with the BTA/NBK Repo Transaction at a monthly fee payable by the Bank of KZT 1,075 million. As at 31 October 2010, the aggregate amount of BTA/NBK Repo Transactions outstanding was KZT 447,521 million. Following the successful completion of the Restructuring the Cooperation Agreement has lapsed. See The Role of Samruk-Kazyna and the NBK Liquidity Support. As at 1 January 2009, the Bank in its unaudited unconsolidated statement of financial position reported provisions on its loan portfolio of KZT 214,777 million (based on FMSA Methodology), representing 9.2 per cent. of its total loan portfolio including loans to credit institutions and reverse repurchase agreements as of such date. Following its due diligence inspection of the Bank, the FMSA instructed the Bank to increase provisions on its loan portfolio to 24.9 per cent. of its loan portfolio by 1 February 2009. The Bank partially responded to this request and increased its provisions on loans to KZT 518,272 million (based on FMSA Methodology) as at 1 March 2009, representing 19.9 per cent. of the total loan portfolio as at such date. Based on the further due diligence conducted by the Bank and in light of its deteriorating loan portfolio, the Bank increased provisions to KZT 1,522,139 million in its unaudited unconsolidated statement of financial position as at 1 June 2009 (based on FMSA Methodology), representing 57.6 per cent. of its total loan portfolio as at such date. This increase of provisions caused the Bank to breach its capital adequacy ratios on 1 June 2009. As at 1 October 2009, the Bank had created KZT 1,958,899 million in its unaudited unconsolidated statement of financial position (based on FMSA Methodology) in provisions, representing 75.5 per cent. of its total loan portfolio; as at 1 July 2010, provisions amounted to KZT 1,474,531 million, representing 75.2 per cent. of its loan portfolio. Additional provisions required to be reported to the FMSA were recognised in the Banks consolidated financial statements as at 31 December 2008 based on IFRS. The Group recognised loan loss provisions in its audited consolidated financial statements equal to KZT 1,217,278 million as at 31 December 2008 (based on IFRS), KZT 2,123,408 million as at 31 December 2009 (based on IFRS) and its unaudited consolidated financial statements equal to KZT 2,015,441 million as at 30 June 2010 (based on IFRS). For a discussion of the differences between the determinations of loan loss provisions under FMSA Methodology and IFRS, see Asset and Liability Management Provisioning Policy.

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During 2009, the Kazakhstan banking system experienced a massive outflow of deposits and a so-called flight to quality. The Groups deposits decreased from KZT 886,052 million as at 31 December 2008 to KZT 655,963 million as at 31 December 2009. During the first six months of 2010, deposits increased slightly to KZT 682,424 million as at 30 June 2010. The Banks market share of total deposits increased from 17.6 per cent. as at 31 December 2009 to 18.9 per cent. as at 30 June 2010. In light of the results of the Banks internal due diligence and in response to the deteriorating market and the Banks financial condition, the Bank continued downsizing its operating activities. The Banks branch network was reduced from 279 cash offices as at 31 December 2008 to 230 cash offices as at 31 December 2009, representing a 17.6 per cent. decrease. It decreased further to 227 cash offices as at 30 June 2010, representing a further 1.3 per cent. decrease. As at 31 December 2009, the Bank further reduced its staff by 23.6 per cent. to 5,045 employees from 6,608 employees as at 31 December 2008. As at 30 June 2009, the Bank slightly increased its staff by 1.0 per cent. to 5,096 employees in comparison with 31 December 2009. The Bank also reduced limits for representative costs, travel expenses and mobile phones, and reduced social benefits for Bank employees except with respect to health insurance costs. The Bank has also reduced costs on advertising, training and compensation for staff transfers to other localities. The Bank suspended implementation of non-critical information technology projects and implemented a moratorium on the purchase of property and equipment and opening new offices. The Bank terminated its plans to open offices in Japan and South Korea. Between February and April 2009, the Bank maintained a consistent position that it would continue to make scheduled payments on its indebtedness as long as creditors did not accelerate their debt, which would effectively cause all debt to be pari passu. In keeping with this position, upon acceleration by certain lenders of the Bank of U.S.$500 million on 22 April 2009, the Bank declared a moratorium on all principal payments. The Bank continued paying interest until 24 July 2009, when repayment of interest was suspended as well. On 1 April 2009, the Bank breached the FMSA requirement that the Bank maintain an exposure of less than 10 per cent. of its equity capital with respect to any single borrower. This was because its loans to Temirbank exceeded the 10 per cent. threshold due to the growth of funds appropriated for Temirbank. The FMSA issued a letter to the Bank on 3 April 2009 notifying the Bank that it had identified a number of factors negatively impacting the financial position of the Bank and requiring the Bank to provide the FMSA with a plan for early reaction measures and further development forecasts. Due to the Banks failure to repay certain of its liabilities, the Bank also breached liquidity requirements of the FMSA in May 2009. Following the Banks breach of these regulatory requirements, the Bank entered into an agreement with the FMSA on 22 May 2009 which imposed certain restrictions on the Bank and required the Bank to develop and present to the FMSA a restructuring and recapitalisation plan by 10 June 2009. The Bank submitted a preliminary plan of restructuring to the FMSA on 10 June 2009. In June 2009, the Bank announced it had recorded negative capital and, consequently, the Bank and the FMSA entered into the FMSA Agreement on 30 June 2009 pursuant to which the Bank was obliged, among other things, to provide the FMSA with a restructuring plan not later than 3 August 2009 and the FMSA undertook not to apply sanctions and enforcement measures against the Bank, including commencement of liquidation or conservation procedures against the Bank or withdrawal of the Banks licence. The deadline under the FMSA Agreement was subsequently extended to 18 September 2009 pursuant to Addendum No. 1 to the FMSA Agreement dated 11 September 2009. Thereafter, the Bank was in breach of the minimum reserve requirements of the NBK, which provide that second tier banks must maintain reserves equal to 1.5 per cent. of internal liabilities and 2.5 per cent. of other liabilities. However, on 30 November 2009, the NBK Management Board reduced the obligatory reserve ratio requirement applicable to the Bank to zero per cent. for both internal and external liabilities. Following the successful completion of the Restructuring, the reduced ratio has now reverted to its original levels.

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On 18 September 2009, the Bank submitted an indicative restructuring and recapitalisation plan to the FMSA in accordance with the FMSA Agreement. Following negotiations with the creditors during September 2009, the Bank and the Steering Committee of the creditors signed a memorandum of understanding on 21 September 2009. The FMSA approved this plan on 26 September 2009. On 5 October 2009, the Bank and the FMSA executed Addendum No. 2 to the FMSA Agreement which extended to 7 December 2009 the deadline for the Bank to enter into a term sheet with the Steering Committee. Following the adoption of the Restructuring Law in Kazakhstan, which came into effect in August 2009, the Bank submitted an application to the Court on 7 October 2009 to formally initiate the restructuring process under the Restructuring Law. The Banks application was approved by the Court on 16 October 2009, which resulted in an automatic stay of all relevant claims of the Banks creditors and protection of the Banks property from execution and attachment until completion of the Restructuring. Pursuant to the terms of the decision of the Court, the Restructuring must be completed by 5 September 2010. The High Court of Justice of England and Wales on 18 December 2009 and the United States Bankruptcy Court for the Southern District of New York on 9 March 2010 each issued an order recognising the restructuring proceedings in the Court as the main foreign proceeding in respect of the Banks assets located in Great Britain and the United States, respectively, pursuant to the Model Insolvency Law. On 17 February 2010, the Solomensky District Court of Kiev issued a decision which came into force on 23 February 2010 recognising the restructuring proceedings in the Court pursuant to the Convention of Legal Aid and Legal Relations on Civil, Family and Criminal Matters signed on 7 October 2002 in Kishinev City, Republic of Moldova by ten CIS member states, including the Ukraine and Kazakhstan. On 7 December 2009, the Bank and the Steering Committee signed a principal commercial term sheet setting out key commercial terms of the Restructuring, certain restructuring options and certain other arrangements, principally relating to the Banks corporate governance and other aspects of its operations and business following completion of the Restructuring. On 17 March 2010, the Bank and the Steering Committee entered into an amendment to the principal commercial term sheet, relating to the restructuring options and the conditions of the Restructuring process. On 29 March 2010, the Bank and the FMSA entered into a further addendum to the FMSA Agreement whereby the FMSA agreed, among other things, (i) to require the implementation of the measures envisaged by the Restructuring Plan (including the conversion of securities into shares of the Bank) by 1 September 2010 and (ii) to extend until 1 September 2010 its agreement not to apply sanctions and enforcement measures against the Bank. On 18 April 2010, the Bank and the Steering Committee entered into a detailed term sheet. As at 30 June 2010, based on data published by the FMSA, the Bank was the third largest bank in Kazakhstan by total assets with a market share of 15.6 per cent. This compares with a market share of 17.1 per cent. as at 31 December 2009 (when it was the third largest bank in Kazakhstan by total assets) and 24.5 per cent. as at 31 December 2008 (when it was the second largest bank in Kazakhstan by total assets). The Bank then published an information memorandum dated 1 May 2010 (which was subsequently supplemented on 19 May 2010) setting out the Restructuring Plan and containing all the information necessary to enable its creditors to make an informed decision concerning the merits of the Restructuring Plan and to vote accordingly at the creditors meeting held on 28 May 2010 in Almaty. The Banks Restructuring Plan was duly approved at the creditors meeting by creditors holding 92.03 per cent. of the Designated Financial Indebtedness. Completion of the Restructuring Distribution of entitlements in accordance with the Restructuring Plan began on 26 August 2010 and The Bank of New York Mellon confirmed on 3 September 2010 that all cash, New Notes and GDRs and any other deliverables in respect of Agreed Claims received from the Bank have been paid or

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distributed in accordance with the distribution notice provided by the Bank to the Distribution Agent prior to the Distribution Date, other than any such settlement instructions which were defective (including unmatched instructions), unlawful or incomplete. As a result, the New Notes and GDRs have been delivered to the Banks creditors or are being held in an escrow account awaiting delivery of settlement instructions from the creditors entitled thereto. The entitlement of such creditors to the New Notes and GDRs held in the escrow account will lapse on 26 August 2013. The FMSA resolved on 31 August 2010 to submit an application for termination of the Restructuring with the Court and, on the same day, the Court issued an order terminating the Restructuring on the basis of those submissions confirming the successful completion of all procedures set out in the Restructuring Plan. The completion of the Restructuring Plan has resulted in the Banks capital position improving by KZT 105,613 million. As at 31 August 2010, the Banks regulatory capital amounted to KZT 283,282 million, bringing the Bank into compliance with FMSA capital adequacy ratios. Recovery Efforts The Bank has assembled a team to investigate the circumstances behind the Banks current financial position and the extent to which it is a result of what are believed to be fraudulent transactions entered into by, or on the instructions of, the former management, in particular, Mr. Ablyazov. That team is made up of a combination of certain members of the Banks new management and staff, as well as lawyers and accountants with international firms. As part of the work of the Banks asset recovery team, various legal proceedings have been commenced which are summarised below. See Asset Recovery. Strengths Management expects the successful completion of the Restructuring to provide the Bank with an advantage over other Kazakhstan banks. The Bank is now perceived as one of the first Kazakhstan financial institutions to have overcome the financial crisis as opposed to other banks operating in a generally distressed banking sector with limited funding sources. The Bank believes that the successful restructuring will also boost client confidence, which will in turn give the Bank an opportunity both to increase collections on existing assets and to attract new clients, including depositors. Now that Samruk-Kazyna has become the controlling shareholder of the Bank, its participation in the Bank is expected to improve public perception of the Banks stability, which may improve repayment rates by customers and result in new customer deposits. Furthermore, since the primary corporate depositors in Kazakhstan are state-controlled companies, the Banks management expects that the Bank would obtain additional corporate deposits of state-controlled companies. In addition, the Bank believes its historical strengths are: extensive network; highly skilled management and staff; one-stop-shop approach for clients; salary card programmes; advanced direct distribution channels infrastructure; and partnerships with money transfer businesses.

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Extensive network As at 30 June 2010, The Bank enjoys one of the most extensive geographical branch networks among the banks in Kazakhstan with 22 branches and 227 cash offices in 66 cities across the country, representing the second most extensive network of cash offices and third most extensive network of branches in Kazakhstan. The Bank ranks third in the country as at 30 June 2010 with 960 automated teller machines and 160 cash and pay self service terminals. As at 30 June 2010, the Bank also provides 11 currency exchange terminals and 1,952 point of service units. Highly skilled management and staff In early 2009, the top management of the Bank was replaced with new highly skilled managers appointed to implement the new corporate strategy. In particular, the Banks new management has significant experience in the financial sector, in various local and foreign banks, accounting firms and governmental agencies. See Management and Corporate Governance Current Management and Corporate Governance Management Team. Despite the changes in the Banks top management, the Bank retained its highly skilled and experienced staff. One-stop-shop approach for clients The Bank provides a full range of products that makes the Bank a one-stop-shop for its retail, corporate and SME clients, including a combination of lending services with current account, payment processing and deposit services. The Banks highly competitive pricing and efficiency of processing payments of clients (e.g., the Bank processes an average of 35,000 payments per day) also serves to strengthen the Banks strong reputation and customer loyalty among retail, corporate and SME clients. The staff has developed a loyal customer base among clients with a corporate and SME client base of over 65,000 and retail client base of over 645,000 as at 30 June 2009. Salary card programmes The Bank launched its salary card programmes in the mid-1990s pursuant to which the Bank issues Visa and Mastercard cards to the staff of participating companies who, in return for signing a salary deposit agreement with the Bank, receive benefits (such as pre-approved credit lines) and reduced commissions on card payments. As at 30 June 2010, the Bank operated salary card programmes with over 6,400 companies under which the Bank provided services to employees through over 740,000 issued and activated cards. The salary card programmes encourage customer loyalty towards the Bank and provide cross-selling opportunities for the Banks payment cards services and internet banking. The Bank seeks to attract new customers and new deposits through the salary card programmes and is targeting an increase in the number of salary cards to 850,000 by the end of 2010. Advanced direct distribution channels infrastructure The Bank has developed alternative distribution technologies, including through internet banking, SMS banking and telebanking. The Bank provides a variety of over 50 services to more than 50,000 users and adds over 950 new user accounts each month to its internet banking platform. During the first six months of 2010, the Bank processed KZT 2.8 billion worth of transactions. The Bank provides SMS banking services to over 68,000 users, including over 3,000 new user accounts each month. The Bank furthermore seeks to improve payment channel availability and the range of services offered in order to increase market share in this segment (from 8 per cent. currently to 15 per cent. by the beginning of 2014). The Bank plans to focus on non-credit products to support all of its retail business infrastructure and to leverage the cross-selling potential of its vast existing client base. The Bank is targeting an increase in its market share of exchange transactions from 12 per cent. to 20 per cent. by the beginning of 2014. Partnerships with money transfer businesses The Bank seeks to provide its clients with prompt and reliable service. Clients can send or receive a money transfer in all cash settlement offices of the Bank. The Bank provides money transfers inside

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Kazakhstan and the CIS, international money transfers (SWIFT and Western Union) and interbank money transfers inside Kazakhstan. Since the beginning of 2010 and until 30 June 2010, the volume of transfers amounted to over KZT 69 billion. The Bank was the first among Kazakhstan banks to launch its own system of express money transfer without the need to open a bank account. In 2009, express transfers were available in all 230 cash offices located in 14 regions of Kazakhstan. There are 6,488 outlets to service customers within the FASTER system in nine CIS countries, Great Britain and the Czech Republic. The express transfers are designed to be effected in less than a minute and money can be transferred in KZT, Dollars, Russian Roubles and Euros. Strategy The Banks principal strategies may be divided into general strategies of the Bank and specific strategies with respect to restructuring and recovery of troubled assets and future development of each of its corporate, SME and retail portfolios. General Strategies of the Bank The Banks general strategies are as follows: Focus on Increasing Liquidity As of the date of this Prospectus, the Bank relies heavily on the liquidity support provided by Samruk-Kazyna. See The Role of Samruk-Kazyna and the NBK. The Bank expects to increase its current liquidity by expanding its role in Government programmes, restructuring its portfolio, refinancing existing obligations, increasing cross-selling and attracting new clients. As at 30 June 2010, the Group had utilised KZT 108,714 million and retained KZT 1,784 million for future lending as an agent under the existing State Finance Programmes. As at 31 October 2010, the Group had utilised KZT 109,298 million and retained KZT 1,200 million for future lending. See State Finance Programmes. The Bank will seek to expand its role under such programmes and become an agent under new programmes proposed by the Government. The successful completion of the debt restructuring has provided the Bank with an advantage over other Kazakhstan banks as the Bank is perceived as one of the first Kazakhstan financial institutions to have overcome the financial crisis. The Bank believes that this will also boost client confidence, giving the Bank an opportunity both to increase collections on existing assets, and to attract new clients, including depositors. Following the Restructuring, the Bank is seeking to capitalise on its historical strengths, including its network, customer base and experience in servicing state-sponsored programmes. Focus on Core Businesses and Client Segments The Banks new management conducted an analysis of the Banks subsidiaries and has decided to refocus the Banks operations on the domestic market. In addition, the Bank has divided its subsidiaries into core (i.e., subsidiaries that the Bank intends to retain going forward) and non-core (i.e., subsidiaries and associates that the Bank intends to dispose of) based on the results of this analysis. The Bank deemed a subsidiary or associate core if such entity was of strategic importance to servicing the Banks key client segments and provided high growth and profitability potential where such subsidiary operates. All material investments in other entities were determined to be core except BTA Georgia, BTA Armenia, Temirbank and BTA Ipoteka. Strengthen Corporate Structure and Governance Following Samruk-Kazynas investment in the Bank in early 2009, Mr. Arman Dunayev was appointed chairman of the Board of Directors. On 6 March 2009, Mr. Iskandirov, Mr. Aitekenov and Mr. Karibzhanov were further appointed to the Board of Directors by Samruk-Kazyna. On the same date, Mr. Wokurka, Dr. Korishchenko and Mr. Talvite were appointed as independent directors on the Board of Directors.

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More recently as part of the restructuring process, on 22 June 2010, the shareholders of the Bank approved the Charter and the Corporate Governance Code, which had been negotiated and agreed with the Steering Committee and is intended to bring standards of corporate governance up to the standards expected of Western companies and to protect creditors and shareholders from any potential abuses of power. On 19 August 2010, the Shareholders of the Bank approved a new regulation on the Board of Directors and amended the membership of the Board of Directors to include the following additional members: Mr. Christoph Schoefboeck and Mr. Maarten Leo Pronk. In view of the termination of the Independent Director, Mr. Ulf Wokurka, a new Independent Director, Mr. Bulat B. Babenov, was also appointed to the Board of Directors. This meeting also terminated the powers of the following members of the Board of Directors: Mr. Yerlan N. Tatishev and Mr. Kairat M. Aitekenov. In addition, the Board of Directors appointed Mr. Maarten Leo Pronk as chairman of the Risk Committee; Mr. Christoph Schoefboeck as chairman of the Internal Audit Committee, and Mr. Konstantin Korishchenko as chairman of the Corporate Management and Appointments Committee. Mr. Bulat Babenov was appointed as a member of both the Internal Audit Committee and the Corporate Management and Appointments Committee. On 28 October 2010, the Asset Recovery Committee was established by the Board of Directors. The committee includes the following members: Mr. Maarten Leo Pronk, Mr. Konstantin Korishchenko, Mr. Anvar Saidenov, Mr. Nikolay Varenko and Mr. Sergey Yeltsov. Mr. Christoph Schoefboeck was appointed as chairman of the Committee. Following these appointments, the Bank commenced a company-wide review and reform of its corporate governance policies and procedures. As a part of these reforms, the Board of Directors now meets three times a month and has increased its interaction with the Banks management. Furthermore, new members were appointed to each of the remuneration committee and the Management Board. Improve Risk Management In order to improve its risk management, the Bank has created a new credit policy that is aimed at enhancing the Banks existing process to minimise risks and bring its lending criteria up to the highest standards used across the market. This entails improving the review of loan products, the control and monitoring of lending processes and the optimisation of the approval committees within the Bank. The new credit policy gives priority to the SME loan business and key agricultural and industrial companies with a focus on vertically integrated businesses. The Bank will also focus on financing state owned companies, export industries and highly efficient production industries, which includes participation in state programmes that provide business support. As a part of its policy, the Bank will not offer loans to new real estate projects, start up investment projects or non residents (including offshore companies). The Bank will also develop and introduce a maximum allowable concentration for its portfolio risks and implement a new borrower risk assessment system after the Restructuring. In addition, the Bank is in the process of transferring client dossiers to electronic folders to minimise operational risks. On the retail side, the Banks new policy will decrease the lending limits established for each loan product, require income confirmation of its retail borrowers and focus on lending to employees of corporate clients with deposits already held by the Bank through its salary card programmes. The Bank will also discontinue a number of its more risky retail lending programmes, including lending to the secondary auto market. Finally the new policy will require examination of clients credit history through the credit history bureau, the First Credit Bureau. The new credit policy requires that liquid collateral, including deposits, real estate, insured cars and equipment, comprise at least 70 per cent. of the overall collateral structure. The Bank has instituted a limit of 30 per cent. on the proportion of collateral that may be comprised of land lots and subsurface use rights. Under the policy, the Bank no longer accepts as collateral immovable property under construction which is less than 80 per cent. completed, except with respect to investment loans (which under FMSA rules of classification must include the following terms: (i) a maturity of five or

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more years; (ii) restriction on prepayment in full; and (iii) a business plan that contemplates the creation, expansion and modernisation of material production, manufacturing or transport infrastructure). Further, any collateral proposed for loans in excess of U.S.$3 million must be reviewed by the Banks Division of Expertise and Monitoring of Collateral. Finally, the Board of Directors must approve (in some cases with a Qualified Majority) any loan involving (i) a borrower that has any type of special relationship with the Bank or is affiliated with the Bank, (ii) an exception from the Banks credit policy, or (iii) any type of Government interest. Build on Existing Banking Franchise Historically, the Bank has had a strong corporate banking franchise and that has only recently been negatively affected by the lending practices of former management. Following the Restructuring, the Banks new management is working to rectify its lending practices to build on the Banks strong franchise. Further, the Banks close relationship and support from the Government allows the Bank to participate in the State Finance Programmes and provides the Bank access to major domestic corporate clients. The Banks new strategy refocuses the Banks business strategy on Kazakhstan customers and the retail and SME businesses. The Bank believes its banking franchise is fundamentally a healthy business that should perform efficiently following the change in management and key shareholders of the Bank and abandonment of the deficient legacy lending practices. The retail and SME business divisions have retained their core infrastructure and personnel despite the recent financial turmoil and the Bank is being further developed to enhance cross selling opportunities. Strengthen Treasury Operations The Bank intends to strengthen its treasury operations to ensure that the Bank maintains current liquidity. The treasury department regulates the Banks external cash flows to meet the Banks client demands, as well as internal and regulatory liquidity standards. Further, the treasury department hedges the Banks currency risks and engages in securities and derivatives trading. The Bank intends to strengthen the treasury department by adopting automated systems that will incorporate real time risk management for a wide range of the treasury departments operations while enhancing further liquidity management. Improve Human Resources and Information Technology In order to reduce its costs, the Bank has decreased its headcount (on an unconsolidated basis) from 6,608 employees as at 31 December 2008 to 5,045 employees as at 31 December 2009 and increased it to 5,096 employees as at 30 June 2010. Going forward, the Bank plans to increase the proportion of employees deployed in client-facing roles by improving efficiency in its back-office operations. With respect to operations, the Bank plans to improve its customer service to differentiate itself from its competitors. The Bank currently has one of the most modern and reliable information technology systems in the Kazakhstan banking sector. The Bank intends to build on its infrastructure by increasing the quality of the data produced, providing consistent classification and resolving data-reconciliation issues. Optimise Branch Network The Banks new management commenced a review and optimisation of the Banks domestic branch network beginning in the fourth quarter of 2008. As a part of the optimisation, the Bank has reduced its branch network to 22 branches and 227 cash offices in 66 cities across the country as at 30 June 2010 from 22 branches and 230 cash offices as at 31 December 2009. The Banks branch network as at 30 June 2010 included 143 full service outlets offering a full range of products to corporate and retail clients, 73 specialised retail units servicing all types of retail clients and 11 cash offices providing payment services to retail clients. The Bank believes that the optimisation is complete as of the date of this Prospectus and the Bank expects to increase its branch network going forward.

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Corporate Business Strategy Restructuring and Recovery of Troubled Assets The Bank has analysed each of the loans in its corporate portfolio and, based on certain economic and legal factors, created a notional division to identify its troubled assets portfolio. The economic factors that the Bank considered when deciding whether to identify a particular corporate loan asset as troubled included: (i) inability of the borrower to service the debt in accordance with the terms of the loan; (ii) delinquency of over 60 days; (iii) a change in provisions of between 50 per cent. and 100 per cent.; (iv) two or more loan extensions; (v) debt discharge at the end of the term; (vi) need for further investments to complete projects with no interim cash flows; and (vii) borrowers in certain problem sectors including construction and development (civil and industrial), property speculation, building materials production or trading and mining start-ups. The legal factors that the Bank considered include: (a) suspected related party transactions; (b) no connection between the purpose of the loan and the business of the borrower; (c) unresolved legal issues in respect of credit transactions; and (d) absence or discharge of a pledge. As of 30 June 2010, the value of the Groups total corporate loans portfolio was KZT 2,324,530 million, of which KZT 1,770,947 million were loans segregated into the troubled assets portfolio. After a loan is segregated into the troubled assets portfolio, the Bank pursues one of three strategies recovery, write-off or restructuring and transfer to the performing loans portfolio. See Asset and Liability Management Non-Performing Loans and Asset and Liability Management Write-off Policy. Development Strategy The Banks development strategy with respect to its corporate portfolio will focus on corporate clients in Kazakhstan and on lending to corporates under the State Finance Programmes and the Industrial Innovation Programme. The Bank also seeks to improve its corporate lending procedures. As an initial matter, the Bank plans to focus on corporate borrowers in Kazakhstan. The Bank plans to restore its reputation and thereby resume its relationships with former domestic corporate clients with the aim of replacing the corporate deposits lost since 2008. The Bank plans to provide loans to Kazakhstan-based companies through the State Finance Programmes and companies in key industries (including oil and gas, minerals, metallurgy, transport, communication and agriculture) and to provide guarantees to contractors and suppliers of Samruk-Kazynas group companies. As at 30 June 2010, the Group has utilised KZT 19,788 million pursuant to the Construction State Finance Programme and utilised KZT 8,160 million pursuant to the Agricultural State Finance Programme. See State Finance Programmes. The Bank intends to continue its participation under these and similar programmes funded by the Government and other multilateral organisations and will covenant in the Trust Deed to use its reasonable efforts to remain eligible for participation in programmes sponsored by the Government or its agencies for funding the commercial banking sector and to participate in such programmes to the extent that such funding is available on reasonable commercial terms. As a state-owned bank following the Restructuring, the Bank will play a crucial role in the national industrialisation programme, pursuant to which the Government has publicly stated that it plans to invest KZT 9.5 trillion into 368 projects over the next five years. The Bank believes that its involvement in this programme will improve the diversification of its corporate loan portfolio due to the programmes strict eligibility requirements. With respect to its lending procedures, the Bank plans to establish more conservative risk limits for specific industries and to monitor more closely its credit risk compliance. The Bank will seek to: ensure adequate diversification of the corporate loan portfolio; provide credit risk monitoring including the calculation of the capital level of an individual borrower, economic sector, country and

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product; more closely monitor risk concentration in the corporate portfolio by economic sectors; and ensure monitoring of lending procedures in accordance with agreed bank rules and regulations. SME Business Strategy Restructuring and Recovery of Troubled Assets The Bank relies on certain economic factors to identify loans that should be included in its SME troubled assets portfolio, including: (i) payment delinquency; (ii) financial performance of the borrower (if the borrowers financial condition is assessed as unsatisfactory or critical due to the borrowers inability to meet its obligations); (iii) collateral quality; and (iv) other parameters, including misuse of previously loaned amounts, previous extensions of the maturity of the loans, presence of other outstanding obligations and the availability of a credit rating for the borrower. The Bank does not evaluate any legal factors when determining whether a loan will be included in the SME troubled assets portfolio. As at 30 June 2010, the value of the Groups total SME loans portfolio was KZT 176,761 million, of which KZT 55,008 million were loans segregated into the SME troubled assets portfolio. The Bank reviews the troubled loans in the SME portfolio on a monthly basis to monitor the borrowers standing and conducts financial due diligence on each SME borrower twice per year. The Bank also undertakes a valuation of the collateral on an annual basis. Both the financial due diligence and collateral valuation must be approved by the Credit Committee of the Bank. After a troubled SME loan becomes delinquent, the Banks Department of Small and Medium Business pursues one of several strategies depending on the particular borrowing, including refinancing, requiring full or partial prepayment, obtaining additional collateral or collateral sale. Once a troubled loan becomes overdue by more than 60 days, the loan is handled by a dedicated department for further work on loan repayment with a focus on full recovery through enforcement and sale of security. Development Strategy As a part of its development strategy, the Bank seeks to regain market share in the SME sector and increase the proportion of its overall loan portfolio represented by SME loans to 30 per cent. As at 30 June 2010, the Banks SME market share was 9.1 per cent. and SME loans comprised 6.4 per cent. of its total loan portfolio, compared to 12.8 per cent. and 6.8 per cent. as at 31 December 2009, respectively. The Bank also seeks to increase its efficiency in the SME business in part by reducing the application processing time for an SME loan from 32 days to 16 days. The Bank also seeks to expand its role in the SME State Finance Programmes. As at 30 June 2010, the Group had received KZT 47,200 million from the Government pursuant to the SME State Finance Programmes, of which it had utilised KZT 43,766 million. See State Finance Programmes. Retail Business Strategy Restructuring and Recovery of Troubled Assets The Bank uses the same analysis to identify the troubled assets in its retail portfolio that it uses for its SME portfolio. As at 30 June 2010, the value of the Groups total retail loans portfolio was KZT 262,585 million, of which KZT 15,897 million were loans segregated into the retail troubled assets portfolio. Once a retail loan is deemed to be a troubled asset (which occurs once payment is overdue for 31 days), the Department of Problem Loans of the Bank implements a three-tiered strategy for recovery. First, the Bank will attempt to prevent delays in repayment by making warning calls to borrowers of loans that are overdue, but not yet classified as non-performing. If the loan becomes non-performing, meaning overdue for 90 days, the Bank will attempt to restructure the loan by

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altering the repayment schedule, prolonging the maturity date and, for loans that qualify, provide refinancing through the Mortgage State Finance Programme. Finally, if these measures do not succeed, the Bank may exercise its rights over collateral, including conducting a collateral sale. If a particular company decides to terminate its salary card programme in which that company pays all employee salaries through the Bank by way of the issuance by the Bank to that companys employees of salary cards, then the Bank will classify any loans granted to employees of such company (which will no longer be secured by the salary cards and by the ability of the Bank to directly debit such cards) as potential troubled assets which are closely monitored. Development Strategy The Banks goal with respect to its retail deposits is to attain a ranking within the top three of Kazakhstan banks by 2014, with a market share of at least 15 per cent. In order to achieve this goal, the Bank will focus on middle and mass segments of the population (as opposed to high-end customers) and improve customer relations through loyalty programmes with existing customers. The Bank also intends to expand its credit card business and attract new corporate clients to salary card programmes. Furthermore, the Bank will focus on non-credit products as a source of support for all retail business, including exchange transactions, payment transactions and transfers. The Bank will expand its payment channel availability to facilitate this goal. The Bank will seek to expand its role as an agent bank for the State Finance Programmes. The Bank will also focus on lending to employees already participating in its salary card programmes and seek to increase the customers in its salary card programmes from approximately 740,000 to 850,000. The Bank will further target borrowers that are employees of financially stable companies. Finally, the Bank will seek to reduce the level of provisions to less than 11.5 per cent. of the overall retail loan portfolio by 2014. Business of the Bank The Bank is a leading commercial bank in Kazakhstan. Under the terms of the Banks licence, the Bank is authorised to offer a full range of traditional corporate and retail banking products and services. See Overview. The Bank services private commercial enterprises, state-owned enterprises and individual customers. As at 30 June 2010, the Bank had 22 regional branches and 227 cash offices throughout Kazakhstan. In addition, the Bank maintains representative offices outside Kazakhstan in Moscow, Russia; Kiev, Ukraine; Shanghai, China and Dubai, the United Arab Emirates and London, the United Kingdom. The Bank has four principal business activities, divided into various departments: corporate, SME, retail and investment activities. See Principal Business Activities. The Bank has various ancillary departments that provide support services. The following table presents a breakdown of the Groups net loan portfolio as at 30 June 2010 and as at 31 December 2009 and 2008:
As at 30 June 2010 (KZT (per cent.) millions) 351,381 47.0% 153,241 20.4% 32.6% 243,813 748,435 100.0% As at 31 December 2009 (KZT millions) 491,989 153,643 395,141 1,040,773 (per cent.) 47.3% 14.7% 38.0% 100.0% (KZT millions) 897,681 235,671 483,711 1,617,063 2008 (per cent.) 55.5% 14.6% 29.9% 100.0%

Corporate loans....................... SME loans .............................. Retail loans ............................. Total .......................................

The Bank offers its products and services through its own branch network as well as through alternative distribution channels.

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Principal Business Activities Corporate Business As at 30 June 2010, the Bank serviced 868 corporate clients. In order to provide high-quality client service, the Bank developed a dedicated team of personal managers with a high level of responsibility and professional skills. The Banks corporate business is comprised of the following divisions: the division responsible for long-term client relationships (The Department of Client Relations of Corporate Business), the division responsible for the quality of the corporate portfolio (The Department of Credit Analysis of Corporate Business), the division responsible for credit analysis and recovery of existing loans made to businesses in CIS countries (The Department of CIS Countries Financing), the division responsible for business development (The Department of Analysis and Corporate Business Development). A significant part of the corporate loan portfolio comprises trade financing, mostly in Tenge and in U.S. Dollars, including letters of credit, guarantees and working capital financing. The corporate departments of the Bank provide a range of services that includes cash management control and online banking. The Bank cross-sells a number of products and services to corporate clients, including payroll management services and corporate card services. According to FMSA data, as at 30 June 2010, the Bank held the third largest market share in the corporate lending market in Kazakhstan. In July 2009, the Bank engaged an independent auditor to review the credit files of a portion of the borrowers in the Banks corporate loan portfolio to assess, in conjunction with independent auditors engaged by the Steering Committee, the appropriate level of loan loss provisions as at 30 June 2009 based on FMSA Methodology. This review resulted in a report dated 3 September 2009. On 23 September 2009, the Bank and the Steering Committee again engaged their independent auditors to supplement and expand on their previous review of the corporate loan portfolio by reviewing the credit files of all of the borrowers in the Banks corporate loan portfolio. Pursuant to its report issued on 12 November 2009, the Banks independent auditors in conjunction with the Steering Committees independent auditors advised that the appropriate level of loan loss provisions on the corporate loan portfolio of the Bank was KZT 1,965 billion (based on FMSA Methodology) as at 30 June 2009. For a discussion of the differences between FMSA Methodology and IFRS, see Pro Forma Financial Information and Asset and Liability Management Provisioning Policy. As at 30 June 2010, the Groups corporate loan portfolio included KZT 2,324,530 million in loans to corporate customers (not including SME customers), representing 84.1 per cent. of its gross loan portfolio. As at 30 June 2010, the Group posted KZT 1,973,149 million of provisions in respect of corporate loans (excluding SME loans). Of the gross corporate loan portfolio, loans totalling KZT 1,770,947 million were deemed troubled loans as at 30 June 2010. See Strategy Corporate Business Strategy Restructuring and Recovery of Troubled Assets. The Banks deposits from corporate clients (on an unconsolidated basis) increased by 3.2 per cent. to KZT 359,657 million as at 30 June 2010 from KZT 348,477 million as at 31 December 2009, primarily due to a reversal of the recent outflow in the Kazakhstan banking sector during 2009. The Bank also provides certain insurance services to its corporate clients, including borrowers property insurance through its insurance subsidiary companies. See Other Activities of the Bank Insurance Services. SME Business The Department of Small and Medium Business provides banking services to SMEs, which are defined as legal entities with assets of no more than KZT 460 million, annual sales of no more than U.S.$25 million and no more than 250 employees. The Bank sets a financing limit equal to no more than U.S.$10 million for SMEs. The Department of Small and Medium Business consists of the following divisions: the Sales Division and the SME Support Division.

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The Bank offers cooperation to enterprises of all sectors of the economy and offers loans for various purposes, including: replenishment of working capital; purchase of raw materials; trade operations; purchase of equipment, real estate purchase and equity investments; and investment loans (which under FMSA guidelines means loans which include the following terms: (i) a maturity of five or more years; (ii) restriction on prepayment in full; and (iii) a business plan that contemplates the creation, expansion and modernisation of material production, manufacturing or transport infrastructure).

The Bank offers different types of products to its SME clients: loans and credit lines, overdrafts, letters of credit, guarantees, promissory notes, bonds and factoring. The Bank also lends funds to SMEs through the SME State Finance Programme and Agricultural State Finance Programme, as well as through other Samruk-Kazyna stabilisation programmes. See State Finance Programmes. As at the date of this Prospectus, the Bank services approximately 69,196 SME clients in its 22 branches, including approximately 8,945 borrowers. The Bank evaluates the particular circumstances of each SME client and uses a tailored approach in servicing their loans supported by a full range of banking services. The Bank will provide certain discounts on certain products to customers who have been loyal to the Bank for many years or to customers who provide high turnover. As at 30 June 2010, the Groups loan portfolio included KZT 176,761 million of loans to SME customers, which represents 6.4 per cent. of its gross loan portfolio. As at 30 June 2010, the Group posted KZT 23,520 million of provisions in respect of SME loans. Of the gross corporate loan portfolio, loans totalling KZT 55,008 million have been deemed troubled loans as at 30 September 2009. See Strategy SME Business Strategy Restructuring and Recovery of Troubled Assets. The Banks deposits of SME clients (on an unconsolidated basis) increased by 19.7 per cent. to KZT 128,460 million as at 30 June 2010 from KZT 103,199 million as at 31 December 2009, primarily due to the reversal of the recent outflow in the Kazakhstan banking sector during 2009. As at 30 June 2010, the Banks share (on an unconsolidated basis) of the SME market was 9.6 per cent., based on data provided by the NBK. Retail Business Retail business continues to be a key direction of the Banks activities. The Bank provides a wide range of services to retail customers, including many different forms of lending, saving products, card products and cash settlement services. As at 1 September 2010, the client base of the retail business comprised 665,116 clients, 1,104,771 accounts, and 1,104,966 cards in circulation. The Bank has a market share of 13.39 per cent. by number of retail clients, representing the second largest share in the market after Halyk Bank. The Banks strategy is to target Kazakhstans urban working population of over five million people by means of salary projects. Currently, the Bank services 6,466 companies with 743,667 employees through such projects. These salary projects are a highly effective way of ensuring large numbers of employees automatically become clients of the Bank as under these projects the employees receive their salaries on a monthly basis through accounts with the Bank. Prior to 2009, the Bank targeted large corporate clients for such salary projects (for example, in the oil and metals industries) and most of these companies still use salary projects today. However, in 2009

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the Bank began to concentrate on diversification of its client base and started to target companies from the SME segment as well. In addition, the Bank focussed on attracting state organisations which currently represent approximately 30 per cent. of all of the employers in Kazakhstan. This redirection gives the Bank the opportunity to continue to grow in the retail segment and develop non-loan products while developing relations with transparent and long-term clients. In 2010, the Banks focus has been on consolidating its hold on deposits and managing the balance between deposits and loans. As at 30 June 2010, the Banks retail loan portfolio amounted to U.S.$1,275 million, a 9 per cent. decrease from U.S.$1,408 million as at 31 December 2009. Its deposits, however, increased by 23 per cent. from U.S.$866 million as at 31 December 2009 to U.S.$1,088 million as at 30 June 2010. These figures represent market shares as at 30 June 2010 of 12.4 per cent. of the Kazakh retail lending market and 9.4 per cent. of Kazakh retail deposits. The Bank intends to increase its share of the retail deposits market to 15 per cent. over the next three years and to become the third largest player in the market, as well as to retain its retail lending market share at 13 to 13.5 per cent. over the same period. In addition, the Bank actively participated in the state programmes of refinancing mortgage loans, accounting for KZT 24 billion out of KZT 120 billion refinanced under the programmes. The following table shows the Banks market share in the relevant retail markets in Kazakhstan based on information provided by the NBK:
Market share Loans ............................................................................................................................. Term deposits ................................................................................................................ Accounts on demand...................................................................................................... Cards (in circulation) ..................................................................................................... Exchange currency operations ....................................................................................... Payments and transfers: ................................................................................................. Payments for public utilities .................................................................................. Western Union ....................................................................................................... Tax payments......................................................................................................... 31 December 2009 13.4% 8.0% 8.5% 14.5% 16.6% 11.9% 24% 18.14% 31 July 2010 12.4% 9.4% 10.7% 13.6% 18.8% 11.04% 23.63% 18.86%

As at 30 June 2010, the Groups consolidated retail loan portfolio included KZT 262,585 million in loans to retail customers, which represents 9.5 per cent. of its gross loan portfolio. As at 30 June 2010, the Group posted KZT 18,772 million of provisions in respect of retail loans. Of the gross corporate loan portfolio, loans totalling KZT 15,897 million have been deemed troubled loans as at 30 June 2010. See Strategy Retail Business Strategy Restructuring and Recovery of Troubled Assets. The deposits of retail clients of the Bank (on an unconsolidated basis) increased by 23 per cent. to KZT 160,535 million as at 30 June 2010 from KZT 131,536 million as at 31 December 2009, primarily as a part of the overall significant deposit outflow in the Kazakhstan banking sector during that time. The Bank also provides certain pension services through its subsidiary BTA Pension Fund, and insurance services through its subsidiaries Insurance Company London Almaty, BTA Zhizn, BTA Zabota and BTA Insurance. See Other Activities of the Bank Pension Fund Services and Other Activities of the Bank Insurance Services. Investment Activities The Banks investment activities include trading or investing financial assets and liabilities, financing and merger and acquisitions transaction support. The Bank operates in local and foreign market operations through BTA Securities, its Treasury department and international operations support department.

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The Banks Treasury department provides open-market operations in order to ensure the efficient management of the Banks funds (for the Bank as a whole). The Treasury department achieves this purpose using foreign exchange (FOREX) and money market operations, and operations with securities, taking into consideration the policy of efficient internal and external risk management. In addition, the Bank is one of the traders of Government debt securities and one of the participants on the interbank money market. See Asset and Liability Management Treasury Operations. In 1997 the Bank created BTA Securities, a wholly owned subsidiary of the Bank. BTA Securities offers its clients a wide range of services: broker services, individual trust management services, mutual fund services, and issuance and placement of securities of its clients. The Bank also renders services related to the organisation of mergers and take-overs. BTA Securities also has a trading division that carries out brokerage operations, as well as trading operations for its own portfolio. BTA Securities provides its clients with access to Kazakhstan and international securities markets. The principal activities of BTA Securities include individual trust management, which is focused on institutional investors and their individual investment preferences and purposes, and mutual funds, focused on preserving and increasing the capital of individuals and SMEs. BTA Securities clients include insurance companies, mutual funds of various types, real estate funds and other legal persons who are interested in the effective implementation of their investment aims by means of the financial market. The cumulative investment portfolios of BTA Securities clients consist of various financial instruments, such as equity and debt securities of Kazakhstan and international issuers and derivative financial instruments. As a financial adviser and underwriter, BTA Securities offers its clients services related to the state registration of securities issuances, inclusion of securities on the KASE and placement of securities with investors. BTA Securities also provides consulting services to assist issuers to obtain ratings by international rating agencies. BTA Securities provides a range of investment banking products and services, including mergers and acquisitions, structured solutions and derivatives, for clients of all sizes and across all industries. BTA Securities investment banking clients include local and foreign acquirers and target companies. Traditionally, BTA Securities primary client was the Bank itself when acquiring businesses in Kazakhstan, Russia, Turkey, Ukraine, Georgia and Armenia. Target company clients have generally not been related to the Bank. The investor base for target company clients includes large foreign investment banks, their clients and local and foreign private equity funds. The Bank has been historically active on the international markets and has regularly entered into various trade finance interbank facilities with foreign banks and Kazakhstan subsidiaries of foreign banks, pursuant to each of which the Bank is permitted to draw various amounts for on-lending funds for export-import operations of its clients in Kazakhstan and abroad. Such facilities are drawn for the purposes of providing short-term financing for export-import contracts for an average of two years and for providing medium-and long-term loans under guarantees of export-import banks and export credit agencies that usually cover imports of goods and services for a period of up to 12 years. In accordance with terms and conditions of the Restructuring Plan, the Bank has entered into the agreement establishing the RCTFF with The Royal Bank of Scotland N.V., Singapore branch as the agent and security agent for the lenders. The lenders under this facility are those of the Banks trade finance related creditors whose Claims were restructured under Senior Package 3. The principal amount of the RCTFF is U.S.$698,186,047.18. The RCTFF will be used for the purposes of enabling the Bank to support the financing of Eligible Trade finance transactions. The RCTFF has a three-year term with a two-year availability period. The Bank has maintained its regional presence through its network of representative offices. As at 30 June 2010, the Bank maintained representative offices beyond Kazakhstan in Moscow, Russia;

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Kiev, Ukraine; China; Dubai, the United Arab Emirates and London, the United Kingdom through which it intends to diversify its client base and the range of banking products in the areas of lending and international trade finance. As at 30 June 2010, the Bank had 18 subsidiaries (entities in which it owns 50 per cent. or more of the share capital) and nine associates (entities in which it owns more than 20 per cent. and less than 50 per cent. of the share capital). See Subsidiaries and Associates of the Bank. The Bank has significant shareholdings in a number of local commercial banks that it believes have the potential, in particular, of developing the Banks trade finance business. The Bank works with these banks to develop and coordinate loan policies, and implement risk management and operational systems. As at the date of this Prospectus, the Bank has no immediate plans for increasing any particular investments in any other banks. Other Activities of the Bank The Bank also provides pension fund services and insurance services to support its corporate, SME and retail business segments. Pension Fund Services The provision of pension fund services is a growing business in Kazakhstan as a result of government reform in this area in 1998. As at 30 June 2010, there are 13 cumulative pension funds (out of which 12 funds have licences to conduct independent asset management) and three asset management companies. The Group is committed to becoming a leading provider of pension fund services and, as at 30 June 2010, owned 86.05 per cent. of the share capital of BTA Pension Fund. Moreover in January 2010, the Bank obtained 75.00 per cent. of the share capital of Ular-Umit and 75.00 per cent. of the share capital of Zhetysu in connection with the settlement of existing liabilities to the Bank by certain clients of the Group. As at 30 June 2010, BTA Pension Fund and Ular-Umit had KZT 470,040 million in fiduciary assets, representing a 23 per cent. share of the total pension assets in the overall Kazakhstan pension market. BTA Pension Fund has a regional network and operates through 21 representative offices and 100 agency centres. The regional network of Ular-Umit operates through 17 branches and 60 branch offices. Its principal activities include collection of obligatory and voluntary pension fees, payments of pensions to clients and investments of pension assets within the framework provided under Kazakhstan law. The Government caps the commission interest of accumulative pension funds to 15 per cent. of investment income and 0.05 per cent. of pension assets. As at 30 June 2010, Zhetysu manages 16.8 per cent. of the total pension assets in the Kazakhstan pension market. The headquarters of Zhetysu is located in Almaty. Its principal activity is the management of pension assets. Insurance Services The insurance market is developing rapidly in Kazakhstan due to changes in legislation, increased regulatory supervision and the general economic development in Kazakhstan over the past few years. As at 30 June 2010, there were 41 insurance companies operating in Kazakhstan with an aggregate total capital of KZT 189.8 billion and total assets of KZT 329.5 billion. The Bank has a controlling interest in each of Insurance Company London Almaty (99.53 per cent.), BTA Zhizn (100 per cent.), BTA Zabota (98.17 per cent.), BTA Insurance (100 per cent.) and Atlanta-Polis (75.28 per cent.) through which it offers a broad range of insurance products. The Bank is focused on furthering its penetration of the insurance market over the next few years. Management believes the Bank is well positioned to capitalise on the expected growth in this sector during the next five years.

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Insurance Company London Almaty focuses on services related to property and responsibility insurance, particularly for legal entities. BTA Zhizn provides life insurance and annuities, primarily to individuals. BTA Zabota specialises in medical insurance, primarily to legal entities, including social benefits to the employees of its corporate clients. BTA Insurance provides voluntary property insurance and obligatory auto insurance. In March 2010, the Bank obtained 75.28 per cent. of the share capital of Atlanta-Polis in connection with the settlement of the liabilities of certain clients to the Bank. The Bank is the sole shareholder of BTA Insurance (100.00 per cent.) and the main shareholder of BTA Zabota (98.17 per cent.) and Atlanta-Polis (75.28 per cent.). BTA Insurance and Atlanta-Polis specialise in different types of voluntary and obligatory property insurance, while BTA Zabota specialises in different types of voluntary personal insurance. For the most effective use of capital inside the Group, the Group is considering merging BTA Zabota and Atlanta-Polis with BTA Insurance. There will be no need for additional capitalisation of joint companies as a result of this reorganisation, and the financial stability of BTA Insurance with assets of more than KZT 24 billion will allow to successfully develop the business. The proposed merger will result in the creation of one of the largest insurance companies in the insurance market in Kazakhstan. On 6 November 2010, the FMSA in its Management Decision #167 granted a permission for the voluntary reorganisation of BTA Zabota and Atlanta-Polis through their merger with BTA Insurance. Encashment of valuables In January 2010, the Bank obtained 100 per cent. of the share capital of Titan-Inkassatsiya. Its main activity is the provision of encashment services. As at 30 June 2010, Titan-Inkassatsiya had a regional network of 21 branches in Kazakhstan. As at 30 June 2010, this company had 319 clients of which the Bank is the largest.

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Subsidiaries and Associates of the Bank Subsidiaries The Bank had 18 subsidiaries as at the date hereof. The financial results of these subsidiaries are consolidated with those of the Bank in the financial statements contained herein. The following table sets out certain information relating to those Banks subsidiaries:
Subsidiary BTA Pension Fund............... BTA Insurance ..................... BTA Ipoteka......................... BTA Zhizn ........................... BTA Zabota.......................... Insurance Company London Almaty .................... BTA Securities..................... TuranAlem Finance ............. TuranAlem Finance (Russia) ................................ BTA Finance Luxemburg .... TemirCapital B.V................. Ular-Umit ............................. Zhetysu................................. Atlanta-Polis......................... Titan Inkassatsiya................. BTA Belarus ........................ First Kazakhstan Securitisation Company ....... Second Kazakhstan Securitisation Company ....... Per cent. owned 86.05 100.00 100.00 100.00 98.17 99.53 100.00 100.00 100.00 86.11 100.00 75.00 75.00 75.28 100.00 99.71 Country of incorporation Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Netherlands Russia Luxembourg The Netherlands Kazakhstan Kazakhstan Kazakhstan Kazakhstan Belarus The Netherlands The Netherlands Date of incorporation 11 December 1997 8 September 1998 20 November 2000 22 July 1999 10 September 1996 20 November 1997 17 October 1997 22 May 2001 22 June 2004 5 January 2006 29 May 2001 27 November 1997 5 March 1998 6 June 1995 22 August 2002 25 April 2002 8 December 2005 25 September 2007 Industry Pension fund Property and responsibility insurance Consumer mortgage lending Life Insurance and annuity Medical insurance Property and liability insurance Securities trading and asset management Capital markets Capital markets Capital markets Operations on capital markets Pension fund Pension assets investment management Property and liability insurance Encashment Banking Securitisation of financial assets Securitisation of financial assets Date of acquisition 16 September 1998 21 December 2006 20 November 2000 30 March 2001 4 April 2001 5 August 2004 13 December 1997 22 May 2001 28 September 2004 6 March 2006 29 December 2006 13 January 2010 14 January 2010 25 March 2010 5 January 2010 30 October 2008

Brief summaries relating to the status and operations of the Banks subsidiaries are set out below. Financial information for each entity has been extracted from the Banks Unaudited Interim Financial Statements. The shares of each of the Banks subsidiaries have no par value, other than TuranAlem Finance (EUR 100), Temir Capital B.V. (EUR 1,000), BTA Belarus (Belarusian Rouble 159,400,000) and BTA Finance Luxembourg (U.S.$1.5). BTA Pension Fund BTA Pension Fund, with its registered office at 2 Jandosov Street, Almaty, Kazakhstan, was established on 25 January 2005 as a result of the merger of two pension funds, JSC Pension Fund Kurmet (established in 1998) and JSC Pension Fund Kazakhstan (established in 1997), each of which was established in 1998 as a closed joint stock company. As at 30 June 2010, the Bank owned 86.05 per cent. of BTA Pension Funds equity capital which it shows at a value of KZT 5,182 million. BTA Pension Fund is a non state pension fund. See The Bank Other Activities of the Bank Pension Fund Services. According to information provided by the FMSA as at 30 June 2010, BTA Pension Fund had an 8.7 per cent. share of the pension market in Kazakhstan. As at 30 June 2010, BTA Pension Fund had unaudited equity capital of KZT 9,352 million, assets of KZT 11,648 million and reserves of KZT 5,545 million. It had a profit arising out of ordinary activities, after tax, of KZT 1,078 for the year ended 31 December 2009. The shares held by the Bank are fully paid up. The Bank did not receive any dividends from this company in respect of the last financial year. The Bank had outstanding intra group debt to BTA Pension Fund amounting KZT 34,909 million as at 30 June 2010.

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Ular-Umit Ular-Umit was established on 3 September 2001, following the merger of JSC Pension Fund Ular (established in 1998) and JSC Pension Fund Umit (established on 27 November 1997). In January 2010, the Bank received 75 per cent. of the share capital of Ular-Umit as consideration for the discharge of the liabilities of JSC Astana-Finance. In June 2010, by a decision of the FMSA, the assets and liabilities of JSC Pension Fund Korgau were transferred to Ular-Umit due to its non-compliance with prudential norms. The main activity of Ular-Umit is to attract pension fees and to make pension payments. Currently, the management of Ular-Umits pension funds is carried out by Zhetysu. In May 2010, Ular-Umit received a licence for the assets management of pension assets. Ular-Umits registered office is at 115a, Abay Avenue, Almaty, Kazakhstan. As at 30 June 2010, Ular-Umit had unaudited assets of KZT 11,905 million, equity capital of KZT 6,236 million and reserves of KZT 563 million. It had a profit arising out of ordinary activities, after tax, of KZT 2,762 million for the year ended 31 December 2009. The Banks participation in Ular-Umit is shown on BTAs balance sheet at a value of KZT 7,850 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from this company during the last financial year. Ular-Umit had no intra-group debt outstanding as at the date hereof. Zhetysu In January 2010, 75 per cent. of the share capital of Zhetysu was transferred to the Bank as consideration for the discharge of the liabilities to the Bank of certain clients of the Group. Zhetysu was established on 5 March 1998 and has licences to manage pension assets and to conduct broker-dealer activities in the securities market (excluding clients accounts management and management of investment portfolios). As at 30 June 2010, Zhetysu had the pension assets of Ular-Umit and JSC Pension Fund Amanat-Kazakhstan under management. The total unaudited amount of pension assets Zhetysu had under management as at 30 June 2010 was KZT 339,742 million. As at 30 June 2010, Zhetysu had unaudited assets of KZT 5,441 million, equity capital of KZT 3,438 million and KZT (2,956) million in reserves. It had a profit arising out of ordinary activities, after tax, of KZT 3,433 million for the year ended 31 December 2009. The registered office of Zhetysu is at 115a, Abay Avenue, Almaty Kazakhstan. The Bank shows its interest in Zhetysu as KZT 5,367 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from the company for the last financial year. Zhetysu had no intragroup debt outstanding as at the date hereof. BTA Insurance BTA Insurance was established on 8 September 1998 as an open joint stock company. BTA Insurance is a wholly owned subsidiary of the Bank with its registered office at 187 Aiteke-bi Street, Almaty, Kazakhstan. It provides a full range of insurance services. As at 30 June 2010, BTA Insurance had a 1.02 per cent. share of the overall insurance market in Kazakhstan according to information provided by the FMSA, unaudited assets of KZT 24,036 million and equity capital of KZT 18,949 million. JSC BTA Ipoteka BTA Ipoteka was established in November 2000 as an open joint stock company and is based in Almaty. Its registered office is at 85 A Dostyk Avenue, Almaty, Kazakhstan. The Bank holds 100 per cent. of BTA Ipotekas share capital. In May 2010, BTA Ipoteka voluntarily terminated its licence on lending operations as part of an overall reorganisation of its business strategy to focus on restructuring, recovery of assets and securitisation of mortgage loans. As at 30 June 2010, BTA Ipoteka had equity capital of KZT 6,709 million and assets of KZT 52,779 million and reserves of KZT (4,611) million. It had a loss arising out of ordinary activities, after tax, of KZT 4,611 million for the year ended 31 December 2009. The Bank shows its interest in BTA Ipoteka at a value of KZT 5,500 million. The shares held by the Bank are fully paid-up. The Bank did not receive any

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dividends from the company for the last financial year. The Bank considers BTA Ipoteka a non-core subsidiary. See Strategy General Strategies of the Bank Focus on Core Businesses and Client Segments. BTA Zhizn BTA Zhizn was established in July 1999 as a closed joint stock company and is based in Almaty with its registered office at 187 Aiteke-bi Street, Almaty, Kazakhstan. As at 30 June 2010, the Bank held 100 per cent. of the share capital of BTA Zhizn. BTA Zhizn provides life insurance services and was one of the first insurance companies in Kazakhstan to be licensed by the FMSA to provide such services. As at 30 June 2010, BTA Zhizn had a 7.5 per cent. share of the voluntary individual insurance market in Kazakhstan according to information provided by the FMSA. As at 30 June 2010, BTA Zhizn had unaudited assets of KZT 9,522 million and its equity capital was KZT 3,732 million. BTA Zabota BTA Zabota was established in September 1996 as an open joint stock company. Its registered office is at 34 Abay Avenue, Almaty, Kazakhstan. As at 30 June 2010, the Bank held 98.17 per cent. of BTA Zabotas equity capital. BTA Zabota provides medical insurance services primarily for legal entities, including social benefits for employees of corporate clients and, as at 30 June 2010, had a 4.8 per cent. share of the voluntary individual insurance market. As at 30 June 2010, BTA Zabota had a 0.18 per cent. share of the overall insurance market in Kazakhstan according to information provided by the FMSA, its total unaudited assets were KZT 1,572 million and its equity capital was KZT 926 million. Insurance Company London Almaty Insurance Company London Almaty was established in November 1997 as a closed joint stock company. As at 30 June 2010, the Bank held 99.53 per cent. of its share capital. Insurance Company London Almaty is located in Almaty and provides a wide range of services such as individual insurance and property insurance. Its registered office is at 9th Floor, Block 3B, Nurly Tau, 19/1 Al-Farabi Avenue, Almaty, Kazakhstan. As at 30 June 2010, it had a 1.01 per cent. share of the insurance market in Kazakhstan according to information provided by the FMSA, total unaudited assets of KZT 8,198 million, equity capital of KZT 5,686 million and reserves of KZT 4,626 million. It had a loss arising out of ordinary activities, after tax, of KZT 722 million for the year ended 31 December 2009. The Bank shows its interest in the share capital of Insurance Company London Almaty at a value of KZT 3,113 million. The shares held by the Bank are fully paid-up. The Bank has not received any dividends from the company for the last financial year. The Bank had outstanding intra-group debt to Insurance Company London Almaty amounting to KZT 200 million as at 30 June 2010. Atlanta-Polis Atlanta-Polis was established in June 1995. Its registered office is located at 260/A1 Kabanbay batyr Street, Almaty, Kazakhstan. As at 30 June 2010, the Bank held 75.28 per cent. of Atlanta-Poliss share capital. Atlanta-Polis is located in Almaty and provides a wide range of services such as individual insurance and property insurance. As at 30 June 2010, Atlanta-Polis had a market share of 0.69 per cent. of the insurance market of Kazakhstan according to information provided by the FMSA, total unaudited assets of KZT 1,761 million and equity capital of KZT 1,056 million. BTA Securities BTA Securities was established on 17 October 1997 and it is a wholly owned subsidiary of the Bank. BTA Securities registered office is at 281 Husainova Street, Almaty, Kazakhstan. Its principal business areas include sales, investment banking, trading and underwriting of government, municipal and corporate securities in Kazakhstan. According to a new method of ranking of activity of

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operators in the stock exchange, bonds and repurchase transactions, during the first six months of 2010, BTA Securities was third place on the stock market activity index, fifth place on the bond market activity index and seventeenth place on the repurchase transactions market activity index. As at 30 June 2010, BTA Securities had equity capital of KZT 51,958 million, assets of KZT 51,987 million and reserves of KZT 10,192 million. It had a loss arising out of ordinary activities, after tax, of KZT 1,372 million for the year ended 31 December 2009. The Bank shows its participation in BTA Securities at a value of KZT 50,560 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from this company during the last financial year. The Bank had outstanding intra-group debt to BTA Securities amounting to KZT 152 million as at 30 June 2010. Titan-Inkassatsiya Titan-Inkassatsiya was established in August 2002. Its registered office is located at 106A Gureleva Street, Almaty, Kazakhstan. The main activity of the company is the encashment of valuables. As at 30 June 2010, Titan-Inkassatsiya had total assets of KZT 615 million and equity capital of KZT 461 million. TuranAlem Finance TuranAlem Finance was established on 22 May 2001 in The Netherlands as a limited liability company. Its registered office is located at Schouwburgplain 30-34, 3012 CL Rotterdam, The Netherlands. TuranAlem Finance is in the process of being dissolved as a company following the completion of the Restructuring. TuranAlem Finance (Russia) TuranAlem Finance was established on 22 June 2004 in Moscow, Russia as a limited liability company and is a wholly owned subsidiary of the Bank. Its registered office is located at Building 1, 62 Mira Avenue, Moscow, Russia. It was created principally for the purpose of raising funds for the Bank through the issuance of Russian Roubledenominated bonds and promissory notes. As at 30 June 2010, TuranAlem Finance (Russia)s assets amounted to KZT 14,814 million and its equity capital was KZT 106.5 million. BTA Finance Luxembourg BTA Finance Luxembourg was established in Luxembourg on 5 January 2006 as a public limited liability company (socit anonyme) to act as a special purpose vehicle for the purpose of issuing the Perpetual Securities. Its registered office is located at 46A Avenue J.F. Kennedy, L-1855 Luxembourg B-112100. BTA Finance Luxembourg is in the process of being dissolved as a company following the completion of the Restructuring. Temir Capital B.V. Temir Capital B.V. was incorporated on 29 May 2001 under the laws of The Netherlands and is a wholly owned subsidiary of the Bank. Its registered office is located at Schouwburgplain 30-34, 3012 CL Rotterdam, The Netherlands. Its primary business consists of raising funds on the international capital markets and lending such funds to Temirbank. As at 30 June 2010, Temir Capital B.V. had assets of KZT 405 million and equity capital of KZT 386 million. During the first six months of 2010, Temir Capital B.V. restructured its financial indebtedness in the form of Eurobonds amounting to U.S.$772 million. BTA Belarus BTA Belarus was established on 25 April 2002 and the Bank acquired its interest in BTA Belarus on 30 October 2008. Its registered office is at 20 V. Horujey Street, Minsk, Belarus. As at 30 June 2010, the Banks share in the equity capital of BTA Belarus was 99.71 per cent. BTA Belarus provides a wide range of services to its corporate and individual customers. As at 30 June 2010, the assets of

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BTA Belarus were KZT 13,202 million, it had equity capital of KZT 3,545 million and reserves of KZT 595 million. It had a profit arising out of ordinary activities, after tax, of KZT 299 million for the year ended 31 December 2009. The Bank is currently seeking to invalidate three sale and purchase agreements entered into on 12 and 19 August 2008 for the acquisition by the Bank of a 51.06 per cent. stake in BTA Belarus. The Bank shows its participation in BTA Belarus at a value of KZT 5,784 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from this company during the last financial year. BTA Belarus had outstanding intra-group debt amounting to KZT 1,677.5 million as at 30 June 2010, including subordinated debt amounting to KZT 1,671.7 million. This forms part of the additional U.S.$106 million claim which has been brought in the Drey Proceedings by way of the Banks proposed amendments to its particulars of claim. See Asset Recovery Drey Proceedings. First Kazakh Securitisation Company The First Kazakh Securitisation Company was founded in The Netherlands on 8 December 2005 as a public limited company for the special purpose of pursuing securitisations of financial assets of the Group. Its registered office is located at 123 Frederik Roesekstraat, Amsterdam, the Netherlands. As at 30 June 2010 the assets of First Kazakh Securitisation Company were KZT 6,328 million and its equity capital was KZT 3.4 million. Second Kazakh Securitisation Company The Second Kazakh Securitisation Company was founded in The Netherlands on 25 September 2007 as a public limited company for the special purpose of pursuing securitisations of financial assets of the Group. Its registered office is located at 123 Frederik Roesekstraat, Amsterdam, the Netherlands. As at 30 June 2010, the assets of Second Kazakh Securitisation Company were KZT 11,741 million and its equity capital was KZT 3.7 million. Associates The Bank has nine associates. Associates are entities in which the Bank owns more than 20 per cent. and less than 50 per cent. of such entitys share capital. The Bank considers BTA Armenia and BTA Georgia non-core associates of the Bank. See Strategy General Strategies of the Bank Focus on Core Businesses and Client Segments. The following sets out information relating to the Banks associates as at 30 September 2009. BTA Armenia BTA Armenia is a bank located in Yerevan, Armenia. BTA Armenias principal activity is banking activities in Armenia and its registered office is located at 48/1 Nalbandyan Street, Yerevan, Armenia. The Bank holds a 48.93 per cent. interest in BTA Armenia. BTA Georgia BTA Georgia is a small bank located in Tbilisi, Georgia. BTA Georgias principal activity is banking activities in Georgia. Its registered office is at 2 Zaarbruken Square, Tblisi, Georgia. The Bank acquired a 49.00 per cent. equity interest in BTA Georgia in June 2005. BTA Kazan BTA Kazan is a bank based in Tatarstan, Russia, with its registered office at 58 Ibragimov Avenue, Kazan, Tatarstan. BTA Kazans principal activity is banking activities in the Russian Federation. The Bank acquired a 47.32 per cent. equity interest in BTA Kazan in October 2006. As at 30 June 2010, BTA Kazan had total assets of KZT 55,551 million, equity capital of KZT 10,369 million and reserves of KZT 2,061 million. Its profit arising out of ordinary activities, after tax, amounted to KZT 102 million for the year ended 31 December 2009. The Bank shows its participation in BTA Kazan at

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a value of KZT 4,091 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from this company during the last financial year. BTA Kazan had outstanding intra-group debt amounting to KZT 475 million as at 30 June 2010, including subordinated debt amounting to KZT 472 million. BTA Russia BTA Russia is a bank located in Moscow, with its registered office at Wave Business Centre, 10 Akademika Sakharova Avenue, Moscow 107005 Russia. BTA Russias principal activity is banking activities in the Russian Federation. In July 2008, the Banks equity interest in BTA Russia was increased to 52.84 per cent. from 14.2 per cent. In November 2008, the Banks equity interest was decreased to 22.26 per cent. In March 2010, BTA Russia was renamed as AMT Bank LLC (Russia). As at 30 June 2010, the Bank held a 22.26 per cent. equity interest in BTA Russia. The Bank is currently seeking to invalidate six sale and purchase agreements (all dated 6 June 2008) for the acquisition by it of an additional 38.63 per cent. shareholding in BTA Russia. This forms part of the additional U.S.$106 million claim which has been brought in the Drey Proceedings by way of the Banks proposed amendments to its particulars of claim. See Asset Recovery Drey Proceedings. As at 30 June 2010, BTA Russia had total assets of KZT 202,724 million, equity capital of KZT 48,285 million and reserves of KZT (6,796) million. It had a loss arising out of ordinary activities, after tax, of KZT 12,930 million for the year ended 31 December 2009. The Bank shows its participation in BTA Russia at a value of KZT 24,618 million. The shares held by the Bank are fully paid-up. The Bank has not received a dividend from this company in the last financial year. BTA Ukraine BTA Ukraine is a bank located in Kiev, Ukraine. Its registered office is at 75 Jilyanskaya Street, Kiev. BTA Ukraines principal activity is banking activities in the Ukraine. The Bank acquired a 40.038 per cent. equity interest in BTA Ukraine in December 2008. BTA Ukraine has claimed that authorised persons of the Bank entered into an agreement dissolving the Banks share purchase agreement for the acquisition of its 49.99 per cent. interest. As a result of this alleged agreement, the ownership of the Bank in BTA Ukraine was reduced in the register of BTA Ukraine down to 9.9 per cent. On 28 May 2009, Samruk-Kazyna and the public prosecutor on behalf of the Bank submitted a petition to the Court asking that the alleged agreement dissolving the share purchase agreements be recognised as invalid, and that the issuing of a power of attorney in respect of debiting the Banks shares in BTA Ukraine be recognised as invalid. The Court satisfied Samruk-Kazynas claims by an absentee decision which was entered into force on 3 December 2009. The decision recognised the transactions as invalid and obligated the defendants to return the shares to the Bank and to make the corresponding entry in the register of BTA Ukraine. On 18 January 2010, the Bank submitted to the Shevchenko district court of Kiev a request to have the decision of the court recognised in accordance with the laws of Ukraine. The application was accepted on 26 February 2010. By a decision of the Shevchenko district court, the Banks claim for the recognition of the decision of the Specialised district economic court of Almaty about the recognition of the invalidity of the purchase-sale agreements of securities dated 24 December 2008, based on which the Bank lost a 49.99 per cent. stake in the equity capital of BTA Ukraine, and the invalidation of the power of attorney in respect of debiting the Banks shares in BTA Ukraine, was satisfied in full. On 11 May 2010, the decision of the Shevchenko district court was appealed to the Appeal Court of Kiev, and on 8 September 2010, at the Appeal Court of Kiev that decision dated 28 April 2010 was overturned and the petition was found in favour of the defendants. The Bank currently plans to submit an appeal to the High Court of Ukraine as well as a judicial review of the decision of the Appeal Court of Kiev. In addition, as at 9 September 2010, shares in BTA Ukraine held by the Bank representing 40 per cent. of the share capital of BTA Ukraine were seized following an order from a judge of the Goloseevskiy district of Kiev.

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On 10 September 2010, the Economic Court of Kiev issued a judgment rejecting claims by OJSC Lakeland Investments, OJSC Drobo Trade Investment, OJSC Impulse Capital Investment and OJSC Goldfine Import Investment over the share capital of BTA Ukraine. As at 30 June 2010, BTA Ukraine had total assets of KZT 64,451 million, equity capital of KZT 28,695 million and reserves of KZT 270 million. It had a profit arising out of ordinary activities, after tax, of KZT 58 million for the year ended 31 December 2009. The Bank shows its participation in BTA Ukraine at a value of KZT 11,238 million. The shares held by the Bank are fully paid-up. The Bank did not receive any dividends from this company during the last financial year. BTA Ukraine had no intra-group debt outstanding as at the date hereof. Temirleasing Temirleasing is located in Almaty, Kazakhstan and its registered office is at 68/74 Abay Avenue, Almaty. Temirleasings principal activity is leasing. The Bank directly holds a 26.75 per cent. equity interest in Temirleasing, Temirbank holds an 18.88 per cent. equity interest in Temirleasing and BTA Securities holds a 0.17 per cent. equity interest in Temirleasing. SK Leasing SK Leasing is located in Almaty, Kazakhstan and has its registered office at 38 Tulebayev Street, Almaty. SK Leasings principal activity is leasing. The Bank directly holds a 45.00 per cent. equity interest in SK Leasing. SK Leasing changed its name to SK Leasing from BTA Orix Leasing in September 2010. Sekerbank Sekerbank is a bank located in Istanbul, Turkey. Its registered office is located at Metrocity A-Blok, 171 Buyukdere Cadessi, Istanbul, Turkey. Sekerbanks principal activities are the provision of a range of individual and corporate banking services. The Bank holds a 33.98 per cent. indirect equity interest in Sekerbank through BTA Securities. In May 2010, BTA Securities transferred its share in the equity capital of Sekerbank to trust management of Samruk-Kazyna. However, BTA Securities has retained the right of ownership and control over its share. As at 30 June 2010, Sekerbanks total assets were KZT 973,368 million and its equity capital amounted to KZT 117,390 million. Oranta In December 2009, the Bank increased its interest in the share capital of Oranta NJSIC OJSC from 14.01 per cent. to 30.39 per cent. Oranta is one of the leading Ukrainian insurance companies with its registered office at 75 Jilyanskaya Street, Kiev. The company is the successor of Ukrgosstrakh established on 25 November 1921. As at 30 June 2010, the total assets of Oranta were KZT 21,246 million, it had equity capital of KZT 14,409 million and reserves of KZT (3,738) million. It had a loss arising out of ordinary activities, after tax, of KZT 4,379 million for the year ended 31 December 2009. The Bank shows its participation in Oranta at a value of KZT 7,344 million. The shares held by the Bank are fully paid-up. The Bank did not receive a dividend from this company during the last financial year. Oranta had no intra-group debt outstanding as at the date hereof. Other Investments Temirbank Temirbank was established on 26 March 1992. The head office of Temirbank is located at 68/74 Abay Avenue, Almaty. As at 30 June 2010, Temirbank had total assets of KZT 232.1 billion, equity capital of KZT 51.2 billion and negative reserves of KZT 8,523 million. It had a net loss after tax of KZT 95,173 million for the year ended 31 December 2009. The Bank and Samruk-Kazyna signed an agreement on 14 October 2009 on the transfer of 100 per cent. of the Banks shares in Temirbank to SamrukKazyna under a trust management agreement. In May 2010 Samruk-Kazyna purchased unallocated shares from Temirbank totalling 75,933 thousand shares, as a result of this the

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Banks share in Temirbanks equity decreased to 14.02 per cent. In June 2010 Temirbank declared additional emission totalling 20,000,000 thousand shares, of which Samruk-Kazyna had purchased 15,905,000 thousand shares. The Bank had not purchased shares of the additional emission, as a result the Banks share in Temirbanks equity decreased to 0.07 per cent. Temirbank successfully completed the process of restructuring its financial indebtedness in 2010. The Banks participation in Temirbank has a total value of KZT 17,890 million. The shares held by the Bank are fully paid up. The Bank did not receive a dividend from Temirbank during the last financial year. Temirbank had outstanding intra group debt to the Bank amounting to KZT 59,023 million as at 30 June 2010. The Role of Samruk-Kazyna and the NBK Samruk-Kazyna, Kazakhstans sovereign wealth fund, is wholly owned by the Government and serves as the holding company for substantially all state enterprises. Samruk-Kazynas primary objective is to improve the competitiveness and stability of the Kazakhstan economy and alleviate the possible effects of changes in world markets on economic growth in Kazakhstan. Liquidity Support Samruk-Kazyna and the NBK have provided liquidity support to the Group by way of the following: allowing the Bank to use the SK Bonds as collateral under BTA/NBK Repo Transactions with the NBK totalling KZT 374,918 million excluding interest accrued as at 30 June 2010. See also NBK Support; deposits of Samruk-Kazyna (both current and term) and its subsidiaries equalled KZT 289,762 million as at 30 June 2010; providing funding to the Group pursuant to the State Finance Programmes under which the Group has received KZT 119,000 million and, as at 30 June 2010, the Group has utilised a total amount of KZT 108,714 million, returned to the Government the unutilised amount of KZT 8,502 million, retained KZT 1,784 million for future lending under the programme and repaid to the Government KZT 4,624 million. See also State Finance Programmes; acquiring the 25,246,343 new common shares of the Bank constituting 75.1 per cent. of the Banks total share capital for cash consideration of KZT 212,095 million; and exchanging the BTA Bonds that belonged to Samruk-Kazyna for a further 6.38 per cent. of the Banks total share capital.

As at 30 June 2010, the total support provided by Samruk-Kazyna and the NBK to the Group amounts to KZT 770,554 million. The Groups obligations under the deposit agreements governing the demand deposits and term deposits with Samruk-Kazyna and other state-owned entities are on the same terms as the Banks typical deposit agreements and do not require any additional security. The total aggregate amount of support provided by Samruk-Kazyna and the NBK to the Bank as at 31 October 2010 was KZT 857,961 million. Legal Framework In October 2008, the Government and the FMSA announced a proposal to strengthen the capital of the Bank as part of a broader plan to stabilise the financial system of the Republic of Kazakhstan. The plan was announced in a public statement entitled On Further Measures to Stabilise the Banking Sector dated 28 October 2008. On 9 November 2008 the Bank, the NBK, FMSA, Samruk-Kazyna and the Ministry of Finance entered into a memorandum of understanding pursuant to which the parties declared their intention to coordinate their efforts to stabilise the economy of the Republic of Kazakhstan, use all reasonable endeavours to provide additional financial resources to the real sector of the economy and assist in the

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stabilisation of the financial system, including the maintenance of an adequate level of liquidity and quality of the credit portfolio. Since 31 December 2009, Samruk-Kazyna and its subsidiaries have further deposited KZT 13,027 million in deposit accounts (both current and term) within the Group, such that deposits of Samruk-Kazyna and its subsidiaries totalled KZT 289,762 million as at 30 June 2010. The deposits are pursuant to standard deposit agreements used generally for the depositors of the Bank. In February 2009, Samruk-Kazyna acquired 25,246,343 newly issued shares in the Bank for KZT 212,095 million and obtained a controlling stake of 75.1 per cent. of the Banks issued share capital. In order to provide additional liquidity to the Bank, Samruk-Kazyna agreed to issue the SK Bonds and sell them to the Bank in exchange for the Bank Bonds. On 17 February 2009 the Bank, the NBK and the FMSA entered into the Cooperation Agreement pursuant to which the Bank is entitled to obtain from the NBK refinancing loans and special purpose loans. In March 2009, the Bank issued the Bank Bonds within the first and second obligation programs in the amounts of KZT 300,000 million and KZT 345,000 million, respectively. See Selected Statistical and Other Information Debt Securities. On 13 March 2009 two agreements were entered into by Samruk-Kazyna and the Bank: one for the sale by Samruk-Kazyna to the Bank of SK Bonds for consideration of KZT 300 billion, the other for the sale by the Bank to Samruk-Kazyna of Bank Bonds for consideration of KZT 300 billion. On 18 March 2009, two further agreements were entered into: one for the sale of SK Bonds for consideration of KZT 345 billion, the other for the sale by the Bank to Samruk-Kazyna of Bank Bonds for KZT 345 billion. The Group had received liquidity support amounting to KZT 374,918 million from the NBK under five BTA/NBK Repo Transactions against delivery of the SK Bonds as at 30 June 2010, and has received a further KZT 150,100 million since then. In addition, Samruk-Kazyna issued the SK Guarantee in favour of the NBK in connection with the BTA/NBK Repo Transaction at a monthly fee payable by the Bank of KZT 1,075 million. The Cooperation Agreement was effective until the termination of the Restructuring, however, Samruk-Kazyna continues to provide support in relation to the BTA/NBK Repo Transaction using the SK Bonds as collateral for a period of 10 years (based on NBK Agreement). State Finance Programmes As at the date of this Prospectus, the Bank participates in four State Finance Programmes with Samruk-Kazyna and its subsidiaries. See the table of all amounts funded by the Government for the stabilisation of the Kazakhstan economy in The Banking Sector in Kazakhstan Introduction. The Group has received KZT 47,200 million in aggregate in four tranches under the SME State Finance Programme, KZT 40,000 million under the Mortgage State Finance Programme, KZT 23,640 million under the Construction State Finance Programme, and KZT 8,160 million under the Agricultural State Finance Programme. As at 30 June 2010, the Group has utilised KZT 108,714 million under the State Finance Programmes from Samruk-Kazyna or its wholly owned subsidiaries, returned to the Government the unutilised amount of KZT 8,502 million, retained KZT 1,784 million and repaid KZT 4,624 million to the Government. SME State Finance Programme The Bank is one of the agents under the SME State Finance Programme adopted by the Government in 2007. The SME State Finance Programme aims to provide financing to SMEs for the acquisition of new, and the modernisation of existing, material assets and the provision of working capital. The SME State Finance Programme funding can also be used to refinance existing loans previously made to SMEs by the Bank or Temirbank or other credit organisations provided the purpose of any loan being refinanced complies with the requirements of the programme.

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Samruk-Kazyna and its subsidiary Damu Fund have provided to the Bank, for the purposes of financing and refinancing of small and medium sized entities under the SME State Finance Programme, a total of KZT 47,200 million in four tranches: KZT 12,200 million on 14 December 2007, KZT 5,000 million on 13 August 2008, KZT 22,000 million on 14 February 2009 and KZT 8,000 million on 21 December 2009. As at 30 June 2010, the Group had utilised KZT 43,766 million of this amount, returned KZT 2,234 million to the Government as unutilised, repaid KZT 3,504 million to the Government and retained KZT 1,200 million. As at 30 May 2010, the Government had allocated KZT 25,200 million under the fourth tranche of the SME State Finance Programme and the following banks utilised the most support under the programme: Kazkommertsbank (KZT 5,200 million), Halyk Bank (KZT 2,857 million), Alliance Bank (KZT 2,857 million) and Temirbank (KZT 2,857 million). As at the date of this Prospectus, the Bank has no information about any further allocations in the future. The interest rate on the Government funds advanced under the SME State Finance Programme is 8.0 per cent. per year. Damu Fund has the right to demand early repayment if (i) the Bank does not make timely repayments of debt or interest, (ii) the Bank does not use the proceeds in compliance with their stated purpose, (iii) the Banks credit rating is downgraded by Fitch, S&P or Moodys by two or more notches, (iv) the Bank infringes the FMSAs prudential requirements at least once in each of two consecutive months or its licence is suspended, (v) more than 10.0 per cent. of the Shares in the Bank are sold or transferred and such transfer has a negative impact on the Banks financial condition, or (vi) the Bank reports negative financial results for two consecutive quarters. Despite the Banks infringement of the FMSAs prudential requirements in 1 April 2009 and the credit rating downgrade, Damu Fund has not demanded repayment under the SME State Finance Programme. See Risk Factors Samruk-Kazyna may demand early repayment of funds allocated to the Bank for the State Finance Programmes if the Bank breaches conditions for the utilisation of the funds. In addition to its right to demand early repayment of the funds, Damu Fund is also entitled to demand from the Bank a penalty of 15.0 per cent. on the amount of any funds used for purposes other than those permitted by the agreement under which the Bank obtained financing under the SME State Finance Programme. Mortgage State Finance Programme The Bank is one of 11 agents under the Mortgage State Finance Programme adopted by the Government in February 2009. The Mortgage State Finance Programme aims at reducing the current interest rate on mortgage loans to between 9.0 and 11.0 per cent., converting foreign currency loans into Tenge and extending loan maturities up to 20 years. The total amount of investments to be made under the programme is KZT 120,000 million. Under the Mortgage State Finance Programme, Samruk-Kazyna deposited KZT 40,000 million during 2009 with the Bank for a period of 20 years. As at 30 June 2010, the Bank had utilised KZT 37,000 million from the total amount of placed funds and returned the unutilised KZT 3,000 million to the Government. The Bank is permitted to provide mortgages under the Mortgage State Finance Programme to the extent it receives repayment proceeds of the previously made Mortgage State Finance Programme loans for a period of 36 months from the date it received the funds under the programme, after which time it will need to use the repayment proceeds to repay Samruk-Kazyna. The Bank pays interest to Samruk-Kazyna on the amounts provided under the Mortgage State Finance Programme of 5.7 per cent. on amounts lent by the Bank to certain vulnerable borrowers and 7.7 per cent. on the amounts lent to the remaining borrowers. Of the 11 agents selected for the Mortgage State Finance Programme, the following banks utilised the most support under the programme: the Bank (KZT 37,000 million), Kazkommertsbank (KZT 24,000 million), Halyk Bank (KZT 20,500 million), Alliance Bank (KZT 10,900 million) and Bank CenterCredit (KZT 4,300 million).

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Construction State Finance Programme The Bank is one of seven agents under the Construction State Finance Programme adopted by the Government on 6 October 2007. The Construction State Finance Programme is intended to assist the completion of incomplete constructions. The total amount of investments to be made under the programme is KZT 240 billion. Under the Construction State Finance Programme, Samruk-Kazyna deposited KZT 23,640 million with the Bank during 2007 and 2008 for a period of three-and-a-half years. As at 30 June 2010, the Bank had utilised approximately KZT 19,788 million from the total amount of placed funds, returned to the Government the unutilised amount of KZT 3,268 million and retained the unutilised amount of KZT 584 million for future lending under the programme. The Bank pays interest to Samruk-Kazyna on the amounts provided under the Construction State Finance Programme of 10.6 per cent. and 11.1 per cent. Of the seven agents selected for the Construction State Finance Programme, the Government plans to provide the following amounts to the following banks under the programme: Kazkommertsbank (KZT 65,353 million), the Bank (KZT 29,771 million), Temirbank (KZT 8,243 million) and Eurasian Bank (KZT 3,374 million). Agricultural State Finance Programme The Bank is one of four agents under the Agricultural State Finance Programme adopted by the Government on 6 October 2007. The Agricultural State Finance Programme aims at stabilising the agricultural sector of Kazakhstan. The total amount of investments to be made under the programme is KZT 120,000 million. Under the Agricultural State Finance Programme, Samruk-Kazyna deposited KZT 8,160 million with the Bank for the period from 28 April 2009 until 28 June 2010 (which was subsequently extended to 28 December 2011). As at 30 June 2010, the Bank had utilised all of the placed funds and repaid the Government KZT 1,120 million of such placed funds. The Bank pays interest of 9.05 per cent. to Samruk-Kazyna on the amounts provided under the Agricultural State Finance Programme. The four agents selected for the Agricultural State Finance Programme received the following amounts under the programme: the Bank (KZT 8,160 million), Bank CenterCredit (KZT 5,550 million), Nurbank (KZT 4,100 million) and Eurasian Bank (KZT 3,170 million). Road Map for Business 2020 The Bank, along with other second-tier banks in Kazakhstan, participates in the Road Map for Business 2020 Programme (the Programme), developed jointly by the Kazakhstan Ministry of Economic Development and Trade, JSC Fund for Development of Entrepreneurship Damu, the akimats of all regions of Kazakhstan and the Association of Financiers of Kazakhstan. The Programme is based on the Agreement on Cooperation in Subsidising Interest Rates on Loans to Private Enterprises and the Road Map for Business 2020 Programme Guarantee Agreement dated 14 May 2010. These second-tier banks are eligible to receive funding through the Programme to provide financing for small and medium-sized businesses. In 2010, the Government of Kazakhstan allocated KZT 30 billion in the state budget for the implementation of the Programme. The funds are set to be distributed in the following manner: KZT 12 billion is to be provided to support new business initiatives, KZT 16 million is planned for the improvement of the entrepreneurial sector, and KZT 2 billion is provided to support the development of export-oriented products in 2010.

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NBK Support The NBK and Samruk-Kazyna continue to provide support in relation to the BTA/NBK Repo Transaction using the SK Bonds as collateral for a period of 10 years (based on NBK Agreement). In addition, Samruk-Kazyna issued the SK Guarantee in favour of the NBK in connection with the BTA/NBK Repo Transaction at a monthly fee payable by the Bank of KZT 1,075 million. Other Potential Government Support According to the Government decree of Kazakhstan No. 1553 dated 9 October 2009, the Governments Distressed Assets Fund will start negotiations with second-tier banks, which includes the Bank, with a view to the possible repurchase of troubled assets of such banks. The Bank plans to participate in this Government programme once rules and procedures are developed and subject to the obligations of the Bank under the Recovery Units. Distribution Channels Branch Network As at 30 June 2010, the Bank had 22 branches and 227 cash offices located throughout Kazakhstan, a decrease from 22 branches and 230 cash offices as at 31 December 2009. The operations of each branch and cash office are subject to internal regulation and to oversight by the head office. Certain types of activities, including control functions such as underwriting and credit administration, are conducted by the Banks head office only. The branches have the authority to undertake all client functions and each branch has an authorised body capable of making certain credit decisions. In comparison to branches, cash offices offer limited services appropriate to the geographical area in which they are located. Each branch has different types of cash offices, including: centres of banking services (which provide consultations and cash settlement services for individuals and legal entities and deposit taking and lending to individuals and legal entities), centres of retail business (which provide consultations and cash settlement services for individuals and deposit taking and lending to individuals), universal offices (which have more limited lending authority to individuals and legal entities) and retail offices (which have more limited lending authority to individuals). In order to increase the Banks presence in the market and the availability of its banking services, the Bank opened interactive self-service zones with access to several alternative distribution channels: Cash&Pay terminals, ATMs, internet banking and exchange currency machines in 2009. During 2009, the Bank opened three self-service zones in Astana and Almaty, and has opened a further zone in Astana in 2010 and intends to open another zone in Almaty by the end of the year. ATM Network The Bank started establishing an automated teller machine network in 1994. As at 30 June 2010, the Bank had 960 automated teller machines compared to 921 automated teller machines as at 31 December 2009, an increase of 4.23 per cent. The Bank does not currently plan to increase its automated teller machines network globally, except in isolated instances in which there is an increase in card activity in a certain area. Competition As at 30 June 2010, there were 39 banks operating in Kazakhstan. Commercial banks in Kazakhstan may be divided into three groups: major local banks with large total assets and a focus on the corporate market, such as the Bank and its principal competitor, Kazkommertsbank; banks under foreign ownership, such as Sberbank, HSBC Bank Kazakhstan and Citibank Kazakhstan; and other local banks, including Halyk Bank, ATF Bank, Alliance Bank, Kaspi Bank and Bank CenterCredit, which are also among the Banks competitors in Kazakhstan. Although the Bank believes that it is well-positioned to compete in the nations banking sector, it faces competition from a number of existing and prospective players and has suffered losses of customers and deposits as described in this

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Prospectus. See Risk Factors Risk Related to the Bank The Bank faces significant competition, which may increase in the future. Kazkommertsbank was established in July 1990. As at 30 June 2010, Kazkommertsbank was the market leader in terms of total assets and the Banks principal competitor in corporate and retail banking services. As at 30 June 2010, Halyk Bank was the largest bank in Kazakhstan in terms of total deposits. The following table sets out certain financial information relating to the Bank and the largest local and foreign banks which the Bank considers to be its major competitors in the Kazakhstan banking sector as at 30 June 2010 (information is unconsolidated and derived from financial statements prepared in accordance with FMSA Methodology):
As at 30 June 2010 Customer Loans(1) Deposits(2) Total Gross Loans (million KZT) 1,960,629 652,731 2,341,588 1,337,050 1,198,185 1,438,738 499,044 68,804 818,559 543,586 699,450 777,878 257,450 210,875 Shareholders Equity 516,598 204,468 147,358 273,953 113,170 69,751 17,773

Total Assets The Bank ............................ Kazkommertsbank .............. Halyk Bank ......................... Alliance Bank ..................... ATF Bank ........................... Bank CenterCredit .............. Kaspi Bank ......................... 1,869,605 2,363,650 2,114,515 461,272 1,131,678 1,290,360 318,498

____________ Source: Based on figures published by the KASE, the FMSA and company websites. Notes: (1) Net, without reverse repurchase agreements. (2) Not including TuranAlem Finance or Kazkommertz International B.V. (a subsidiary of Kazkommertsbank).

Property The Group mainly leases its office space with certain exceptions. The Bank owns eight buildings and land on which three of the buildings stand, which it uses as cash offices. Additionally, BTA Belarus owns the building in which its head office is situated in Minsk. Recovery Efforts The Bank has assembled a team to investigate the circumstances behind the Banks current financial position and the extent to which it is a result of what are believed to be fraudulent transactions entered into by, or on the instructions of, the former management, in particular, Mukhtar Ablyazov. That team is made up of a combination of certain members of the Banks new management and staff, as well as lawyers and accountants with international firms. As part of the work of the Banks asset recovery team, various legal proceedings have been commenced in England, Cyprus and the British Virgin Islands (BVI) which are summarised below. See Asset Recovery. The summary below reflects the position as at 31 January 2011 and is limited to the proceedings issued by the Bank in the above jurisdictions. Asset Recovery As part of the work of the Banks asset recovery team, various legal proceedings have been commenced in England, Cyprus and the British Virgin Islands which are summarised below. The courts have imposed various restrictions on the publication and dissemination of information concerning the litigation. The summaries below have been prepared having regard to those restrictions. The Bank expects to issue further claims in jurisdictions such as England against the former management of the Bank and individuals and entities connected with them.

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Drey Proceedings In August 2009, the Bank commenced proceedings in the Commercial Court in England (Claim No 2009 Folio 1099) against Mr. Ablyazov, Roman Solodchenko, Zhaksylyk Zharimbetov, Drey Associates Limited, Anthony Stroud, John Wilson and Sarah Wilson (the Drey Proceedings). In summary, the claim relates to the alleged misappropriation of funds belonging to the Bank totalling approximately U.S.$295 million (plus interest) pursuant to various Compensation Agreements entered into with Drey Associates Limited (Drey), a UK company, between May and October 2008. Drey is also a shareholder of the Bank. See Principal Shareholders The Banks Shareholders Prior to the Restructuring and Principal Shareholders The Banks Shareholders Following the Restructuring. Under the Compensation Agreements, the Bank paid Drey approximately U.S.$295 million. This money was purportedly paid in consideration for Drey procuring that certain existing shareholders of BTA Ukraine, BTA Belarus and BTA Russia would not exercise supposed pre emption rights to block the proposed purchase by the Bank of shares in these three banks. The Bank contends that there was no legitimate commercial justification for the payments made under the Compensation Agreements and that they were simply a device used by the first three defendants, as officers of the Bank, for misappropriating funds from the Bank. The Bank also alleges that the fourth to seventh defendants (all incorporated or resident in England) facilitated or were used to facilitate the misappropriation. The Bank has amended its claim since it was first issued to seek a further U.S.$106 million (plus interest) transferred by the Bank under purported share purchase agreements (SPAs) relating to the acquisition of shares in BTA Russia and BTA Belarus that were connected to the Compensation Agreements. Under its amended claim, the Bank is seeking the return of the monies paid under both the Compensation Agreements and the SPAs plus profits and interest and/or delivery of the assets to which the monies were applied. The Commercial Court has granted various asset freezing and disclosure orders against the defendants in the Drey Proceedings up to a value of 175 million in respect of the defendants other than Mr. Ablyazov, Mr. Solodchenko and Mr. Zharimbetov. This is the equivalent of the U.S.$295 million that was paid under the Compensation Agreements. In relation to Mr. Ablyazov, however, the injunction is in the amount of 451,130,000. This reflects not only the amount of the claim in respect of the Drey proceedings, but also the separate claims against him in the Chrysopa Proceedings and the Tekhinvest Proceedings discussed below. In relation to Mr. Soldodchenko, the injunction is in the amount of 435,299,000, reflecting the claims in the AAA Proceedings, as well as the Drey proceedings. In relation to Mr. Zharimbetov, the injunction is in the amount of 243,000,000 reflecting the claims in the Drey Proceedings. It is expected that these amounts will be increased to reflect other claims in due course. The effect of the asset freezing order is that if the total value of the defendants assets in England and Wales do not exceed the amount enjoined (which they do not, for any defendant), the defendants (including Mr. Ablyazov) are prohibited from disposing or dealing with any of their assets outside England and Wales other than in limited circumstances in the ordinary course of their businesses. The Bank has obtained various orders against the defendants requiring the provision of information concerning their assets and other matters. The disclosures provided by the defendants are subject to various confidentiality obligations imposed by the Court, including limitations on sharing certain disclosures with the Bank itself. In connection with the asset freezing orders, the Bank has provided corresponding undertakings in damages as and when required. Under these undertakings the Bank is liable to compensate the defendants if the Court later finds that the asset freezing orders should not have been granted and have caused the defendants loss for which they should be compensated. The undertakings are unlimited in amount and are standard provisions in any English asset freezing orders.

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Due to its doubts as to whether Mr Ablyazov could be trusted to obey the freezing order made against him, the English Court has recently ordered that all of Mr Ablyazovs disclosed assets be placed into receivership to ensure that they are not dissipated prior to any judgment the Bank may obtain. The receivers appointed by the English Court are partners at KPMG. The fact that the Bank had applied for the appointment of receivers and the fact of the receivers appointment could not, until recently, be disclosed to third parties. As with the asset freezing orders described above, the Bank has given undertakings in damages to the Court in respect of the receivership appointment and has also posted security with the Court in relation to its undertakings. The Court has subsequently extended the receivership to a large number of additional entities believed to be owned or controlled by Mr Ablyazov. Mr. Ablyazov has issued a defence in the Drey Proceedings contending inter alia that (i) there is no rule of law in Kazakhstan, (ii) Mr. Ablyazov held a majority stake in the Bank, and was the ultimate beneficial owner of all the selling and non-selling shareholders under the Compensation Agreements (through a series of nominee arrangements), (iii) given the alleged risk of assets being confiscated or extorted in Kazakhstan the use of such nominee holding arrangements is extensive, (iv) the Board of Directors knew of Mr. Ablyazovs interests in the Bank and the selling and non-selling shareholders, and (v) the global consideration paid by the Bank under the Compensation Agreements and SPAs was reasonable. The Bank is subject to a counterclaim in this matter from Mr. Zharimbetov. Mr. Zharimbetovs counterclaim is for KZT 108,378,000 (or 441,154). It is alleged to be monies due for the notice period to which he says he was entitled under his contract of employment (which he was not paid since he was summarily dismissed). The Bank is confident that its termination of Mr. Zharimbetovs contract was justified. Mr. Ablyazov (and certain other defendants) has applied to strike out the Drey Proceedings on the basis that, inter alia, they were brought in breach of international law constitute an abuse of process and an abuse of Mr Ablyazovs human rights. Mr Ablyazov asserts this partly on the basis that his majority shareholding in the Bank was allegedly misappropriated from him by Samruk-Kazyna in February 2009. Similar applications have been made in respect of the Chrysopa Tekhinvest and Granton Proceedings. The Bank will seek to have Mr. Ablyazovs applications struck out on the basis that (amongst other things) they raise matters which are not capable of being addressed by an English Court; this will come before the Court on 31 January 2011. Mr Ablyazov (together with certain other defendants in the Drey, Chrysopa, Tekhinvest and Granton Proceedings) has applied for security for costs against the Bank. Those applications are not yet fixed for hearing A second Case Management Conference (which will set a timetable for the future conduct of this and various other English cases) is due to take place on 29-30 March 2011. BVI Proceedings On 16 November 2009, the Bank brought a claim for U.S.$65 million (plus interest) and declaratory relief in the Commercial Division of the High Court of the British Virgin Islands against four defendants: REUEL Limited (REUEL), RIROil sarl (now known as TANIL sarl) (RIROil), Mr. Ablyazov and Mr. Khazhaev. The background to the claim is as follows. On 6 August 2008, the Bank made a loan of US.$57.5 million to RIROil, a Swiss company. The loan was repayable on 5 August 2013, accrued interest at a rate of 18 percent per annum and appears to have been secured (although the value of the security is unclear). On 14 January 2009, the Bank purportedly assigned its rights under the loan agreement to REUEL, a recently established BVI company, for consideration of U.S.$57.5 million plus U.S.$ 229,944.05 (apparently in respect of interest accrued on the loan as at the date of the purported assignment).

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Under the terms of the purported assignment agreement, REUEL was not obliged to pay the consideration amount of U.S.$57,729,944.05 until 31 December 2015 (over 28 months later than the Bank would have been paid by RIROil under the terms of the loan agreement). REUEL had no obligation to pay interest on this amount, and no security was provided. The Bank believes that the purported assignment to REUEL on such unfavourable terms was a fraud against the Bank for the benefit of, inter alia, the owners of REUEL. On 18 November 2009, the Bank was granted ex parte freezing injunctions and ancillary disclosure orders against REUEL and Mr. Ablyazov, and disclosure orders against RIROil and REUELs registered agent in the BVI. On the same date, the BVI court granted the Bank permission to serve the proceedings on RIROil, Mr. Ablyazov and Mr. Khazhaev out of the jurisdiction. On 15 January 2010, Mr. Ablyazov applied for an order setting aside the courts permission to serve the proceedings on him out of the jurisdiction. The application was heard on 22 and 23 March 2010. In a judgment handed down on 24 March 2010, The Honourable Justice Bannister granted the order applied for by Mr. Ablyazov and released the freezing injunction against him. That judgment, including the reasons for the judges decision, is confidential. The decision does not affect the Banks claims against the other defendants to the action. REUEL served its Defence on 17 December 2009 and its Amended Defence on 25 February 2010. REUELs stated position appears to be that the purported assignment was executed in escrow and, since it has never been released from escrow, it does not bind the Bank or REUEL. REUEL has failed to comply with an order of the BVI court dated 26 July 2010 requiring it to provide details of its beneficial ownership. RIROil has so far taken no steps in the proceedings. Mr. Khazhaev served his defence on 22 January 2010. Mr. Khazhaevs stated position appears to be that the signature that appears on the purported assignment and which purports to be his signature is not, in fact, his signature. The Bank was subsequently provided with documents which appear to show that the Banks interest in the loan to RIROil was the subject of further purported assignments to a second BVI company, Smileworld Investments Limited (Smileworld), then to a Cypriot company, Bainsder Investments Limited (Bainsder) and then to a Singaporean company, ISR Group of Companies PTE Limited (ISR) (which was at all material times the majority shareholder in RIROil). The documents also appear to show that Bainsder assigned its right to receive part of the consideration due from ISR in respect of the purported assignment agreement between them to a second Cypriot company, Swinden Limited (Swinden). Furthermore, RIROil purportedly novated its interest in the loan to ISR. Finally, the documents appear to show that ISR made payments of U.S.$10 million to each of Bainsder and Swinden pursuant to the purported assignments referred to above. On 10 December 2010, the Bank filed an Amended Claim Form and Amended Statement of Claim by which it joined Smileworld, Bainsder, ISR and Swinden to the proceedings. By the amended proceedings, the Bank seeks (amongst other relief) a declaration that the purported assignments referred to above were invalid, a declaration as to the validity of the purported novation agreement, and consequential relief. The amended pleadings also introduce a claim for U.S.$2 million (plus interest) in respect of the purported assignment to REUEL of the Banks interest in a second, smaller loan to RIROil. On the same date, the Bank issued applications for (i) permission to serve the Amended Claim Form and Amended Statement of Claim on those defendants domiciled out of the BVI; and (ii) a disclosure order against Smileworld. Both of the orders sought by the Bank were granted by the Honourable Justice Bannister on 10 January 2011. The Amended Claim Form and Amended Statement of Claim were served on REUEL and Smileworld in the BVI on 13 December 2010. Both companies failed to file a defence to the claim within the 28 day time period.

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Chrysopa Proceedings The Bank commenced further proceedings in the Commercial Court (Claim No 2010 Folio 93) in January 2010 against Mr. Ablyazov, Ildar Khazhaev, Anton Rybalkin, Chrysopa Holdings BV (a Dutch company (Chrysopa)), Usarel Investments Limited (a Cyprus company (Usarel)) and Lux Investing Limited (a British Virgin Islands company (Lux)) (the Chrysopa Proceedings). The claim relates to a purported loan of U.S.$120 million by the Bank to Chrysopa (the Chrysopa Loan) on terms highly unfavourable to the Bank. The Bank contends that the loan was a sham intended to conceal the misappropriation of U.S.$120 million for the benefit of Mr. Ablyazov. In summary, the background to the Chrysopa Loan is that on or around 1 August 2008, the Bank purportedly agreed to lend U.S.$120 million to Chrysopa for onward transmission to Usarel which appears to have been used by Usarel to acquire various companies who owned and/or operated the Vitino port facility on the White Sea in Russia. Although the loan agreement provided for security in the form of a pledge over Usarels shares and over the assets that Usarel was to acquire, the Bank had no record of security being granted and each of Mr. Ablyazov, Lux and Usarel admitted that no security was ever granted. Mr. Khazhaev has since produced a document which purports to be a pledge by Lux over the shares in Usarel. In the absence of responses to a number of questions it has raised, the Bank has reserved its position regarding this document. No interest has been paid on the purported loan. In the Chrysopa Proceedings, the Bank contends that the purported loan was a sham to disguise the fact that the defendants were engaged in misappropriating funds from the Bank for the benefit of Usarel and Lux which, together with Chrysopa, are alleged by the Bank to be controlled by Mr. Ablyazov. The Bank seeks, amongst other things, a declaration invalidating the Chrysopa Loan, repayment of the money transferred under the loan agreement and delivery up of all assets to which any of the funds were applied. On 27 January 2010 the Commercial Court granted freezing orders (and associated disclosure orders containing confidentiality obligations imposed by the Court similar in nature to those in the Drey Proceedings) against Messrs Khazhaev and Rybalkin and Usarel and Lux in connection with this claim up to the value of U.S.$ 120 million. As noted above, the injunction against Mr. Ablyazov in the Drey Proceedings has since been increased to reflect the claim against him in the Chrysopa Proceedings and, at the same time, he was also ordered to provide disclosure in support of the Banks claim in the Chrysopa Proceedings. The Bank, as claimant, has given cross undertakings in damages in respect of these freezing orders similar in nature to the undertakings in the Drey Proceedings. Defences have been served by Ablyazov and most of the other defendants. Mr. Ablyazov asserts, amongst other things, that (i) the Chrysopa Loan was entered into in good faith and in the ordinary course of the Banks business; (ii) that his involvement in the formulation and implementation of the loan was limited; (iii) that the loan was in the best interests of the Bank and that he believed it could be repaid; (iv) that although he had a significant interest as the ultimate recipient of the loan proceeds, the transaction was not a related party transaction under Kazakh law requiring disclosure of his interests; and (v) if he was in breach of any disclosure or other obligation, that caused the Bank no loss as it would have gone ahead with the loan even if no such breaches had occurred. Lux and Usarel also contend that the Bank is unable, as a matter of Kazakh law, to assert a proprietary claim to assets acquired by Usarel with monies which were on-lent by Chrysopa pursuant to a separate and, they contend, valid sub-loan agreement. All of the defendants also deny that there is any free-standing cause of action under Article 8 of the Kazakh Civil Code. The Bank has recently filed Amended Particulars of Claim. The amendments reflect developments in the Banks understanding of the factual background (including in respect of Mr Ablyazovs ownership and control of Chrysopa, Usarel and Lux, the purported loan agreement between Chrysopa and Usarel

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and the purported pledge agreement (discussed above)) and also make minor amendments to the claims asserted under Kazakh, Russian and English law. Mr Ablyazov and Mr Khazhaev have now served their Amended Defences. Amended Defences are expected from Chrysopa, Lux and Usarel by early February 2011. In November 2010, Vetabet Holdings Limited, a company incorporated in the BVI, together with its beneficial owners, Sergey Sheklanov and Maxim Pukhlikov, gave notice of a claim against Mr Ablyazov and the Bank relating to the Chrysopa Proceedings. Vetabet has a minority indirect interest in Usarel. In its claim, Vetabet asserts (in effect) that if the Bank succeeds in the Chrysopa Proceedings, Vetabet will suffer loss for which it should be compensated by Mr Ablyazov and/or the Bank. The Bank considers Vetabets claim against it to be without merit and that the English Court has no jurisdiction to determine it. Vetabet has made an application to seek permission from the English Court to serve the Bank in Kazakhstan. The Bank intends to challenge that application. Tekhinvest Proceedings In March 2010 the Bank issued proceedings in the Commercial Court (Claim No 2010 Folio 362) against Mr. Ablyazov, Ildar Khazhaev, Tekhinvest CJSC, Konvis LLC, PaladioExport LLC, CityBestPlus LLC and Colligate Investments Limited. In summary, the claim relates to a series of purported loan facilities amounting to over U.S.$300 million that were granted to Tekhinvest, Konvis, PaladioExport, and CityBestPlus between 2004 and 2008 on terms that were highly unfavourable to the Bank. These funds were purportedly to be used in connection with the construction by Tekhinvest of the Eurasia Tower building in the Moscow City development in Russia. The Bank contends that these were related party transactions to Affiliates of Mr. Ablyazov and that he failed to disclose (adequately or at all) his interests in those companies to the Bank. The Bank also contends that no adequate security was ever put in place and that Mr. Ablyazov, with the assistance of Mr. Khazhaev and Colligate Investments Limited, dishonestly engineered the release of such security as had been obtained through an undated pledge release document. The Bank seeks, inter alia, a declaration invalidating the loans, repayment of the money transferred under the loan agreements and delivery up of all assets to which any of the funds were applied. In the alternative, the Bank seeks repayment of the amounts outstanding under the loans as at the date of the claim (plus interest). The Bank was granted permission to serve the claim out of the jurisdiction on the second to sixth defendants on 22 March 2010 and the Bank is seeking to effect service of the proceedings pursuant to the Hague Convention on the Russian domiciled defendants who have not yet accepted service within the jurisdiction. Mr. Ablyazov, Mr. Khazhaev, Tekhinvest and Colligate Investments Limited have been served with the claim. Of those defendants, only Mr. Ablyazov has served a Defence. In summary, he contends that, aside from the period when he was Chairman of the Tekhinvest Board of Directors, the transactions were not related party transactions under Kazakh law because his interest in Tekhinvest was held beneficially. For the period when he was Chairman of Tekhinvest, he contends that, even if he did not follow the appropriate disclosure procedures, the Bank has suffered no loss as it would have entered into the transactions in any event. As regards the security arrangements, Mr. Ablyazov contends that he simply approved the proposals that were put in front of him by the Banks credit analysts, and he also contends that the release of the Banks pledge was effected in order to enable new funding to be brought into the project (and was therefore in the Banks best interests). Tekhinvest and Colligate Investments Limited have both issued an application to challenge the jurisdiction of the English courts. They each assert that England is not the appropriate forum to determine the Banks claims against them. The parties have agreed that both applications will be dealt with at a single hearing, which is listed for February 2011.

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As noted above, the freezing order against Mr. Ablyazov in the Drey Proceedings has been increased to reflect the value of the claim in relation to Tekhinvest. Granton Proceedings On 17 June 2010, the Bank issued proceedings in the Commercial Court (Claim No. 2010 Folio 706) against Messrs, Ablyazov and Zharimbetov, Granton Trade Ltd, Branden & Associates Ltd, Aldridge Ventures Ltd, Zafferant Partners Inc, Forest Management Ltd, Loginex Projects LLP, Incompro Management Ltd, Perspective Communications Ltd, Austin Universal Inc and Maden Holding Inc. On 21 January 2010, the Bank filed Amended Particulars of Claim to include details of what are referred to below as the Unlawful Loans. In summary, the claim relates to two series of loans. The first set (the Unlawful Loans), totalling U.S.$1,428,840,000, were made by the Bank to 19 companies (the Recipients) between March 2006 and August 2008. The Recipients are all incorporated in the Seychelles, BVI or Cyprus, and it is the Banks case that they were all owned or controlled by Mr Ablyazov. The second set of loans, totalling U.S.$1,031,263,000, were made between November and December 2008 to four companies Granton Trade, Branden & Associates, Aldridge Ventures and Zafferant Partners, together the Borrowers) and paid out by the Bank pursuant to letters of credit to six further companies (Forest Management, Loginex Projects, Incompro Management, Perspective Communications, Austin Universal and Maden Holding, together the Intermediaries). The stated purpose of the loans to the Borrowers was to fund the purchase of oil and gas equipment from the Intermediaries. The Banks case is that the equipment never existed and the loans to the Borrowers and payments to the intermediaries were part of a scheme (the Misappropriation Scheme). Pursuant to the Misappropriation Scheme, the Intermediaries transferred the sums received from the Bank to the Recipients, which in turn used those sums to repay, in part, the amounts due to the Bank under the Unlawful Loans. The Bank believes that the ultimate beneficiary of the Misappropriation Scheme was Mr Ablyazov, who was seeking to avoid the need to dramatically increase the Banks provisions for bad loans, a step which Kazakhstans financial regulator had been pressing the Bank to take because of the high level of risk associated with the Banks portfolio of loans to offshore entities (including the Recipients). The Bank is seeking orders to set aside all of the financial agreements pursuant to which the Misappropriation Scheme payments were made. It further seeks the return of the sums paid out under the Unlawful Loans, or alternatively under the Misappropriation Scheme, together with any proceeds. In the alternative, the Bank seeks damages or compensation for the Banks losses. Freezing injunctions have been obtained against the Borrowers and the Intermediaries in both England and the BVI. The injunctions are supplemented by orders requiring disclosure of information. On 12 August 2010, the Borrowers and Intermediaries other than Loginex Projects and Austin Universal applied to challenge the jurisdiction of the English Court. That challenge was dismissed by Mr. Justice Christopher Clarke on 5 October 2010. On 24 August 2010, the Bank obtained an unless order compelling the respondents to the English freezing injunction to provide disclosure under the freezing order. Some disclosure has been provided, which confirmed the Banks original case with respect to the Misappropriation Scheme, namely, that the relevant agreements between the Bank and Borrowers and between the Borrowers and Intermediaries were shams. Further, this disclosure identified that the moneys paid by the Bank to the Intermediaries had been paid on to other companies (several of the Recipients were named) to enable them to repay their own loans to the Bank. This disclosure (in conjunction with the Defence of Mr Zharimbetov) prompted the Bank to amend its Particulars of Claim. The Bank considered the disclosure provided to be materially deficient and, on 24 September 2010, it applied to enter judgment under the unless order.

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On 8 October 2010 the First Defendant, Mr. Ablyazov, served his defence. In summary, he denied any involvement in or knowledge of the approval of the loans to the Borrowers or the underlying transactions, arguing that the Banks Credit Committee acted independently in approving these loans and that the arrangements between the Borrowers and Intermediaries appear from the documents provided to be genuine commercial transactions involving entities that were already borrowers from the Bank. Mr. Ablyazov denies that he owns or controls the Borrowers or Intermediaries. Further, Mr. Ablyazov denies that the Bank has a proper cause of action under Kazakh law against him (or at all) in relation to the transactions. Mr Ablyazov is due to serve his Amended Defence on 17 February 2011. On 5 November 2010, Mr Zharimbetov served his Defence in response to the Banks case as initially pleaded. Mr Zharimbetov states that the loans to the Borrowers, although genuine transactions, had a secondary purpose. This secondary purpose was to permit the refinancing of loans made by the Bank to other clients. (These other clients are not identified by Mr Zharimbetov, but the Banks assumption is that Mr Zharimbetov is referring to the Recipients). Mr Zharimbetov denies that he acted contrary to his obligations to the Bank under Kazakh law, and states that all members of the Credit Committee were fully aware of the secondary purpose of the loans to the Borrowers. Mr Zharimbetov is due to serve his Amended Defence on 17 February 2011. On 10 December 2010, the Banks application for judgment against the corporate defendants (other than Austin Universal) for breach of the unless order was heard. The Bank obtained an order requiring provision of further information from five of these defendants. In respect of Loginex Projects, the Bank obtained judgment for U.S.$1,031,263,000 plus interest and is now considering appropriate steps to enforce that judgment. AAA Proceedings On 28 July 2010, the Bank commenced proceedings (Claim No HC10CO2462) against Mr. Solodchenko, two Cypriot individuals, (Paul Kythreotis and Jason Hercules), and a number of offshore companies, Celina Investment Holdings Limited, Shoreline Investment Holding Limited, Nafazko Investments Limited, Olofu Investments Limited, Mymana Holdings Investments Limited, Mabco Inc, Calernen Finance Inc, Astrogold Corp and Grundberg Inc. The Banks claims allege the misappropriation from the Bank of U.S.$295 million in AAA-rated investments and/or their value as part of a scheme that was implemented between June 2008 and January 2009, whereby the investments held by the Bank were transferred into an offshore account and then used as security for a contract whereby Celina, Shoreline, Nafazko and Olofu and Mymana (the Receiving Companies) agreed to sell to an investment house, Alfa Equity Investments, investments that matched the description of those held by the Bank. These Receiving Companies were paid U.S.$295 million in June 2008 in return for a commitment to supply investments by the end of the year. The Banks case is that a security arrangement must have been put in place using the Banks investments to allow these monies to be paid to Receiving Companies (who provided no security of their own and did not appear to have any assets). The monies were then paid on by the Receiving Companies to the other corporate defendants. In January 2009, the Bank transferred its investments to the Receiving Companies. It is understood that the Receiving Companies used those investments to comply with their obligations under their contracts with Alfa Equity Investments. The Banks case is that it was left with no investments and was given no consideration for transferring them away. Mr. Solodchenko signed off on the documents implementing the scheme. Mr. Kythreotis and Mr. Hercules were directors of certain of the corporate defendants. The Bank alleges that they were all complicit in the fraud committed against it. On 26 July 2010, the Bank obtained a freezing injunction against all of the defendants other than Mr. Solodchenko (whose assets were already frozen through the Drey Proceedings). It also obtained orders that those defendants disclose details of their assets and answer certain questions aimed at

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finding out where the Banks monies have gone. Similar orders were obtained in the BVI Court against the BVI incorporated defendants. All of the corporate defendants have effectively ignored the proceedings. Those incorporated in the BVI (i.e. all the corporate defendants save Grundberg) have been held to be in contempt of court. Mr Kythreotis and Mr Hercules also failed to fully comply with their disclosure obligations under the freezing injunction. Contempt proceedings have been pursued against both in England. Mr Kythreotis admitted his contempt but was not committed to prison after he purported to provide the required disclosure out of time. The contempt application against Mr Hercules will be heard on 2 March 2011. Mr Solodchenko served his Defence on 19 October 2010. Essentially his case is that, whilst he signed the relevant documents that the Bank contends implemented the fraudulent scheme, he remembers nothing about them and considers that he would simply have been involved as an authorised signatory with others (unnamed) in the Bank reviewing and approving the transactions in accordance with the Banks internal procedures. Stepanov Litigation Partly on the basis of the partial disclosure provided by Mr Kythreotis, on 3 November 2010, the Bank obtained without notice freezing and disclosure orders against Eastbridge Capital Limited (Eastbridge - an English company), Mr Shalabayev (Mr Ablyazovs son-in-law) and Mr Udovenko, all of whom appear to have given instructions to Mr Kythreotis in respect of the Receiving Companies. The Bank also obtained non-party disclosure orders against Mr Ereshchenko and Mr Aizhulov, two former directors of Eastbridge. Eastbridge, Mr Shalabayev and Mr Ereshchenko have all been served with the orders described above, although only Eastbridge and Mr Ereshchenko have purported to provide the required disclosure. Eduardof Proceedings In July 2010, the Bank became aware of a purported Factoring Agreement entered into between the Bank and a Cypriot shell company, Eduardof Finance Limited (Eduardof), in late January 2009. The Factoring Agreement purports to assign debts with a face value of over U.S.$4.8 billion, representing almost a third of the Banks entire loan portfolio, for an initial payment of just U.S.$1 million. In total, some 70 borrowers are covered by the purported agreement, including Chrysopa, RIROil and Tekhinvest. Whilst not identical, the Factoring Agreement bears a number of close similarities to matters which the Bank understands to be the subject of the criminal charges brought against Mr. Ablyazov by the Russian authorities. On 20 October 2010, the Bank issued proceedings before the Nicosia District Court in Cyprus seeking a declaration of invalidity in relation to the purported Factoring Agreement (amongst other things on the basis that it was not properly authorised in accordance with mandatory provisions of Kazakh law and/or that it is illegal and/or a sham). On 25 October 2010, the Cypriot Court granted an ex parte injunction restraining Eduardof from taking any steps pursuant to the purported agreement. At the same time, the Cypriot Court ordered Eduardof, as well as its former directors at the time the Factoring Agreement was purportedly signed, to disclose the identity of its beneficial owner(s) and to provide details of any amounts already collected in purported pursuance of the Factoring Agreement. The Cypriot Court also ordered Marfin Popular Bank to provide disclosure in relation to the ownership and control of a bank account from which Eduardof purported to transfer the U.S.$1 million initial payment in May 2009. A further hearing, at which the respondents will have the opportunity to challenge the orders granted on 25 October 2010 and at which the Bank will be seeking further disclosure, is due to take place on 16 February 2011.

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Paveletskaya Proceedings In December 2010, the Bank issued proceedings in the Commercial Court (Claim No 2010 Folio 1519) against Mr Ablyazov, Mr Khazhaev, Paveletskaya OJSC, Samuel Finance Sarl, Simplecity Holdings Limited, Ringbell Investments Limited (Ringbell), Malabar Investments Group Limited (Malabar) and Mishia Investments Limited (Mishia). In summary, the claim relates to a series of purported loan facilities amounting to approximately U.S.$269 million advanced by the Bank to Paveletskaya and Samuel Finance between 2005 and 2009. The loans were purportedly for the purpose of investment in the construction of an underground shopping and entertainment mall in Paveletskaya Square, Moscow (the Paveletskaya Project). The Bank contends that Mr Ablyazov orchestrated a scheme (the Scheme) to misappropriate these funds from the Bank for his own benefit through the loans to Paveletskaya and Samuel Finance. The Bank asserts that Mr Ablyazov controlled both Paveletskaya and Samuel Finance and that the loans were related party transactions which Mr Ablyazov failed to disclose in breach of Kazakh law. The Bank alleges that, as part of the Scheme, Mr Ablyazov engineered the transfer of the Banks funds to Paveletskaya and Samuel Finance without any adequate security arrangements being put in place. Any security which may have been obtained was subsequently released to the Banks detriment. Further, the Bank contends that at least U.S.$47 million of the loan monies were not used for the purposes of the Paveletskaya Project and were transferred to Ringbell without the Banks permission. The Bank has also identified two purported assignment agreements, dated 30 January 2009, under which the Banks rights to repayment of the Paveletskaya loans (save for one letter of credit) were purportedly assigned to two companies incorporated in the BVI: Malabar and Mishia. The Bank claims that the assignment agreements are shams and further evidence of the Scheme whereby Mr Ablyazov sought to prevent the Bank from recovering the outstanding loan monies from Paveletskaya by assigning its rights to two BVI companies that he beneficially owned and/or controlled. The Bank seeks, amongst other things, a declaration invalidating the purported loans and assignment agreements, repayment of the money transferred under the loan agreements and delivery up of all assets to which any of the funds were applied. The Bank also claims damages from all of the defendants on grounds of bad faith. In the alternative, the Bank seeks repayment of the amounts outstanding under the loans as at the date of the claim (plus interest). In December 2010, the Bank obtained an injunction against Malabar and Mishia which prevents either company from taking any steps in relation to the purported assignment agreements and requires both companies to disclose certain information and documents. To date, neither Malabar nor Mishia have complied with such disclosure requirements under the injunction. Defences in the Paveletskaya Proceedings are due from certain of the defendants (including Mr Ablyazov) in February and March 2011. The DCM Proceedings On 21 January 2011, the Bank issued the DCM Proceedings in the Commercial Court (claim number 2011 Folio 79) against Mr Ablyazov, Mr Zharimbetov, Fedelm Corp., Telford Financiers Corp. and Dowring & Associates, Inc (the latter three defendants being companies incorporated in the BVI). The claim concerns five transactions, each comprising a loan to a Kazakh company (Borrower A), purportedly for the predominant purpose of purchasing and developing land, and a subsequent loan to a second (Kazakh or offshore) company (Borrower B), purportedly for the purchase of the shares in Borrower A (in one case from Mr Ablyazov himself). The Bank claims that these loans, which were uncommercially favourable to the borrowers, were part of a dishonest scheme on the part of Mr Ablyazov and Mr Zharimbetov to misuse the Banks money for their own purposes and/or personal benefit.

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By its claim, the Bank seeks a declaration that the loan agreements under which moneys were advanced to three of the Borrower B companies, as well as the subsequent share purchase agreements whereby those Borrower B companies purportedly acquired interests in the respective Borrower A companies, are invalid. It also seeks the repayment of all the moneys purportedly paid pursuant to each of those loan and/or share purchase agreements, as well as damages or compensation in respect of its losses resulting from all five transactions. The total value of the claim is approximately U.S.$1.2 billion. On 25 January 2011, the Bank issued applications for permission to serve the Claim Form and Particulars of Claim out of the jurisdiction on the three BVI defendants, and for permission to serve Particulars of Claim exceeding 25 pages in length. Stepanov Litigation The Bank obtained judgment in England on 14 October 2009 against Alexander Stepanov, the former General Director and major shareholder of Energomash (UK) Limited, in the amount of U.S.$468 million in an action commenced in May 2009. The judgment was granted in connection with a guarantee given by Mr Stepanov for a loan by the Bank to Rolls Finance Limited, an English company. Mr Stepanov resides in Russia and the English Court took jurisdiction over him based on an English jurisdiction clause in a charge he had granted to the Bank. As part of the process of enforcing the judgment against Mr Stepanov, Alan Bloom and Liz Bingham of Ernst & Young were appointed liquidators of Energomash (UK) Limited (which is an English company) by a Secretary of State appointment made on 29 October 2009 (Alan Bloom and Liz Bingham were replaced as liquidators on 13 July 2010 by Peter Spratt and Russell Downs of PricewaterhouseCoopers). Some of the shares of Energomash belonging to Mr Stepanov had been pledged to the Bank as security for the loan to Rolls Finance Limited. The Bank had to provide undertakings when obtaining the injunction orders following judgment against Mr Stepanov to meet any losses that he might suffer if it proves that those injunctions were wrongfully granted. On 31 March 2010, the High Court in England sentenced Mr Stepanov (in absentia) to two years imprisonment for breaching various orders made by the Court in the proceedings initiated against him by the Bank, including a failure to disclose information on his assets. The Bank has also obtained judgment in Russia in November 2009 against Mr Stepanov in the amount of U.S.$411 million in relation to this matter. Mr Stepanov appealed this judgment but was unsuccessful. Legal Proceedings Except as described below and above in Asset Recovery, the Group is not and has not been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which either of TuranAlem Finance or the Bank is aware) during the last twelve months which may have, or have had in the recent past, significant effects on the Groups financial position or profitability. Litigation in respect of BTA Kyrgyzstan The Bank is involved in a legal dispute with CJSC Investment Holding Company, a Kyrgyzstan registered entity. The total amount of this dispute is 30,418,144. In June 2009, Central Asia Investment Company, a Kyrgyzstan registered entity and a 100 per cent. subsidiary of CJSC Investment Holding Company, obtained a loan from its parent of 8,670,000 to purchase Kyrgyzstan state securities. Central Asia Investment Company, in violation of the intended purpose of the loan from its parent, used these funds to purchase bonds of TuranAlem Finance at a significant discount on the market. The nominal value of the purchased bonds was 28,395,000 and accrued interest was 2,023,144. Central Asia Investment Company defaulted on its loan payable to CJSC Investment Holding Company. As a result, CJSC Investment Holding Company filed a lawsuit against the Bank,

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BTA Kyrgyzstan and TuranAlem Finance claiming repayment of the full nominal value and interest accrued on bonds of TuranAlem Finance. In accordance with the decision of Bishkeks district court, Bishkeks municipal court of appeals and the Supreme Court of Kyrgyzstan dated 11 September 2009, the Bank is obliged to pay the full amount; CJSC Investment Holding Company commenced enforcement of the decision against the Bank, the guarantor of bonds issued by TuranAlem Finance, including seeking the Banks shares in BTA Kyrgyzstan and amounts due to the Bank by BTA Kyrgyzstan. In December 2009, an officer of the court foreclosed on shares held by the Bank in BTA Kyrgyzstan. The current management of the Bank believes that the decision of the Kyrgyzstan courts was not in compliance with international laws and legislation between the Republic of Kazakhstan and Kyrgyzstan and was executed in violation of Kyrgyzstan law. On 5 November 2009, the Bank filed a claim with the Kyrgyzstan government for compensation of 30,418,143 and an additional U.S.$38,891,000 representing damages incurred as a result of illegal acts of Kyrgyz legal and government entities. Litigation in respect of BTA Russia The Bank holds 22.2589 per cent. of the voting share capital of BTA Russia. In February 2010, BTA Russia was renamed AMT Bank LLC (Russia). Three writs were lodged during 2009 with the Moscow Arbitration Court disputing the results of general shareholders meetings of BTA Russia held on 13 April 2009, 29 April 2009 and 11 August 2009 at which, among other things, the question of the approval of a new edition of charter containing the new name of the company, was included. The claims in respect of the meetings held on 13 April 2009, 29 April 2009 and 11 August 2009 were rejected by the court. The court considered and rejected the appeal of the Bank in respect of the meeting held on 11 August 2009 and the decision on the rejection of the Banks appeal was upheld on 30 August 2010. On 2 June 2010, the Bank submitted a claim to the Arbitration Court of Moscow, disputing the legality of the actions of the Central Bank of Russia and the Department of Federal Tax Services of Russia in relation to the registration of the new edition of the BTA Russias charter. The extraordinary meeting of the BTA Russias shareholders approved the new edition of the charter with new name of AMT Bank LLC on 7 December 2009. The Central Bank of Russia registered the new edition of the charter of BTA Russia indicating the banks new name. The Department of Federal Tax Services of Russia made a corresponding registration entry with the banks new name in the United State Registry of Legal Entities. On 17 June 2010, the Bank submitted a claim asking the Arbitration Court of Moscow to find these actions to be illegal and to oblige the Department of Federal Tax Services of Russia to cancel the registration entry. The Arbitration Court rejected the claim in its decision of 27 August 2010. On 17 September 2010, the Bank filed an appeal of this decision with the Appeal Court. The Appeal Court rejected the Banks appeal on 25 October 2010 and the decision of the Arbitration Court of Moscow stood. Other Proceedings The Bank has been notified of several separate arbitration proceedings (only one of which is active) commenced under various international treaties against, inter alia, the Government of Kazakhstan in connection with the actions taken in relation to the Bank in 2008 and early 2009, namely the various capital injections made into the Bank and described in Background to the Restructuring. These proceedings do not name the Bank as a respondent and, indeed, it is not possible to bring a claim against anyone other than a state under the relevant treaty. In addition, certain creditors of the Bank have commenced proceedings against it and have sought to attach certain assets of the Bank including correspondent accounts in Switzerland and the shares of certain of the Finance Subsidiaries. These creditors have participated in the Restructuring and filed Claim Forms. Accordingly, pursuant to the terms of the Restructuring Plan the relevant creditors are now obliged to terminate the proceedings they have commenced. On 15 September 2010, Goldman Sachs LLC dropped its claim against the Bank and its subsidiary Turan Alem Finance LLC with respect to indebtedness in the amount of 3.4 billion Roubles. This

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decision was made as a result of receipt by Goldman Sachs LLC of entitlements issued by the Bank pursuant the Restructuring Plan. The proceedings commenced by Rabobank and Banque Internationale De Commerce-Bred S.A. are currently pending. The Bank carried on negotiations with these financial institutions and the Bank believes that there are reasonable prospects that this issue will be resolved by way of further negotiations taking into account the fact that Rabobank and Banque Internationale De Commerce-Bred S.A. have participated in Restructuring and have a right to receive entitlements under the Restructuring plan. Criminal Proceedings against Former Management Based on news reports, the Bank is aware of criminal investigations commenced against Mr. Ablyazov and other former management (as well as entities connected to them) in each of Kazakhstan, the Russian Federation and Kyrgyzstan, in respect of actions taken by these individuals and entities during the period in which Mr. Ablyazov was the Chairman of the Board of Directors of the Bank. Technology The Banks information technology strategy focuses on the integration of its business needs and information technology capabilities, while maintaining cost effective and safe systems. In recent years, the Bank has built a highly productive and reliable technology environment, located in two data centers located in Almaty. The Bank has also developed and implemented disaster recovery and backup strategy. The Bank is certified under ISO 27001, an international quality certification. The Bank now has a modern, reliable, secure, flexible and scalable information technology system that can support the business operations of the Bank, as well as provide business opportunities for income generation. Information technology systems of the Bank are in a state of continuous improvement and change. The Bank intends to continue to take advantage of modern technologies, which allow it to reduce capital and operating costs. Due to the Banks financial condition, the Bank stopped the work on the implementation of the new core banking system; however, the existing systems are expected to be able to handle the current volume of operations and have substantial reserves for processing. As a part of its strategy going forward, the Bank plans to strengthen its Treasury department by automating its processes to provide real time risk management for a wide range of operations. See Strategy General Strategy of the Bank Strengthen Treasury Operations. Furthermore, the Bank plans to build on its already strong information technology infrastructure to increase the quality of data produced, provide consistent classification and resolve data-reconciliation issues. See Strategy General Strategy of the Bank Improve Human Resources and Information Technology. Employees and Training As at 30 June 2010, the Bank employed 5,096 full time employees, of whom 3,468 were employed at the Banks branches outside Almaty. As at 31 December 2009, the Bank employed 5,045 full time employees. The average number of employees employed by the Bank was 2,120 at the Banks head office and 4,325 across the branch network in 2007, 2,381 at the Banks head office and 4,732 across the branch network in 2008, 1,956 at the Banks head office and 3,952 across the branch network in 2009 and 1,670 at the Banks head office and 3,472 across the branch network in 2010. Currently, there are no labour unions representing any employees of the Bank or its subsidiaries. The Group has never experienced any industrial action or other work stoppages resulting from labour disputes. The average age of the Groups employees as at 30 June 2010 was 31.4 years and 4,571 of the employees in professional positions held university degrees as at that date.

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The Bank currently conducts internal training for its employees in respect of different aspects of the business of the Bank including financial analysis and working with clients. In addition, the Bank also engages external providers of training programmes including: Professional education center Business Academy of Ernst & Young in Kazakhstan; The Institute of professional accountants and auditors of the Republic of Kazakhstan; Business and Finance Consulting Centre; International centre of financial and economical development Kazakhstan; Assistance + Centre of Personality Development; and Specialised Training Centre of Association of Security Organisation of Kazakhstan.

During the six month period ending 30 June 2010, 58 employees have been trained by external providers and 589 employees have been trained by internal employees. The Bank does not have any schemes for involving employees in the capital of the Bank.

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SELECTED CONDENSED CONSOLIDATED FINANCIAL DATA The summary information set out below has been extracted from, should be read in conjunction with, and is qualified in its entirety by, the Groups financial statements, including the notes thereto, contained in this Prospectus. See Schedule 3 Index to Financial Statements and Managements Discussion and Analysis of Results of Operations and Financial Condition. Certain figures in the Groups income statement for the year ended 31 December 2008 related to the Groups non-interest income and non-interest expense are presented differently in the Annual Financial Statements for the year ended 31 December 2009 than in the Annual Financial Statements for the years ended 2008 and 2007. These figures include specifically income from insurance operations, inventory write-offs, other income and other expenses. The differences are due to the disclosure of inventory write-offs, other income and other expenses in the Annual Financial Statements for the year ended 31 December 2009, which were simply included as other income / (loss) in the Annual Financial Statements for the years ended 31 December 2008 and 2007. Furthermore, income from insurance operations is reflected as net in the Annual Financial Statements for the year ended 31 December 2009 as opposed to income and expense in the Annual Financial Statements for the years ended 31 December 2008 and 2007. Finally, the Bank changed the methodology for the calculation of total interest earning assets to exclude equity securities from such calculation since equity securities are not interest earning assets. The effect of this change is from 31 December 2008 inclusive. These changes also affect certain profitability ratios contained in this Prospectus. See Selected Financial Ratios and Economic Data. The Groups audited consolidated financial statements contained in this Prospectus, including the notes thereto, as at and for the years ended 31 December 2009 and 2008 were prepared in accordance with the IFRS and were audited by Ernst & Young, whose audit reports are included in this Prospectus. The Groups unaudited interim condensed consolidated financial statements contained in this Prospectus including notes thereto, as at and for the six-months ended 30 June 2010, were prepared in accordance with International Financial Reporting Standard IAS 34, Interim Financial Reporting. The Groups unaudited interim condensed consolidated financial statements including notes thereto, as at and for the six-months ended 30 June 2010 were reviewed by Ernst & Young, whose review report thereon is included on page F-4 of this Prospectus. Prospective investors should read this selected consolidated financial information in conjunction with information contained in Managements Discussion and Analysis of Results of Operations and Financial Conditions, Risk Factors, Capitalisation and The Bank and the Banks audited consolidated financial statements including the notes thereto, as well as the other financial data appearing elsewhere in this Prospectus.

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Consolidated Statement of Financial Position Data

As at 30 June 2010 (U.S.$ (KZT millions(1)) millions) Assets Cash and cash equivalents................................................. Obligatory reserves ........................................................... Trading securities .............................................................. Amounts due from credit institutions ............................... Derivative financial assets................................................. Available-for-sale investment securities........................... Held-to-maturity investment securities............................. Loans to customers............................................................ SK Bonds........................................................................... Investments in associates .................................................. Property and equipment .................................................... Goodwill............................................................................ Current income tax assets.................................................. Deferred tax assets ............................................................ Other assets........................................................................ Total assets ....................................................................... Liabilities Amounts due to the Government and central banks......... Amounts due to credit institutions .................................... Derivative financial liabilities ........................................... Amounts due to customers ................................................ Debt securities issued ........................................................ Provisions .......................................................................... Other liabilities .................................................................. Total liabilities ................................................................. Equity deficit Issued capital: common shares.......................................... Additional paid-in capital.................................................. Treasury shares.................................................................. Available-for-sale investment securities revaluation reserve............................................................................ Foreign currency translation reserve................................. Accumulated deficit .......................................................... Equity attributable to shareholders of the parent ....... Non-controlling interest .................................................... Total equity/(deficit)........................................................ 910 0 575 458 57 163 49 5,072 3,507 583 62 13 43 20 286 11,798 134,299 36 84,901 67,568 8,476 23,995 7,213 748,435 517,413 86,074 9,110 1,841 6,271 2,993 42,162 1,740,787 2009 (U.S.$ millions(1) ) 527 1 780 212 175 128 7,011 3,450 573 67 12 38 36 251 13,261 As at 31 December 2008 (KZT (KZT millions) millions) 78,215 145 115,784 31,444 25,980 19,019 1,040,773 512,246 85,088 9,911 1,841 5,708 5,267 37,238 1,968,659 87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 72,371 13,704 37,421 5,505 5,046 35,688 2,194,201 2007 (KZT millions) 99,723 168,242 112,175 107,589 31,397 26,422 2,379,810 67,767 13,433 37,557 110 683 19,709 3,064,617

2,549 5,427 17 4,625 10,558 223 252 23,651

376,173 800,703 2,466 682,424 1,557,843 32,957 37,181 3,489,747

2,739 5,634 27 4,418 11,239 398 188 24,643

406,595 836,384 3,974 655,963 1,668,602 59,127 27,834 3,658,479

1,718 803,366 18,789 886,052 1,087,726 104,893 34,436 2,936,980

913 835,304 652,508 5,528 1,084,445 10,577 23,311 2,612,586

3,494 (263) (29) (1) (4) (15,078) (11,881) 28

515,551 (38,798) (4,270) (217) (641) (2,224,688) (1,753,063) 4,103

3,473 (261) (43) (16) (3) (14,444) (11,294) (88)

515,551 (38,798) (6,383) (2,352) (448) (2,144,27 1) (1,676,70 1) (13,119) (1,689,82 0) 1,968,659

303,456 (1,568) (1,112) (948) (1,057,64 6) (757,818) 15,039

303,427 (555) (195) 104 129,938 432,719 19,312

(11,853) (1,748,960) (11,382) (742,779) 452,031 Total liabilities and equity .............................................. 11,798 1,740,787 13,261 2,194,201 3,064,617 ________ Note: (1) See Presentation of Financial and other Information of the Information Memorandum for information as to the U.S. Dollar/Tenge exchange rate used to calculate U.S. Dollar amounts.

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Consolidated Statement of Income Data

For the six months ended 30 June 2010 (U.S.$ (KZT millions)(1) millions) 488 71,862 123 18,067 9 1,416 27 3,988 18 2,652 665 (95) (477) (127) (90) (789) (124) (693) (817) 56 (25) 31 (222) (10) 198 4 15 262 (3) 97,985 (14,044) (70,223) (18,701) (13,225) (116,193) (18,208) (102,076) (120,284) 8,293 (3,762) 4,531 (32,646) (1,438) 29,098 525 2,181 38,590 (458) For the year ended 31 December 2009 (U.S.$ (KZT millions)(1) millions) 1,284 189,523 194 28,551 17 2,490 39 5,756 77 11,405 1,611 (150) (960) (310) (326) (1,746) (135) (5,110) (5,245) 145 (12) 133 (20) 21 (2,211) 18 32 (21) (19) (240) (5) 237,725 (22,195) (141,611) (45,810) (48,047) (257,663) (19,938) (754,254) (774,192) 21,382 (1,732) 19,650 (2,965) 3,052 (326,398) 2,688 4,690 (3,075) (2,764) (35,436) (676) 2008 (KZT millions) 366,037 2,766 17,833 9,831 396,467 (82) (95,888) (55,748) (56,663) (208,381) 188,086 (1,094,300) (906,214) 30,334 (1,179) 29,155 (29,769) 1,665 (10,870) 2,100 (15,448) (11,252) (42,610) (8,107) (19,138) 2007 (KZT millions) 291,724 2,189 17,137 12,398 323,448 (29) (85,683) (39,935) (53,632) (179,279) 144,169 (67,810) 76,359 28,489 (1,057) 27,432 2,503 2,512 19,884 3,317 4,234 (249) -

Loans ........................................................... SK Bonds ..................................................... Investment securities, held for sale .............. Deposits with other banks ............................ Trading securities ......................................... Total interest income ................................. Amounts due to the Government and central banks............................................................. Debt securities issued ................................... Due to customers ......................................... Deposits and loans from credit institutions .. Interest expense .......................................... Net interest (expense)/income before impairment charge ................................ Impairment charge ....................................... Net interest (expense)/income ................... Fees and commission income ...................... Fee and commission expense ....................... Fees and commissions ................................ Net trading loss ............................................ Gains less losses from foreign currencies .... dealing .................................................... translation differences ............................. Net income from insurance operations ........ Share of income / (loss) of associates .......... Income / (loss) on disposal of subsidiaries ... Impairment charge for available-for-sale investment securities ................................ Impairment charge for goodwill .................. Impairment charge for investments in associates ..................................................... Excess of the purchasers share in net fair value of identifiable assets and liabilities of purchased company over the cost ................. Inventory write-off ....................................... Other income/(loss) ..................................... Non-interest income (loss) ......................... Salaries and other employee benefits ........... Administrative and other operating expenses ....................................................... Depreciation and amortisation ..................... Taxes other than income tax ........................ Loss on realisation of collaterals................... Obligatory insurance of individuals deposits ........................................................ Other provisions ........................................... Other expenses ............................................. Non-interest income / (expense) ................ (Loss)/income before income tax expense Income tax (expense) / benefit .....................

69 7 320 (72) (92) (15) (19) (26) (9) 157 (14) (90) (556) (4)

10,169 1,029 47,050 (10,672) (13,587) (2,213) (2,753) (3,776) (1,357) 23,163 (2,036) (13,231) (81,934) (518)

(30) 28 (2,447) (151) (165) (33) (26) (4,473) 4,165 (361,192) (22,226) (24,388) (4,886) (3,836) (2,396) 5,792 (130,033) (26,597) (27,414) (4,435) (4,163) (62) 32,139 (25,744) (23,400) (2,314) (3,469)

(14) 423 (22) 12 (7,547) (4)

(2,051) 62,451 (3,238) 1,826 (1,113,908) (626)

(2,102) (113,130) (3,184) (181,025) (1,188,117) 67

(1,761) (4,705) (61,393) 74,537 (9,832)

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For the six months ended 30 June

For the year ended 31 December 2008 (KZT millions) (1,188,050) (1,187,584) (466) (1,188,050) (143,526) 2007 (KZT millions) 64,705 61,354 3,351 64,705 8,143

Net loss after income tax expenses ............ Attributable to: Equity holders of the parent ......................... Non-controlling interest in net income ........ Net loss......................................................... Basic and diluted loss per share (in KZT) ....

2009 2010 (KZT (U.S.$ (KZT (U.S.$ millions) millions)(1) millions) millions)(1) (82,452) (7,551) (1,114,534) (560) (546) (14) (560) (18) (80,417) (2,035) (82,452) (2,585) (7,362) (189) (7,551) (225) (1,086,625) (27,909) (1,114,534) (33,193)

________ Note: (1) See Presentation of Financial and other Information of the Information Memorandum for information as to the U.S. Dollar/Tenge exchange rate used to calculate U.S. Dollar amounts.

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Selected Financial Ratios and Economic Data

As at and for the six months ended 30 June 2010 2009 Profitability Ratios(1) Return on average equity(9) .......................... Return on average total equity..................... Return on average assets (2) .......................... Net interest margin(3) .................................. Net interest spread(4) ................................... Non-interest expense(12)/net interest income before impairment charge plus non-interest income(13) ..................................................... Non-interest expense(12) as a percentage of net interest income before impairment ....... Non-interest expense(12) as a percentage of average total assets ...................................... Loan Portfolio Quality(5) Non-performing loans/gross loans(6) ........... Allowance for impairment/gross loans ....... Allowance for impairment/non-performing loans(6) ........................................................ Balance Sheet Ratios and Capital Adequacy Amounts due to customers as a percentage of total assets ............................................... Loans from other banks and financial institutions as a percentage of total assets .. Debt securities issued as a percentage of total assets .................................................. Net loans as a percentage of total assets ..... Total equity as a percentage of total assets . Liquid assets as a percentage of total assets(7) ........................................................ Risk weighted total capital adequacy ratio(8) .......................................................... Risk weighted Tier I capital adequacy ratio(8) .......................................................... Operating Data Number of full time employees .................. Number of regional branches ..................... Number of retail units ................................ Economic Data Period-end exchange rate (KZT/U.S.$)....... Average exchange rate for period (KZT/U.S.$) ................................................ Inflation rate (CPI) ..................................... GDP growth (real) ...................................... N/A(11) N/A(11) N/A(11) (2.7)%(10) 7.4%(10) N/A(15) N/A(15) 4.2% 66.6% 72.9% 109.4% N/A(11) N/A(11) N/A(11) 5.2%(10) 9.9%(10) N/A(14) 58.4% 2.3% 47.5% 55.3% 116.5% N/A(11) N/A(11) N/A(11) (1.1)%(10) 5.4%(10) N/A(14) N/A(15) 2.7% 64.6% 67.1% 103.9% N/A(11) N/A(11) N/A(11) 7.0%(10) 6.9%(10) 22.4% 22.4% 2.4% 6.0% 5.2% As at and for the year ended 31 December 2007 2009 2008

40.1% 36.1% 2.1% 34.3% 42.9% 125.0%

28.8% 41.6% 2.3% 0.8% 5.4% 691.1%

39.2% 46.0% 89.5% 43.0% N/A(8) 17.9% (199.26)% (189.92)% 8,570 22 227 147.55 147.24 7.0% 8.0%

30.5% 29.4% 67.6% 58.3% N/A(8) 12.3% (75.0)% (70.5)% 11,444 22 269 150.43 144.94 7.5% (2.4)%

33.3% 42.5% 84.8% 52.9% N/A(8) 12.4% (147.5)% (140.4)% 11,331 22 230 148.46 147.59 6.2% 1.2%

40.4% 36.6% 49.6% 73.7% N/A(8) 17.6% (44.8)% (41.0)% 12,965 22 279 120.79 120.29 9.5% 3.3%

21.3% 27.3% 35.4% 77.7% 14.7% 16.8% 17.6% 16.9% 13,194 22 289 120.30 122.56 18.8% 8.9%

________ Notes: (1) Average balances of assets and liabilities, equity and total equity were calculated on a monthly basis. (2) Return on average assets comprises net income less dividends on non-redeemable convertible preference shares divided by average period assets. Average period assets were calculated on a monthly basis. (3) Net interest margin comprises net interest income/(loss) before impairment charge as a percentage of average interest earning assets. Average earning assets are calculated on a monthly basis. (4) Net interest spread comprises the difference between the average interest rate on interest earning assets and the average interest rate on interest bearing liabilities. Average interest bearing liabilities are calculated on a monthly basis. (5) Calculate using gross loan balances, including accrued interest. (6) Non-performing loans comprise loans where past due payments exceed 90 days. (7) Liquid assets comprise securities (excluding SK Bonds) plus cash and cash equivalents, obligatory reserves and due from other banks. (8) Calculated in accordance with BIS standards. (9) Total equity, excluding preferred shares. (10) Calculated using net total interest earning assets excluding equity securities.

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(11) The ratio is not economically useful due to the Bank having negative equity as at 31 December 2008 and 2009 and as at 30 June 2009 and 2010. (12) Non-interest expense excludes other provisions. (13) Non-interest income excludes extraordinary items. (14) The ratio is not economically useful due to the non-interest loss recorded by the Bank for the period ended 30 June 2009 and 31 December 2009. (15) The ratio is not economically useful due to the net interest expense recorded by the Bank for the period ended 31 December 2009 and 30 June 2010.

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PRO FORMA FINANCIAL INFORMATION The following information should be read in conjunction with Presentation of Financial and Other Information Pro Forma Financial Information, Risk Factors Risks Relating to the Restructuring The Pro Forma Financial Information would likely differ materially if it were based on financial statements prepared in accordance with IFRS and the Financial Statements included elsewhere in this Prospectus and the notes thereto. The Pro Forma Financial Information was prepared by the Bank to illustrate the effect of the Restructuring as if the Restructuring had been completed as at 30 June 2010 and is based on data derived from the Unaudited Interim Financial Statements prepared in accordance with IAS 34 and management accounts prepared on the basis of FMSA Methodology. The Pro Forma Financial Information is unaudited and is presented for illustrative purposes only. The Banks management believes that the Pro Forma Financial Information may be useful in enabling investors to assess and understand the financial position of the Bank. The Pro Forma Financial Information is based upon certain assumptions and adjustments which the Banks management believes are reasonable and necessary for a fair presentation of such information. The assumptions and adjustments are based upon the Banks preliminary analysis and currently available information. While the Bank has used all reasonable efforts to ensure that the Pro Forma Financial Information is correct, accurate and complete as at the date of this Prospectus, no representation or warranty is made (express or implied) as to the reliability, accuracy or completeness of the Pro Forma Financial Information. The Pro Forma Financial Information does not take into account the potential adverse impact of certain negative developments since 30 June 2010, such as additional loan loss provisions and further operational losses. Readers of this Prospectus are cautioned that pro forma financial information is inherently unreliable and that the Pro Forma Financial Information is not necessarily indicative of how the Banks consolidated capitalisation, statement of financial position or capital adequacy as at 30 June 2010 would have been presented had the Restructuring actually been completed at that the date, nor is it necessarily indicative of the Banks consolidated capitalisation, statement of financial position or capital adequacy as at any future date. The Pro Forma Financial Information should be read in conjunction with the Financial Statements included elsewhere in this Prospectus. See Risk Factors Risks Relating to the Restructuring The Pro Forma Financial Information would likely differ materially if it were based on financial statements prepared in accordance with IFRS. Assumptions The Pro Forma Financial Information is based on the following assumptions: the Restructuring had been completed as at 30 June 2010 as set out in the Information Memorandum; there have been no material transactions concerning the Bank, other than the transactions discussed herein; all amounts in U.S. Dollars are translated at the Tenge/U.S. Dollar exchange rate as at 30 June 2010, as reported by the NBK, of KZT 147.55 = U.S.$1.00.

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Pro Forma Financial Information based on FMSA Methodology Statement of Financial Position The following table sets out the Banks unaudited unconsolidated historical and pro forma unconsolidated statement of financial position prepared based on FMSA Methodology as at 30 June 2010:
Historical As at 30 June 2010 (U.S.$ (KZT millions) millions) 55,648 377 70,003 474 738,256 5,003 307 2 62,111 421 690,750 4,681 7,165 49 78,065 529 519 4 166,780 1,130 1,869,605 12,671 16,511 112 669,687 4,539 2,024,855 13,723 695,367 4,713 2,979 20 7,026 48 82,653 560 (1,629,473) (11,044) 12,671 1,869,605 As Adjusted to Reflect the Restructuring As at 30 June 2010 (KZT (U.S.$ millions) millions) 55,648 377 70,003 474 605,164 4,101 307 2 62,111 421 902,321 6,115 7,165 49 78,065 529 519 4 166,780 1,130 1,948,084 13,203 16,511 112 707,278 4,793 1,085,141 7,354 0 0 0 0 7,026 48 26,516 180 105,613 716 1,948,084 13,203

Cash and cash equivalents .......................................... Obligatory reserves..................................................... Financial assets at fair value through profit or loss..... Investment securities................................................... Amounts due from credit institutions.......................... Loans to customers .................................................... Property and equipment .............................................. Investments in associates ............................................ Derivative financial assets .......................................... Other assets................................................................. Total assets ................................................................. Amounts due to the NBK and the Government ......... Amounts due to clients ............................................... Total financial debt ..................................................... Bonds bought by Samruk-Kazyna ............................. Derivative financial liabilities..................................... Reserves...................................................................... Other liabilities ........................................................... (Accumulated deficit) Total shareholders equity....... Total liabilities and shareholders equity ...............

Capital Adequacy The following table gives information regarding the Banks unconsolidated total, Tier I and Tier II capital and its capital adequacy ratios calculated based on FMSA Methodology:
Historical unconsolidated As at 30 June 2010 (KZT millions, except percentages) (1,791,007) (1,631,508)(1) 0 (104.74)% 2,611,135 (68.59)% As Adjusted to Reflect the Restructuring As at 30 June 2010 (KZT millions, except percentages) 282,923 243,876(2) 89,607 10.83% 1,902,629 14.87%

Total capital ................................................................................. Tier I capital................................................................................. Tier II capital .............................................................................. K1 (Tier I capital to total assets) ................................................. Total risk weighted assets ............................................................ K2 (own capital to total assets weighted for risk) ........................

________ Notes: (1) For purposes of calculating itsTier I capital the Bank excludes reserves for revaluation of fixed assets and deducts intangible assets. (2) For purposes of calculating itsTier I capital the Bank excludes reserves for revaluation of fixed assets and deducts intangible assets. In accordance with FMSA rules the negative difference between fair values of financial instruments (with accumulated amortisation) acquired (issued) during the restructuring is not included in calculation of Tier I capital.

Pro Forma Financial Information based on Unaudited IFRS Capitalisation The following table sets out the Groups unaudited historical and pro forma consolidated capitalisation based on data derived from interim condensed consolidated financial statements prepared in accordance with IAS 34 as at 30 June 2010:

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Senior short- and long-term liabilities .......................... Subordinated short- and long-term liabilities................ Total short- and long-term liabilities ........................ Share capital ................................................................. Treasury shares ............................................................. Additional paid-in capital ............................................. Retained earnings and revaluation reserves(1) ............... Minority interests.......................................................... Total equity ................................................................

Unaudited historical As at 30 June 2010 (KZT (U.S.$ millions) millions) 2,191,117 14,850 167,428 1,135 2,358,545 15,985 515,551 3,494 (4,270) (29) (38,798) (263) (2,225,546) (15,083) 4,103 28 (1,748,960) (11,853)

As Adjusted to Reflect the Restructuring As at 30 June 2010 (KZT (U.S.$ millions) millions) 534,501 3,623 87,967 596 622,468 4,219 1,187,023 8,045 (4,270) (29) (148,405) (1,006) (1,042,492) (7,065) 4,103 28 (4,041) (27)

Note: (1) Includes available for-sale-investment securities revaluation reserve of KZT (217) million and foreign currency revaluation reserve of KZT (641) million.

Statement of Financial Position The following table sets out the Groups unaudited historical consolidated statements of financial position based on IAS 34 as at 30 June 2010:
As Adjusted to Reflect the Restructuring As at 30 June 2010(2) (KZT (U.S.$ millions) millions) 134,299 910 36 0 84,901 575 31,208 212 67,568 458 517,413 3,507 938,434 6,360 9,110 62 86,074 583 1,841 12 8,994 61 2,993 20 6,271 43 42,162 286 1,931,304 13,089 523,723 3,549 719,011 4,873 71,949 488 550,519 3,731 5 0 32,957 223 37,181 252 1,935,345 13,116 1,187,023 8,045 (4,270) (29) (148,405) (1,006) (217) (1) (641) (4) (2,139,320) (14,499) 1,097,686 7,439 (8,144) (55) 4,103 28 (4,041) (27) 1,931,304 13,089

Cash and cash equivalents ............................................................ Obligatory reserves....................................................................... Financial assets at fair value through profit or loss....................... Investment securities..................................................................... Amounts due from credit institutions............................................ Shareholders bonds...................................................................... Loans to customers ...................................................................... Property and equipment ................................................................ Investments in associates .............................................................. Goodwill ....................................................................................... Derivative financial assets ............................................................ Deferred tax assets........................................................................ Current income tax assets ............................................................. Other Assets.................................................................................. Total Assets ................................................................................. Amounts due to the NBK and the Government ............................ Amounts due to customers............................................................ Amounts due to credit institutions ................................................ Debt securities issued ................................................................... Derivative financial liabilities....................................................... Reserves........................................................................................ Other liabilities ............................................................................. Total Liabilities ........................................................................... Common shares ............................................................................ Treasury shares ............................................................................. Additional paid-in capital ............................................................. Securities revaluation reserve ....................................................... Other revaluation reserves ............................................................ (Accumulated deficit)/related earning of previous years .............. (Accumulated deficit)/related earning........................................... Total shareholders equity before minority interest ................ Minority interest ........................................................................... Total shareholders equity ......................................................... Total Liabilities and Equity .......................................................

Unaudited historical As at 30 June 2010 (KZT (U.S.$ millions) millions) 134,299 910 36 0 84,901 575 31,208 212 67,568 458 517,413 3,507 748,435 5,073 9,110 62 86,074 583 1,841 12 8,476 57 2,993 20 6,271 43 42,162 286 1,740,787 11,798 376,173 2,549 682,424 4,625 800,703 5,426 1,557,843 10,558 2,466 17 32,957 223 37,181 252 3,489,747 23,650 515,551 3,494 (4,270) (29) (38,798) (263) (217) (1) (641) (4) (2,144,271) (14,533) (80,417) (545) (1,753,063) (11,881) 4,103 28 (1,748,960) (11,853) 1,740,787 11,798

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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Unless otherwise stated, the following discussion should be read in conjunction with the Financial Statements included elsewhere in this Prospectus and the notes thereto. The Banks Annual Financial Statements were prepared in accordance with IFRS and the Unaudited Interim Financial Statements were prepared in accordance with IAS 34. See Selected Condensed Consolidated Financial Data. The forward-looking statements contained in this discussion and analysis 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. Certain figures in the Groups income statement for the year ended 31 December 2008 related to the Groups non-interest income and non-interest expense are presented differently in the Annual Financial Statements for the year ended 31 December 2009 than in the Annual Financial Statements for the year ended 2008 and in Results of Operations for the Years ended 31 December 2009 and 2008 than in Results of Operations for the Years ended 31 December 2008 and 2007. These figures include specifically inventory write offs, other income and other expense. The differences are due to the disclosure of inventory write offs, other income and other expenses in Annual Financial Statements for the year ended 31 December 2009, which were simply included as other income / (loss) in the Annual Financial Statements for the year ended 31 December 2008. The Bank changed methodology for calculation of total interest earning assets to exclude equity securities from 31 December 2009, and retrospectively changed certain ratios for the period ended 31 December 2008. These changes were not reflected in the Annual Financial Statements for the year ended 31 December 2008 and in Results of Operations for the Years ended 31 December 2008 and 2007. Overview After following an aggressive growth strategy from 2004 to 2007 primarily funded by short term bank borrowings and debt securities issues in the international capital markets, the Banks financial condition and liquidity position had severely deteriorated by February 2009. The Bank reported increasing levels of loan loss provisions on its loan portfolio throughout the first five months of 2009, beginning with provisions on its unconsolidated unaudited loan portfolio of KZT 214,777 million (based on FMSA Methodology), representing 9.2 per cent. of its total unconsolidated unaudited loan portfolio as at 1 January 2009, KZT 518,272 million (based on FMSA Methodology), representing 19.9 per cent. of the total unconsolidated unaudited loan portfolio as at 1 March 2009, and finally KZT 1,522,139 million (based on FMSA Methodology), representing 57.6 per cent. of its total unconsolidated unaudited loan portfolio as at 1 June 2009. This increase in provisions caused the Bank to breach its required capital adequacy ratios during 2009. As at 31 December 2009, the Bank had created KZT 1,959,620 million (based on FMSA Methodology) in provisions, representing 77.7 per cent. of its total unconsolidated unaudited loan portfolio and as at 30 June 2010, the Bank reported provisions of KZT 1,474,531 million or 75.2 per cent. of its total unconsolidated unaudited loan portfolio. Additional provisions were recognised in the Banks consolidated financial statements as at 31 December 2008 and 2009 in accordance with IFRS. The balance of loan loss provisions in its audited consolidated financial statements amounted to KZT 1,217,278 million as at 31 December 2008, KZT 2,123,408 million as at 31 December 2009 and in its unaudited condensed consolidated financial statements amounted to KZT 2,015,441 million as at 30 June 2010 (all based on IFRS). For a discussion of the differences between the determination of loan loss provisions under FMSA Methodology and IFRS, see Asset and Liability Management Provisioning Policy. On 2 February 2009, the Government accepted the recommendation from the FMSA to recapitalise the Bank, following which Samruk-Kazyna acquired a controlling shareholding of the Banks total share capital for cash consideration of KZT 212,095 million. As at 31 December 2009, Samruk-Kazyna held 75.1 per cent. of the issued share capital of the Bank. Furthermore, the

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Government has provided additional liquidity support in the form of deposits and pursuant to loans under the State Finance Programmes. As at 30 June 2010, the Group has received liquidity support in the amount of KZT 770,554 million from Samruk-Kazyna and other state-owned entities to support the Groups financial stability and capitalisation. See The Bank The Role of Samruk-Kazyna and the NBK Liquidity Support. As at 30 June 2010, the Bank was the third largest bank in Kazakhstan by total assets with a market share of 15.6 per cent. compared to 17.1 per cent. as at 31 December 2009 and 24.5 per cent. as at 31 December 2008 according to data provided by the FMSA. As at 30 June 2010, the Groups total assets were KZT 1,740,787 million compared to KZT 1,968,659 million as at 31 December 2009 and KZT 2,194,201 million as at 31 December 2008, representing decreases of 11.6 per cent. from 30 June 2010 to 31 December 2009 and 10.3 per cent. from 31 December 2009 to 31 December 2008, respectively. The Groups total equity was KZT (1,748,960) million as at 30 June 2010 as a result of the provisions against the Groups loan portfolio, compared to total equity of KZT (1,689,820) million as at 31 December 2009 and KZT (742,779) million as at 31 December 2008. Recent Developments Since the creditors meeting of 28 May 2010, at which the Banks creditors voted in favour of the Restructuring Plan, the Bank took steps to implement the Restructuring Plan culminating in the successful completion of the Restructuring in September 2010. Those steps included the following changes to the share capital and debt profile of the Bank. On 1 July 2010, the Court issued a decree approving the Restructuring Plan. On 23 July 2010, the FMSA registered an increase in the Banks share capital from 55,219,743,695 to 55,258,029,745 Shares, and, accordingly, on 29 July 2010, the Bank increased its authorised share capital to 55,258,029,745. On 19 August 2010, the Bank placed 44,175,794,956 Shares as part of the Banks debt restructuring process. These Shares were issued upon the conversion of KZT 671,472 million of the Banks bonds owned by Samruk-Kazyna into Shares. On 20 August 2010, the Bank repurchased 8,179,148,436 Shares from Samruk-Kazyna for a total consideration of KZT 1. As a result of these changes and the distribution of shares to creditors as part of the consideration for the Restructuring, creditors of the Bank currently hold Shares representing an aggregate interest of 18.5 per cent. in the Banks share capital, and the holding of Samruk-Kazyna increased from 75.10 per cent. to 81.48 per cent. On 31 August 2010, the Court declared the Restructuring complete, effectively finalising the process by which the Bank successfully restructured KTZ 2,441,988 of its Financial Indebtedness, equivalent to USD 16,647 million into equity and indebtedness amounting to KZT 618,663 million. Accordingly, the Bank recognised a restructuring gain of KZT 992,341 million. As part of the successful completion of the Restructuring, the Bank has cancelled all of its previously issued debt securities and other liabilities and in consideration therefor has distributed KZT 138,991 million in cash to creditors in addition to the following debt securities: recovery units in principal amount of KZT 768,343 million, senior notes in principal amount of KZT 339,025 million, original issue discount notes in principal amount of KZT 63,150 million and subordinated notes in principal amount of KZT 113,750 million. The Bank also entered into a revolving credit facility on trade finance representing KZT 102,738 million and the maturity profile of such indebtedness increased from 8 to 20 years at the same time. The completion of all of the steps contemplated by the Restructuring Plan has resulted in a further improvement in the Banks capital position of KZT 105,613 million. The Banks regulatory capital

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amounted to KZT 283,282 million as at 31 August 2010, allowing the Bank to comply with the required FMSA capital adequacy ratio. Going Concern During the fourth quarter of 2008 there was a significant deterioration in the consolidated financial position of the Group principally resulting from loss events related to the loan portfolio, which ultimately led to a breach by the Group of certain prudential requirements including those related to capital adequacy set by the FMSA as the Groups total liabilities as at 31 December 2008 exceeded its total assets by KZT 742,779 million and the Group incurred a net loss of KTZ 1,188,050 million for the year ended 31 December 2008. See The Bank Background to the Restructuring. In addition, in February 2009, the Tenge devalued against the US Dollar, which negatively affected the Group and its customers, resulting in further deterioration of the Groups assets. See The Bank Background to the Restructuring. As a result, the Bank was in breach of capital adequacy and lending covenants contained in the terms of its syndicated loans, Eurobonds and certain other facilities. In addition, in April 2009, the credit rating of the Bank was downgraded to default levels by the major international rating agencies. Accordingly, all credit facilities were in default and had been accelerated or become callable by the lenders by 30 June 2009. In April 2009, the Bank suspended all payments of principal in relation to its financial indebtedness and, in July 2009, extended the moratorium to all interest payments thereon. In light of the negative events described above, the Annual Financial Statements included a note indicating there was a material uncertainty which may cast significant doubt about the Banks ability to continue as a going concern. The Annual Financial Statements did not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might have been necessary if the Restructuring was unsuccessful, adequate additional funding were not available and the Bank were unable to continue as a going concern. The Unaudited Interim Financial Statements show that the Groups total liabilities as at 30 June 2010 exceeded its total assets by KZT 1,748,960 million compared to an excess of KZT 1,689,820 million as at 31 December 2009 and the Group incurred a net loss amounting to KZT 82,452 million for the six months ended 30 June 2010 compared to a net loss of KZT 633,572 million for the six months ended 30 June 2009. The Unaudited Interim Financial Statements were prepared on the basis of the going concern principle, which assumes that non-current debt was restructured and ongoing support would be provided at an adequate level by Samruk-Kazyna. On 31 August 2010, the Court declared the Restructuring to be complete. The completion of all of the steps contemplated by the Restructuring Plan led to, among other things, the restoration of the Banks equity capital, allowing the Bank to comply with the required FMSA capital adequacy ratio. Having successfully completed the Restructuring, the Bank intends to focus on an active business development and recovery of its pre-crisis positions. In the medium term, the Banks business strategy will be to maintain the wide range of services offered and to focus on the domestic market. The funding strategy of the Bank is also aimed at the domestic market and is intended to result in the growth of the Banks deposit base by attracting deposits of individuals and legal entities. In the corporate business segment the Bank plans to work to improve the quality of its loan portfolio and risk diversification, and to increase the efficiency and profitability of the loan portfolio. In addition, the Bank intends to continue to work jointly with its legal and financial advisors on the recovery of the collateral base and to maximise return of illegally withdrawn assets.

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In the small and medium-sized business segment the Bank will continue to work in conjunction with the governments programmes in support of entrepreneurs, carried out by Damu Fund. The Bank constitutes one of the largest investments of the Government in the financial sector. At present the share of Samruk-Kazyna in the share capital of the Bank is 81.48 per cent. On 27 October 2010, S&P upgraded the credit ratings of the Bank. Upgrading the Banks long-term credit rating from D to B- (B minus) and short-term ratings from D to C, both with stable outlook. The Bank has a national credit rating of kzBB- (kzBB minus). On 10 December 2010, Fitch upgraded the Banks long-term issuer default rating from RD to B-, its short term issuer default rating from RD to B, and its individual rating from F to E. It also confirmed the Banks support rating at 5 and support rating floor at No floor. Moodys put the Banks credit ratings under review. The Banks management believes that the Bank is now well positioned to continue as a going concern. Factors Affecting the Banks Results of Operations Kazakhstans Economy The unprecedented recent market and economic conditions have resulted in 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 economy in Kazakhstan was particularly affected by the collapse of oil and gas prices beginning in the second half of 2008. In addition, real estate prices in Kazakhstan have dropped sharply since June 2007. See Risk Factors Volatility in the real estate market in Kazakhstan has had and may continue to have an adverse effect on the Banks asset quality and collateral value. Such volatility in the commodity prices and the real estate market has had an adverse effect on the countrys economy. These adverse economic conditions led to a decrease in GDP growth of 3.3 per cent. in 2008 compared to 8.9 per cent. GDP growth in 2007. According to NSA data, GDP increased by 1.2 per cent. in 2009, but due to the acceleration of economic development since then, GDP growth increased to 8 per cent. as at 30 June 2010 in comparison with 30 June 2009. Furthermore, on 4 February 2009, the NBK reduced its level of support for the exchange rate from KZT 117-123 to the U.S. Dollar to KZT 150 to the U.S. Dollar (+/- 3 per cent.) This devaluation was due in part to declines in Kazakhstans balance of payments and foreign exchange reserves as a result of falls in commodity prices, in particular oil and gas, in the international markets. From 5 February 2010 a new exchange rate corridor began to operate. In light of the state of world trade and currency markets, and in order to make the setting of exchange rates more flexible, the NBK has indicated that it will widen the KZT corridor until 20 March 2011 to allow fluctuations from a base rate of KZT 150 to the U.S. Dollar of + 10 per cent. (i.e., up to KZT 165 to the U.S. Dollar) and -15 per cent. (i.e., down to KZT 127.5 to the U.S. Dollar). In addition, concern about the stability of the banking sector in Kazakhstan led to a material reduction in liquidity as wholesale funding has become more expensive and less available. Funding from retail depositors also fell as a result of a public loss of confidence in the Kazakhstan banking sector. To prevent deposit outflow and due to the deterioration in asset quality in 2009, Samruk-Kazyna has provided financial support to the banking sector totalling KZT 1,082.1 billion as at 30 September 2010, according to official data. This support took a number of forms, including direct equity investment and, in the case of the Bank, the exchanging of the Banks bonds for the SK Bonds. Moreover, the Government has provided KZT 120 billion pursuant to each of the Mortgage State Finance Programme and SME State Finance Programme. For more detailed information, see The Banking Sector in Kazakhstan Introduction.

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Loan Loss Provisions The Banks provisioning policies comply with FMSA regulations on provisioning, pursuant to which loans are separated into two groups: loans for which provisions accrue on a case by case basis and homogeneous loans. The Bank determines provisions for the homogeneous loans pool, which includes corporate, SME loans and retail loans in excess of 0.02 per cent. of the Banks equity, based on its analysis of historical losses and the supervision of its loan portfolio. For loans assessed on an individual basis, there are five asset quality criteria and three contingent liabilities quality criteria. For those retail loans that are classified as homogeneous loans, the Bank decides on the level of provisions in respect of the entire group of homogenous retail loans rather than overdue loans only. According to this policy, the Bank reviews historical data on a monthly basis and, if necessary, revises its provisioning rate to reflect changes in its losses and other relevant factors. Provisions as a percentage of gross loans based on IFRS increased to 72.9 per cent. as at 30 June 2010 compared to 67.1 per cent. as at 31 December 2009 and 42.9 per cent. as at 31 December 2008. For a discussion on recognition of provisions, see Asset and Liability Management Loan Supervision and Monitoring. Provisions as a percentage of gross loans increased in the first half of 2010 as a result of a multitude of internal and external (both foreign and domestic) factors that materially influenced the worsening of the quality of the corporate loan portfolio. For a complete discussion of these factors, see The Bank Background to the Restructuring Factors Affecting Deterioration of Banks Loan Portfolio and The Bank Asset Recovery. One such factor was that a high number of purported loans granted to non-residents became problem loans. Such loans represented 50.9 per cent. of the gross portfolio of the Group as at 30 June 2010. Provisions in respect of loans issued to non-resident borrowers rose as a result of the following factors: a number of such borrowers may have been connected with the former management of the Bank and potentially fraudulent schemes were used when issuing loans and transferring loaned funds outside Kazakhstan; former management used multi-layered credit schemes under which one company (usually offshore) would act as the borrower, then forward the loaned funds to a project manager (often a resident of Russia, Ukraine or another country) and a third person would provide security (if security was provided at all) and such schemes have made it more difficult for the Bank to investigate and enforce its rights; many non-resident borrowers are not responding to the Banks requests and communication with them has been lost, which leads to loss of control over the realisation of the project and of the ability to monitor the use of funds; the Bank has been unable to monitor the use of funds, security and results of financial activity of non-resident borrowers; the Bank has been unable to monitor and re-value pledged property; and certain security provided by certain borrowers has been inaccessible as a consequence of the borrowers having purportedly cancelled the security over the property in question and subsequently sold such property to third persons.

In addition, during the first six months of 2009, provisions in respect of loans issued to resident borrowers rose 5.0 per cent. The Bank has faced internal challenges identifying, analysing and dealing with problem loans since the Banks management changed in early 2009, see Risk Factors Risks Related to the Bank Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. The Bank has taken the actions in order to deal

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with the large volume of problem loans. See Asset and Liability Management Non-Performing Loans. In respect of external factors, the global financial crisis in 2008 and 2009 was accompanied by a fall in world prices for oil and gas, metals, raw materials and real estate. In the domestic economy, there was a reduction in business activity, a fall in the volume of sales, a reduction of consumer demand and a crisis in the construction sector, among other things. The economic crisis led to a sharp loss of turnover for businesses (a liquidity crisis) which led to payment defaults. As the financial condition of the Banks borrowers worsened, this contributed to a reduction in their creditworthiness and consequently to an increase in defaults on their obligations to the Bank. Late payment of indebtedness during the first six months of 2010 by corporate business borrowers decreased to 20.0 per cent. of the Banks corporate loan portfolio from 25.0 per cent. during 2009. In addition, in a number of cases the term of problem loans was extended by mutual agreement. These loans amounted to 15 per cent. of the Banks total loan portfolio as at 30 June 2010. On a consolidated basis, the Bank wrote off loans amounting to 2.4 per cent. of its total loan portfolio during the first six months of 2010, compared to 0.2 per cent. over the year ended 31 December 2009. The drop in real estate prices also contributed to a fall in the value of pledged property and increased the likelihood of problem loans not being covered by the value of such pledges in the event of enforcement. As at 30 June 2010, 31 December 2009 and 31 December 2008, the Group held retail mortgages totalling KZT 174,817 million, KZT 229,778 million and KZT 234,130 million, respectively, which represented 6.3 per cent., 7.3 per cent. and 8.3 per cent., respectively, of its total gross loan portfolio. However, in large part the decrease in the proportion of retail mortgages was due to the deconsolidation of Temirbank and BTA Kyrgyzstan. Provisions on corporate loans as a percentage of gross corporate loans increased to 84.9 per cent. as at 30 June 2010 compared to 80.1 per cent. as at 31 December 2009 and 56.7 per cent. as at 31 December 2008. On a consolidated basis, provisions on CIS loans of the Bank increased to 90.1 per cent. of CIS loans as at 30 June 2010 compared to 88.9 per cent. as at 31 December 2009 and 10.1 per cent. as at 31 December 2008. Provisions on SME loans as a percentage of gross SME loans decreased to 13.3 per cent. as at 30 June 2010 from 29.0 per cent. as at 31 December 2009, which was in turn a significant increase from 8.2 per cent. as at 31 December 2008. The decrease in the first six months of 2010 resulted from the deconsolidation of Temirbank. Provisions on retail loans as a percentage of gross retail loans decreased to 7.1 per cent. as at 30 June 2010 from 16.2 per cent. as at 31 December 2009, an increase from 4.3 per cent. as at 31 December 2008. The decrease in the first six months of 2010 resulted from the deconsolidation of Temirbank and BTA Kyrgyzstan. Interest Rates As a significant portion of the Banks assets and liabilities are interest-bearing, changes in prevailing interest rates, both in Kazakhstan and internationally, can materially affect its results. As a general matter, because the Bank has both interest-earning assets and interest-bearing liabilities, rising interest rates can lead to higher or lower interest margins, depending on whether the Banks interest earning assets reprice at a faster rate than its interest-bearing liabilities. From 2003 to early 2009, the NBK steadily raised refinancing interest rates, from 7 per cent. as at 7 July 2003 to 10 per cent. as at 1 January 2009. As at 4 September 2009, the NBK has decreased the refinancing interest rate to its current level of 7 per cent. Although the official refinancing rate of the NBK has, under normal conditions, a minimal effect on the cost of funding of Kazakhstan banks, its influence grows sharply during periods of constrained liquidity on the internal banking market, when most banks are forced to turn to the NBK for liquidity.

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In addition, the Banks securities portfolio, which consists of both Tenge and U.S. Dollar denominated assets, is affected by changes in interest rates. Rising interest rates would, over time, increase the Banks income from its securities portfolio but may at the same time reduce the market value of its pre existing fixed income investment portfolio. Mix of Funding Base Historically international sources of funding were less expensive than domestic sources of funding. Before 2008, the Bank relied heavily on raising funds through the international debt capital markets and through term facilities with international lenders. As at 31 December 2007, 41.5 per cent. of the Groups funding base (i.e., the Groups total liabilities) consisted of debt securities issued and 32.0 per cent. was due to credit institutions, both of which derived primarily from international markets. As at 31 December 2007, the remaining portion of the funding base was made up primarily of customer accounts (25.0 per cent.) and other liabilities (1.5 per cent.). As a result of the global financial crisis, the Bank no longer had access to new international sources of funding. Of the international funding reflected on the Groups statement of financial position as at 31 December 2008, 84.5 per cent. was obtained prior to 31 December 2007 and represented primarily debt securities issued and due to banks. As at 31 December 2009, 45.6 per cent. of the Groups funding base consisted of debt securities issued and 22.9 per cent. was due to credit institutions, compared to 37.0 per cent. and 27.4 per cent. as at 31 December 2008, respectively. As at 30 June 2010, amounts due to credit institutions constituted 22.9 per cent. of the Groups funding base and debt securities constituted 44.6 per cent. As a result of the Restructuring, the proportion of international funding reflected on the Groups balance sheet has significantly decreased. As at 30 September 2010, the portion of funding represented by international funding was 37.7 per cent.: amounts due to credit institutions accounted for 8.4 per cent., while debt securities represented 29.3 per cent. The Groups funding base also includes amounts due to the Government and the NBK (22.8 per cent.) and amounts due to customers (36.3 per cent.). The Banks funding strategy targets internal markets and management expects the Banks deposit base to grow through the attraction of further deposits from both individuals and legal entities. The management of the Bank does not believe that new international funding will become available in the short term, so the Bank will increasingly rely on domestic funding sources, which historically have been more expensive than international funding. Furthermore, management expects that the competition among banks in Kazakhstan for domestic funding will increase, which will further increase the cost of such funding. Samruk-Kazynas Support In contrast to the outflows of customer deposits experienced in 2009, the Group has experienced inflows since January 2010. The Groups retail deposits increased by 7.8 per cent. from KZT 183,977 million as at 31 December 2009 to KZT 198,255 million as at 30 June 2010. The Group has also experienced an inflow of private corporate and SME deposits (i.e., deposits from entities other than Samruk-Kazyna and its subsidiaries) during the same period. Such deposits increased by 12.23 per cent. from KZT 110,761 million as at 31 December 2009 to KZT 124,302 million as at 30 June 2010. Deposits by Samruk-Kazyna and its subsidiaries (which includes amounts deposited pursuant to the State Finance Programmes) decreased by 0.38 per cent. from KZT 361,225 million as at 31 December 2009 to KZT 359,867 million as at 30 June 2010 and the Groups total deposits increased by 4.03 per cent. from KZT 655,963 million as at 31 December 2009 to KZT 682,424 million as at 30 June 2010. See also The Banking Sector in Kazakhstan Introduction. Critical Accounting Policies and Estimates The Groups accounting policies are integral to an understanding of the results of operations and financial condition presented in the consolidated financial statements and notes thereto. The Groups significant accounting policies are described in Note 4 to the 2009 Annual Financial Statements and

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Unaudited Interim Financial Statements. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the relevant period. On an on-going basis, management evaluates its estimates and judgements, including those related to impairment charges, reserves for insurance claims, the carrying values of property and investments, income taxes and deferred taxes, financing operations and contingencies, litigation and arbitration. Management bases its estimates and judgments on historical experience and on various other factors that are considered to be reasonable under the circumstances. Actual results may differ from estimates under different assumptions or conditions. Please refer to Managements Discussion and Analysis of Results of Operations and Financial Condition Factors Affecting the Banks Results of Operations Loan Loss Provisions for information regarding the Banks loan loss provisions. Significant Accounting Judgements and Estimates In the process of applying the Groups accounting policies, the Banks management has made certain judgements and estimates set out in Note 5 to the 2009 Annual Financial Statements. Changes in accounting policies Since 1 January 2009 the Group has implemented revised IFRS standards and new interpretations, the effects of which are discussed in Note 4 to the 2009 Annual Financial Statements and the Unaudited Interim Condensed Consolidated Financial Statements for the period ended 30 June 2010. Results of Operations for the six months ended 30 June 2010 and 2009 Summary For the six months ended 30 June 2010, the Group reported a net loss of KZT 82,452 million or KZT 2,585 per basic and diluted share, compared to a net loss of KZT 633,572 million or KZT 21,666 per basic and diluted share for the six months ended 30 June 2009. The impairment recognised on the Groups loans to customers and amounts due from credit institutions was KZT 102,076 million for the six months ended 30 June 2010 as compared to KZT 357,392 million for the six months ended 30 June 2009, which represents a decrease of 71.4 per cent. The Group recognised gains from foreign currency operations of KZT 27,660 million in the six months ended 30 June 2010 compared to losses of KZT 274,092 million in the six months ended 30 June 2009. Interest Income, Interest Expense, Net Interest Income and Provision for Losses The following table sets out the principal components of the Groups net interest income for the periods indicated:
For the six months ended 30 June 2009 2010 (unaudited) (KZT millions) 71,862 151,781 18,067 10,462 1,416 1,335 2,652 6,222 3,988 5,357 97,985 175,157 (116,193) (125,969) (18,208) 49,188 (102,076) (357,392) (120,284) (308,204)

Loans to customers .................................................................................................................... SK Bonds................................................................................................................................... Investment securities, held for sale ............................................................................................ Trading securities....................................................................................................................... Deposits in other banks.............................................................................................................. Total interest income ............................................................................................................... Interest expense........................................................................................................................ Net interest (loss) / income before impairment .......................................................................... Impairment charge ..................................................................................................................... Net interest (expense)/income .................................................................................................

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Total Interest Income Total interest income decreased by 44.1 per cent. to KZT 97,985 million for the six months ended 30 June 2010 from KZT 175,157 million for the six months ended 30 June 2009, largely as a result of a 52.7 per cent. decrease in interest on loans to customers to KZT 71,862 million in the first six months of 2010 from KZT 151,781 million in the first six months of 2009 due to a decrease of 51.3 per cent. in the average amounts of loans provided to customers. The decrease in total interest income was partially offset by interest on the SK Bonds in the amount of KZT 18,067 million earned over the six months ended 30 June 2010. See The Bank NBK Support for a description of the SK Bonds. The monthly average yield on total interest-earning assets decreased to 14.5 per cent. for the six months ended 30 June 2010, compared to 18.4 per cent. for the six months ended 30 June 2009, as calculated by the Bank according to the unaudited accounting records of the Group as at 30 June 2010. As at 30 June 2010, interest rates charged to borrowers ranged from 11 per cent. to 20 per cent. on Tenge-denominated loans, with the average interest rate on Tenge-denominated loans being 18.3 per cent., while interest rates charged on foreign currency denominated loans ranged from 8.1 per cent. to 21 per cent. with the effective interest rate on foreign currency denominated loans being 26.0 per cent. The overall average yield earned on loans for the six months ended 30 June 2010 decreased to 21.5 per cent. compared to 22.1 per cent. for the six months ended 30 June 2009, as calculated by the Bank according to the unaudited accounting records of the Group for the six months ended 30 June 2010 and 2009, respectively. These decreases largely reflected write-offs of the balance of accrued interest on the balance of loans that were themselves written off. For the six months ended 30 June 2010, interest income earned on securities decreased by 46.2 per cent. to KZT 4,068 million from KZT 7,557 million for the same period in 2009, as a result of a decrease in interest rate of the securities portfolio to 8.1 per cent. as at 30 June 2010 from 12.0 per cent. as at 30 June 2009. For the six months ended 30 June 2010, the average balance of the Groups securities portfolio, including trading securities, available-for-sale and held-to-maturity securities, was KZT 100,442 million, compared to KZT 125,509 million for the same period in 2009, reflecting a decrease of 20.0 per cent., as calculated by the Bank according to the unaudited accounting records of the Group as at 30 June 2010 and 2009. Average interest rates earned on the securities portfolio were 8.1 per cent. and 12.0 per cent. for the first six months of 2010 and 2009, respectively, as calculated by the Bank according to the unaudited accounting records of the Group as at 30 June 2010 and 2009. Interest earned on bank deposits decreased by 25.6 per cent. to KZT 3,988 million for the six-months ended 30 June 2010 from KZT 5,357 million for the six months ended 30 June 2009. The decrease in interest earned on bank deposits during the first half of 2010 was primarily attributable to the decrease in the average amounts of deposits with other banks of 38.2 per cent. The average interest rates on balances in other banks increased to 10.4 per cent. over the six-months ended 30 June 2010 from 8.6 per cent. over the same period in 2009. Tenge-denominated average deposits represented 28 per cent. of total average deposits as at 30 June 2010, compared to 27 per cent. of total deposits as at 30 June 2009.

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Interest Expense The following table sets out certain information relating to the Groups interest expense for the periods indicated:
Six months ended 30 June 2009 2010 (unaudited) (KZT millions) (14,044) (8,142) (13,225) (22,480) (18,701) (26,162) (70,223) (69,185) (116,193) (125,969)

Amounts due to the Government and central banks................................................................... Amounts due to credit institutions ............................................................................................. Customer accounts..................................................................................................................... Debt securities issued................................................................................................................. Total ..........................................................................................................................................

For the six months ended 30 June 2010, interest expense decreased by 7.8 per cent. to KZT 116,193 million from KZT 125,969 million for the six months ended 30 June 2009. The decrease in interest expense over the period was largely due to the decrease of expenses on amounts due to credit institutions and due to customers as a result of the reduction in deposit accounts for such customers over the same period. Average balances of the Groups interest-bearing customer deposits, including both corporate and retail deposits (calculated, in each case, by reference to the unaudited accounting records of the Bank in the relevant year based on balances at the end of each month in the relevant year) were KZT 522,440 million in the first six months of 2010, compared to KZT 597,443 million in the first six months of 2009, reflecting a decrease of 12.6 per cent. Average interest rates paid on interest-bearing customer deposits in the six months ended 30 June 2010 and 2009 were 7.2 per cent. and 8.8 per cent., respectively, as calculated by the Bank by reference to the unaudited accounting records of the Group for the relevant period. The decrease in average interest rates paid during the six months ended 30 June 2010, compared to the six months ended 30 June 2009, primarily reflected a decrease of 3.4 per cent. in the amount of individuals term deposits with higher interest rates. For the six months ended 30 June 2010, interest expense on issued debt securities increased by 1.5 per cent. to KZT 70,223 million from KZT 69,185 million for the six months ended 30 June 2009. See Selected Statistical and other Information Funding Sources Debt Securities. Net Interest Income before Impairment Charge The Group had a net interest loss before impairment charge of KZT 18,208 million for the six months ended 30 June 2010 compared to net interest income before impairment charge of KZT 49,188 million for the six months ended 30 June 2009, reflecting a decrease of 137 per cent. The Groups net interest margin, defined as net interest income before impairment charge as a percentage of average interest-earning assets, was (2.7) per cent. for the six months ended 30 June 2010 compared to 5.2 per cent. for the six months ended 30 June 2009. This decrease was due to the decrease in interest income on loans to customers as a result of the deterioration of the quality of the loan portfolio. The Bank constantly monitors its interest rate margins and spreads. Impairment Charge Impairment charges (including in respect of amounts due from credit institutions) taken by the Group for the six months ended 30 June 2010 decreased by 71.4 per cent. to KZT 102,076 million from KZT 357,392 for the six months ended 30 June 2009, mainly due to the fact that the majority of losses from problem loans were discovered during 2009 and were therefore recognised in that period.

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Non-Interest Income/(Loss) The following table sets out certain information on the Groups non-interest income for the periods indicated:
Six months ended 30 June 2009 2010 (unaudited) (KZT millions) 4,531 10,343 (32,646) (17,725) (1,438) 29,098 525 2,181 (458) 10,169 38,590 1,029 47,050 32,753 (306,845) 1,741 2,832 (574) (12,582) (535) 1,000 (299,935)

Fees and commissions, net ........................................................................................................ Net trading loss .......................................................................................................................... Gains less losses from foreign currencies: dealing .................................................................................................................................. translation differences........................................................................................................... Net income from insurance operations ...................................................................................... Share of income of associates .................................................................................................... Impairment loss on available-for-sale investment securities...................................................... Impairment loss on goodwill ..................................................................................................... Excess of the purchasers value in net fair value of identifiable assets and liabilities of purchased company over cost ................................................................................................. Income/(loss) on disposal of subsidiaries .................................................................................. Other income ............................................................................................................................. Total ..........................................................................................................................................

Fees and commission, net Net fees and commission for the six months ended 30 June 2010 decreased by 56.2 per cent. to KZT 4,531 million from KZT 10,343 million for the six months ended 30 June 2009. Fee and commission income decreased to KZT 8,293 million for the six months ended 30 June 2010 from KZT 11,153 million for the same period in 2009, representing a decrease of 25.6 per cent. due to decreases in fees and commission income for services on operations with guarantees, for services on cash operations and for documentary settlements. Fees and commission expenses increased by 364.4 per cent to KZT 3,762 million for the six months ended 30 June 2010 from KZT 810 million for the same period in 2009. This was mainly as a result of the indemnification by BTA Pension Fund of negative commission income for the six months ended 30 June 2010. Net trading loss The Groups net trading loss for the six months ended 30 June 2010 increased by 84.2 per cent. to KZT 32,646 million from KZT 17,725 million for the six months ended 30 June 2009. This increased loss was mainly due to the revaluation of trading securities (Alliance Bank, Astana Finance and KazMunaiGaz) and trading and changes in the fair value of interest rate swaps. Gains less Losses from Foreign Currencies Gains less losses arising from the translation of foreign currency-denominated assets and liabilities and from dealing, which are reported in the income statement as gains less losses from foreign currencies, comprised a gain of KZT 27,660 million for the six months ended 30 June 2010, compared to a loss of KZT 274,092 million for the six months ended 30 June 2009. The loss from foreign currency revaluation for the six months ended 30 June 2009 was due to the U.S. Dollar exchange rate increase to KZT 150.43 per U.S. Dollar as at 30 June 2009 from KZT 120.79 per U.S. Dollar as at 31 December 2008. The gain from translation differences for the six months ended 30 June 2010 was due to a slight change in the exchange rate to KZT 147.55 per U.S. Dollar as at 30 June 2010. Net Income from Insurance Operations Income from insurance operations decreased by 69.8 per cent. to KZT 525 million in the six months ended 30 June 2010 compared to KZT 1,741 million in the six months ended 30 June 2009. The decrease was due to decreases in the amount of insurance premiums received and due to the increase in expenses as a result of increased payments under claims made.

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Share of Income of Associates The Group reported net income from its share of income from associates of KZT 2,181 million for the six months ended 30 June 2010 compared to KZT 2,832 million for the six months ended 30 June 2009. This decrease was primarily due to a decrease in income received from Sekerbank and increased losses incurred by BTA Georgia. Impairment Charge for Available-for-sale Securities The Group recognised an impairment charge for available-for-sale investment securities of KZT 458 million for the six months ended 30 June 2010 compared to KZT 574 million over the same period in 2009. For the six months ended 30 June 2010, the impairment charge was accrued on available-for-sale securities of Ular-Umit and Zhetysu, while for the six months ended 30 June 2009, it was accrued on available-for-sale securities of Alliance Bank and Astana Finance both of which were involved in restructuring processes during 2009. Impairment Charge for Goodwill The Group performed an impairment test of goodwill as at 30 June 2010, and since goodwill recoverable exceeds its carrying value, the Group has concluded that there should be no impairment of goodwill. There was an impairment charge on goodwill of KZT 12,582 million over the same period in 2009 as a result of the impairment test conducted with respect to Temirbank based on a comparison of the book value of the Banks investment in Temirbank against the recoverable value of Temirbank. Recoverable value was determined based on the discounted future cash flows of Temirbank. This impairment is largely the result of uncertainties in the Kazakhstan economy, especially in the retail and mortgage sectors. Another key factor in the evaluation of goodwill is the discount rate used to determine the present value of projected cash flows. Excess of the purchasers share in net fair value of identifiable assets and liabilities of purchased company over the cost Due to the aggregate positive net assets attributable to the shares of Ular-Umit, Zhetysu, Atlanta-Polis and Titan-Inkassatsiya received by the Bank as a result of the settlement of existing liabilities owed to the Group, the Group reported income of KZT 10,169 million for the six months ended 30 June 2010. The Group did not receive any such income for the six months ended 30 June 2009. Income/(loss) on Disposal of Subsidiaries The Group reported a net income on disposal of subsidiaries of KZT 38,590 million for the six months ended 30 June 2010, compared to a net loss on disposal of subsidiaries of KZT 535 million for the six months ended 30 June 2009 due to Temirbanks disposal as a result of Samruk-Kazynas purchase of the unallocated shares of Temirbank in May 2010, as well as a further additional issue of shares, which resulted in the Banks interests in Temirbanks share capital decreasing to 0.07% as at 30 June 2010. Other Income Other income increased by 2.9 per cent. to KZT 1,029 million for the six months ended 30 June 2010 compared to KZT 1,000 million for the six months ended 30 June 2009, largely due to income from Ular-Umit and Titan-Inkassatsiya that the Bank first consolidated into its financial statements in 2010.

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Non-Interest Expense The following table shows the composition of the Groups non-interest expense for the periods indicated:
Six months ended 30 June 2009 2010 (unaudited) (KZT millions) (10,672) (11,663) (13,587) (11,442) (2,213) (2,489) (2,753) (1,230) (3,776) 23,163 (3,305) (1,357) (681) (2,036) (1,228) (13,231) (32,038)

Salaries and other employee benefits......................................................................................... Other administrative and operating expenses............................................................................. Depreciation and amortisation ................................................................................................... Taxes other than income tax ...................................................................................................... Loss on realisation of collaterals................................................................................................ Other provisions......................................................................................................................... Obligatory insurance of individuals deposits............................................................................ Other expenses........................................................................................................................... Total ..........................................................................................................................................

Salaries and Benefits Salaries and benefits for the six months ended 30 June 2010 decreased by 8.5 per cent. to KZT 10,672 million from KZT 11,663 million for the six months ended 30 June 2009. This decrease was primarily attributable to the decrease in staff levels. Other Administrative and Operating Expenses The following table shows the composition of the Groups other administrative and operating expenses for the periods indicated:
Six months ended 30 June 2009 2010 (unaudited) (KZT millions) (5,048) (1,011) (2,288) (2,867) (933) (532) (829) (202) (640) (874) (548) (682) (544) (718) (403) (467) (357) (605) (257) (552) (239) (201) (222) (207) (175) (529) (119) (141) (112) (84) (85) (1,206) (64) (70) (28) (98) (696) (396) (13,587) (11,442)

Legal services and consultancy.................................................................................................. Occupancy and rent ................................................................................................................... Insurance expense...................................................................................................................... Loss on disposal of assets .......................................................................................................... Repair and maintenance of property and equipment.................................................................. Communications ........................................................................................................................ Security...................................................................................................................................... Encashment................................................................................................................................ Marketing and advertising ......................................................................................................... Plastic cards ............................................................................................................................... Data processing.......................................................................................................................... Business travel and related expenses ......................................................................................... Transportation expenses ............................................................................................................ Office supplies........................................................................................................................... Mail and express services .......................................................................................................... Penalties..................................................................................................................................... State duty ................................................................................................................................... Agency services ......................................................................................................................... Other .......................................................................................................................................... Administrative and other operating expenses .......................................................................

Total administrative and other operating expenses for the six months ended 30 June 2010 increased by 18.7 per cent. to KZT 13,587 million from KZT 11,442 million for the six months ended 30 June 2009. Expenses for legal services and consultancy and insurance, and loss on disposal of assets represented the largest contributing factors to the increase, while occupancy and rent expenses, transportation expenses and penalties decreased. Legal and consultancy fees increased 5.0 times to KZT 5,048 million for the six months ended 30 June 2010, compared to KZT 1,011 million for the six months ended 30 June 2009. This

145

significant increase was due to the restructuring process and the recovery of problem assets in the CIS and abroad. Loss on disposal of assets increased 4.10 times to KZT 829 million for the six months ended 30 June 2010 from KZT 202 million for the six months ended 30 June 2009, primarily due to BTA Ipotekas expenses on the write-off of the difference between collateral sold and the principal amount of the respective loans. Occupancy and rent decreased by 20.2 per cent. to KZT 2,288 million for the six months ended 30 June 2010, compared to KZT 2,867 million for the six months ended 30 June 2009. This decrease resulted primarily from the closure of 49 cash offices in 2009, as well as the Bank ceasing to rent out one of the administrative buildings of its head office. See The Bank Strategy General Strategies of the Bank Optimise Branch Network. Transportation expenses decreased to KZT 175 million for the six months ended 30 June 2010, compared to KZT 529 million for the same period in 2009, reflecting a decrease of 66.9 per cent., primarily due to measures that the Bank implemented to reduce costs including: reducing the limits of travel expenses, introducing new purchasing rules, and further decreasing transportation expenses based on the norms of Samruk-Kazyna. Penalties decreased by 93.0 per cent. to KZT 85 million for the six months ended 30 June 2010 from KZT 1,206 million for the six months ended 30 June 2009, mainly due to the penalties incurred by Temirbank in 2009. Depreciation and Amortisation Depreciation and amortisation expenses for the six months ended 30 June 2010 decreased by 11.1 per cent. to KZT 2,213 million from KZT 2,489 million for the six months ended 30 June 2009 as a result of measures implemented by the Bank to reduce costs, including reducing the number of employees and a moratorium on the purchase of fixed assets that was valid until the end of 2009. Taxes other than Income Tax Taxes other than income tax were KZT 2,753 million for the six months ended 30 June 2010, compared to KZT 1,230 million for the same period in 2009, reflecting an increase of 2.2 times, due to the increase of value added tax expenses incurred by the Group. Loss on realisation of collaterals The Group reported KZT 3,776 million as a loss on the realisation of collateral, mainly due to the sale of collateral to the Distressed Assets Fund. Other Provisions The Group recovered other provisions in the amount of KZT 23,163 million in the six months ended 30 June 2010, compared to a charge for other provisions of KZT 3,305 million over the same period in 2009. This was largely due to the reversal of previous impairment charge on guarantees and letters of credit. Obligatory Insurance of Individuals Deposits Certain members of the Group have a regulatory obligation to pay premiums for the insurance of individuals deposits. The Bank has an obligation to pay premiums to the KDIF in respect of its insured customer deposits. In the first six months of 2010 such expenses were KZT 1,357 million as compared to KZT 681 million for the same period in 2009. This was due to the rate for insurance of individuals deposits being higher for the six months ended 30 June 2010 than it was for the six months ended 30 June 2009.

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Other Non-Interest Expenses Other non-interest expenses increased by 65.8 per cent. to KZT 2,036 million for the first six months of 2010 from KZT 1,228 million for the first six months of 2009 due to the expenses incurred by Titan-Inkassatsiya which the Bank first consolidated into its accounts in 2010. Taxation Kazakhstan tax regulations do not provide for the filing of consolidated income tax returns. Accordingly, the Bank and its subsidiaries file individual tax returns. For the period ended 30 June 2010, income tax expenses were KZT 518 million, compared to KZT 3,738 million for the period ended 30 June 2009. The decrease in income tax expenses was due to deferred tax benefits that, in turn, were due to losses carried forward as a result of allowance for bad debts. Results of Operations for the Years ended 31 December 2009 and 2008 Summary For the year ended 31 December 2009, the Group reported a net loss of KZT 1,114,534 million or KZT 33,193 per basic and diluted share, compared to a net loss of KZT 1,188,050 million or KZT 143,526 per basic and diluted share for the year ended 31 December 2008. The impairment recognised on the Groups loans to customers and amounts due from credit institutions was KZT 754,254 million for the year ended 31 December 2009 as compared to KZT 1,094,300 million for the year ended 31 December 2008, which represents a decrease of 31.1 per cent. The Group recognised losses from foreign currency operations of KZT 323,346 million in the year ended 31 December 2009 compared to losses of KZT 9,205 million in the year ended 31 December 2008. Interest Income, Interest Expense, Net Interest Income and Provision for Losses The following table sets out the principal components of the Groups net interest income for the periods indicated:
31 December 2008 2009 (unaudited) (KZT millions) 189,523 366,037 28,551 2,490 2,766 11,405 9,831 5,756 17,833 237,725 396,467 (257,663) (208,381) (19,938) 188,086 (1,094,300) (754,254) (774,192) (906,214)

Loans to customers .................................................................................................................... SK Bonds................................................................................................................................... Investment securities, held for sale ............................................................................................ Trading securities....................................................................................................................... Deposits in other banks.............................................................................................................. Total interest income ............................................................................................................... Interest expense........................................................................................................................ Net interest (loss) / income before impairment .......................................................................... Impairment charge ..................................................................................................................... Net interest (expense)/income .................................................................................................

Total Interest Income Total interest income decreased by 40.0 per cent. to KZT 237,725 million for 2009 from KZT 396,467 million for 2008, largely as a result of a 48.2 per cent. year-to-year decrease in interest on loans to customers to KZT 189,523 million in 2009 from KZT 366,037 million in 2008 due to the decrease in the average amounts of loans provided to customers by 51.1 per cent. The decrease in total interest income was partially offset by interest on the SK Bonds in the amount of KZT 28,551 million earned over the year ended 31 December 2009. See The Bank NBK Support for a description of the SK Bonds.

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The monthly average yield on total interest-earning assets decreased to 13.7 per cent. for the year ended 31 December 2009, compared to 14.8 per cent. for the year ended 31 December 2008, as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2009 and 2008. See Selected Condensed Consolidated Financial Data for explanation of differences in the Annual Financial Statements for 2008 and 2009 in the calculation of total interest earning assets as at and for the period ended 31 December 2008. As at 31 December 2009, interest rates charged to borrowers ranged from 11 per cent. to 20 per cent. on Tenge-denominated loans, with the average interest rate on Tenge-denominated loans being 15.6 per cent., while interest rates charged on foreign currency denominated loans ranged from 7.2 per cent. to 20 per cent. with the effective interest rate on foreign currency denominated loans being 17.5 per cent. The overall average yield earned on loans for the year ended 31 December 2009 increased to 16.7 per cent. compared to 15.8 per cent. for the year ended 31 December 2008, as calculated by the Bank according to the unaudited accounting records of the Group for the years ended 31 December 2009 and 2008, respectively. These decreases largely reflected write-offs of the balance of accrued interest on the balance of loans that were themselves written off. For the year ended 31 December 2009, interest income earned on securities increased by 10.3 per cent. to KZT 13,895 million from KZT 12,597 million in 2008 as a result of an increase in interest rates on the securities portfolio to 11.9 per cent. as at 31 December 2009 from 8.2 per cent. as at 31 December 2008. For the year ended 31 December 2009, the average balance of the Groups securities portfolio, including financial assets at fair value through profit or loss, available-for-sale and held-to-maturity securities, was KZT 117,074 million, compared to KZT 153,880 million for 2008, reflecting a decrease of 23.9 per cent., as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2009 and 2008. Average interest rates earned on the securities portfolio were 11.9 per cent. and 8.2 per cent. for 2009 and 2008, respectively, as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2009 and 2008. See Selected Condensed Consolidated Financial Data for explanation of differences in the Annual Financial Statements for 2008 and 2009 in the calculation of total interest earning assets as at and for the period ended 31 December 2008. Interest earned on bank deposits decreased by 67.7 per cent. to KZT 5,756 million for the year ended 31 December 2009 from KZT 17,833 million for the year ended 31 December 2008. The decrease in interest earned on bank deposits during 2009 was primarily attributable to the decrease in the average amounts of deposits with other banks by 54.8 per cent. The average interest rates on balances in other banks decreased to 6.0 per cent. over the year ended 31 December 2009 from 8.4 per cent. over the same period in 2008. Tenge-denominated average deposits represented 27.0 per cent. of total average deposits as at 31 December 2009, compared to 31.6 per cent. of total deposits as at 31 December 2008. As at 31 December 2009, large deposits (i.e., in excess of U.S.$10,000), as a percentage of total deposits, decreased compared to 31 December 2008 to 86.2 per cent. from 88.0 per cent. Deposits of an amount between U.S.$10,000 and 100,000 accounted for 14.1 per cent. of total deposits and deposits in excess of U.S.$100,000 accounted for 72.1 per cent. of total deposits as at 31 December 2009, compared to 13.5 per cent. and 74.5 per cent. of total deposits, respectively, as at 31 December 2008.

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Interest Expense The following table sets out certain information relating to the Groups interest expense for the periods indicated:
Year ended 31 December 2008 2009 (unaudited) (KZT millions) (22,195) (82) (48,047) (56,663) (45,810) (55,748) (141,611) (141,611) (257,663) (257,663)

Amounts due to the Government and central banks................................................................... Loans and advances from other credit institutions..................................................................... Customer accounts..................................................................................................................... Debt securities issued................................................................................................................. Total ..........................................................................................................................................

For the year ended 31 December 2009 interest expense increased by 23.6 per cent. to KZT 257,663 million from KZT 208,381 million for the year ended 31 December 2008. The increase in interest expense over the period was largely due to the issuance of the Bank Bonds in 2009, partially offset by reductions in average amounts of client deposits. Average balances of the Groups interest-bearing customer deposits, including both corporate and retail deposits (calculated, in each case, by reference to the unaudited accounting records of the Bank in the relevant year based on balances at the end of each month in the relevant year) were KZT 535,871 million in 2009, compared to KZT 639,666 million in 2008, reflecting a decrease of 16.2 per cent. Average interest rates paid on interest-bearing customer deposits in the years ended 31 December 2009 and 2008 were 8.5 per cent. and 8.7 per cent., respectively, as calculated by the Bank by reference to the unaudited accounting records of the Group for the relevant period. The decrease in average interest rates paid during the year ended 31 December 2009, compared to the year ended 31 December 2008, primarily reflected the decrease in the volume of customer deposits having a term of more than a year to 26.6 per cent. from 39.5 per cent. of the total amount of deposits. For the year ended 31 December 2009, interest expense on issued debt securities increased by 47.7 per cent. to KZT 141,611 million from KZT 95,888 million for the year ended 31 December 2008. The primary reason for the increase was the higher average balances of debt securities outstanding by 37.4 per cent. and the increase of the effective rates from 8.7 per cent. over the year ended 31 December 2008 to 9.3 per cent. over the same period ended 31 December 2009. Net Interest Income before Impairment Charge The Group had a net interest loss before impairment charge of KZT 19,938 million for the year ended 31 December 2009 compared to net interest income before impairment charge of KZT 188,086 million for the year ended 31 December 2008, reflecting a decrease of 110.6 per cent. The Groups net interest margin, defined as net interest income before impairment charge as a percentage of average interest-earning assets, was (1.1) per cent. for the year ended 31 December 2009 compared to 7.0 per cent. for the year ended 31 December 2008. This decrease was due to an increase in the average rate on interest-bearing liabilities and a decrease in the rates on interest-earning assets. The decrease was also due to issuances of debt securities. The Bank constantly monitors its interest rate margins and spreads. Impairment Charge Impairment charges (including in respect of amounts due from credit institutions) taken by the Group for the year ended 31 December 2009 decreased by 31.1 per cent. to KZT 754,254 million from KZT 1,094,300 million as at 31 December 2008 due to the significant amount of impairment recognised by the Group in 2008.

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Non-Interest Income The following table sets out certain information on the Groups non-interest income for the periods indicated:
Year ended 31 December 2008 2009 (unaudited) (KZT millions) (2,965) (29,769) 3,052 (326,398) 2,688 4,690 (3,075) (38,876) (4,473) 4,165 (361,192) 1,665 (10,870) 2,100 (15,448) (11,252) (69,855) (2,396) 5,792 (130,033)

Net trading loss .......................................................................................................................... Gains less losses from foreign currencies: dealing .................................................................................................................................. translation differences........................................................................................................... Income from insurance operations............................................................................................. Share of income / (loss) of associates ........................................................................................ Loss on disposal of subsidiaries................................................................................................. Other impairment charge ........................................................................................................... Inventory write-off..................................................................................................................... Other income ............................................................................................................................. Total ..........................................................................................................................................

Net trading loss The Groups net trading loss for the year ended 31 December 2009 decreased by 90.0 per cent. to KZT 2,965 million from KZT 29,769 million for the year ended 31 December 2008. This decrease was due to income from trading interest rate swaps and changes in the fair value of interest rate swaps. Gains less Losses from Foreign Currencies Gains less losses arising from the translation of foreign currency-denominated assets and liabilities and from dealing, which are reported in the income statement as gains less losses from foreign currencies, comprised a loss of KZT 323,346 million for the year ended 31 December 2009, compared to a loss of KZT 9,205 million for the year ended 31 December 2008, reflecting a decrease due in large part to gains from a revaluation of foreign currency. Losses from foreign currency revaluation are due to the U.S. Dollar exchange rate increase to KZT 148.46 per U.S. Dollar as at 31 December 2009 from KZT 120.79 per U.S. Dollar as at 31 December 2008. Income and Expenses from Insurance Operations Income from insurance operations increased by 28.0 per cent. to KZT 2,668 million in the year ended 31 December 2009 from KZT 2,100 million in the year ended 31 December 2008. Decreases in income, due to decreases in the amount of insurance premiums received, were less than decreases in expenses, which were due to a proportional decrease in commissions paid and insurance payments, as well as better management of administrative expenses. Loss/Income of Associates The Group reported net income from its share of income from associates of KZT 4,690 million for the year ended 31 December 2009 compared to a net loss of KZT 15,448 million for the year ended 31 December 2008, primarily due to changes in the Banks equity share in BTA Russia during 2008. Loss on Disposal of Subsidiaries The Group reported a net loss on disposal of subsidiaries of KZT 3,075 million for the year ended 31 December 2009, compared to a net loss on disposal of subsidiaries of KZT 11,252 million for the year ended 31 December 2008 due to the deemed disposal of the Banks equity share in BTA Russia in 2008.

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Other impairment charge Other impairment charge, which includes impairment charges for available-for-sale securities, impairment charge for goodwill and impairment charge for investments in associates, for the year ended 31 December 2009 decreased by 44.3 per cent. to KZT 38,876 million from KZT 69,855 million for the year ended 31 December 2008. Impairment Charge for Available-for-sale Securities The Group recognised an impairment charge for available-for-sale investment securities of KZT 2,764 million for the year ended 31 December 2009 compared to KZT 42,610 million over the same period in 2008. During 2008, the Bank placed certain available-for-sale securities with a carrying amount of KZT 35,402 million with a custodian in an offshore jurisdiction. Subsequent to 31 December 2008, the Bank received a statement from its custodian, which indicated that these securities were disposed of in January 2009. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and FMSA. The Banks management believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities have been fully written-off as at 31 December 2008. Also included in this figure is an impairment loss on equity securities in the amount of KZT 7,208 million which the Group recognised during 2008. Impairment Charge for Goodwill This impairment is largely the result of uncertainties in the Kazakhstan economy, especially in the retail and mortgage sectors. Another key factor in the evaluation of goodwill is the discount rate used to determine the present value of projected cash flows. An impairment charge for goodwill for the year ended 31 December 2009 was KZT 35,436 million compared to KZT 8,107 million over the same period in 2008, as a result of the impairment test conducted with respect to Temirbank based on a comparison of the book value of the Banks investment in Temirbank against the recoverable value of Temirbank. Recoverable value was determined based on the discounted future cash flows of Temirbank. Impairment Charge for Investment in Associates The Group reported an impairment charge for investment in associates in the amount of KZT 676 million as at 31 December 2009, compared to impairment charge of KZT 19,138 million over the same period in 2008 primarily due to the impairment of investments in BTA Ukraine which took place in 2008. Other Income Other income decreased by 28.1 per cent. to KZT 4,165 million for the year ended 31 December 2009 compared to KZT 5,792 million for the year ended 31 December 2008, largely due to reductions in the business of subsidiaries and affiliated companies.

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Non-Interest Income / (Expense) The following table shows the composition of the Groups non-interest expense for the periods indicated:
Year ended 31 December 2008 2009 (unaudited) (KZT millions) (22,226) (26,597) (24,388) (27,414) (4,886) (4,435) (3,836) (4,163) 62,451 (113,130) (2,051) (2,102) (3,238) (3,184) 1,826 (181,025)

Salaries and other employee benefits......................................................................................... Other administrative and operating expenses............................................................................. Depreciation and amortisation ................................................................................................... Taxes other than income tax ...................................................................................................... Other provisions......................................................................................................................... Obligatory insurance of individuals deposits............................................................................ Other expenses........................................................................................................................... Total ..........................................................................................................................................

Salaries and Benefits Salaries and benefits for the year ended 31 December 2009 decreased by 16.4 per cent. to KZT 22,226 million from KZT 26,597 million for the year ended 31 December 2008. This decrease was primarily attributable to the decrease in staff levels and closure of cash offices. The number of employees in the Group decreased by 12.6 per cent. to 11,331 employees as at 31 December 2009 compared to 12,965 employees as at 31 December 2008. Administrative and Other Operating Expenses The following table shows the composition of the Groups other administrative and operating expenses for the periods indicated:
Year ended 31 December 2008 2009 (unaudited) (KZT millions) (6,276) (1,499) (5,655) (7,056) (1,682) (2,548) (1,366) (1,572) (1,363) (1,639) (1,317) (427) (1,000) (767) (961) (1,047) (951) (909) (936) (3,984) (509) (2,077) (433) (1,041) (413) (346) (254) (445) (169) (191) (112) (294) (55) (99) (29) (59) (17) (100) (11) (43) (3) (12) (876) (1,259) (24,388) (27,414)

Legal services and consultancy.................................................................................................. Occupancy and rent ................................................................................................................... Repair and maintenance of property and equipment.................................................................. Security...................................................................................................................................... Communications ........................................................................................................................ Penalties..................................................................................................................................... Plastic cards ............................................................................................................................... Agency services ......................................................................................................................... Encashment................................................................................................................................ Marketing and advertising ......................................................................................................... Transportation expenses ............................................................................................................ Business travel and related expenses ......................................................................................... Data processing.......................................................................................................................... Office supplies........................................................................................................................... Postal charges ............................................................................................................................ State duties and customs ............................................................................................................ Representation ........................................................................................................................... Insurance.................................................................................................................................... Trainings.................................................................................................................................... Participation in forums, seminars and conferences .................................................................... Loss on disposals of property and equipment ............................................................................ Other .......................................................................................................................................... Administrative and other operating expenses .......................................................................

Total administrative and other operating expenses for the year ended 31 December 2009 decreased by 11.0 per cent. to KZT 24,388 million from KZT 27,414 million for the year ended 31 December 2008. Marketing and advertising, occupancy and rent and transportation expenses represented the largest

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contributing factors to the decrease, while expenses for legal services and consultancy significantly increased. Marketing and advertising expenses decreased by 76.5 per cent. to KZT 936 million for the year ended 31 December 2009, compared to KZT 3,984 million for the same period in 2008. This decrease was mainly attributable to the decreased level of advertising conducted by the Group in line with the restructuring of its business. Occupancy and rent decreased by 19.9 per cent. to KZT 5,655 million for the year ended 31 December 2009, compared to KZT 7,056 million for the year ended 31 December 2008. This decrease primarily resulted from the closure of 49 cash offices in 2009. See The Bank Strategy General Strategies of the Bank Optimise Branch Network. Transportation expenses decreased to KZT 509 million for the year ended 31 December 2009, compared to KZT 2,077 million for the same period in 2008, reflecting a decrease of 75.5 per cent. Legal and consultancy fees increased by 318.7 per cent. to KZT 6,276 million for the year ended 31 December 2009, compared to KZT 1,499 million for the year ended 31 December 2008. Higher legal and consultancy fees for the year ended 31 December 2009 were mainly due to the costs associated with the Restructuring. Depreciation and Amortisation Depreciation and amortisation expenses for the year ended 31 December 2009 increased by 10.2 per cent. to KZT 4,886 million from KZT 4,435 million for the year ended 31 December 2008. This increase was mainly due to purchases in the second half of 2008 of servers and certain other equipment for the Groups call centres. Taxes other than Income Tax Taxes other than income tax were KZT 3,836 million for the year ended 31 December 2009, compared to KZT 4,163 million for the same period in 2008, reflecting a decrease of 7.9 per cent., due to decreases in taxable advertisements and the taxable base for property taxes. Other Provisions The Group recovered other provisions in the amount of KZT 62,451 million in the year ended 31 December 2009, compared to a charge for other provisions of KZT 113,130 million in 2008, an increase in the recovery of other provisions of 155.2 per cent. Other provisions consist of recoveries or charges under guarantees and letters of credit and other assets. The Group recovered other provisions in the amount of KZT 70,596 million for guarantees and letters of credit in 2009, compared to charges of other provisions of KZT 95,397 million in 2008, an increase in recoveries of 174.0 per cent. This increase in recoveries of other provisions in respect of guarantees and letters of credit was due to recoveries of provisions due to the satisfaction of the underlying obligations under the guarantees and letters of credit. The Group had charges of other provisions of KZT 8,145 million for other assets in 2009, compared to charges of other provisions of KZT 1,435 million in 2008, an increase in the charges of other provisions of 467.6 per cent. This increase in the charges of other provisions in respect of other assets is due to provisions in relation to commissions on guarantees and letters of credit. Obligatory Insurance of Individuals Deposits Certain members of the Group have a regulatory obligation to pay premiums for the insurance of individuals deposits. The Bank has an obligation to pay premiums to the KDIF in respect of its insured customer deposits. In 2009 such expenses were KZT 2,051 million as compared to KZT 2,102 million in 2008.

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Other Non-Interest Expenses Other non-interest expenses increased by 1.7 per cent. to KZT 3,238 million in 2009 from KZT 3,184 million in 2008 due to the Banks purchase of 553,185 common shares of BTA Pension Fund in February and March 2009. Taxation Kazakhstan tax regulations do not provide for the filing of consolidated income tax returns. Accordingly, the Bank and its subsidiaries file individual tax returns. The statutory corporate income tax rate in Kazakhstan for the year 2008 was 30.0 per cent. In November 2008, the Tax Code was revised to reduce corporate income tax to 20.0 per cent. effective from 1 January 2009, to 17.5 per cent. effective from 1 January 2013 and to 15.0 per cent. effective from 1 January 2014. Due to the Banks negative financial results for the year ended 31 December 2009, the Bank did not pay corporate income tax during this period. The Group, however, reported income tax expense of KZT 626 million in 2009, compared to a tax benefit of KZT 67 million in 2008. Results of Operations for the Years ended 31 December 2008 and 2007 Summary The Group reported net loss of KZT 1,188,050 million, equal to a loss per basic and diluted share of KZT 143,526, for 2008, compared to net income of KZT 64,705 million, or income per basic and diluted share of KZT 8,143, for 2007. The decrease in net income for 2008 compared to 2007 primarily reflected the increase of impairment charge of the Groups assets. The return on average common shareholders equity was negative 259.7 per cent. for year ended 31 December 2008, compared to 22.4 per cent. for 2007. The return on average common shareholders equity in 2008 and 2007 is calculated based on monthly average balances of shareholders equity. Interest Income, Interest Expense, Net Interest Income and Provision for Losses The following table sets out the principal components of the Groups net interest income for the periods indicated:
31 December 2007 2008 (unaudited) (KZT millions) 366,037 291,724 12,597 14,587 17,137 17,833 396,467 323,448 (208,381) (179,279) 188,086 144,169 (1,094,300) (67,810) (906,214) 76,359

Loans to customers .................................................................................................................... Securities ................................................................................................................................... Deposits with other banks.......................................................................................................... Total interest income ............................................................................................................... Interest expense........................................................................................................................ Net interest income before impairment...................................................................................... Impairment charge ..................................................................................................................... Net interest (expense)/income .................................................................................................

Total Interest Income Total interest income increased by 22.6 per cent. to KZT 396,467 million for 2008 from KZT 323,448 million for 2007. The increase in interest income in 2008 as compared to 2007 was due to the growth in interest-earning assets by 23.6 per cent. from KZT 2,412,615 million in 2007 to KZT 2,982,189 million in 2008.

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The monthly average yield on total interest-earning assets decreased to 13.3 per cent., for the year ended 31 December 2008, compared to 13.4 per cent. for the year ended 31 December 2007, as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2008 and 2007. Interest income on loans to customers increased by 25.5 per cent. to KZT 366,037 million for the year ended 31 December 2008, compared to KZT 291,724 million for the year ended 31 December 2007, as the average balance of outstanding loans in the Groups loan portfolio rose by 29.9 per cent. to KZT 2,579,135 million for the year ended 31 December 2008 from KZT 1,985,158 million for the year ended 31 December 2007, as calculated by the Bank according to the unaudited accounting records of the Group for the year ended 31 December 2008 and 2007, respectively. As at 31 December 2008, interest rates charged to borrowers ranged from 12 per cent. to 20 per cent. on Tenge-denominated loans, with the average interest rate on Tenge-denominated loans being 17.8 per cent., while interest rates charged on foreign currency denominated loans ranged from 10 per cent. to 20 per cent. with the effective interest rate on foreign currency denominated loans being 12.1 per cent. The overall average yield earned on loans for the year ended 31 December 2008 decreased to 14.2 per cent. compared to 14.7 per cent. for the year ended 31 December 2007, as calculated by the Bank according to the unaudited accounting records of the Group for the years ended 31 December 2008 and 2007, respectively. These decreases largely reflected write offs, the balance of accrued interest of loans that were written off the balance. For the year ended 31 December 2008, interest income earned on the Groups securities portfolio decreased by 13.6 per cent. to KZT 12,597 million from KZT 14,587 million for 2007 largely as a result of the decrease of the average balance of the Groups securities portfolio. For the year ended 31 December 2008, the average balance of the Groups securities portfolio, including trading securities, available-for-sale and held-to-maturity securities, was KZT 190,908 million, compared to KZT 242,516 million for 2007, reflecting a decrease of 21.3 per cent., as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2008 and 2007. Average interest rates earned on the securities portfolio were 6.6 per cent. and 6.0 per cent. for 2008 and 2007, respectively, as calculated by the Bank according to the unaudited accounting records of the Group as at 31 December 2008 and 2007, respectively. Interest earned on bank deposits increased by 4.1 per cent. to KZT 17,833 million for the year ended 31 December 2008 from KZT 17,137 million for the same period in 2007, primarily as a result of the higher average balance of bank deposits maintained by the Group in 2008, which increased to KZT 212,146 million from KZT 184,941 million in 2007, as calculated by the Bank according to the unaudited accounting records of the Group for the years ended 31 December 2008 and 2007, respectively. As at 31 December 2008 the average balance of Tenge-denominated deposits represented 31.2 per cent. of total deposits, compared to 32.5 per cent. as at 31 December 2007. As at 31 December 2008 large deposits (i.e., in excess of U.S.$10,000), as a percentage of total deposits, also increased compared to 31 December 2007 to 88.0 per cent. from 85.0 per cent. In particular, deposits of an amount between U.S.$10,000 U.S.$100,000 accounted for 13.5 per cent. of total deposits and deposits in excess of U.S.$100,000 accounted for 74.5 per cent. of total deposits as at 31 December 2008, compared to 17.5 per cent. and 67.5 per cent. of total deposits, respectively, as at 31 December 2007.

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Interest Expense The following table sets out certain information relating to the Groups interest expense for the periods indicated:
Year ended 31 December 2007 2008 (unaudited) (KZT millions) (95,888) (85,683) (55,748) (39,935) (56,745) (53,661) (208,381) (179,279)

Debt securities issued................................................................................................................. Customer accounts..................................................................................................................... Loans and advances from other credit institutions..................................................................... Total ..........................................................................................................................................

For the year ended 31 December 2008, interest expense increased by 16.2 per cent. to KZT 208,381 million from KZT 179,279 million for the year ended 31 December 2007. The increase in interest expense over the period was largely due to the growth in the Groups deposit base, increased bank borrowings and issuances of debt securities in 2008 and 2007, partially offset by reductions in average rates paid on bank borrowings and debt securities. Average balances of the Groups interest-bearing customer deposits, including both corporate and retail deposits (calculated, in each case, by reference to the unaudited accounting records of the Group as at the relevant year end based on the balances for the end of each month in the relevant year) were KZT 639,666 million in 2008, compared to KZT 520,269 million in 2007, reflecting an increase of 22.9 per cent., as calculated by the Bank according to the unaudited accounting records of the Group for the years ended 31 December 2008 and 2007. Average interest rates paid on interest-bearing customer deposits as at 31 December 2008 and 2007 were 8.7 per cent. and 7.7 per cent., respectively, as calculated by the Bank according to the unaudited accounting records of the Bank for the years ended 31 December 2008 and 2007. The increase in the average interest rates paid during the year ended 31 December 2008, compared to those during the year ended 31 December 2007, primarily reflected the growth in the volume of customer deposits having a term of more than a year from 39.5 per cent. to 29.5 per cent. of the total amount of deposits, as well as the increase in such deposits. For the year ended 31 December 2008, interest expense on issued debt securities increased by 11.9 per cent. to KZT 95,888 million from KZT 85,683 million for the year ended 31 December 2007. The primary reason for the increase was the higher average balances of debt securities outstanding. Net Interest Income before Impairment Charge Net interest income before impairment charge increased by 30.5 per cent. to KZT 188,086 million for the year ended 31 December 2008 from KZT 144,169 million for the year ended 31 December 2007. The Groups net interest margin was 6.3 per cent. for the year ended 31 December 2008, compared to 6.0 per cent. for 2007. The lower margin was attributable to decreases in cost of funding, since the rate of interest-bearing liabilities decreased to 7.9 per cent. in 2008 from 8.2 per cent. in 2007. Impairment Charge Impairment charges (including in respect of amounts due from credit institutions) taken by the Group for the year ended 31 December 2008 increased by 1,513.8 per cent. to KZT 1,094,300 million, compared to KZT 67,810 million in 2007. During 2008, the quality of the Groups loan portfolio significantly deteriorated as a result of circumstances and actions taken before the current management of the Bank were appointed by the controlling shareholder. Certain loan documentation, including collateral and associated additional agreements, primarily relating to financing of projects outside Kazakhstan, was no longer available. In addition, many loans were transferred to new borrowers that do not have adequate sources of repayment. Moreover, no collateral was provided by these new borrowers. Consequently all transferred loans were unsecured. A number of significant

156

borrowers, primarily registered outside Kazakhstan, have ceased servicing their loans, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. While the Bank continues its efforts related to the recovery of the above loans, the Banks management considers that loans where a borrower fails to service debt, monitoring of the borrowers has not been possible and there is neither properly registered collateral nor other necessary legal documentation, to be fully impaired and has created an allowance for the full carrying amount of such loans. In addition, the ongoing financial crisis has affected borrowers ability to service their obligations and the value of collateral in 2008. As a result of the above the Group recorded an impairment charge for losses on loans to customers of KZT 1,090,127 million and an impairment charge on loans to credit institutions of KZT 4,173 million for 31 December 2008, compared to KZT 67,414 million and KZT 396 million respectively as at 31 December 2007. The Groups total allowance for loan impairment as at 31 December 2008 increased by 788.2 per cent. to KZT 1,217,278 million from KZT 137,043 million as at 31 December 2007. During 2008 loan provisions as a part of total loan portfolio increased to 42.9 per cent. as at 31 December 2008 compared to 5.4 per cent. as at 31 December 2007. Non-Interest Income The following table sets out certain information on the Groups non-interest income for the periods indicated:
Year ended 31 December 2007 2008 (unaudited) (KZT millions) 29,155 27,432 (9,205) 22,396 (29,769) 2,503 2,100 3,317 (15,448) 4,234 (11,252) (249) (42,610) (8,107) (19,138) (62) 212 (104,062) 59,571

Fees and commissions, net......................................................................................................... Foreign exchange gains, net....................................................................................................... Net trading loss/income ............................................................................................................. Loss/gain from insurance operations ......................................................................................... Loss/income of associates.......................................................................................................... Loss on disposal of subsidiaries................................................................................................. Impairment charge for available-for-sale investment securities................................................. Impairment charge for goodwill ................................................................................................ Impairment charge for investments in associates....................................................................... Other income ............................................................................................................................. Total ..........................................................................................................................................

Fees and Commissions Fee and commission income increased by 6.5 per cent. for the year ended 31 December 2008 to KZT 30,334 million compared to KZT 28,489 million for 2007. This increase was attributable to the increases in fees and commissions related to letters of credit and guarantees issued, asset management fees and transfer operations. Fee and commission expense increased to KZT 1,179 million for the year ended 31 December 2008 compared to KZT 1,057 million, for the year ended 31 December 2007, representing the increases of 11.5 per cent. Reflecting the foregoing, net fees and commissions increased by 6.3 per cent. for the year ended 31 December 2008 to KZT 29,155 million, compared to KZT 27,432 million for 2007. The increases were primarily due to increases in the volume of transactions. Gains and Losses from Foreign Currencies Gains and losses arising from the translation of and dealing with foreign currency-denominated assets and liabilities, which are reported in the income statement as gains less losses from foreign currencies, comprised a loss, of KZT 9,205 million for the year ended 31 December 2008, compared to a gain of KZT 22,396 million for the year ended 31 December 2007 reflecting a decrease by 141.1 per cent., due to losses from currency revaluations in JPY (exchange rate increased from KZT 1,071 per JPY 1

157

to KZT 1,340 per JPY 1) since the Group had a large short position in this currency in amount of KZT 201 billion as at 31 December 2008. Insurance Income (Loss) The Group reported net insurance gains of KZT 2,100 million for the year ended 31 December 2008, compared to a net gain of KZT 3,317 million in 2007. This decrease primarily reflected the increase in expenses of agent services and insurance. Loss/Income of Associates The Group reported a net loss in its share of income from associates of KZT 15,448 million for the year ended 31 December 2008, compared with a net gain of KZT 4,234 million as at 31 December 2007, reflecting a decrease of 464.9 per cent. This resulted from changes in the Banks equity share in BTA Russia. Loss on Disposal of Subsidiaries The Group reported a net loss on disposal of subsidiaries of KZT 11,252 million for the year ended 31 December 2008, compared with a net loss of KZT 249 million as at 31 December 2007 due to deemed disposal in equity share in BTA Russia. Impairment Charge for Available-for-sale Securities As at 31 December 2008, the Group reported an impairment charge on available-for-sale investment securities in the amount of KZT 42,610 million. During 2008, the Bank placed certain available-for-sale securities with a carrying amount of KZT 35,402 million with a custodian in an offshore jurisdiction. Subsequent to 31 December 2008, the Bank received a statement from its custodian, which indicated that these securities were disposed of in January 2009. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and FMSA. Management of the Bank believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities have been fully written-off as at 31 December 2008. Also included in this figure is an impairment loss on equity securities in the amount of KZT 7,208 million which the Group recognised during 2008. Impairment Charge for Goodwill The Group recorded an impairment charge of KZT 8,107 million in respect of goodwill as at 31 December 2008, whereas no impairment charge was recorded as at 31 December 2007. The impairment is largely the result of uncertainties in the Kazakhstan economy, especially in the retail and mortgage sectors. Another key factor in the evaluation of goodwill is the discount rate used to determine the present value of projected cash flows. Impairment Charge for Investment in Associates As at 31 December 2008, the Group reported an impairment charge for investment in associates in the amount of KZT 19,138 million as a result of impairment of investments in BTA Ukraine. Other Income Other income increased by 441.9 per cent. to KZT 212 million for the year ended 31 December 2008, compared to KZT loss of 62 million for the year ended 31 December 2007, largely due to adjustments of difference between audited and unaudited reporting of subsidiaries.

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Non-Interest Expense The following table shows the composition of the Groups non-interest expense for the periods indicated:
Year ended 31 December 2007 2008 (unaudited) (KZT millions) (26,597) (25,744) (27,414) (23,400) (4,435) (2,314) (4,163) (3,469) (113,130) (4,705) (2,102) (1,761) (177,841) (61,393)

Salaries and other employee benefits......................................................................................... Administrative and other operating expenses ............................................................................ Depreciation and amortisation ................................................................................................... Taxes other than income tax ...................................................................................................... Other provisions......................................................................................................................... Obligatory reserves of individuals deposits.............................................................................. Total ..........................................................................................................................................

Non-interest expense increased by 189.7 per cent. to KZT 177,841 million for the year ended 31 December 2008, compared to KZT 61,393 million for 2007. This increase was due to the adjustment of provisions on contingent liabilities for 2008. Salaries and Benefits Salaries and benefits remained stable, increasing by only 3.3 per cent. to KZT 26,597 million for the year ended 31 December 2008, compared to KZT 25,744 million in 2007. Administrative and Other Operating Expenses The following table shows the composition of the Groups other administrative and operating expenses for the periods indicated:
Year ended 31 December 2007 2008 (unaudited) (KZT millions) (7,056) (4,797) (3,984) (3,193) (2,548) (1,750) (2,077) (1,411) (1,639) (1,522) (1,572) (1,117) (1,499) (1,307) (1,047) (1,035) (1,041) (1,033) (909) (752) (767) (786) (445) (358) (427) (59) (346) (298) (294) (75) (191) (161) (100) (117) (99) (80) (59) (2,891) (43) (54) (12) (1,259) (604) (27,414) (23,400)

Occupancy and rent ................................................................................................................... Marketing and advertising ......................................................................................................... Repair and maintenance of property and equipment.................................................................. Transportation expenses ............................................................................................................ Communications ........................................................................................................................ Security...................................................................................................................................... Legal services and consultancy.................................................................................................. Agency services ......................................................................................................................... Business travel and related expenses ......................................................................................... Encashment................................................................................................................................ Plastic cards ............................................................................................................................... Office supplies........................................................................................................................... Penalties..................................................................................................................................... Data processing.......................................................................................................................... State duties and customs ............................................................................................................ Postal charges ........................................................................................................................... Trainings.................................................................................................................................... Representation ........................................................................................................................... Insurance.................................................................................................................................... Participation in forums, seminars and conferences .................................................................... Loss on disposals of property and equipment ............................................................................ Other .......................................................................................................................................... Administrative and other operating expenses .......................................................................

Total administrative and other operating expenses increased by 17.2 per cent. to KZT 27,414 million for the year ended 31 December 2008, compared to KZT 23,400 million for 2007. Occupancy and rent expenses, marketing and advertising costs and repair and maintenance of property and equipment represented the largest factors contributing to this increase.

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Occupancy and rent increased by 47.1 per cent. to KZT 7,056 million for the year ended 31 December 2008, compared to KZT 4,797 million for the year ended 31 December 2007. This increase primarily resulted from increase of leased area due to business growth and the increase of rent tariffs on leased buildings. Marketing and advertising expenses increased by 24.8 per cent. to KZT 3,984 million for the year ended 31 December 2008, compared to marketing and advertising expenses of KZT 3,193 million for 2007. This year-on-year increase was mainly attributable to the higher level of advertising conducted by the Group and to the rebranding campaign. Business travel and related expenses increased to KZT 1,041 million for 2008, compared to KZT 1,033 million for 2007, reflecting an increase of 0.8 per cent. Communication fees increased by 7.7 per cent. to KZT 1,639 million from KZT 1,522 million for the year ended 31 December 2008 compared to 2007. Increase of communication fees in 2008 was mainly due to business development and the spectrum of available services (services through internet) and accordingly network service (new cash settlement centres, offices and the Banks expansion of staff). Security charges increased by 40.7 per cent. to KZT 1,572 million for the year ended 31 December 2008, compared to KZT 1,117 million for the year ended 31 December 2007. The increase of security charges occurred partly due to an increase in post-hours (the number of hours worked by security personnel) and to a minor increase in hourly wages of security personnel. The costs increased in 2008 also due to the new requirements of the NBK regarding organisational safety and on arrangements of accommodations of second-tier banks. The buildings of branches were equipped with additional equipment, for which maintenance costs have increased correspondingly. Legal and consultancy fees increased by 14.7 per cent. to KZT 1,499 million for the year ended 31 December 2008, compared to KZT 1,307 million for 2007. The increase in 2008 compared to 2007 was mainly due to new borrowings and new developments in the Groups activities, including the costs to implement the IBS system, operational risk management system, and the business continuity management function. In 2008 other expenses increased by 108.4 per cent. to KZT 1,259 million compared to KZT 604 million in 2007, primarily due to the increase of expenses related to deposit insurance. Depreciation and Amortisation Depreciation and amortisation expenses for the year ended 31 December 2008 increased by 91.7 per cent. to KZT 4,435 million for the year ended 31 December 2008 from KZT 2,314 million for 2007. In the second half 2007 automated teller machines and computer and server equipments were transferred on the balance sheet of the Bank from Alem Card (processing centre) and Force Technology. This fact, in addition to further purchases by the Bank during 2008, were the primary factors underlying the increase. Taxes other than Income Tax Taxes (other than income taxes) increased to KZT 4,163 million for the year ended 31 December of 2008, compared to KZT 3,469 million for the year ended 31 December 2007, reflecting an increase of 20.0 per cent. This increase in tax expenses was mainly attributable to higher value-added taxes, land taxes and other taxes, duties and mandatory payments required to be made under the national budget. Other Provisions Other provisions increased to KZT 113,130 million from KZT 4,705 million for 2007 largely due to the significant adjustment of provisions on contingent liabilities. See Factors Affecting the Banks Results of Operations Loan Loss Provisions.

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Obligatory insurance of individuals deposits Expenses for deposit insurance increased by 19.4 per cent. to KZT 2,102 million for the year ended 31 December 2008 from KZT 1,761 million for the year ended 31 December 2007, due to the increase in the volume of the Banks deposits that were required to be insured. Taxation Kazakhstan tax regulations do not provide for the filing of consolidated income tax returns. Accordingly, the Bank and its subsidiaries file individual tax returns. In 2008, the Group reported an income tax benefit of KZT 67 million. Financial Condition as at 30 June 2010 and 31 December 2009, 2008 and 2007 Total Assets As at 30 June 2010, the Groups total assets were KZT 1,740,787 million compared to KZT 1,968,659 million as at 31 December 2009, reflecting a decrease of 11.6 per cent. This was due to decreases in trading securities, loans to customers and derivative financial assets, which were partially offset by increases in cash and cash equivalents and amounts due from credit institutions. The primary cause of the decrease in total assets was the decrease in loans to customers by 28.1 per cent. from KZT 1,040,773 million as at 31 December 2009 to KZT 748,435 million as at 30 June 2010, due primarily to a deterioration of the loan portfolio quality and increases in loan loss provisions. Trading securities decreased by 26.7 per cent. to KZT 84,901 million as at 30 June 2010 from KZT 115,784 million as at 31 December 2009, primarily due to a decrease in the market value of the Groups securities portfolio and the deconsolidation of Temirbank due to a reduction of the Banks holding in the capital of Temirbank. Derivative financial assets decreased by 67.4 per cent. to KZT 8,476 million as at 30 June 2010 from KZT 25,980 million as at 31 December 2009 due to the early termination of swap contracts during the first half of 2010 for a total notional amount of KZT 255,463 million. As at 30 June 2010, cash and cash equivalents amounted to KZT 134,299 million representing an increase of 71.7 per cent. compared to KZT 78,215 million as at 31 December 2009. This increase was due to an increase of cash on hand and current accounts in national banks as a result of the decrease of NBK obligatory reserve requirements to zero for banks undergoing restructuring processes. Amounts due from credit institutions increased by 114.9 per cent. to KZT 67,568 million as at 30 June 2010 from KZT 31,444 million as at 31 December 2009, mainly due to an increase in long-term deposits placed with other banks.

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The following table sets out a breakdown of the Groups total assets, excluding goodwill and property and equipment, by currency as at the dates indicated:
As at 30 June 2010 Other foreign currency 2009 Other foreign currency 2008 Other foreign currency As at 31 December 2007 Other foreign currency

KZT Assets: Cash and cash equivalents ........................ Obligatory reserves ................................... Trading securities...................................... Amounts due from credit institutions........ Derivative financial assets ........................ Available-for-sale securities ..................... Held-to-maturity investment securities ..... Loans to customers ................................... Bonds of NWF Samruk-Kazyna ............... Investments in associates .......................... Current income tax asset........................... Deferred income tax.................................. Other assets............................................... Total .........................................................

Total

KZT

Total KZT (KZT millions) 78,215 145 115,784 31,444 25,980 19,019 1,040,773 512,246 85,088 5,708 5,267 37,238 1,956,907 25,011 40,329 95,738 22,271 701 16,350 392,170 48,152 5,487 5,040 26,839 678,088

Total

KZT

Total

101,113 27,954 38,113 1 22,185 6,138 392,693 517,413 86,074 6,271 2,993 17,282 1,218,230

33,186 36 56,947 29,455 8,475 1,810 1,075 355,742 24,880 511,606

134,299 36 84,901 67,568 8,476 23,995 7,213 748,435 517,413 86,074 6,271 2,993 42,162 1,729,836

42,577 35,088 8,931 12,108 17,095 514,383 512,246 85,088 5,692 5,267 33,812 1,272,287

35,638 145 80,696 22,513 13,872 1,924 526,390 16 3,426 684,620

62,882 23,725 32,412 62,903 20,949 4,132 1,224,893 24,219 18 6 8,849 1,464,988

87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 72,371 5,505 5,046 35,688 2,143,076

46,050 43,983 55,937 44,849 12,287 15,705 950,000 48,585 110 683 14,539 1,232,728

53,673 124,259 56,238 62,740 19,110 10,717 1,429,810 19,182 5,170 1,780,899

99,723 168,242 112,175 107,589 31,397 26,422 2,379,810 67,767 110 683 19,709 3,013,627

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As at 31 December 2009, the Groups total assets were KZT 1,968,659 million, reflecting a decrease of 10.3 per cent. compared to KZT 2,194,201 million as at 31 December 2008. Total assets decreased 10.3 per cent. as at 31 December 2009 compared to 31 December 2008, due to significant decreases in loans to customers, cash and cash equivalents, obligatory reserves and amounts due from credit institutions. The decreases were partially offset by increases in the Groups assets due to the acquisition of the SK Bonds and increased in investments in associates. The primary cause of the decrease in total assets was the decrease in loans to customers by 35.6 per cent. to KZT 1,040,773 million as at 31 December 2009 from KZT 1,617,063 million as at 31 December 2008, due primarily to a deterioration of the loan portfolio quality and increases in loan loss provisions. See Factors Affecting the Banks Results of Operations Loan Loss Provisions. Cash and cash equivalents also decreased by 11.0 per cent. to KZT 78,215 million as at 31 December 2009 from KZT 87,893 million as at 31 December 2008, due primarily to the decrease in the amount of cash held by the Group, current accounts with other financial organisations and reverse repurchase agreements. As at 31 December 2009, obligatory reserves decreased by 99.8 per cent. to KZT 145 million compared to obligatory reserves of KZT 64,054 million as at 31 December 2008 due to a decrease in the obligatory reserve requirements of the NBK from 6.0 per cent. to 1.5 per cent. of internal liabilities and from 8.0 per cent. to 2.5 per cent. of other liabilities since 31 December 2007 on 30 November 2009, the NBK Management Board reduced the obligatory reserve ratio requirement applicable to the Bank to zero per cent. for both internal and external liabilities. Amounts due from credit institutions was KZT 31,444 million as at 31 December 2009 compared to KZT 85,174 million as at 31 December 2008, a decrease of 63.1 per cent., attributable primarily to an increase in the allowance for impairment due to the deterioration of the quality of the loan portfolio to financial organisations, in particular with respect to organisations focused in mortgages and leasing. The SK Bonds represent an asset of KZT 512,246 million as at 31 December 2009. There was no corresponding asset as at 31 December 2008. See The Bank The Role of Samruk-Kazyna and the NBK. Investments in associates increased by 17.6 per cent. to KZT 85,088 million as at 31 December 2009 from KZT 72,371 million as at 31 December 2008, primarily as a result of the investment of KZT 3,269 million into Sekerbank and KZT 2,516 million into Oranta NJSIC OJSC in 2009. As at 31 December 2008, the Groups total assets were KZT 2,194,201 million, reflecting a decrease of 28.4 per cent. compared to KZT 3,064,617 million as at 31 December 2007. Total assets decreased by 28.4 per cent. as at 31 December 2008 compared to 31 December 2007, due to significant decreases in loans to customers and obligatory reserves. The decreases were partially offset by increases in the Groups assets due to the trading securities and other assets. The primary cause of the decrease in total assets was the decrease in loans to customers by 32.1 per cent. to KZT 1,617,063 million as at 31 December 2008 from KZT 2,379,810 million as at 31 December 2007, due primarily to a deterioration of the loan portfolio quality and increases in loan loss provisions. See Factors Affecting the Banks Results of Operations Loan Loss Provisions. As at 31 December 2008, obligatory reserves decreased by 61.9 per cent. to KZT 64,054 million compared to obligatory reserves of KZT 168,242 million as at 31 December 2007, due to a decrease in the obligatory reserve requirements of the NBK from 6.0 per cent. to 1.5 per cent. of internal liabilities and from 8.0 per cent. to 2.5 per cent. of other liabilities since 31 December 2007. Trading securities increased by 14.2 per cent. to KZT 128,150 million as at 31 December 2008 from KZT 112,175 million as at 31 December 2007, primarily due to an increase of corporate bonds and treasury bills of the Ministry of Finance of the Republic of Kazakhstan.

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Other assets increased to KZT 35,688 million as at 31 December 2008 from KZT 19,709 million as at 31 December 2007, due to an increase in the amount of collateral obtained by the Bank as a result of enforcement against collateral of borrowers of non-performing loans. Total liabilities The Groups total liabilities decreased by 4.6 per cent. to KZT 3,489,747 million as at 30 June 2010 from KZT 3,658,479 million as at 31 December 2009, mainly due to decreases in the amounts due to the Government and the National Bank, amounts due to credit institutions, debt securities issued and provisions. The decrease in total liabilities was partially offset by increases in amounts due to customers and other liabilities. Amounts due to the Government and the National Bank decreased to KZT 376,173 million as at 30 June 2010 from KZT 406,595 million as at 31 December 2009, representing a decrease of 7.5 per cent. due to a decrease in the volume of REPO transactions carried out. Amounts due to credit institutions decreased by 4.3 per cent. to KZT 800,703 million as at 30 June 2010 from KZT 836,384 million as at 31 December 2009. This was due to the lower number of loans from Kazakhstani banks and financial institutions attracted by the Bank as well as the deconsolidation of Temirbank. Debt securities issued decreased by 6.6 per cent. to KZT 1,557,843 million as at 30 June 2010 from KZT 1,668,602 million as at 31 December 2009 due to the restructuring of TemirCapital B.V.s liabilities for the total amount of U.S.$772 million. Provisions on contingent liabilities decreased to KZT 32,957 million as at 30 June 2010 from KZT 59,127 million as at 31 December 2009, representing a decrease of 44.3 per cent., as a result of an improvement of the quality of the Banks contingent liabilities. As at 30 June 2010 amounts due to customers increased by 4.0 per cent. to KZT 682,424 million from KZT 655,963 million as at 31 December 2009. This was due to an increase in term deposits from state organisations. Other liabilities increased to KZT 37,181 million as at 30 June 2010 from KZT 27,834 million as at 31 December 2009, representing an increase of 33.6 per cent., primarily due to the increase of assessed liabilities and liabilities of other debtors of non-core activities. As at 31 December 2009, the Groups total liabilities were KZT 3,658,479 million, an increase of 24.6 per cent. from KZT 2,936,980 million as at 31 December 2008. The increase was primarily attributable to the increase in debt securities issued by the Group, amounts due to the Government and NBK and amounts due to credit institutions. The increase in total liabilities was partially offset by decreases in amounts due to customers and provisions. Debt securities issued increased to KZT 1,668,602 million as at 31 December 2009 from KZT 1,087,726 million as at 31 December 2008, representing an increase of 53.4 per cent., due primarily to the issuance in March 2009 of the Bank Bonds with a nominal value of KZT 645,000 million. Furthermore, amounts due to the Government and the central banks increased substantially to KZT 407,911 million from KZT 1,718 million, due to the BTA/NBK Repo Transactions. See The Bank NBK Support. Amounts due to credit institutions increased due to an increase in loans from Kazakhstan banks and financial institutions. The increases described above were partially offset by decreases in amounts due to customers to KZT 655,963 million as at 31 December 2009 from KZT 886,052 million as at 31 December 2008, representing a 26.0 per cent. decrease. Amounts to customers decreased as a result of the decrease in term deposits of businesses and individuals in connection with the overall deterioration of the economic conditions in Kazakhstan.

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Provisions decreased to KZT 59,127 million as at 31 December 2009 from KZT 104,893 million as at 31 December 2008, representing a decrease of 43.6 per cent. due to the recovery of impairment charges on guarantees and letters of credit. The Groups total liabilities increased by 12.4 per cent. to KZT 2,936,980 million as at 31 December 2008 from KZT 2,612,586 million as at 31 December 2007, due to the increase in deposits held by the Group to KZT 886,052 million, and also to the increase in provisions on contingent liabilities to KZT 104,893 million in 2008. Amounts due to customers increased to KZT 886,052 million as at 31 December 2008 in comparison with KZT 652,508 million as at 31 December 2007. The increase was mainly due to increase of short-term deposits of legal entities in 2008. Provisions increase to KZT 104,893 million as at 31 December 2008 from KZT 10,557 million as at 31 December 2007, mainly due to deterioration of contingent liabilities quality. Other liabilities increased by 47.7 per cent. to KZT 34,436 million as at 31 December 2008 from KZT 23,311 million as at 31 December 2007. The increase of other liabilities in 2008 in comparison with 2007, primarily reflected higher balances due to creditors for banking.

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KZT Liabilities: Amounts due to the Government and central banks ...................... Amounts due to credit institutions ................................ Amounts due to customers.......... Derivative financial obligations ................................ Debt securities issued.................. Provisions ................................... Other liabilities ...........................

As at 30 June 2010 Other foreign currency

Total

KZT

2009 Other foreign currency

As at 31 December 2008 Other foreign currency Total KZT Total (KZT millions)

KZT

2007 Other foreign currency

Total

376,117 51,546 424,971 2,461 720,575 272 24,953

56 749,157 257,453 5 837,268 32,685 12,228 1,888,852

376,173 800,703 682,424 2,466 1,557,843 32,957 37,181 3,489,747

406,489 83,075 382,286 3,352 723,101 74 16,012 1,614,389

106 753,309 273,677 622 945,501 59,053 11,822 2,044,090

406,595 836,384 655,963 3,974 1,668,602 59,127 27,834 3,658,479

1,320 161,294 461,912 1,246 211,531 306 21,748 859,357

398 642,072 424,140 17,543 876,195 104,587 12,688 2,077,623

1,718 803,366 886,052 18,789 1,087,726 104,893 34,436 2,936,980

398 112,871 396,012 5,467 179,224 10,436 19,101 723,509

515 722,433 256,496 61 905,221 141 4,210 1,889,077

913 835,304 652,508 5,528 1,084,445 10,577 23,311 2,612,586

Total ........................................... 1,600,895

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Off-Balance Sheet Arrangements The Group enters into certain financial instruments with off-balance sheet risk in the normal course of business 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 Groups balance sheet. The Group enters into swaps to hedge movements in interest and foreign currency rates. The notional amount of interest rate swaps and currency swaps of the Group decreased to KZT 176,594 million and KZT 1,400 million as at 30 June 2010, respectively, from KZT 255,463 million and KZT 1,429 million as at 31 December 2009, representing decreases of 30.9 per cent. and 2.0 per cent., respectively. This was due to the fact that a number of counterparties exercised their rights to cancel swap contracts due to the announcement of moratorium for payment of principal amount of external liabilities. The notional amount of interest rate swaps and currency swaps of the Group as at 31 December 2009 was KZT 255,463 million and KZT 1,429 million compared to KZT 462,318 million and KZT 136,115 million, respectively, as at 31 December 2008 representing decreases of 44.7 per cent. and 99.0 per cent. due to the Group closing out most of its interest rate and cross currency swap transactions. The notional amount of interest rate swaps and currency swaps of the Group as at 31 December 2008 were KZT 462,318 million and KZT 136,115 million compared to KZT 392,888 million and KZT 358,631 million, respectively, as at 31 December 2007. Forwards and futures contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. The notional amount of forwards and futures contracts that the Group entered into decreased from KZT 27,799 million as at 31 December 2008 to KZT 1,456 million as at 31 December 2009 and further decreased to KZT 157 million as at 30 June 2010 representing decreases of 94.8 per cent. and 89.2 per cent., respectively, due to the Group closing out most of its forwards and futures contracts. As at 31 December 2008, the aggregate notional amount outstanding under forward and futures contracts was KZT 27,799 million, in comparison with KZT 204,128 million as at 31 December 2007. The Group had made certain loans which were foreign currency linked debt instruments with a floor feature, i.e., where interest and principal payments are linked to foreign currencies in such a way that the Group has an option to demand higher payments if the foreign currency specified in the contract appreciates above a certain floor (which is generally set at the level of spot rates prevailing on the loan issue date). At the same time, if foreign currency rates fall below the floor, interest and principal rates will remain at the original level. The Group recorded this feature as a foreign currency option equal to KZT 115,316 million as at 30 June 2010, KZT 109,369 million as at 31 December 2009, KZT 127,968 million as at 31 December 2008 and KZT 5,177 million as at 31 December 2007. As at 30 June 2010, the Group had issued letters of credit totalling KZT 22,665 million, guarantees in the amount of KZT 60,564 million and undrawn loan commitments in the amount of KZT 111,788 million. As at 31 December 2009, the Group had issued letters of credit totalling KZT 42,652 million, guarantees in the amount of KZT 77,239 million and undrawn loan commitments in the amount of KZT 431,767 million. As at 31 December 2008, the Group had issued letters of credit totalling KZT 139,524 million, guarantees in the amount of KZT 175,196 million and undrawn loan commitments in the amount of KZT 363,490 million. As at 31 December 2007, the Group had undrawn loan commitments totalling KZT 334,171 million, issued letters of credit totalling KZT 150,644 million and guarantees totalling KZT 141,931 million. The Groups maximum exposure to credit losses for guarantees and letters of credit is represented by the contractual amount of these transactions. Since many of the commitments are expected to expire without being drawn upon, the total amount does not necessarily represent future cash requirements.

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The Group did not have any significant commitment as at 30 June 2010 other than as discussed above. The Group applies the same credit control and management policies to its off-balance sheet commitments as it does to its on-balance sheet operations. Capital Adequacy As at 30 June 2010, the Bank was in breach of the minimum capital adequacy ratios established by the FMSA. Due to the shareholding of Samruk-Kazyna, the Bank is subject to minimum level requirements of 5.0 per cent. for K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) ratios and 10.0 per cent. for K2 (own capital to total assets weighted for risk ratio). If the composition of the Banks Shareholders changes, the Bank may become subject to the general minimum level requirements of 6.0 per cent. for K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) ratios and 12.0 per cent. for K2 (own capital to total assets weighted for risk) ratio or to the increased requirements of 7.0 per cent. for the K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) ratios and 14.0 per cent. for the K2 (own capital to total assets weighted for risk) ratio. See Risk Factors Risks Relating to the Bank Any failure to maintain the minimum capital adequacy ratios following the Restructuring could lead to conservation or liquidation of the Bank. As at 30 June 2010, total equity deficit was KZT 1,748,960 million compared to KZT 1,689,820 million as at 31 December 2009. This negative result was mainly due to the decrease in the asset quality and increase in loan loss provisions. The Group was in breach of BIS capital adequacy ratios as at 30 June 2010 and as at 31 December 2009 due to negative capital. The following table gives certain information regarding the Groups Tier I and Tier II capital and risk weighted capital adequacy ratio calculated in accordance with the Basel Accord as at the dates indicated:
As at 30 June 2010 As at 31 December 2009 2008 (KZT millions) (1,688,861) 0 (1,688,861) (85,088) (1,773,949) 1,202,499 (140.45)% (147.52)% (778,140) 0 (778,140) (72,371) (850,511) 1,900,154 (40.95)% (44.76)% 2007

Tier I capital.......................................................................... Tier II capital ........................................................................ Gross available capital .......................................................... Less investments................................................................... Tier I + Tier II capital ........................................................ Risk weighted assets ............................................................. BIS Tier I capital adequacy ratio(1) ................................... BIS Tier I + Tier II capital adequacy ratio(2) ....................

(1,749,943) 0 (1,749,943) (86,074) (1,836,017) 921,404 (189.92)% (199.26)%

462,320 85,168 547,488 (67,767) 479,721 2,730,706 16.93% 17.57%

____________ Notes: (1) Comprising Tier I capital divided by total risk weighted assets calculated in accordance with the Basel Accord. (2) Comprising Tier I + Tier II capital divided by total risk weighted assets calculated in accordance with the Basel Accord.

Recent Developments As a result of the successful completion of the Restructuring, the Bank has cancelled all of its previously issued debt securities and other liabilities and in consideration therefor has distributed KZT 138,991 million in cash to creditors in addition to the following debt securities: recovery units in principal amount of KZT 768,343 million, senior notes in principal amount of KZT 339,025 million, original issue discount notes in principal amount of KZT 63,150 million and subordinated notes in principal amount of KZT 113,750 million. The Bank also entered into a revolving credit facility on trade finance representing KZT 102,738 million. As a result of the Restructuring, the extent of the Banks financial indebtedness decreased from KZT 2,441,988 million to KZT 618,663 million, and the maturity profile of such indebtedness increased from 8 to 20 years at the same time.

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The conclusion of all procedures specified by the Restructuring Plan has resulted in an improvement in the Banks capital position of KZT 105,613 million. The Banks regulatory capital amounted to KZT 283,282 million as at 31 August 2010, allowing the Bank to comply with the required FMSA capital adequacy ratio. The following table gives information regarding the Banks unconsolidated total, Tier I and Tier II capital and its capital adequacy ratios calculated based on FMSA Methodology:
As at 30 September 2010 As at 30 June 2010 (KZT millions, except percentages) (1,791,007) 274,766 (1,631,508) 234,999 0 90,327 (104.74)% 10.4% 1,781,715 2,611,135 (68.6)% 15.4%

Total capital............................................................................................................... Tier I capital .............................................................................................................. Tier II capital ............................................................................................................. K1 (Tier I capital to total assets)............................................................................... Total risk weighted assets....................................................................................... K2 (own capital to total assets weighted for risk) ................................................

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MANAGEMENT AND CORPORATE GOVERNANCE Pursuant to paragraph 4.1 of Article 4 of the Charter, the basic objectives of the Bank include assisting the promotion and further development of a market economy in the Republic of Kazakhstan, financial activities facilitating the formation and development of various industries and sectors of the economy and social sphere, income generation and its application for the benefit of the Banks shareholders, performing and expanding a range of banking services in accordance with international standards and the laws of the Republic of Kazakhstan. The General Meeting of Shareholders is the highest corporate governing body of the Bank. The Charter provides that the Bank shall have a Board of Directors and a Management Board. The JSC Law vests in the board of directors the final approval of the majority of corporate decisions, although the final approval of certain major corporate decisions is vested in the General Meeting of Shareholders. In accordance with Kazakhstan legislation, members of the Board of Directors are elected and their powers may be terminated early at any time by the General Meeting of Shareholders. The Chairman of the Board of Directors and Members of the Management Board are elected and their term of office may be terminated early by the Board of Directors. The appointment of the Chairman, members of the Board of Directors and members of the Management Board is subject to the consent of the FMSA. Management and Corporate Governance The Bank has recently implemented a number of changes to the Banks management and corporate governance. The structure of the Banks management bodies remains unchanged and consists of the General Meeting of Shareholders, the Board of Directors and the Management Board. However, approval matters, composition of certain management bodies and financial and information reporting have been amended to improve the Banks corporate governance. The Bank has not entered into any transactions with any of the members of its administrative, management or supervisory bodies which are unusual in their nature or conditions (such as purchases outside normal activity, acquisition or disposal of fixed asset items) during the preceding and current financial years. Board of Directors The Board of Directors is a permanently functioning body involved in the general management of the Banks activities during the period between General Meetings of Shareholders except for the matters specifically reserved by the legislation of the Republic of Kazakhstan and the Banks Charter as being within the exclusive authority of the General Meeting of Shareholders. The powers of the Board of Directors (subject to the overview of the General Meeting of Shareholders) include deciding on the strategy of the Bank, defining the investment, credit and other policies of the Bank, nominating the Chairman and members of the Management Board, approving material contracts, calling General Meeting of Shareholders approving the Banks budget, establishing and closing branches and representative offices, adopting decisions of the Bank on the acquisition of 10 per cent. or more of the shares in another legal entity and increases in the Banks liabilities in excess of 10 per cent. of its equity capital. In addition, the JSC Law requires that at least one third of the members of a companys Board of Directors must be independent directors. All members of the Board of Directors are elected for an indefinite term. As at 1 February 2009, immediately prior to the acquisition by Samruk-Kazyna of control of the Bank, the Banks Board of Directors consisted of Mukhtar Ablyazov, Yerlan Tatishev, Talgat Akhsambiyev, Yurki Talvitie (Independent Director), Akmaral Ablyazova, Roman Solodchenko, Yerkin Tatishev and Tatiana Paramonova (Independent Director). As at the same date, the Management Board of the Bank consisted of Roman Solodchenko, Dmitriy Gladkov, Timur Sabyrbayev, Raimkhan Uzbekgaliyev, Kunsulu Kapbasova, Indira Izteleuova, Khalil

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Kamalov, Botagoz Jardemalie, Murat Yuldashev, Karlygash Yezhenova, Genrikh Kholodzinskiy, Bakhyt Otarbekov and Zhaksylyk Zharimbetov. Certain members of the Board of Directors and the Banks former management have fled Kazakhstan and the Bank has commenced legal proceedings in the High Court of Justice of England and Wales in London against Mukhtar Ablyazov, the former Chairman of its Board of Directors, Roman Solodchenko, the former Chairman of its Management Board and Zhaksylyk Zharimbetov, the former First Deputy Chairman of its Management Board. See Risk Factors Risks Relating to the Bank Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. In February and March 2009, eight of the nine members of the Board of Directors were replaced. In August 2010, as an integral part of the Restructuring, the following changes were made to the membership of the Board of Directors: The appointments of Kairat Aytekanov and Erlan Tatishev were terminated along with that of the independent director Ulf Vokurova; Maarten Pronk and Christophe Shefbek were appointed as directors (following their appointment at the request of the Steering Committee to act as representatives of the creditors of the Bank); and Bulat Babenov was appointed as independent director. The Board of Directors currently consists of nine members: Name Arman Dunayev .......................................... Anvar Saidenov........................................... Abay Iskandirov.......................................... Aidan Karibzhanov ..................................... Yurki Talvite............................................... Konstantin Korishchenko............................ Bulat Babenov Christophe Shefbek..................................... Maarten Pronk.. Position Chairman Member Member Member Member, Independent Director Member, Independent Director Member, Independent Director Member, Creditor Director Member, Creditor Director Director Since 2 February 2009 2 February 2009 6 March 2009 6 March 2009 7 September 2006 6 March 2009 19 August 2010 19 August 2010 19 August 2010

The business address of all members of the Board of Directors is 97 Zholdasbekov Street, Samal 2 Microdistrict, Almaty 050051, Republic of Kazakhstan. Arman Dunayev Chairman, Board of Directors. Mr. Dunayev graduated from Kazakh State University named after Kirov in 1988, majoring in Political Economy, and received a Candidate of Economic Science degree at Moscow State University named after M. V. Lomonosov in 1991. During the period from 1992 to 1993 Mr. Dunayev worked within local state executive bodies in management positions. For the next seven years, he worked in the head offices of holdings and a commercial bank in positions of increasing responsibility. Mr. Dunayev returned to state service in 2000. He was appointed Director of the Department of State Borrowing, Finance Ministry of the Republic of Kazakhstan from 2000 until May 2001. From May 2001 until September 2002, Mr. Dunayev held the post of Vice-Minister of Finance of Kazakhstan. On 4 September 2002, Mr. Dunayev was appointed Vice-Minister of Economics and Budget Planning. In June 2003 he was appointed Chairman of the National Innovation Fund CSC and First Vice-Minister of Finance from March to April 2004. From January 2006 to January 2008, Mr. Dunayev was the Chairman of the FMSA. From January until October 2008, Mr. Dunayev was Chairman of JSC Sustainable Development Fund Kazyna and from October 2008 until February 2009, Vice-Chairman of Samruk-Kazyna. On 3 February 2009, Mr. Dunayev was appointed Chairman of the Board of Directors by the decision of the Board of Directors. Anvar Saidenov Member of the Board of Directors. Mr. Saidenov graduated magna cum laude from the Economic Faculty of Moscow State University named after M. V. Lomonosov and received a qualification of Economist and Lecturer of Political Economy. Mr. Saidenov further received a Master of Science degree in Financial Economics from London University in 1994 and a degree of Candidate of Economic Science degree from Moscow University. Mr. Saidenovs started his

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professional career as a Lecturer and Head of Sector at the Social and Economic Disciplines at Dzhambul Irrigation and Construction Institute. In 1994, Mr. Saidenov joined EBRD as a consultant and banker in London. In 1996, he was appointed Deputy Governor of the NBK and in 1998 was appointed Executive Director of the State Investment Committee. During the period from January to August 1999, Mr. Saidenov held the post of Chairman at the Investment Agency of the Republic of Kazakhstan that was followed by his appointment as Vice-Minister of Finance of Kazakhstan until August 2000 when he was appointed Chairman of the Executive Board at National Savings Bank JSC. In June 2002 Mr. Saidenov joined the NBK first as Deputy Governor and then as of January 2004 as Governor. On 2 February 2009, Mr. Saidenov was appointed Member of the Board of Directors. On 16 February 2009 he was appointed acting Chairman of the Management Board of the Bank by a decision of the Board of Directors. On 21 February 2009, he became Chairman of the Management Board. Abai Iskandirov Member of the Board of Directors. Mr. Iskandirov received a law degree from the Kazakh State Law University in 2003, an LLM degree from Oxford Brookes University in 2004 and MSc IM from Oxford Brookes University in 2005. Mr. Iskandirovs professional experience started in 2005 at the Ministry of Economics and Budget Planning where he held positions of increasing responsibility, from Specialist to Deputy Director. In October 2006, Mr. Iskandirov joined Fund for Sustainable Development Kazyna JSC as Director Systems Project, and then Director of Corporate Development, Director of Investment and Managing Director effective September 2007. In 2008, Mr. Iskandirov was appointed Deputy Leader at the Centre of Strategic Development and Analysis at the Presidents Office. In October 2008, he was appointed Managing Director of Samruk-Kazyna. On 6 March 2009, he was appointed Member of the Board of Directors. Aidan Karibzhanov Member of the Board of Directors. Mr. Karibzhanov graduated from Moscow State Institute of International Relations under the auspices of the Ministry of Foreign Affairs of the Russian Federation from the faculty of International Economic Relations. Mr. Karibzhanov has professional experience as a consultant and top manager with the State Privatisation Committee of the Russian Federation, Representative Office of Credit Commercial De France in Kazakhstan, as 1st Vice-Chairman at Investment Bank Global Kazkommerts CSC, as Director at Kazkommerts Securities and as Managing Director of Kazmunaygaz CJSC. During the period from August 2005 to February 2007, Mr. Karibzhanov was President at VISOR Investment Solutions JSC. In December 2008, Mr. Karibzhanov was appointed Managing Director at Samruk-Kazyna. On 6 March 2009, he was appointed Member of the Board of Directors. Yurki Talvite Independent Member of the Board of Directors. In 1991, Mr. Talvite received a degree in International Finance and a Masters degree in Juridical Science from the University of Helsinki and an Executive MBA from the London Business School in 2002. From 1990 to 1992, he worked as Manager in SCORP field in Helsinki. From 1992 to 1993, he served as Vice-President of Union Bank of Finland, Helsinki. From 1993 to 1995, he headed the Representative Office in Moscow and was Vice-President of Scandinavian Bank Partners (Merita Bank, Den Norske Bank, Skandinaviska Enskilda Banken, Unibank). From 1995 to 1997, he was the Head of the Representative Office in Moscow and the Vice-President of New-York Bank. From 1997 to 2000 he was Vice-President in charge of the Department of Eastern Europe of New-York Bank, in London, and simultaneously a member of the Executive Board of Registrar Company, Moscow. From 2000 to 2003, he was Vice-President and Manager of New-York Group Bank, London. In 2003, he was appointed Senior Vice-President of BNP Paribas Securities Services, Paris. From 2003 to 2005, he served as the Head of International Trade and General Manager of Financial Corporation URALSIB, Moscow. Since 2005, he has been Head of the Representative Office of East Capital, Moscow. In 2006, he became a member of Board of Directors. Konstantin Korishchenko Independent Member of the Board of Directors. Dr. Korishchenko graduated from Moscow State University named after M. V. Lomonosov from the faculty of Applied Mathematics. Dr. Korishchenko holds a Ph.D. in Economics. During the period from 1984 until 1988, Dr. Korishchenko worked at the Scientific Research Institute Scientific Centre as an engineer, then joined the All State Scientific Research Institute for polygraphic industry. From 1992 to 1995,

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Dr. Korishchenko worked in the Securities Department of the Central Bank of the Russian Federation as Secondary Market Department Manager and as Deputy Head of the Exchange Department. Over the next five years, Dr. Korishchenko served as the Deputy Director and the Director of Open Market Operations at the Securities Department of the Central Bank. From 2000 to 2001, Dr. Korishchenko was the President at the Non-profit Partnership RTS Exchange. From 2001 to 2002 he held the post of Managing Director at Investment Company Troika Dialog CJSC. From July 2002 until September 2008 Dr. Korishchenko, was Vice-Chairman and Member of the Board of Directors of the Central Bank of the Russian Federation. Since September 2008 Dr. Korishchenko has served as President of the Russian Exchange Moscow Interbank Currency Exchange Information Technologies. On 6 March 2009, Dr. Korishchenko was appointed Independent Director of the Board of Directors. Bulat Babenov Independent Member of the Board of Directors. In 1999, Mr. Babenov graduated from the Academy of Public Service under the President of the Republic of Kazakhstan (Almaty), specialty - Manager of public service. In 1996, he graduated Kostanai Agricultural Institute (Kostanai, Kazakhstan), specialty - Economist. He started his career in 1996 as a specialist of Kostanai regional committee on pricing and antimonopoly policy, where he worked until 1997. From 2000 to 2002, he worked as Chief of Strategy and Coordination Sector of Kazakhstan Stock Exchange JSC (KASE) (Almaty, Kazakhstan). In 2002, he was appointed vice-president of Kazakhstan Stock Exchange JSC. From June 2010, he became as independent director of JSC BTA Securities. In August 2010, Mr. Babenov was elected to the Board of Directors as an Independent Director. Christophe Shefbek Creditor Director Member of the Board of Directors. In 1984, Mr. Shefbek graduated with honours from the Bundesgymnasium Laa-Thaya (Austria). In 1989, he graduated from the Vienna University of Economics (business administration). In 1989, he graduated with honours from Harvard University (Cambridge, USA). In 1995, he completed his doctoral studies at the Vienna University of Economics (with honours). From 1996 to 1998, he headed the Executive Office of Creditanstalt in Creditanstalt Moscow. From October 1998 to October 2001, he directed the risk division, and worked as a coordinator of the Return Unit in BACA (Moscow, Russia). From January 2001 to December 2001, Mr. Shefbek led the project of integration IMB-Bank Austria Creditanstalt (Russia) and the International Moscow Bank (Moscow, Russia). From January 2002 to July 2003, he worked in HVB Croatia d.d. (Zagreb, Croatia) and held the following positions: Member of the board of directors; chairman of the credit committee and a member of the committee on asset and liability management; a representative of HVB Group on the supervisory board of HVB Leasing Croatia; representative of HVB Group in Supervisory Board of HVB Wuestenrot Buildings Society Croatia in HVB Croatia d.d. (Zagreb, Croatia). From July 2003 to January 2006, he worked at HVB Splitskabanka (Croatia, Split) as an operating director and risk director. In January 2006, Mr. Shefbek is an operating director and a member of the board of directors of CJSC Raiffeisenbank (Russia, Moscow). In August 2010, he was elected a member of the Board of Directors as a Creditor Director. Maarten Pronk Creditor Director Member of the Board of Directors. In 1980, Mr. Pronk graduated from the University of Utrecht (Netherlands) with a degree in Economic Geography, has a Doktorandus degree (equivalent to Masters degree). In the period from 1981 to 1991, he worked at NMB Bank (Netherlands), at the head office in Amsterdam, a subsidiary Bank in Sao Paulo, Rio de Janeiro (Brazil), Montevideo (Uruguay) and held the following positions: Assistant of a regional manager in the correspondent banking subdivision; in the interim mission in Uruguay; Manager of accounts for international companies; Chief representative, deputy Chairman of FIDESA an asset management and brokerage of securities company; deputy country manager; Deputy Chairman of the local credit committee. From 1992 to 1996, Mr. Pronk worked as a general manager in ING Bank (Netherlands). From April 1996 to August 1997, he worked at Banco Rio de La Plata (Argentina) as a director for Europe. From September 1997 to July 2001, he worked at Rabobank (Netherlands), as country manager for Russia with location in Moscow. From July 2001 to September 2004, he acted as First Deputy Chairman of the Group and Acting Chairman of IBG NIKoil Bank, a member of the Supervisory Board of Avtobank, responsible for international financing, risk management and private banking of NIKoil Financial Corporation (Russia). From October 2004 to June 2006, Mr. Pronk worked in Rabobank (Netherlands), as regional manager for Russia, Ukraine and Kazakhstan with

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location in Moscow. From July 2006 to December 2007, held the position of regional manager for Russia and Ukraine with location in Moscow, was a member of the Board of Directors of Fortis Insurance Russia, Fortis Insurance Ukraine and KIT Fortis Asset Management, a chief representative of Fortis Bank (Belgium) in the Fortis Group (Belgium and the Netherlands). From January 2008 to July 2009, he worked in the Fortis Group (Belgium and the Netherlands) as a regional manager for Russia and Ukraine located in Moscow, the chairman of Fortis Insurance Russia, a member of the board of directors of Fortis Insurance Russia, Fortis Insurance Ukraine, KIT Fortis Asset Management and Fortis Intertrust Rus, Chief Representative of Fortis Bank (Belgium). Since October 2009, he has worked as a partner on financial consulting for one of the largest Russian conglomerates, P&Z GMBH (Austria). In August 2010, Mr. Pronk was elected a member of the Board of Directors as a Creditor Director. Internal Audit Service The Internal Audit Service exercises control over the Banks financial and economic activities. Under the Charter, the Internal Audit Service monitors the following aspects of the Bank: (i) the Banks internal control system; (ii) the completeness and effectiveness of the Banks risk assessment methodology and the Banks risk management procedures; (iii) the effective operation of information systems, including the integrity of databases and their protection from unauthorised access, as well as the availability of emergency plans (including a plan of business recovery, a plan for continuity of business and a plan of crisis management); (iv) the accuracy, completeness, objectivity and timing of accounting and reporting; (v) the accuracy, completeness, objectivity and timing of all filings under Kazakhstan law; (vi) the economic viability and effectiveness of the Banks operations; (vii) the compliance of the Banks internal documents with Kazakhstan laws; and (viii) the Banks human resources department. The Internal Audit Service has the following structure: 1. Internal Audit Division: 2. Head Office Audit Section; Branch Network Audit Section; and Subsidiary Companies and Banks Audit Section.

Information Systems Audit Division, which includes the Information Security Audit Section.

The Internal Audit Service is appointed by and is directly accountable to the board of directors and is supervised by the Internal Audit Committee. Pursuant to the Charter, the office of any member of the Internal Audit Service may be terminated at any time by a resolution of the Board of Directors. Committees of the Board of Directors The following is a description of the committees of the Board of Directors, established to comply with the Corporate Governance Code: Internal Audit Committee The Internal Audit Committee: (a) discusses the Banks financial statements with the Management Board and external auditor; (b) analyses the functioning and assessment of internal control system efficiency; (c) sets aggregate limits on transactions with financial instruments as well as limits accepted in the international practice; (d) performs occasional checks of the Banks strategy; (e) issues recommendations to the Board of Directors on identifying, appointing and re-appointing the external auditor; (f) coordinates the work of external auditors; (g) considers audit results; (h) approves audit terms and remuneration for services; (i) assesses the external auditors qualification, competence and independence; (i) assesses the efficiency of the audit processes; (j) monitors the activities of the

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Internal Audit Service; (k) assesses the efficiency of internal audit functions and observation of laws by the Bank; and (l) approves the register of persons affiliated to the Bank. The Internal Audit Committee is comprised of at least three members, each with a term of office of three years. The committee is headed by the Chairman, and each member of the committee must be a member of the Board of Directors, an officer of the Bank or a person nominated by the Board of Directors. At least one member of the Internal Audit Committee must be independent. The Internal Audit Committee meets as necessary, but no less than once every three months. As at the date of this Prospectus, the Internal Audit Committee consists of the following five members, as approved by a resolution of the Board of Directors dated 7 September 2010: Name Christophe Shefbek..................... Konstantin Korishchenko............ Yurki Talvite............................... Maarten Pronk............................. Bulat Babenov............................. Position Chairman, Member of Board of Directors (Creditor Director) Member, Member of Board of Directors (Independent Director) Member, Member of Board of Directors (Independent Director) Member, Member of Board of Directors (Creditor Director) Member, Member of Board of Directors (Independent Director)

For the biographies of The Internal Audit Committee members, see Board of Directors. Risk Committee The Risk Committee is an advisory and consultative body under the Board of Directors, engaged in analysis, assessment and control and risk minimisation in order to strengthen the Banks financial stability. The aim of the committee is to provide recommendations to the Board of Directors in relation to the creation and functioning of the Banks risk management system. The Risk Committee provides the Board of Directors with: (a) recommendations on improving the methodology for management, measurement, assessment and monitoring of risks; (b) approval of risk evaluation card, risk profile and risk reporting forms for further approval of the Board of Directors; (c) approval of internal normative documents related to the Banks risk management; (d) recommendations for the allocation of maximum acceptable equity losses under risk transactions and risk minimisation; and (e) approval of action plans to implement risk management principles under Basel II in the Bank. The committee is entitled to request any information related to risk management in the Bank. The Chairman of the Risk Committee is a member of the Board of Directors who is approved by the Board of Directors. The committee consists of a minimum of two members of the Board of Directors and the Deputy Chairman of the Management Board supervising risk management issues in the Bank. The committee may also be composed of the Banks department directors responsible for risks as well as other persons nominated by the Chairman of the Risk Committee. The Risk Committee meets monthly. The members of the Risk Committee, approved by the Board of Directors on 7 September 2010 are: Name Maarten Pronk............................. Konstantin Korishchenko............ Yurki Talvite............................... Christophe Shefbek..................... Anvar Saidenov........................... Abay Iskandirov.......................... Position Chairman, Member of Board of Directors (Creditor Director) Member, Member of Board of Directors (Independent Director) Member, Member of Board of Directors (Independent Director) Member, Member of Board of Directors (Creditor Director) Member, Member of Board of Directors Member, Member of Board of Directors

For the biographies of Risk Committee members, see Board of Directors.

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Corporate Management and Appointments Committee The Corporate Management and Appointments Committee advises and consults with the Board of Directors in order to improve the Banks management by developing guidelines as to the human resources policy and motivation policy. The committee: (a) recommends qualification requirements to the Board of Directors in respect of the Banks executives, managing directors and corporate secretary; (b) considers applicants for positions to be approved by the Board of Directors; (c) provides recommendations on early termination, remuneration and bonuses to persons to be approved by the Board of Directors; (d) provides recommendations in respect of the labour contract for the Chairman of the Management Board; (e) performs comparative analyses of the pay level and policy of chairman of members of the Management Board, Internal Audit Service employees, corporate secretary, and managing directors; (f) provides recommendations to the Board of Directors in relation to nominations to the boards of directors of subsidiaries and associates and their qualification requirements. The Corporate Management and Appointments Committee is composed of at least three members of the Board of Directors, including at least two independent directors. The committee holds meetings as scheduled by the chairman of the committee. Extraordinary meetings are held pursuant to a decision of the chairman of the committee, at the request of a committee member, or at the request of the Board of Directors. As at the date of this Prospectus, the members of the Corporate Management and Appointments Committee are: Name Konstantin Korishchenko............ Dunayev Arman .......................... Christophe Shefbek..................... Bulat Babenov............................. Position Chairman, Member of Board of Directors (Independent Director) Member, Chairman of Board of Directors Member, Member of Board of Directors (Creditor Director) Member, Member of Board of Directors (Independent Director)

For the biographies of members of the Corporate Management and Appointments Committee, see Board of Directors. Management Board The Management Board is responsible for the day-to-day management and administration of the Banks activities. The Management Board possesses all executive powers. The Management Boards responsibilities include making executive business decisions, implementing the Banks business strategy, appointing senior management and branch representatives of the Bank and dealing with all other matters not reserved to the Board of Directors or the General Meeting of Shareholders. The internal by-laws of the Management Board are fixed by the Board of Directors, which also appoints the members of the Management Board. The Management Board has a duty to fulfil decisions approved by the General Meeting of Shareholders and the Board of Directors. Shareholders and employees (whether or not Shareholders) are eligible to become members of the Management Board. Members of the Management Board are permitted to act in other capacities for other entities only with the prior consent of the Board of Directors.

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As at the date of this Prospectus, the members of the Management Board are: Name Anvar Saidenov........................... Nikolay Varenko......................... Berik Otemurat............................ Sergey Yeltsov ............................ Abilakim Zhumakhmetov ........... Natalya Loginova........................ Kunsulu Kapbasova .................... Saida Abuova .............................. Position Chairman of the Management Board The First Deputy Chairman of the Management Board Deputy Chairman of the Management Board Deputy Chairman of the Management Board Deputy Chairman of the Management Board, Director of Astana Branch Managing Director, Member of the Management Board Managing Director, Member of the Management Board Managing Director, Member of the Management Board

For a biography of Mr. Saidenov, see Board of Directors. Nikolay Varenko First Deputy Chairman of the Management Board. In 1994, Mr. Varenko graduated from Moscow State Institute of International Relations and qualified as Economist. In 1995, he received a Banking and Finance degree from the London School of Economics and received an MBA from St. Anna College at Oxford University. Mr. Varenkos professional experience started in 1994 first at the State Property Committee of the Russian Federation, then at the Russian Privatisation Centre as well as at the Representative Office of Deloitte & Touche in Moscow. During the period from 1997 until 2001, Mr. Varenko held the post of Director of Corporate Finance at Kazkommerts Securities JSC. From 2003 to 2004, Mr. Varenko was a member of the board of directors of Himpharm JSC, chairman of the board of directors at Central Asia Cement JSC, and chairman and board member of Compass Investment Management Company. Mr. Varenko has been the President of Venture Fund Advant SC since 2005 and chairman of the board of directors at Visor Investment Solutions JSC since 2001. On 9 February 2009, Mr. Varenko was appointed Vice-Chairman of the Bank. In August 2009, Mr. Varenko was appointed the First Deputy Chairman of the Management Board of the Bank. Berik Otemurat Deputy Chairman of the Management Board. Mr. Otemurat graduated with honours from Zhambyl Kazakh-Turkish Accounting and Economics College in 1999 with a specialty in banking. In 2003, he graduated from Kazakh Institute of Management, Economics and Strategic Research (KIMEP) with Bachelors of Science in Business Administration and Accounting with a specialisation in Finance. He began his career in 2003 as an audit expert at Ernst & Young. From 2005 to 2007, Mr. Otemurat worked as the CFO at Paragon Development. From 2007 to 2008 he worked at Sustainable Development Fund Kazyna JSC as a senior manager of Corporate Financing Department. From 2008 to 2009, he served as Director of Corporate Financing Department in National Welfare Fund Kazyna JSC and from October 2009 as Director of Corporate Finance Department at Samruk-Kazyna. From June 2009 to March 2010, Mr. Otemurat was a Managing Director and member of the Management Board of the DBK. On 18 March 2010, he was appointed Deputy Chairman of the Management Board. Abilakim Zhumakhmetov Deputy Chairman of the Management Board. In 1981, Mr. Zhumakhmetov graduated from Karaganda Co-operative Institute, majoring in Accounting. In 1984, he graduated from Moscow Cooperative Institute, specialising in Accounting and received a qualification as a teacher of cooperative technical school. During the period of 1984-1989, he worked as an assistant, then as a Professor of Karaganda Cooperative Institute. In 1993, he received a PhD in Economic Science. In 1994, he worked as a specialist in the Branch Offices Management Department at Kazkommertsbank. From 1995 until 1998, he served as the Director of the Kzylorda Branch office of Kazkommertsbank. Since 1998, he has worked at the Bank, beginning in the position of Director of Kzylorda branch office. Since August 2000, he has been Deputy-Chairman of the Management Board of the Bank. Sergey Yeltsov Deputy Chairman of the Management Board. In 1997, Mr. Yeltsov graduated from the Kazakh Institute of Law and International Relations with an International Law specialty and

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qualification as a lawyer (international lawyer). In 2005, he graduated from the Almaty Academy on Economics and Statistics, with a Finance and Credit specialty and qualification as an economist. Mr. Yeltsov started his career in 1995 at the Ministry of Industry and Trade of the Republic of Kazakhstan. From 1998 to 1999, he was a Senior Specialist at the non-commercial Legislation Section of the Financial Authorities Activity Maintenance Division, Legal Service Department and the Deputy Head of Claim Arrangement Division of the Finance Legal Service Department at the Ministry of Finance of Kazakhstan. From 1999 to 2000, he worked at OJSC Kazakhtelecom and in CJSC National Law Service in the Ministry of Justice of the Republic of Kazakhstan. From 2000 through 2007, he worked as a lawyer and as a Head of Legal Department in Kazphosphate LTD. At the same time from 2002 to 2004 he held the position of the Chairman of the board of directors of OJSC Vasilkovskiy GOK. From 2007 through 2008 he was a Head of Legal Department, Managing Director-Head of the Unit under the President of OJSC Vasilkovskiy GOK. Since 2007, he has been an out-of-the-staff Advisor to the Chairman of the Management Board of JSC ICKazkommerce-Polis. From 2008 until 2009, Mr. Yeltsov served as the Legal Department Head and Chairman of the Management Board of JSC Investment Fund of Kazakhstan. In December 2003 he passed an examination for the position of Judge in the Qualification College of Justice of the Republic of Kazakhstan and was accepted to the reserve Judges of the Republic of Kazakhstan. Since 2001 he has been a judge of the International Court of Arbitration. On 24 August 2009, Mr. Yeltsov was appointed a Deputy Chairman of the Management Board of the Bank. On 7 October 2009, by the decision of the Board of Directors, Mr. Yeltsov was appointed to the position of the Banks Compliance-Controller. Natalya Loginova Managing Director, Member of the Management Board. In 1986, Ms. Loginova graduated from the Kazakh Polytechnic Institute with a specialty in Automated Management Systems. In 1997 she graduated from Almaty Banking School with a speciality in Banking. She started her career in 1991 as an engineer-programmer in the Computer Center of Kazakh Republican Bank of USSR State Bank. In the period from 1994 to 1997 she worked at the NBK, beginning as an Economist of the Improvement of Accounting and Reporting Group and ending as a Chief Economist. In 1997, she started working for the Bank. From 1997 to 2009 she worked as a Chief of the Budget Planning Division, then Director of the Financial Controlling Department. In December 2009, she was appointed as a Managing Director of the Bank and in January 2010 Ms. Loginova was appointed a member of the Management Board of the Bank. Kunsulu Kapbasova Managing Director, Member of the Management Board. In 1996, Ms. Kapbasova graduated from Kazakh State Economic University with a specialty in Finance and Credit. In the period from 1995 to 1998, she worked as an expert at different levels at the Economic Analysis Department in Kazkommertsbank, Almaty. In 1998, she headed the Financial Analysis Department of Kazkommertsbank. In 1998, she received a diploma with honours from the Maastricht School of Management at the direction of Financial Management (Netherlands). In 2000-2002, she served as deputy director of the Marketing Department of Kazkommertsbank. In 2002, she headed the Marketing Department of Kazkommertsbank. In 2005, she became Director of the former Retail Products Department of the Bank. In July 2009, she was appointed a Managing Director of the Bank. Saida Abuova Managing Director, Member of the Management Board. In 1994, Ms. Abuova graduated from Kazakh State Academy of Management with a degree in Finance and Credit. In 2000, she graduated from the Kazakh Institute of Management, Economics and Strategic Research, receiving an MBA degree. Since 2000, she has worked in various leadership positions, including as Managing Director at JSC Kazinvestbank, Chairman of the Board of Directors of JSC ATF Polis, Vice Chairman of the Management Board of JSC Demir Bank Kazakhstan. In October 2009, she was appointed a Managing Director of the Bank.

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Committees of the Management Board Asset and Liability Management Committee ALCO is responsible for the execution of policy with respect to the asset and liabilities management of the Bank and for setting rates for banking products. See Asset and Liability Management Asset and Liability Management Committee. The committee meets weekly. The members of ALCO are: Name Tsurkan Oleg............................... Kunsulu Kapbasova .................... Natalya Loginova........................ Marlen Zhakezhanov .................. Nurlan Mukhametzhanov............ Timur Sabyrbaev......................... Gulnara Tleukulova .................... Kanat Mustafaev ......................... Product Committee The Product Committee is responsible for making decisions on issues related to the development, modification and implementation of new and modified competitive banking products in the market to ensure performance of sales plans, achievement of the given market positions and overall financial performance of the Bank. The committee meets as necessary, but at least once every two weeks. The members of the Product Committee are: Position Chairman, Managing Director Member, Managing Director, Member of the Management Board Member, Managing Director, Member of the Management Board Member, Managing Director Member, Treasurer Member, Managing Director Member, Managing Director Member, Director of Department of Client Relations of Corporate Business

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Name Sergey Yeltsov ............................

Position Chairman, Deputy Chairman of the Management Board

Section for working with products for legal entities Marlen Zhakezhanov .................. Chief of Section, Managing Director Ekaterina Prikhodko.................... Member, Deputy Director of the Department of Analysis and Corporate Business Development Erik Iklasov................................. Member, Deputy Director of Department of Small and Medium Business Luiza Satvoldinova ..................... Member, Deputy Chief of Legal Corporate Business Support Division, Legal Department Marina An ................................... Member, Deputy Chief of Division of Small and Medium Business Credit Risks, an internal division of the Department of Credit and Operational Risks Adilzhan Nugmanov ................... Member, Chief of Operational Risk Division, an internal division of the Department of Credit and Operational Risks Akbota Temirbekova .................. Member, Chief of Division of Product Technologies of Business Technologies Department Natalya Loginova........................ Member, Managing Director, Member of the Management Board Ramazan Basibekov.................... Member, Chief of Branch Network of Economic Security Division, an internal division of the Economic Security Department Section for working with products for individuals Tatiana Fedorova ........................ Chief of Section, Director of Retail Marketing Department Kunsulu Kapbasova .................... Member, Managing Director, Member of the Management Board Bekbolat Isabaev......................... Member, Deputy Chief of Division of Retail Business Risks and Underwriting, an internal division of the Department of Credit and Operational Risks Adilzhan Nugmanov ................... Member, Chief of Operational Risk Division, an internal division of the Department of Credit and Operational Risks Akbota Temirbekova .................. Member, Chief of Division of Product Technologies of Business Technologies Department Natalya Loginova........................ Member, Managing Director, Member of the Management Board Rinat Shaibakov .......................... Member, Chief of Information and Analytical Division, an internal division of Economic Security Department Oleg Izmestyev ........................... Member, Deputy Chief of Division of Legal Support and Methodology of SME, Branch Network and Retail Business of Legal Department

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Credit Committee of Head Office The Credit Committee of the Head Office is responsible for the organisation, execution and control over the lending procedures of the Bank. The committee makes decisions regarding issuing any types of financing, setting limits for financing of the other credit committees and contractor banks. The committee meets twice per week. The members of the Credit Committee of the Head Office are: Name Nikolay Varenko......................... Halinur Isakova........................... Kanat Mustafaev ......................... Galym Omarov............................ Irina Telegina .............................. Tuleu Ashlyaev ........................... Zhamilya Maxatbek .................... Position Chairman, First Deputy Chairman of the Management Board Member, Director of Department of Credit Analysis of Corporate Business Member, Director of Department of Client Relations of Corporate Business Member, Director of Department of Credit and Operational Risks Member, Deputy Director of Legal Department Member, Director of Economic Security Department Member, Managing Director

Regional Credit Committee of Head Office The Regional Credit Committee of Head Office is responsible for executing and controlling the lending procedures of the Bank within the Russian Federation. The committee meets weekly. The members of the Regional Credit Committee of Head Office are: Name Nikolay Varenko......................... Zhamilya Maxatbek .................... Gulnara Tleukulova .................... Tuleu Ashlyaev ........................... Sholpan Basambaeva .................. Ulukbek Maxatbekuulu............... Position Chairman, First Deputy Chairman of the Management Board Member, Managing Director Member, Managing Director Member, Director of Economic Security Department Member, Director of Legal Department Member, Managing Director

Major Credit Committee for HO Retail Business The Major Credit Committee for HO Retail Business is responsible for ensuring compliance of retail financing with the credit policy of the Bank and making decisions on non-standard extra-limit retail loans as well as loan applications in amounts exceeding the limit of Minor Committee for HO Retail Business. The committee also considers disputes related to the Banks credit procedure. The committee does not meet on a regular basis, but instead only when necessary. The members of the Major Credit Committee for HO Retail Business are: Name Nikolay Varenko......................... Kunsulu Kapbasova .................... Bekbolat Isabaev......................... Position Chairman, First Deputy Chairman of the Management Board Member, Managing Director, Member of the Management Board Member, Deputy Chief of Division of Retail Business Risks and Underwriting, an internal division of the Department of Credit and Operational Risks

Minor HO Retail Business Credit Committee The Minor HO Retail Business Credit Committee is responsible for ensuring compliance of retail financing with the credit policy of the Bank within the limits set by the Credit Committee of Head Office. The committee considers issues on improving credit procedures within the Bank, improving financial analysis of borrowers, structuring of transactions, cooperation of departments during application consideration and further monitoring. The Minor HO Retail Business Credit Committee

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also considers and makes decisions on non-standard extra-retail loans as well as loan applications in amounts exceeding the limit of the Credit Committee of Branch Network. Furthermore, the committee establishes the authority of persons and the limits of powers in the Banks branches and approves the methodologies and instruments to assess the solvency of Borrowers. The Minor HO Retail Business Credit Committee meets daily. The members of the Minor HO Retail Business Credit Committee responsible for loan applications are: Name Kunsulu Kapbasova .................... Dina Berdiyarova ........................ Serik Meirzhanov........................ Position Chairperson, Managing Director, Member of the Management Board Member, Chief of the Section of collateral crediting Member, Head of the Division of Credit Applications Analysis of Retail Business Risk Department, an internal division of the Department of Credit and Operational Risks On request of one of the Committees members a representative of: Law Department Economic Security Division

Invitees........................................

The members of the Minor HO Retail Business Credit Committee responsible for product applications are: Name Kunsulu Kapbasova .................... Dina Berdiyarova ........................ Bekbolat Isabaev......................... Position Chairperson, Managing Director, Member of the Management Board Member, Chief of the Section of collateral crediting Member, Deputy Chief of Division of Retail Business Risks and Underwriting, an internal division of the Department of Credit and Operational Risks Member, Head of Retail Products Development Section of Retail Products Development Division, an internal division of the Retail Marketing Department On request of one of the Committees members a representative of: Law Department Business Technologies Department

Madina Utegulova.......................

Invitees........................................

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Customer Committee of Corporate Business The Customer Committee of Corporate Business is responsible for monitoring the Banks policies in respect of servicing corporate customers, corporate banking products and diversification of the corporate business customer base. The committee meets weekly. The members of the Customer Committee of Corporate Business are: Name Kanat Mustafaev ......................... Vladimir Klyuzko ....................... Kunsulu Kapbasova .................... Oleg Tsurkan............................... Dina Palymbetova....................... Timur Sabyrbaev......................... Tuleu Ashlyaev ........................... Position Chairman, Director of Department of Client Relations of Corporate Business Deputy Chairman, Chief of Division of Corporate Business 4 of Department of Credit Analysis of Corporate Business Member, Managing Director, Member of the Management Board Member, Managing Director Member, Director of Department of Analysis and Corporate Business Development Member, Managing Director Member, Director of Economic Security Department

Customer Committee of SME Business The main objective of the Customer Committee of SME Business is to maximise profitability from customer service, achieve sales growth of the Banks products and increase the customer base of SMEs. The Customer Committee of SME Business meets once per week. The members of the Customer Committee of SME Business are: Name Marlen Zhakezhanov .................. Aigul Turebaeva.......................... Position Chairman, Managing Director Member, Head of Analytics and Marketing Section of Support Division of Small and Medium Business, an internal division of Department of Small and Medium Business Deputy Chairman, Deputy Director of SME Department Member, Chief of Sector of Operational Business of SME Department Member, Chief of Division of Support of Small and Medium Business of SME Department Member, Main Dealer of Division of Client Operations of Treasury Member, Head of Micro and Small Business Expertise Section of Credit Business Division, an internal division of the Department of Small and Medium Business Member, Chief of Sector of Restructuring and Control of Sale Division of SME Department

Ruslan Dzhamankulov ................ Baurzhan Ziyabekov ................... Erlan Alimbayev ......................... Kamila Akimbekova ................... Madiyar Kasenov ........................

Alen Abilzhanov .........................

HO NPL Committee The HO NPL Committee is responsible for monitoring the Banks loan portfolio to determine payment delays and makes decisions in order to minimise potential non-payment risks and increase non-performing loan recovery. The committee meets weekly.

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The members of the HO NPL Committee are: Name Sergey Yeltsov ............................ Nikolay Varenko......................... Timur Suleymanov...................... Sholpan Basambaeva .................. Galym Omarov............................ Ulukbek Maxatbekuulu............... Tuleu Ashlyaev ........................... Svetlana Vitkovskaya.................. Position Chairman, Deputy Chairman of Management Board Deputy Chairman of Committee, First Deputy Chairman of the Management Board Member, Director of the Department for Working with Problem Loans Member, Director of Legal Department Member, Director of the Department of Credit and Operational Risks Member, Managing Director Member, Director of Economic Security Department Member, Chief of Division of Expertise and Monitoring of Collateral

Retail Business NPL Committee The Retail Business NPL Committee monitors the Banks retail loan portfolio to determine payment delays and makes decisions in order to minimise potential non-payment risks and increase retail non-performing loan recovery. The committee meets weekly. The members of the Retail Business NPL Committee are: Name Timur Suleymanov...................... Syrim Adambaev ........................ Kunsulu Kapbasova .................... Bekbolat Isabaev......................... Position Chairman, Director of the Department for Working with Problem Loans Member, Chief of Retail Business Problem Loans Division, an internal division of the Department of Problem Loans Member, Managing Director, Member of the Management Board Member, Deputy Chief of Division of Retail Business Risks and Underwriting, an internal division of the Department of Credit and Operational Risks Member, Deputy Chief Accountant of Accounting and Reporting Department Member, Chief of the Claim Work Division, an internal division of the Legal Department Member, Deputy Director of Economic Security Department Member, Head of Problem Loans Section an internal section of Division of Expertise and Monitoring of Collateral

Aizhan Ershina............................ Ermek Tulepov............................ Alpamys Kurmambaev ............... Gulzada Abdullina ......................

Credit Committee of Branch Network The Credit Committee of Branch Network makes decisions regarding the financing of small and medium business of the Banks branches. The committee meets twice weekly.

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The members of the Credit Committee of Branch Network are: Name Marlen Zhakezhanov .................. Ernar Tashenov ........................... Aset Amirbekov .......................... Erzhan Akzhanov........................ Position Chairman, Managing Director Deputy Chairman, Director of Department of Small and Medium Business Member, Chief of the Working with Collateral Sector of the Division of Expertise and Monitoring of Collateral Member, Chief of Division of Credit Risks of Small and Medium Business, an internal division of the Department of Credit and Operational Risks Member, Chief of Division of Legal Support and Methodology of SME, Branch Network and Retail Business of Legal Department Member, Chief of Branch Network of Economic Security Division, an internal division of the Economic Security Department

Alla Delmagambetova ................ Ramazan Basibekov....................

Ethics Committee The Ethics Committee is responsible for determining the Banks corporate ethics standards in internal banking in respect of the relationships between the Bank and its Affiliates and Associates, customers and contractors of the Bank, authorised bodies and other third parties. The Ethics Committee meets as necessary. The members of the Ethics Committee are: Name Anvar Saidenov........................... Abilakim Zhumakhmetov ........... Sergey Yeltsov ............................ Aidar Alibaev.............................. Elvira Ankapova ......................... Dana Zakirova............................. Information Committee The main purpose of Information Committee is to coordinate and control processes associated with the automation of the Bank, as well as the implementation of control and supervisory authority in the implementation of new technologies in the information structure of the Bank. The Committee meets not less than once every two weeks. The members of the Information Committee are: Name Sergey Yeltsov ............................ Sultan Doskhojayev .................... Ainura Kunkhozhayeva .............. Yekaterina Prikhodko ................. Yliya Kim ................................... Adilzhan Nugmanov ................... Sergey Nasyrov........................... Position Chairman, Deputy Chairman of Management Board Member, Director of the Department of Technological Solutions Member, Director of the Department of sales channels and bank cards development Member, Deputy Director of the Department of analysis and corporate business development Member, Director of the Business Technologies Department Member, Chief of Operational Risk Division, an internal division of Department of Credit and Operational Risk Member, Deputy Chief of the Division of Information and Technical Security, Security Department Position Chairman, Chairman of the Management Board Member, Deputy Chairman of Management Board, Director of Astana branch Member, Deputy Chairman of Management Board Member, Director of Internal Audit Service Member, Chief of HR Division Member, Chief of Compliance Control Division

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HO SME Problem Debts Committee This committee was created in order to optimise the structure of the problem loans portfolio, maximise recovery of problem loans, and coordinate the work of structural divisions of the head office and branch offices to recover the problem loans of small and medium-sized businesses. Name Timur Suleymanov...................... Ernar Tashenov ........................... Ermek Tulepov............................ Ramazan Basibekov.................... Position Chairman, Director of the Department for Working with Problem Loans Member, Director of the Department of Small and Medium Business Member, Chief of the Claim Work Division, an internal division of the Legal Department Member, Chief of Branch Network of Economic Security Division, an internal division of the Economic Security Department Member, Chief of the Division of Credit Risks of Small and Medium Business, an internal division of the Department of Credit and Operational Risks Member, Chief of the Division of Expertise and Monitoring of Collateral Member, Chief of the Division of Problem Loans of Branch Network

Erzhan Akzhanov........................

Elena Rudakova .......................... Kanat Balykbaev......................... Regional Problem Debts Committee

The purpose of this Committee is to optimise the structure of the problem loans portfolio, maximise recovery of problem loans, and coordinate the work of the Banks structural units to recover problem loans. Name Nikolay Varenko......................... Ulukbek Maxatbekuulu............... Aizhan Musina ............................ Ermek Tulepov............................ Tuleu Ashlyaev ........................... Elena Molchanova ...................... Eldar Askarov ............................. Galym Omarov............................ Svetlana Vitkovskaya.................. Management Team The Management Team comprises the individuals responsible for the day-to-day management of their respective departments or divisions and who report regularly to the Management Board in relation to the status of their respective departments. Any member of the Management Team can be called to sit at a meeting of the Board of Directors as appropriate. Position Chairman, First Deputy Chairman of the Management Board Deputy Chairman, Managing Director Member, Chief of Division of Financing 3, Department of Financing of CIS countries Member, Chief of the Claim Work Division, an internal division of the Legal Department Member, Director of Economic Security Department Member, Director of the Department of Assets Return Member, Chief of the Division of Problem Loans, Department for Working with Problem Loans Member, Director of Department of Credit and Operational Risks Member, Chief of Division of Expertise and Monitoring of Collateral

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As of the date of this Prospectus, the Management Team consists of nine members, including the following persons: Name Oleg Tsurkan............................... Timur Sabyrbaev......................... Marlen Zhakezhanov .................. Zhamilya Maxatbek .................... Ulukbek Maxatbekuulu............... Gulnara Tleukulova .................... Position Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director

The business address for all members of the Banks Management Board and management team is 97 Zholdasbekov Street, Samal 2 Microdistrict, Almaty 050051, Republic of Kazakhstan. The name and certain other information about each of the current members of the management team are set out below: Oleg Tsurkan Managing Director. In 1991, Mr. Tsurkan graduated from Kazakh State University named after S.M. Kirov with a specialty in Biology. In 1994, he graduated from Kazakh Institute of Management, Economics and Strategic Research, Almaty, with an MBA. From 1991 to 1992, he worked as an expert in the firm of Eicos. In 1994, he accepted the post of specialist at ABN AMRO Bank Kazakhstan. He started as a senior dealer, treasurer to the Deputy Chairman of the Board of ABN AMRO Bank Kazakhstan. From 2003 to 2004, Mr. Tsurkan acted as Managing Director, Deputy Chairman of the Board of JSC Nauryz Bank Kazakhstan. From 2004 to 2005, he worked as an adviser to the Chairman of the Board of the Bank. Concurrently, in 2005, he served as Chairman of the Board of JSCB Transbank. From 2006 to 2007, he served as Acting Chairman of the Board, Chairman of the Board of JSC Ukrainian Credit Commercial Bank. Since 2007 he has been Managing Director of the Bank. Timur Sabyrbaev Managing Director. In 2000, Mr. Sabyrbaev graduated from the University of Turan, Faculty of Business and Management. In May 2004, he took a course to improve his skills of strategic management at the EBRD, Vienna, Austria. He started his career in 2000 as a specialist in the operating department of ABN AMRO Bank Kazakhstan. In the period from December 2000 to the present, he held various positions at the Bank in the Trade Finance Office of the International Relations Department and the Global Trade Finance and Financial Institutions Department, eventually serving as the Head of Global Trade Finance and Financial Institutions Department. In May of 2008, he was appointed Managing Director of the Bank. In December 2008, he was elected to the Management Board. In March 2009, he resigned as a member of the Management Board. Marlen Zhakezhanov Managing Director. In 1992, Mr. Zhakezhanov graduated from Army General Khrulev A.V. Yaroslavl Higher Military Financial Order of the Red Star College with a specialty in monetary-cash and credit-cash support of troops, and qualified as an economist. In 2004, he graduated from the University of International Business and received a Masters in Business Administration. In 2006, he graduated from the Satpaev K.I. Kazakh National Technical University with a specialty in the Development of Oil and Gas Fields and a qualification as an engineer. He began his career in 1992, as a senior cashier of the field office of the State Bank. In 1994, he worked as an accountant in the company BIAL. From 1994 to 2000, he worked at the NBK, in the positions of Chief Economist, Head of the Balance Sheet and Financial Statements Division, Deputy Chief of Banking Supervision Division and the Deputy Director of Banking Supervision Department. From 2000 to 2006, he worked at the Halyk Bank, as Chief of Internal Audit Service, Chief of Internal Audit Division, Director of Internal Audit Department, Acting Director of the Akmolinsk regional branch and acting Director of the Taldycorgan regional branch. From September 2006 to September 2008 worked as a Head of the Internal Audit Service of National Company Kazakhstan Temir Zholy JSC. From September 2008 to November 2008 he has worked as the Head of the Internal Audit Service of Sustainable Development Fund Kazyna JSC and from November to December 2008 as the Head of the Internal Audit Service of National Welfare Fund Kazyna JSC.

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From February 2009 to January 2010, Mr. Zhakezhanov was a Member of the Management Board and Deputy Chairman of the Management Board of Temirbank. On 1 February 2010, Mr. Zhakezhanov was appointed Managing Director of the Bank. Zhamilya Maxatbek Managing Director. In 1991, Ms. Maxatbek graduated from the Almaty Institute of National Economy with a degree in Labour Economics and a qualification as an economist. She began her career in 1991 in the Almaty branch of the national office of the Pension Fund. In the period from 1993 to 1994, she worked in JSB Montazhbank. From 1994 to 1997, she worked in Alem Bank Kazakhstan. From 1997 to 2000, she worked at the Bank in the Documentary Account Division of Operational Department. From 1997 to 2000, she worked in the Almaty Trade Finance Bank. Since 2000, she worked at the Bank in various positions, including Head of Representative Office in Moscow, Managing Director, Executive Director, Advisor to the Chairman of the Board. In May 2009, she was appointed Managing Director of the Bank. Ulukbek Maxatbekuulu Managing Director. In 2001, Mr. Maxatbekuulu graduated from the Moscow State Institute of International Relations with a specialty in jurisprudence. In 2006, he graduated from the Kazakh Humanitarian Law University, with a masters degree in jurisprudence. In 2006, he earned a scientific degree of candidate of economic sciences of Russian State Agrarian University Timiryazev K.A. Moscow Agricultural Academy. From 2001 to 2003, he worked at the post of General Director Deputy of LLP Vimpeks. From 2003 to 2005, he was the Assistant Chairman of the board of directors, Chief of Legal Department of LLC Postnoff, Moscow. From 2007 to 2008, he worked as the general partner of LLC Forsyth. In August 2009, he was appointed to the position of Managing Director of the Bank. Gulnara Tleukulova Managing Director. In 1983, Ms. Tleukulova graduated from Lenin V.I. Kazakh Polytechnic Institute with a degree in Economics and Organisation of the metallurgical industry. In 1992, she earned a PhD in Economics from the Ordzhonikidze State Academy of Management. She began her career in 1983 at the Kazakh Institute for Chemical Technology. In 1992, she worked in the Staff of Heads of regional administration. In 1993, she worked in Trade industrial firm Shart. From 1995 to 1998, she worked in the Kazakh holding company Astana Holding. Since 1998, she has been working at the Bank starting as the Chief of the Investment Planning Division of Investment and International Programs Department and ultimately rising to the Managing Director, overseeing the Department of Credit and Operational Risks of the Bank. Corporate Governance Corporate governance best practice in Kazakhstan is set out in the Kazakhstan Corporate Governance Code, which is based on existing international best practice in the area of corporate governance and sets out recommendations for the application of the principles of corporate governance by Kazakhstan joint stock companies. The Code was developed in 2005 by the Association of Financiers of Kazakhstan and approved by the FMSA. The Banks current Corporate Governance Code was adopted by the Shareholders of the Bank on 22 June 2010. The Code incorporates provisions of the Kazakhstan Corporate Governance Code and otherwise complies with the JSC Law in all material respects. During the due diligence process conducted by the Banks new management team beginning in February 2009, certain irregular transactions were uncovered that indicated that the existing corporate governance procedures were ineffective. See Risk Factors Risks Relating to the Bank Internal control weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. To remedy this situation, the Bank and the Steering Committee agreed to implement a number of changes to the Banks corporate governance, including, amongst others, the changes to the configuration of the Banks managing bodies. See Management and Corporate Governance Management and Corporate Governance Following the Restructuring. Management Remuneration as at 30 June 2010 In accordance with the Banks Charter, the remuneration and compensation of all managing directors of the Bank are determined by the Management Board of the Bank. The Bank paid KZT 96 million to

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members of the Management Board for the period from 1 January 2010 to 30 June 2010. In addition, the Bank paid KZT 66 million to members of the Management Team who were not members of the Management Board. The Bank has further committed to pay in aggregate KZT 51 million upon the termination of the employment contracts of the Banks current management. The Bank paid KZT 32.5 million to the independent directors on its Board of Directors for the period from 1 January 2010 to 30 June 2010 and KZT 53 million was paid to the non-independent directors on its Board of Directors over the same period. Overall KZT 85.5 million was paid to members of the Board of Directors. Management Remuneration as at 31 December 2009 In accordance with the Banks Charter, the remuneration and compensation of all managing directors of the Bank are determined by the Management Board of the Bank. The Bank paid KZT 303 million to members of the Management Board during the year ended 31 December 2009. In addition, the Bank paid KZT 222 million to members of the Management Team who were not members of the Management Board. The Bank has further committed to pay in aggregate KZT 54 million upon the termination of the employment contracts of the Banks current management. The Bank paid KZT 56 million to the independent directors on its Board of Directors during the year ended 31 December 2009 and KZT 117 million was paid to the non independent directors on its Board of Directors over the same period. Overall KZT 173 million was paid to members of the Board of Directors. Management Holding of Shares As at the date of this Prospectus, none of the members of the Management Board or managing directors of the Bank held Shares, other than Ms. Loginova and Ms. Tleukulova, who both held 2 Common Shares in the Banks share capital. Thus, in total, members of both the Management Team and the Management Board held in total two Shares. None of the members of the Management Board or other managing directors hold options over the share capital of the Bank. None of the members of the Board of Directors held any Shares. Loans to Management As at the date of this Prospectus, the Bank had loans outstanding to members of the Banks Management Board amounting to KZT 57,260,800 in aggregate principal amount and to the members of the Management Team of KZT 5,698,940. There are currently no loans outstanding to members of the Board of Directors. Conflicts of Interest There are no potential conflicts of interest between duties owed to the Bank by any of the members of the current management team and their private interests and/or other duties. A director may not vote on or be counted in the quorum in relation to a resolution of the Board, or of any committee of the Board, concerning any contract, arrangement, transaction or proposal with the Bank or in which the Bank is otherwise interested and in which he, the Shareholders who appointed him, or any Affiliate, has an interest which may reasonably be regarded as likely to give rise to a material conflict of interest. For the avoidance of doubt, if the relevant provisions are incorporated in the Banks Charter, the Creditor Directors shall not be prevented from being counted in the quorum of any Board meetings or committee meetings, and shall not be excluded from voting at such meetings on matters relating to recoveries (whether such recoveries shall be paid out under the Recovery Units or otherwise), owing only to the interest of the Restructuring Creditors who appointed them in such recoveries.

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Litigation Statement As at the date of this Prospectus, for at least the last five years, none of the current directors or members of the Management Board: (i) (ii) has had any convictions in relation to fraudulent offences; has held an executive function in the form of a senior executive officer or a member of the administrative, management or supervisory bodies, of any company at the time of or preceding any bankruptcy, receivership or liquidation; nor has been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including any designated professional body) or has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company.

(iii)

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SELECTED STATISTICAL AND OTHER INFORMATION The following information is included for informational purposes and you should read the selected statistical and other information set forth below in conjunction with Managements Discussion and Analysis of Results of Operations and Financial Condition, Selected Condensed Consolidated Financial Data and Presentation of Financial and Other Information as well as the Financial Statements. Certain statistical information has been derived from the Financial Statements and except where otherwise indicated the figures have been prepared in accordance with IFRS. Average Balances The following table sets out certain information as to average balances of the Groups assets and liabilities for the periods indicated based upon the monthly average balances of such periods, respectively:
For the six months ended 30 June 2010(1) 2009(1) Average Assets: Cash and cash equivalents....................................................... 103,450 80 Obligatory reserves ................................................................. Gross amounts due from credit institutions ............................ 108,087 Financial assets at fair value through profit of loss ................ 119,731 26,772 Available-for-sale securities.................................................... Held-to-maturity securities ..................................................... 5,192 Gross loans to customers......................................................... 2,901,677 Impairment charge................................................................... (2,017,912) 441,205 Bonds of NWF Samruk-Kazyna ............................................. Property and equipment .......................................................... 20,745 Investments to affiliates .......................................................... 58,989 3,864 Goodwill.................................................................................. Asset as a current tax asset...................................................... 5,104 Deferred tax income ................................................................ 78,635 18,942 Derivatives............................................................................... 43,597 Other assets.............................................................................. Total average assets............................................................... 1,918,158 Average liabilities and equity: Amounts due to the Government and the NBK...................... 402,188 Amounts due to credit institutions .......................................... 818,595 Amounts due to customers ...................................................... 661,051 Debt securities issued .............................................................. 1,657,989 Corporate income tax payable................................................. 0 Deferred income tax ................................................................ 10 8,565 Derivatives............................................................................... Reserves (provisions) against loss from notional liabilities ... 51,682 34,273 Other liabilities ........................................................................ 3,634,353 Total average liabilities......................................................... (12,711) Minority interest...................................................................... Average equity ....................................................................... (1,703,484) Average liabilities and equity............................................... 1,918,158 90,608 66,864 82,953 134,702 21,244 0 3,118,996 (1,491,849) 287,321 13,933 75,355 35,384 6,254 4,655 24,785 44,793 2,515,998 185,565 764,959 818,727 1,449,722 0 0 24,532 131,894 37,877 3,413,276 11,658 (908,936) 2,515,998 For the years ended 31 December 2009(1) 2008(1) 2007(1) (KZT millions) 66,927 133,444 125,895 53,165 152,103 148,987 81,816 104,215 95,535 134,127 146,496 198,505 21,491 48,702 35,830 0 0 11,247 3,158,617 2,744,813 2,060,086 (1,771,037) (259,030) (90,782) 393,747 12,980 14,214 9,799 78,152 63,340 40,245 27,050 42,715 28,198 5,939 948 68 4,503 1,968 53 31,157 42,690 6,243 45,392 37,254 34,739 2,344,026 3,273,872 2,704,648 286,192 761,544 753,191 1,560,853 0 0 25,815 122,178 44,027 3,553,800 3,838 (1,213,612) 2,344,026 2,212 892,417 815,328 1,124,936 699 571 9,161 8,069 36,497 2,889,890 28,541 355,441 3,273,872 1,068 747,250 659,520 934,996 1,477 529 1,106 30,128 2,376,074 15,991 312,583 2,704,648

____________ Notes: (1) Calculated based on the monthly averages.

The table below sets out the Groups consolidated average balances and interest rates for the periods indicated, as calculated by the Group according to the unaudited consolidated accounting records of the Group for the years ended 31 December 2009, 2008 and 2007, respectively and the unaudited consolidated accounting records of the Group for the six months ended 30 June 2010.

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For the six months ended 30 June 2010 Average Balance Assets Interest-earning deposits ................. KZT................................................... Foreign currency............................... Securities .......................................... KZT................................................... Foreign currency............................... Loans ................................................ KZT................................................... Foreign currency............................... SK Bonds .......................................... KZT................................................... Total interest-earning assets .......... Cash and non-interest deposits ......... Accrued interest ................................ Impairment charge ............................ Fixed assets....................................... Other assets ....................................... Total average assets ........................ Liabilities and equity Due to the NBK and the Government ................................. KZT................................................... Foreign currency............................... Due to other banks........................... KZT................................................... Foreign currency............................... Due to customers.............................. KZT................................................... Foreign currency............................... Debt securities issued....................... KZT................................................... Foreign currency............................... Interest Yield/Rate Average Balance 2009(1) Interest Yield/Rate Average Balance 2009(1) Interest (KZT millions) 5,756 2,230 3,526 13,895 9,306 4,589 189,523 77,133 112,390 28,551 28,551 237,725 Yield/Rate

For the years ended 31 December 2008(1) Average Interest Yield/Rate Balance

2007(1) Average Balance Interest Yield/Rate

76,960 21,614 55,346 100,442 64,871 35,571 667,499 388,895 278,604 507,264 507,264 1,352,165 201,333 281,652 0 9,750 73,258 1,918,158

3,988 1,248 2,740 4,068 2,829 1,239 71,862 35,629 36,233 18,067 18,067 97,985

10.4% 11.5% 9.9% 8.1% 8.7% 7.0% 21.5% 18.3% 26.0% 7.1% 7.1% 14.5%

124,433 34,215 90,218 125,509 90,422 35,087 1,371,790 493,521 878,269 284,892 284,892 1,906,624 238,254 282,787 (6,087) 13,933 80,487 2,515,998

5,357 1,830 3,527 7,557 5,726 1,831 151,781 60,542 91,239 10,462 10,462 175,157

8.6% 10.7% 7.8% 12.0% 12.7% 10.4% 22.1% 24.5% 20.8% 7.3% 7.3% 18.4%

95,661 25,821 69,840 117,074 79,817 37,257 1,134,658 492,940 641,718 389,529 389,529 1,736,922 217,287 292,774 (3,278) 12,980 87,341 2,344,026

6.0% 8.6% 5.0% 11.9% 11.7% 12.3% 16.7% 15.6% 17.5% 7.3% 7.3% 13.7%

211,546 66,832 144,714 153,880 90,369 63,511 2,320,705 828,272 1,492,433

17,833 6,452 11,381 12,597 8,602 3,995 366,037 168,539 197,498

8.4% 9.7% 7.9% 8.2% 9.5% 6.3% 15.8% 20.3% 13.2%

184,941 60,078 124,863 242,516 135,059 107,457 1,985,158 710,216 1,274,942

17,137 4,565 12,572 14,587 9,402 5,185 291,724 126,163 165,561

9.3% 7.6% 10.1% 6.0% 7.0% 4.8% 14.7% 17.8% 13.0%

2,686,131 321,239 172,706 (3,278) 14,214 82,860 3,273,872

396,467

14.8%

2,412,615 251,673 80,206 (90,782) 9,799 41,137 2,704,648

323,448

13.4%

Total interest-bearing liabilities .... Non interest bearing customer accounts ........................................ 134,448 Accrued interest ................................ 133,553 Other liabilities ................................. 94,531 (12,711) Minority interest............................... Equity ............................................... (1,703,484) Total average liabilities and equity ........................................... 1,918,158 Net interest spread ............................ Net interest income ........................... Net interest margin ...........................

401,443 401,350 93 792,718 64,157 728,561 522,440 320,296 202,144 1,555,220 684,439 870,781 3,271,821

14,044 14,042 2 13,225 2,253 10,972 18,701 11,752 6,949 70,223 39,771 30,452 116,193

7.0% 7.0% 4.3% 3.3% 7.0% 3.0% 7.2% 7.3% 6.9% 9.0% 11.6% 7.0% 7.1%

185,149 184,701 448 757,593 113,636 643,957 597,443 331,980 265,463 1,423,252 504,168 919,084 2,963,437 214,316 41,221 194,303 11,658 (908,937) 2,515,997

8,142 8,129 13 22,480 4,542 17,938 26,162 13,962 12,200 69,185 29,733 39,452 125,969

8.8% 8.8% 5.8% 5.9% 8.0% 5.6% 8.8% 8.4% 9.2% 9.7% 11.8% 8.6% 8.5%

285,448 285,039 409 752,478 95,905 656,573 535,871 318,214 217,657 1,517,285 601,209 916,076 3,091,082 210,976 59,722 192,020 3,838 (1,213,612) 2,344,026

22,195 22,172 23 48,047 8,958 39,089 45,810 26,022 19,788 141,611 69,726 71,885 257,663

7.8% 7.8% 5.6% 6.4% 9.3% 6.0% 8.5% 8.2% 9.1% 9.3% 11.6% 7.8% 8.3%

2,191 978 1,213 881,358 140,351 741,007 639,666 318,829 320,837 1,104,303 205,618 898,685 2,627,518 167,542 39,831 54,998 28,542 355,441 3,273,872

82 40 42 56,663 11,044 45,619 55,748 32,066 23,682 95,888 23,941 71,947 208,381

3.7% 4.1% 3.5% 6.4% 7.9% 6.2% 8.7% 10.1% 7.4% 8.7% 11.6% 8.0% 7.9%

1,059 759 300 738,061 103,353 634,708 520,269 291,161 229,108 917,672 174,305 743,367 2,177,061 133,001 32,836 33,255 15,991 312,504 2,704,648

57 44 13 53,604 8,690 44,914 39,935 25,481 14,454 85,683 17,003 68,680 179,279

5.4% 5.8% 4.3% 7.3% 8.4% 7.1% 7.7% 8.8% 6.3% 9.3% 9.8% 9.2% 8.2%

7.4% (18,208) (2.7)% 49,188

9.9% 5.2%

5.4% (19,938) (1.1)%

6.9% 188,086 7.0%

5.2% 144,169 6.0%

____________ Notes: (1) Calculated based on the monthly averages.

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Analysis of Changes in Net Interest Income The following table provides a comparative analysis of changes in net interest income and expense by reference to changes in average volumes and rates for the periods indicated. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume multiplied by the previous rate, while rate change is change in rate multiplied by the current volume. The rate/volume change (change in rate multiplied by change in volume) is allocated between volume change and rate change at the ratio each component bears to the absolute value of their total.
For the six months ended 30 June 2010/2009 Increase/(decrease) due to changes in Net Volume Rate Change Interest Income Interest-earning deposits: KZT ........................................................ Foreign currency .................................... Securities: .................................................... KZT ........................................................ Foreign currency .................................... Loans: .......................................................... KZT ........................................................ Foreign currency .................................... Bonds of NWF Samruk-Kazyna ................. KZT ........................................................ Foreign currency .................................... Total interest income................................. Interest Expense Due to the Government and the NBK: KZT ........................................................ Foreign currency .................................... Due to other banks:...................................... KZT ........................................................ Foreign currency .................................... Due to customers:........................................ KZT ........................................................ Foreign currency .................................... Debt securities: ............................................ KZT ........................................................ Foreign currency .................................... Total interest expense................................ Net change in net interest income ............ For the years ended 31 December 2009/2008 Increase/(decrease) due to changes in Net Volume Rate Change (KZT millions) For the years ended 31 December 2008/2007 Increase/(decrease) due to changes in Net Volume Rate Change

(1,348) (2,727) (3,236) 51 (25,670) (124,592) 16,332 (141,190)

766 1,939 339 (642) 756 69,587 (8,727) 64,018

(582) (787) (2,897) (592) (24,913) (55,006) 7,605 (77,172)

(3,959) (5,888) (1,004) (1,651) (68,235) (112,578) (193,315)

(263) (1,967) 1,708 2,245 (23,171) 27,470 28,551 34,573

(4,222) (7,855) 704 594 (91,406) (85,108) 28,551 (158,742)

511 2,062 (2,436) (801) 42,048 46,395 87,779

1,376 (3,253) 1,636 (389) 328 (14,458) (14,760)

1,887 (1,191) (800) (1,190) 42,376 31,937 73,019

19,070 (21) (3,955) 4,713 (983) (5,820) 21,263 (4,147) 30,120 (171,310)

(13,158) 11 1,667 (11,680) (1,226) 568 (11,226) (4,852) (39,896) 103,914

5,912 (10) (2,288) (6,967) (2,209) (5,252) 10,037 (8,999) (9,776) (67,396)

11,646 (28) (3,511) (5,235) (62) (7,635) 45,889 1,391 42,455 (235,770)

10,486 9 1,425 (1,295) (5,982) 3,741 (104) (1,453) 6,827 27,746

22,132 (19) (2,086) (6,530) (6,044) (3,894) 45,785 (62) 49,282 (208,024)

13 40 3,111 7,522 2,421 5,787 3,054 14,350 36,298 51,481 511

(17) (11) (757) (6,817) 4,164 3,441 3,884 (11,083) (7,196) (7,564) 1,376

(4) 29 2,354 705 6,585 9,228 6,938 3,267 29,102 43,917 1,887

The Groups Loan Portfolio Loans to customers represent the largest part of the Banks business. The Groups gross loan portfolio (including accrued interest) was KZT 2,516,853 million as at 31 December 2007, KZT 2,834,341 million as at 31 December 2008, KZT 3,164,181 million as at 31 December 2009 and KZT 2,763,876 million as at 30 June 2010. See Managements Discussion and Analysis of Results of Operations and Financial ConditionTotal Assets. The average balance of the Groups gross loan portfolio (net of accrued interest) was KZT 1,985,158 million for 2007, KZT 2,579,135 million for 2008, KZT 2,877,626 million for 2009 and KZT 2,634,556 million for the six months ended 30 June 2010. Lending to corporate clients represented 84.1 per cent. of the Groups gross loan portfolio as at 30 June 2010, compared to 78.3 per cent. as at 31 December 2009 and 73.1 per cent. as at 31 December 2008, and 66.3 per cent. as at 31 December 2007. The Groups customer base includes many of Kazakhstans leading industrial companies and trading corporations, as well as medium and small size enterprises. Gross amounts due from credit institutions and the Groups gross loans to customers were KZT 2,912,148 million as at 30 June 2010, KZT 3,248,082 million as at 31 December 2009, KZT 2,923,954 million as at 31 December 2008 and KZT 2,624,565 million as at 31 December 2007. Gross amounts due from credit institutions represented a small percentage of that sums (5.1 per cent., 2.6 per cent., 3.1 per cent. and 4.1 per cent., respectively).

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The following table sets out certain information relating to the amounts and composition of the Groups loan portfolio, its contingent liability exposure and loss allowances, as calculated by the Bank according to the unaudited accounting records of the Bank as at 30 June 2010 and 31 December 2009, 2008 and 2007, respectively:
As at 30 June 2010 As at 31 December 2009 2008 2007 (KZT millions) 2,884,545 2,622,783 2,400,649

Loans ................................................................................. 2,500,346 including: ........................................................................... Non performing loans(1) ................................................... 1,841,853 2,043,082 973,551 19,829 263,530 279,636 211,558 116,204 Accrued interest receivable................................................ 2,763,876 3,164,181 2,834,341 2,516,853 Total gross loans .............................................................. Commercial letters of credit............................................... 22,665 42,652 139,524 150,644 Financial guarantees(2)...................................................... 60,564 77,239 175,196 141,931 111,788 431,767 363,490 334,171 Undrawn loan commitments .............................................. 195,017 551,658 678,210 626,746 Total contingent liabilities............................................... Allowance for impairment of loans ................................... 2,015,441 2,123,408 1,217,278 137,043 Provision for off balance sheet items ................................. 32,957 59,127 104,893 10,577 123 Allowance for impairment on amounts due from credit 80,704 52,457 4,439 institutions ...................................................................... 3,589 8,478 1,387 360 Other .................................................................................. 2,132,691 2,243,470 1,327,997 147,993 Total .................................................................................. (1,748,960) (1,689,820) (742,779) 452,031 Equity................................................................................ Non performing loans/gross loans ..................................... 66.6% 64.6% 34.3% 0.8% Allowance for impairment of loans/non performing loans 109.4% 103.9% 125% 691.1% Allowance for impairment of loans/gross loans................. 72.9% 67.1% 42.9% 5.4% ____________ Notes: (1) Non-performing loans comprise loans where past due payments exceed 90 days or are 100 per cent. Provisioned. (2) Financial guarantees do not include the guarantees given by the Bank in favour of TuranAlem Finance in respect of its Euronotes issued from 2001 through 2006.

Loans by Type The Group provides financing for various purposes, although the majority of loans are for working capital purposes with a maturity of twelve months or less, for fixed asset purchases and for trade finance. The following table sets out certain information relating to the Groups loan portfolio (including advances and accrued interest), by reference to the type of loan, as calculated by the Bank according to the unaudited accounting records of the Group as at the dates indicated in the table:
As at 30 June 2010 (KZT (%) millions) 626,919 22.7% 479,047 17.3% 34,435 87,768 466,334 1,071,373 2,763,876 1.2% 3.2% 16.9% 38.7% 100.0% 2009 (KZT millions) 776,417 576,875 33,159 241,759 547,936 988,035 3,164,181 (%) 24.5% 18.2% 1.1% 7.7% 17.3% 31.2% 100.0% As at 31 December 2008 (KZT (%) millions) 1,297,743 45.8% 463,706 16.4% 484,741 271,387 60,405 256,359 2,834,341 17.1% 9.6% 2.1% 9.0% 100.0% 2007 (KZT millions) 1,305,560 309,926 278,673 292,463 69,912 260,319 2,516,853

Working capital finance ................................. Construction and repair .................................. Fixed asset purchase (excluding real estate).......................................................... Consumer loans .............................................. Real estate purchase ....................................... Other ............................................................... Total (including accrued interest)...............

(%) 51.9% 12.3% 11.1% 11.6% 2.8% 10.3% 100.0%

194

Loans by Type of Borrower The following table sets out certain information relating to the Groups commercial loan portfolio (including advances and accrued interest), by reference to the type of borrower, as at the dates indicated in the table:
As at 30 June 2010 (KZT millions) (%) 2,500,000 90.5% 262,585 9.5% 1,071 0.0% 220 0.0% 100.0% 2,763,876 2009 (KZT millions) 2,684,843 471,537 7,574 227 3,164,181 (%) 84.9% 14.9% 0.2% 0.0% 100.0% As at 31 December 2008 (KZT (%) millions) 2,321,272 81.9% 505,517 17.8% 7,353 0.3% 199 0.0% 2,834,341 100.0% 2007 (KZT (%) millions) 1,963,281 78.0% 546,880 21.7% 6,609 0.3% 83 0.0% 2,516,853 100.0%

Private companies ..................... Individuals ................................. State companies......................... Others ........................................ Loans to customers, gross.......

The Bank inherited a large corporate customer base from its predecessors, Alem Bank and Turan Bank, including many of the countrys leading industrial companies engaged in a broad range of industries. Historically, a significant percentage of the Banks predecessors loans were extended to state-owned companies, but since the Banks establishment in January 1997, this focus has been significantly reduced. Loans to private companies and individuals increased from 99.1 per cent. of total loans as at the time of the Banks establishment to 100 per cent. of total loans as at 30 June 2010. The increase in loans to private companies and individuals reflects the overall growth of the economy and the resulting improvement in the general welfare of a large number of individuals across Kazakhstan, the privatisation of a number of State-owned enterprises by the Government in recent years as well as the policy of the Bank. The Bank has identified certain sectors, including oil and gas, energy, trading and metals & metallurgy and construction, as key target areas in which it intends to expand its lending business. As at 30 June 2010, the Groups loan portfolio including accrued interest comprised KZT 2,762,585 million to private companies and individuals (99.96 per cent.) and KZT 1,071 million to state-owned companies (0.04 per cent.). As at 31 December 2009, the Groups loan portfolio including accrued interest comprised KZT 3,156,380 million to private companies and individuals (99.8 per cent.) and KZT 7,574 million to state-owned companies (0.2 per cent.). As at 31 December 2008, the Groups loan portfolio including accrued interest comprised KZT 2,826,789 million to private companies and individuals (99.7 per cent.) and KZT 7,353 million to state controlled companies (0.3 per cent.). As at 31 December 2007, the Groups loan portfolio including accrued interest comprised KZT 2,510,161 million to private companies and individuals (99.7 per cent.) and KZT 6,609 million to state controlled companies (0.3 per cent.). As at 30 June 2010, the Groups ten largest borrowers accounted for 16.0 per cent. of the total gross loan portfolio then outstanding (as compared to 15.0 per cent. as at 31 December 2009 and 14.0 per cent. as at 31 December 2008).

195

Loans by Sector The following table sets out the composition of the Groups loan portfolio (including advances and accrued interest), by reference to the economic sector of the borrower, as at the dates indicated in the table:
As at 30 June 2010 (KZT millions) (%) Real estate investments................ 527,014 Individuals .................... 262,585 including consumer 87,768 loans .......................... including mortgage 174,817 loans .......................... Housing construction .... 469,031 Oil & gas....................... 353,289 Wholesale trade ............ 333,246 Construction of roads and industrial buildings .................... 238,038 Agriculture.................... 142,545 Energy........................... 68,124 Chemical industry ......... 61,029 Retail trade.................... 40,765 Transport....................... 36,429 Food industry................ 40,863 Mining .......................... 34,202 Telecommunication ...... 31,445 Metallurgical industry... 26,731 Hospitality .................... 12,560 Financial services.......... 1,738 Textile and leather ........ 11,381 Production of machinery and equipment .................. 10,583 Publishing .................... 721 Production of rubber and plastic articles ..... 1,439 Research and development .............. 457 59,661 Other ............................. Total ............................. 2,763,876 19.1% 9.5% 3.2% 6.3% 17.0% 12.8% 12.1% 2009 (KZT millions) 536,224 471,537 241,759 229,778 492,138 382,103 359,531 (%) 16.9% 14.9% 7.6% 7.3% 15.6% 12.1% 11.4% As at 31 December 2008 (KZT millions) (%) 435,188 505,517 271,387 234,130 415,536 314,970 298,573 15.4% 17.8% 9.6% 8.3% 14.7% 11.1% 10.5% 2007 (KZT millions) 365,741 546,880 292,463 254,418 316,222 173,948 415,817 (%) 14.5% 21.7% 11.6% 10.1% 12.6% 6.9% 16.5%

8.6% 5.2% 2.4% 2.2% 1.5% 1.3% 1.5% 1.2% 1.1% 1.0% 0.4% 0.1% 0.4%

274,311 153,401 68,895 64,452 49,552 39,453 41,037 38,991 33,940 28,534 16,102 8,896 12,514

8.7% 4.8% 2.2% 2.0% 1.6% 1.2% 1.3% 1.2% 1.1% 0.9% 0.5% 0.3% 0.4%

206,066 142,819 84,266 62,783 62,116 51,087 40,152 35,580 25,244 25,374 13,903 12,968 11,241

7.3% 5.0% 3.0% 2.2% 2.2% 1.8% 1.4% 1.3% 0.9% 0.9% 0.5% 0.5% 0.4%

154,495 139,615 7,971 47,869 71,836 50,650 48,401 30,325 24,233 11,174 10,689 8,024 4,134

6.1% 5.5% 0.3% 1.9% 2.9% 2.0% 1.9% 1.2% 1.0% 0.5% 0.4% 0.3% 0.2%

0.4% 0.0% 0.0% 0.0% 2.2% 100.0%

9,136 645 992 584 81,213 3,164,181

0.3% 0.0% 0.0% 0.0% 2.6% 100.0%

12,259 1,059 894 818 75,928 2,834,341

0.4% 0.0% 0.0% 0.0% 2.7% 100.0%

16,664 3,072 731 724 67,638 2,516,853

0.7% 0.1% 0.0% 0.0% 2.7% 100.0%

Loans by Maturity The Group predominantly lends to SMEs for terms ranging from one to three years and to large corporations for longer terms. The Bank expects that demand for longer-term financing from existing customers and other high quality corporate credits will continue to increase and that the maturity profile of the Groups loan portfolio will, in turn, be lengthened. The policy of the Bank in respect of the maturity profile of its loans depends on the Banks strategic goals and the sources of funding available to the Bank, as well as on the current state of the Kazakhstan economy, overall market conditions and the financial standing of the borrower.

196

The following table sets out certain information relating to the maturity profile of the Groups loan portfolio (including advances and accrued interest) based on the accounting records of the Bank as at the dates indicated in the table:
As at 30 June 2010 (KZT (%) millions) Less than 1 year ............. 495,512 From 1 to 3 years ........... 678,094 Over 3 years...... 1,161,885 Past Due............ 428,385 Total ................. 2,763,876 17.9% 24.5% 42.0% 15.5% 100.0% As at 31 December 2009 (KZT millions) 485,583 673,976 1,367,829 636,793 3,164,181 (%) 15.4% 21.3% 43.2% 20.1% 100.0% (KZT millions) 509,045 707,869 1,556,024 61,404 2,834,341 (%) 18.0% 25.0% 54.9% 2.1% 100.0% 2008 (KZT millions) 392,622 697,990 1,408,617 17,624 2,516,853 (%) 15.6% 27.7% 56.0% 0.7% 100.0%

Loans by Geographic Location The following table sets out certain information relating to the Groups loan portfolio (including advances and accrued interest) by reference to the geographic location of the Borrower, based on the unaudited accounting records of the Bank as at the dates indicated in the table:
As at 30 June 2010 (KZT (%) millions) Kazakhstan Almaty ...................... 771,813 Astana ....................... 118,853 West region............... 158,443 East region ................ 102,108 North region.............. 66,879 Central region(1) ........ 57,002 73,743 South region(2)........... CIS and other countries ............... 1,415,035 Total ......................... 2,763,876 ____________ Notes: (1) Excluding Astana (2) Excluding Almaty 27.9% 4.3% 5.7% 3.7% 2.4% 2.1% 2.7% 51.2% 100.0% 2009 (KZT millions) 879,325 166,746 167,848 100,705 94,734 56,445 91,433 1,606,945 3,164,181 (%) 27.8% 5.2% 5.3% 3.2% 3.0% 1.8% 2.9% 50.8% 100.0% As at 31 December 2008 (KZT (%) millions) 857,785 151,054 189,366 107,689 104,405 88,687 128,888 1,206,467 2,834,341 30.3% 5.3% 6.7% 3.8% 3.7% 3.1% 4.5% 42.6% 100.0% 2007 (KZT (%) millions) 664,054 173,139 243,283 139,356 131,596 84,687 142,160 938,578 2,516,853 26.4% 6.9% 9.7% 5.5% 5.2% 3.4% 5.6% 37.3% 100.0%

Collateralisation of Loan Portfolio The Bank estimates that it holds collateral with a value in excess of the principal amount of its loan portfolio as a part of principal debt. While Kazakhstan has passed a law on the foreclosure of assets such as property of a pledgee, historically the Bank has generally not been able to realise the full value of the collateral on its loans. The following table sets out certain information relating to the collateralisation of the Groups loan portfolio, based on the unaudited accounting records of the Bank as at the dates indicated in the table. For a description of the Banks collateralisation policy, see Asset and Liability ManagementLending Policies and Procedures.

197

As at 30 June 2010 (KZT (%) millions) Collateralised........................ 2,176,745 78.8% 587,131 21.2% Uncollateralised.................... 100.0% Total loans ........................... 2,763,876

2009 (KZT millions) 2,568,334 595,847 3,164,181 (%) 81.2% 18.8% 100.0%

As at 31 December 2008 (KZT (%) millions) 2,459,283 86.8% 375,058 13.2% 2,834,341 100.0%

2007 (KZT (%) millions) 2,307,954 91.7% 208,899 8.3% 2,516,853 100.0%

Credit Exposure other than Loans As at 30 June 2010, the Group had exposure to other credit risks consisting of financial instruments with off-balance sheet risk in the aggregate amount of KZT 195,017 million, including commitments to extend credit of KZT 111,788 million, financial guarantees and promissory notes of KZT 60,564 million and commercial letters of credit of KZT 22,665 million. As at 30 June 2010, the Bank held open forward contracts for KZT 178,692 million. As at 31 December 2009, the Group had exposure to other credit risks consisting of financial instruments with off-balance sheet risk in the aggregate amount of KZT 551,658 million, including commitments to extend credit of KZT 431,766 million, financial guarantees and promissory notes of KZT 77,239 million and commercial letters of credit of KZT 42,653 million. As at 31 December 2009, the Bank held open forward contracts for KZT 194,198 million. As at 31 December 2008, the Group was exposed to other credit risks consisting of financial instruments with off-balance sheet risk in the aggregate amount of KZT 678,209 million, including commitments to extend credit of KZT 363,490 million, financial guarantees and promissory notes of KZT 175,195 million and commercial letters of credit of KZT 139,524 million. As at 31 December 2008, the Bank held open forward contracts for KZT 176,239 million. As at 30 June 2010, 31 December 2009 and 2008 the Group had established provisions for losses with respect to off-balance sheet risks of KZT 32,957 million, KZT 59,127 million and KZT 104,893 million, and KZT 10,577 million, respectively. See also Managements Discussion and Analysis of Results of Operations and Financial ConditionFinancial Condition for the years ended 31 December 2009 and 2008Off-Balance Sheet Arrangements and Managements Discussion and Analysis of Results of Operations and Financial ConditionFinancial Condition for the Years ended 31 December 2008 and 2007Off-Balance Sheet Arrangements. Investments Financial Assets at Fair Value through Profit or Loss Securities purchased with the intention of recognising short-term profits, which consist primarily of debt securities, but also include some equity securities, are classified as financial assets at fair value through profit or loss. After initial recognition, securities which are classified as held for trading are measured at estimated fair value. Changes in the estimated fair value are included in the accompanying consolidated statements of income within gains less losses from securities. In determining estimated fair value, financial assets at fair value through profit or loss are valued at the last trade price, if quoted on an exchange, or the last bid price, if traded over-the-counter.

198

The following table sets out certain information relating to the Groups portfolio of financial assets at fair value through profit or loss as at the dates indicated:
As at 30 June 2010 Amount (KZT millions) Debt securities: Corporate bonds .......................................... Treasury bills of Ministry of finance of Kazakhstan............................................... Notes of NBK.............................................. Bonds of Kazakhstan non-financial institutions................................................ Sovereign bonds of OECD countries .......... Bonds of Kazakhstan financial institutions................................................ Bonds of international financial organisations ............................................ Treasury bills of Ministry of Finance of Russia....................................................... Municipal bonds ......................................... Total ............................................................ Equity securities .......................................... Mutual funds shares ................................... Financial assets at fair value through profit or loss............................................ Subject to repurchase agreements ............... 30,295 9,291 58 4,991 8,262 4,984 99 3 57,983 26,918 8.8% 4.0% 6.5% 4.4% 5.5% 7.5% 7% 12.0% 5.5% 8.4% 2010 2018 2012 2015 2010 2013 2037 2013 2024 2012 2013 2030 39,359 20,642 4,921 8,679 5,278 97 3 78,979 36,805 8.8% 4.0% 7.0% 4.4% 5.5% 7.5% 2013 2010 2037 2015 2024 2012 2013 2030 6.8% 12.0% 0% 8.5% 2010 2015 2010 2012 59,979 25,019 9,918 4,841 3,793 2,887 80 2 106,519 21,631 7.0% 12.0% 3.5% 18.7% 6.6% 8.0% 8.0% 4.0% 6.0% 4.4% 5.5% 7.5% 2009 2018 2009 2015 2009 2013 2037 2026 2012 2013 2030 46,241 19,156 3,707 6,694 6,881 76 3 264 83,022 29,100 53 112,175 60,129 4.0% 2037 7.0%-8.9% 2009-2015 5.5%-6.4% 2008-2010 7.3% 2008 Repayment term Amount (KZT millions) 2009 Repayment term Amount (KZT millions) As at 31 December 2008 Repayment term Amount (KZT millions) 2007 Repayment term

6%-12.2% 2013-2026 4.4%-5.5% 2012-2013 7.5% 8.5% 2030 2008

84,901

115,784 4,420

128,150 74,590

199

Available-for-Sale Investment Securities The Bank classifies investment securities based on the intention of management at the time of the purchase. Shares of Affiliates and subsidiaries held by the Bank for the purpose of future disposal are classified as available-for-sale. Available-for-sale securities are measured at fair value, which is equal to the market value at the relevant balance sheet date. When debt securities with fixed maturities are non-marketable or there is no available public information for similar instruments, fair value is estimated as discounted future cash flows using current interest rates. As at 30 June 2010, the Group had held-to-maturity securities in its portfolio of investment securities amounting to KTZ 7,213 million. As at 31 December 2009, the Group did not have any held-to-maturity securities in its portfolio of investment securities as all such securities were reclassified to available-for-sale securities due to the tainting rule as at 31 December 2007 in line with IAS 39.

200

The following table sets outs certain information in respect of the Groups securities classified as available-for-sale as at the dates indicated:
As at 30 June 2010 Amount (KZT millions) Corporate bonds ..................... Treasury bonds of Ministry of Finance of Kazakhstan ..... Treasury bonds of Ministry of Finance of Belarus........... Treasury bonds of Ministry of Finance of Kyrgyzstan ..... Bonds of KZ financial institutions ......................... Bonds of KZ government institutions ......................... State bonds of KZ .................. Notes of the NBK................... Notes of National bank of Kyrgyzstan ............................ Bonds of OECD countries Securities available for sale ... Equity securities..................... Mutual fund shares ................. Total .......................................... 9,125 12,790 980 Repayment term 2011 2015 2012 2014 2010 2012 Amount (KZT millions) 10,441 6,215 897 940 2009 Repayment term 2010 2011 2010 5.2% 8.5% 2011 % 6.8% 12.0% 6.0% 7.4% 5.5% 2013 2014 2010 2012 Amount (KZT millions) 15,142 2,129 912 409 312 218 As at 31 December 2008 Repayment term 2009 2014 2009 5.5% 8.8% 2014 9.2% 2009 10.3% 8.6% 2009 25.0% 2010 % 8.1% 20.7% 7.40% 6.7% 2013 2009 Amount (KZT millions) 14,179 410 24 1,165 1,390 3,697 20,865 5,557 26,422 2007 Repayment term 2008-2015 2008-2009 2014 2008 2008 2008-2009

% 6.2% 9.5% 3.6% 8.75% 5.5%-8.0%

% 8.5%-16.0 % 5.7%-14.6 % 12.2% 7.3% 8.2%-9.2% 5.3%-6.0%

22,895 1,100 23,995

18,493 526 19,019

19,122 1,328 32 20,482

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Bonds of international financial organisations are represented as securities of EBRD, CEDB, EuroFIMA, EIB (European Investment Bank) and IFC (International Finance Corporation). Pursuant to the adjustments made to IAS 39 and IFRS 7, Reclassification of financial assets, the Bank reclassified a number of financial assets purchased in order to control current liquidity from the category designed for trade which it did not intend to sell in the near future. Reclassification was made as at 1 July 2008 at the fair value for this date. The table below reflects this reclassification:
Trade financial assets were reclassified into financial assets, available for sale (KZT millions) 35,420 35,402 (35,402) (546) 728 4.06% 41,376

Fair value as at the date of reclassification .......................................................................................... Balance cost of assets reclassification as at 31 December 2008 .......................................................... Write-off of reclassified assets............................................................................................................. Fair value of reclassified assets as at 31 December 2008..................................................................... Losses from change in a fair value of reclassified assets recognised prior to reclassification ended on 31 December 2008....................................................................................................................... Interest income recognised after reclassification in income and loss report per year ended on 31 December 2008............................................................................................................................ Effective interest rate as at the date of reclassification ........................................................................ Cash flow to be reimbursed by the date of reclassification..................................................................

Funding Sources The Groups principal sources of funding include domestic customer deposits, amounts due from other banks and financial institutions and debt securities issued. The following table sets out certain information relating to the Groups sources of funding as at the dates indicated in the table:
As at 30 June 2010 (KZT (%) millions) 682,424 19.6% 501,401 14.4% 171,194 4.9% 9,829 0.3% 800,703 22.9% 1,557,843 44.6% 376,173 2,466 32,957 37,181 3,489,747 10.8% 0.1% 0.9% 1.1% 100% 2009 (KZT millions) 655,963 373,802 270,221 11,940 836,384 1,668,602 406,595 3,974 59,127 27,834 3,658,479 (%) 17.9% 10.2% 7.4% 0.3% 22.9% 45.6% 11.1% 0.1% 1.6% 0.8% 100% As at 31 December 2008 (KZT (%) millions) 886,052 30.2% 684,330 23.3% 179,658 6.1% 22,064 0.8% 803,366 27.4% 1,087,726 37.0% 1,718 18,789 104,893 34,436 2,936,980 0.0% 0.6% 3.6% 1.2% 100% 2007 (KZT millions) 652,508 463,450 165,685 23,373 835,304 1,084,445 913 5,528 10,577 23,311 2,612,586

Customer deposits .............................. Time deposits ..................................... Current accounts................................. Guarantee and other deposits ............. Amounts due to credit institutions ..... Debt securities issued ......................... Amounts due to the Government and the NBK .......................................... Deferred tax liability .......................... Derivative financial liability .............. Reserves.............................................. Other liabilities ................................... Total ...................................................

(%) 25.0% 17.7% 6.3% 1.0% 32.0% 41.5% 0.0% 0.2% 0.4% 0.9% 100%

Funding from Samruk-Kazyna and the NBK As at 30 June 2010, the Group received liquidity support in the amounts of KZT 374,918 million excluding interest accrued through refinancing loans from the NBK under BTA/NBK Repo Transactions, against delivery of the SK Bonds, KZT 289,762 million in deposits of Samruk-Kazyna, KZT 105,874 million under the State Finance Programmes and KZT 212,095 million through a capital injection in consideration for 75.1 per cent. of the shares of the Bank. See The BankThe Role of Samruk-Kazyna and the NBKLiquidity Support. Customer Deposits The Bank believes customer deposits are relatively insensitive to short term fluctuations in interest rates and more dependent on the Banks ability to provide a good level of customer service and on the range of banking products and services according to information provided by the FMSA. As at 30 June 2010, the Group had total customer deposits of KZT 682,424 million, representing 9.7 per cent. of the total deposits in the banking system. As at 30 June 2010, 70.9 per cent. of deposits

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were made by corporate and governmental entities (including 52.7 per cent. by Samruk-Kazyna and its Affiliates) and 29.1 per cent. of deposits were made by individuals. As at 30 June 2010, the ten largest customers of the Group accounted for 56.58 per cent. of total customer deposits compared to 56.61 per cent. as at 31 December 2009. The Groups deposits consist of customer current accounts and time deposits. Customer current accounts generally bear no interest and can be withdrawn upon demand. For time deposits, different interest rates are paid on the various types of accounts offered by the Group. For the six months ended 30 June 2010 rates on Tenge based time deposits offered by the Group ranged between 6.8 per cent. and 12.5 per cent., while interest rates paid on U.S. Dollar and Euro deposits ranged from 4.0 per cent. to 12.0 per cent. For the year ended 31 December 2009, rates on Tenge based time deposits offered by the Group ranged between 5.3 per cent. and 12.9 per cent., while interest rates paid on U.S Dollar and Euro deposits ranged from 4.0 per cent. to 12.0 per cent. For the year ended 31 December 2008, rates on Tenge based time deposits offered by the Group ranged between 2.0 per cent. and 12.9 per cent., while interest rates paid on U.S Dollar and Euro deposits ranged from 4.5 per cent. to 14.4 per cent. Deposits by Currency As at 30 June 2010, foreign currency deposits accounted for 37.7 per cent. of total customer deposits compared to 41.7 per cent., 47.9 per cent. and 39.3 per cent. as at 31 December 2009, 2008 and 2007, respectively. Customer deposits in foreign currencies are substantially denominated in U.S. Dollars. The following table sets out certain information relating to customer deposits in Tenge and foreign currency, by amount and as a percentage of the total amount owed to customers, as at the dates indicated in the table:
As at 30 June 2010 (KZT millions) (%) 257,453 37.7% 424,971 62.3% 682,424 100.0% 2009 (KZT millions) 273,677 382,286 655,963 (%) 41.7% 58.3% 100.0% As at 31 December 2008 (KZT millions) (%) 424,140 47.9% 461,912 52.1% 886,052 100.0% 2007 (KZT millions) (%) 256,496 39.3% 396,012 60.7% 652,508 100.0%

Foreign currency.. Tenge accounts .... Total ....................

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Deposits by Maturity The following table sets out certain information relating to the structure of the Groups deposits, based on the unaudited accounting records of the Bank, as at the dates indicated in the table:
As at 30 June 2010 (KZT (%) millions) On demand ................................. 146,803 21.5% Savings: Less than 1 month ...................... 50,263 7.4% Between 1 and 3 months. ........... 12,237 1.8% 195,090 28.6% Between 3 months and 1 year .... Between 1 and 3 years................ 96,474 14.1% 181,557 26.6% Over 3 years................................ Total savings ............................. Total (On demand + savings)................................... 535,621 682,424 78.5% 100.0% 2009 (KZT millions) 275,357 122,121 20,561 63,486 96,769 77,669 380,606 655,963 (%) 42.0% 18.6% 3.1% 9.7% 14.8% 11.8% 58.0% 100.0% As at 31 December 2008 (KZT (%) millions) 67,194 7.6% 141,530 90,188 237,390 252,233 97,517 818,858 886,052 16.0% 10.1% 26.8% 28.5% 11.0% 92.4% 100.0% 2007 (KZT millions) 165,211 77,852 110,360 106,380 136,031 56,674 487,297 652,508

(%) 25.3% 11.9% 16.9% 16.3% 20.9% 8.7% 74.7% 100.0%

Deposits by Type of Accounts The following table sets out the balances of the Groups customer deposits, by type, as at the dates indicated in the table:
As at 30 June 2010 131,574 198,255 352,595 682,424 As at 31 December 2008 2007 339,664 268,179 307,345 280,425 239,043 103,904 655,963 886,052 652,508

Corporate deposits ................................................................................ Individual deposits (retail) .................................................................... State and budgetary deposits................................................................. Total .....................................................................................................

2009 114,369 183,977 357,617

Deposits by Sector The following table sets out the composition of the Groups customer deposits by reference to the economic sector of the deposit as at the dates indicated in the table:
As at 30 June 2010 (KZT millions) Individuals .............................. 198,255 Amounts due to Samruk-Kazyna .................. 193,361 Oil and gas.............................. 163,487 State agencies ......................... 1,242 Construction ........................... 26,382 Wholesale trade ...................... 16,769 Non-credit financial organisations ....................... 11,951 Transportation ........................ 3,773 Research and development..... 7,945 Education................................ 2,372 Retail trade ............................. 4,341 Mining .................................... 709 Agriculture.............................. 2,616 Textile and leather industry.... 1,367 Chemical processing .............. 3,348 Machinery and equipment 3,525 production ........................... Food industry.......................... 1,524 Energy industry ...................... 3,938 Metallurgy .............................. 694 Entertainment ......................... 1,611 Communication ...................... 514 Hotel and hospitality .............. 330 Other ....................................... 32,370 Total ....................................... 682,424 (%) 29.1% 28.3% 24.0% 0.2% 3.9% 2.5% 1.7% 0.6% 1.2% 0.3% 0.6% 0.1% 0.4% 0.2% 0.5% 0.5% 0.2% 0.6% 0.1% 0.2% 0.1% 0.0% 4.7% 100.0% (KZT millions) 183,977 160,454 183,478 13,035 25,405 18,668 19,635 3,328 5,772 1,945 3,320 849 2,484 1,065 2,845 1,975 759 1,454 749 517 411 155 23,683 655,963 2009 (%) 28.0% 24.5% 28.0% 2.0% 3.9% 2.8% 3.0% 0.5% 0.9% 0.3% 0.5% 0.1% 0.4% 0.2% 0.4% 0.3% 0.1% 0.2% 0.1% 0.1% 0.1% 0.0% 3.6% 100.0% (KZT millions) 307,345 233,290 28,501 49,060 81,303 19,226 33,113 11,594 7,014 4,265 1,912 3,887 1,607 1,480 5,873 1,091 30,788 11,475 1,241 5,425 353 46,209 886,052 2008 (%) 34.7% 26.3% 3.2% 5.5% 9.2% 2.2% 3.7% 1.3% 0.8% 0.5% 0.2% 0.4% 0.2% 0.2% 0.7% 0.1% 3.5% 1.3% 0.1% 0.6% 0.0% 5.3% 100.0% (KZT millions) 280,425 86,213 11,071 33,623 52,003 38,578 41,388 6,622 5,938 8,691 3,688 6,596 1,235 5,720 6,652 3,620 3,978 12,024 1,207 2,429 454 40,353 652,508 As at 31 December 2007 (%) 43.0% 13.2% 1.7% 5.2% 8.0% 5.9% 6.3% 1.0% 0.9% 1.3% 0.6% 1.0% 0.2% 0.9% 1.0% 0.6% 0.6% 1.8% 0.2% 0.4% 0.1% 6.1% 100.0%

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Bank Loans and Similar Financings The following table sets out certain information relating to balances due to other banks and financial institutions based on the unaudited accounting records of the Group, as at the dates indicated in the table:
As at 30 June 2010 Loans from OECD based banks and financial institutions................. Syndicated bank loans ....................................................................... Loans from Kazakh banks and financial institutions ......................... Loans from other banks and financial institutions ............................. Pass through loans ............................................................................. Interest bearing placements from Kazakh banks................................ Interest bearing placements from non OECD banks .......................... Loro accounts .................................................................................... Total .................................................................................................. Subject to repurchase agreements.................................................. 440,534 168,711 152,649 18,383 18,580 1,257 18 571 800,703 As at 31 December 2009 2008 (KZT millions) 442,778 451,737 163,053 156,617 190,438 126,434 19,293 24,201 18,429 17,278 1,600 21,112 21 3,484 772 2,503 836,384 803,366 4,430 65,472

2007
455,384 241,157 51,329 26,609 9,482 46,021 4,034 1,288 835,304

60,129

The Group has historically entered into various trade finance interbank facilities with foreign banks and Kazakhstan subsidiaries of foreign banks. As at 31 December 2009, the aggregate outstanding principal balance including overdue indebtedness under trade finance facilities was approximately U.S.$1,762 million; such facilities have maturities ranging between one and seven years, while off balance Trade Finance liabilities including overdue indebtedness as at 31 December 2009 were approximately U.S.$1,445 million. In accordance with the terms and conditions of Restructuring Plan, the Bank entered into the RCTFF with The Royal Bank of Scotland N.V., Singapore branch as the Agent and Security Agent for the lenders for the amount of U.S.$698,186,047.18. The RCTFF will be used for the purpose of enabling the Bank to support the financing of Eligible Trade Finance transactions. The Facility has a three year term with a two year availability period. In accordance with the contractual terms of loan facilities from foreign banks and with the terms of the debt securities issued, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. As at 30 June 2010 and 31 December 2009 and 2008, the Bank was in breach of capital adequacy, lending exposure and cross default covenants on these loan facilities. On 31 August 2010, the Bank successfully completed the process of restructuring its debt in the amount totalling KZT 2,441,988 million, (U.S.$16,647 million). Among other things, the completion of all of the procedures forming part of the Restructuring Plan, restored the Banks equity capital on 1 September 2010 to KZT 105,613 million. The Banks regulatory capital amounted to KZT283,282 million bringing the Bank into compliance with the required FMSA capital adequacy ratio. On 27 October 2010, Standard & Poors announced an upgrade of the Banks long-term ratings in national and foreign currencies from D to B- (B minus), and short-term ratings in national and foreign currency from D to C, with stable outlook. At the same time, the Bank was given a national rating of kzBB-(kzBB minus). Fitch upgraded the Banks long-term international debt rating from RD to B-, its short term international debt rating from RD to B and its individual rating from F to E.

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Debt Securities As at the date of this Prospectus, the only debt securities outstanding issued by the Bank are the New Notes and BTA Ipoteka senior bond issuances.
Issuer BTA Bank BTA Bank BTA Bank BTA Bank BTA Bank BTA Bank BTA Bank BTA Bank BTA Bank BTA Ipoteka Name Senior Notes Senior Notes Original Issue Discount Notes Original Issue Discount Notes Subordinated Notes Subordinated Notes Subordinated Notes Subordinated Notes Recovery Units Mortgage bonds, 1st issue Currency USD KZT USD EUR USD EUR KZT KZT USD KZT Nominal Value 2,082,371,783 32,604,173,503 384,848,130(2) 437,110,856(2) 496,631,368 28,237,359 7,396,248,930 28,000,000,000 5,221,494,216 500,000,000 Interest rate (%) 10.75(1)/12.5 14.75(1)/16.5 3.70(3)/3.30 3.14(3)/2.74 7.20 6.75 11.20 8.0 0.0 Company has right to change interest rate once a year. Average rate for circulation period must not be less than 5% inflation rate + 1.3% inflation rate + 1.0% inflation rate + 1.0% inflation rate + 1.0% inflation rate + 0.5% inflation rate + 0.1% 15% inflation rate inflation rate + 0.1% inflation rate + 1.5% Due 6/30/2018 6/30/2018 6/30/2021 6/30/2021 6/30/2025 6/30/2025 6/30/2025 6/30/2030 6/30/2020(4) 12/26/2010

BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka BTA Ipoteka

Mortgage bonds, 2nd issue Mortgage bonds (1st bond program), 1st issue Mortgage bonds (1st bond program), 3rd issue Mortgage bonds (2nd bond program), 1st issue Mortgage bonds (2nd bond program), 2nd issue Mortgage bonds (2nd bond program), 3rd issue Mortgage bonds (3rd bond program), 1st issue Mortgage bonds (3rd bond program), 5th issue Mortgage bonds (3rd bond program), 7th issue

KZT KZT KZT KZT KZT KZT KZT KZT KZT

1,500,000,000 2,000,000,000 4,000,000,000 1,417,000,000 7,000,000,000 4,000,000,000 1,004,120,000 3,895,540,000 17,180,000

10/21/2014 12/15/2011 5/11/2015 7/13/2012 8/22/2013 2/21/2016 8/4/2016 4/3/2014 4/1/2018

__________________ Notes: (1) From 1 July 2010 to 1 January 2013. (2) Fully Accreted Principal Amount of Original Issue Discount Notes. (3) From 1 July 2010 up to but excluding 1 July 2017. (4) Initial Settlement Date.

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ASSET AND LIABILITY MANAGEMENT Introduction The Bank monitors its interest rate and exchange rate exposure and the maturities of its financial instruments in order to minimise the effect of market changes on the Banks profitability and liquidity. The Bank has a relatively liquid asset base, including substantial Tenge and U.S. Dollar demand deposits, comprised, as at 30 June 2010, of 81.5 per cent., of corporate deposits and 18.5 per cent., of retail deposits. The volume of clients assets, as at the same date, comprised 75.2 per cent., of term deposits and 24.8 per cent., of deposits on demand. In addition, as at 30 June 2010, the Banks loan portfolio comprised corporate loans, accounting for 88.5 per cent., and retail loans, accounting for 11.5 per cent. Accordingly, the Banks interest rate risk is relatively low and, despite the size of the portfolio, adjusting the profile of the portfolio is relatively straightforward for the Bank. Asset and Liability Management Committee The overall asset and liability position of the Bank is monitored by the Banks Asset and Liability Management Committee (ALCO), which reports directly to the Management Board with respect to issues relating to the day-to-day operations of the Bank or, in the case of matters relating to the Banks strategy, directly to the Board of Directors. ALCO is chaired by the Chairman of Management Board or Deputy Chairman of Management Board or any person specifically appointed by Management Board. The Committee consists of representatives of Department of Credit and Operational Risk, one of the corporate business departments, one of the SME business departments, one of the retail business departments, the international operations departments of the investment activities business, Treasury Department and Financial Controlling Department of the Bank. ALCO meets on a weekly basis to review the Groups asset and liability position by reference to the following criteria, based on information provided by the Financial Controlling Department: size and maturity of assets and liabilities; the Banks foreign currency position; operational ratios in terms of the regulations established by the FMSA; and exchange rates and other economic data.

Based on its review of this information, ALCO determines short-term policies for the forthcoming week with the aim of increasing interest and non-interest income for the Group while maintaining adequate liquidity, complying with prudential standards and regulations and minimising the impact of financial market risks so as to maintain the Groups attractiveness to depositors. Policies proposed by ALCO are reviewed and approved by the Banks senior management, which has overall responsibility for ensuring that the asset and liability maturity profiles are prudent considering prevailing market conditions, consistent with the Banks strategy and in compliance with all of the FMSAs requirements and limitations. Liquidity Risk and Management of Funding Sources The liquidity risk is the risk that the Group may not be able to meet its obligations when they fall due. Managing the liquidity risk is one of the key components of the Groups risk management process. This risk is managed by: 1. 2. compliance with the regulators liquidity ratios; and managing liquidity by gap analysis and forecasting cash flows.

According to the FMSA requirements, the Bank must meet certain liquidity ratios over each reporting period, including the K4, K4-1, K4-2, K4-3, K4-4, K4-5 and K4-6 ratios. The K4 ratio is calculated as the ratio of average monthly highly liquid bank assets to the average size of on demand deposits,

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taking into account accrued interest. The K4-1 ratio is calculated as the average monthly liquid assets to the average size of fixed-term obligations with remaining maturity of up to seven days inclusive. The K4-2 ratio is calculated as the average size of liquid assets with a remaining maturity up to one month inclusive, including highly liquid assets, to the average size of fixed-term obligations with remaining maturity up to one month inclusive. The K4-3 ratio is calculated as the average size of liquid assets with a remaining maturity up to three months inclusive, including highly liquid assets, to the average size of fixed-term obligations with remaining maturity up to three months inclusive. The K4-4 ratio is calculated as the average size of highly liquid assets in foreign currency to the average size of fixed-term obligations in the same foreign currency with remaining maturity of up to seven days inclusive. The K4-5 ratio is calculated as the average size of liquid assets in foreign currency with a remaining maturity up to one month inclusive, including highly liquid assets, to the average size of fixed-term obligations in the same foreign currency with remaining maturity up to one month inclusive. The K4-6 ratio is calculated as the average size of liquid assets in foreign currency with remaining maturity up to three months inclusive, including highly liquid assets, to the average size of fixed-term obligations in the same foreign currency with remaining maturity up to three months inclusive. The minimum ratio values established by the FMSA are as follows: K4 (0.3), K4-1 (1.0), K4-2 (0.9), K4-3 (0.8), K4-4 (1.0), K4-5 (0.9) and K4-6 (0.8). The gap analysis consists of comparing the maturity profiles of the Groups assets and liabilities to evaluate the absolute and relative gap between the flow of assets and liabilities at each of various intervals. The Bank then attempts to adjust the maturities of its assets and liabilities to reduce significant gaps in any given maturity interval. In forecasting future cashflows, the Bank analyses the risk of changes in the urgency of the requirements and obligations of the Bank and unexpected withdrawals of deposits. The Bank undertakes this analysis on both a short-term and long-term basis to detect potential risks to such changes. ALCO meets weekly to analyse operational data and make liquidity management decisions. If the situation warrants it, additional ALCO meetings are scheduled. ALCO reviews asset-liability gaps by maturity and currency, asset and liability durations and projected future cash flows. All business subdivisions, together with Risk Management, participate in the process of managing the liquidity of the Group so as to provide informational support. The management regularly monitors highly liquid assets that can be sold at any time. The Group maintains a portfolio of highly liquid assets consisting mostly of debt instruments issued by governments with high credit ratings. On 30 November 2009, the management board of the NBK amended the obligatory reserve ratio requirement for the Bank to zero per cent., for both internal and external liabilities. Since the completion of the restructuring process, the NBK obligatory reserve ratio requirements were restored for both internal and external liabilities, to 1.5% and 2.5%, respectively. As at the date of this Prospectus, the Bank is in compliance with all such statutory requirements. As at 30 June 2010, the balance of funds borrowed by the Group via various bond issues, bilateral, syndicated-loan and other agreements totalled KZT 2,358,546 million. Under the terms of part of these bonds and loan agreements, the Bank has undertaken to maintain certain financial ratios, including, with respect to its liquidity, capital adequacy and credit exposure. In addition, the Bank is obliged to maintain a certain credit rating from leading rating agencies. As at 30 June 2010, and since approximately 1 January 2009, the Bank was not, and has not been, in compliance with some of these requirements. Following the acquisition of shares in the Bank by Samruk-Kazyna, certain creditors accelerated their loans to the Bank, amounting in total to U.S.$550 million or KZT 83 billion. In addition, in April 2009, the Bank had its credit ratings lowered to default, which constituted another credit event under other credit agreements to which the Bank was a party.

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Following the completion of the Restructuring the Groups debt practice changed significantly as borrowings fell to KZT 791,505 million as at 31 August 2010 from KZT 2,358,546 million as at 30 June 2010. As a result of this and the recapitalisation resulting from the Restructuring, the Bank also achieved the required capital ratios: as at 31 August 2010, the Banks equity of KZT 105.6 billion and regulatory capital of KZT 283.3 billion, provide the Banks business with a new, sustainable capital structure with K1-1, K1-2 and K2 ratios of 10.8 per cent., 10.9 per cent. and 14.9 per cent. respectively, all of which are in compliance with the FMSAs prudential requirements. In addition, on 25 October 2010, S&P raised its long-term counterparty credit rating of the Bank to B- from D and its short-term counterparty credit rating to C from D. On 10 December 2010, Fitch upgraded the Banks long-term, issuer default rating from RD to B, its short-term issuer-default rating from RD to B, and its individual rating from F to E. It also confirmed the Banks support rating at 5 and support rating floor at No floor. Moodys put the Banks credit ratings under review.

Analysis of Financial Liabilities by Reference to Maturity The table below summarises the Groups financial obligations as at 31 December 2009, with a breakdown by time remaining until maturity on the basis of contractual undiscounted repayment obligations.
Maturity As at 31 December 2009 1 year or More than Total less 1 year 407,453 1,086 408,539 756,422 104,209 860,631 3,974 3,974 505,800 251,119 756,919 1,611,473 355,500 1,966,973 31,740 27,387 59,127 32,442 330 32,772 3,349,304 739,631 4,088,935

Amounts due to the Government and National Bank....................................... Amounts due to credit institutions ................................................................... Derivative financial instruments ...................................................................... Amounts due to customers............................................................................... Debt securities outstanding .............................................................................. Reserves........................................................................................................... Other liabilities ................................................................................................ Total undiscounted financial obligations .....................................................

The table below summarises the Groups financial obligations as at 31 December 2008, with a breakdown by time remaining until maturity on the basis of contractual undiscounted repayment obligations.
Maturity As at 31 December 2008 1 year or More than Total less 1 year 217 1,902 2,119 698,139 127,258 825,397 16,689 2,100 18,789 680,055 300,393 980,448 769,514 637,713 1,407,227 50.599 104.893 54.294 34,957 1,306 36,263 2,253,865 1,121,271 3,375,136

Amounts due to the Government and National Bank....................................... Amounts due to credit institutions ................................................................... Derivative financial instruments ...................................................................... Amounts due to customers............................................................................... Debt securities outstanding .............................................................................. Reserves........................................................................................................... Other liabilities ................................................................................................ Total undiscounted financial obligations .....................................................

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The table below summarises the Groups financial obligations as at 31 December 2007, with breakdown by time remaining until maturity on the basis of contractual undiscounted repayment obligations.
Maturity As at 31 December 2007 1 year or More than less 1 year 130 884 384,784 559,105 3,130 2,398 489,668 225,075 164,010 1,473,570 32,999 5,398 1,074,721 2,266,430

Amounts due to the Government and National Bank................... Amounts due to credit institutions ............................................... Derivative financial instruments .................................................. Amounts due to customers........................................................... Debt securities outstanding .......................................................... Other liabilities ............................................................................ Total undiscounted financial obligations .................................

Total 1,014 943,889 5,528 714,743 1,637,580 38,397 3,341,151

The Groups financial condition deteriorated drastically in 2008, mainly due to losses from its loan portfolio, financial derivatives and securities uncovered by the Banks new management in 2009. This effectively put both the Bank and the Group in breach of certain prudential ratios, including the FMSAs capital adequacy ratio. As a result of these losses, the Groups total liabilities, exceeded its total assets by KZT 742,779 million as at 31 December 2008, and the Group reported a net loss of KZT 82,452 million as at 30 June 2010 and of KZT 1,114,534 million for the year ended 31 December 2009. The table below summarises the contractual maturities of the Groups financial and contingent liabilities.
On demand 37,723 14,694 17,775 1 month or less 7,683 21,095 16,478 From 1 to 3 months 31,144 39,854 28,756 From 3 to 12 months 129,051 192,546 146,621 From 1 year to 3 years 142,325 249,788 250,623 More than 3 years 203,732 160,233 166,493

2009 ............................ 2008 ............................ 2007 ............................

Total 551,658 678,210 626,746

As mentioned above, as at 30 June 2010, the Bank was not in compliance with certain financial covenants undertaken pursuant to certain of its debt securities issues, a fact that led to a number of cross-defaults being triggered as well in relation to other financings. On 1 September 2010, the Bank completed the Restructuring of its liabilities amounting to KZT 2,441,988 million (U.S.$ 16,647 million) which effectively replaced those financings which had previously been in default.

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The table below breaks down financial assets and liabilities by reference to their expected maturities:
Six months to 30 June 2010 1 year or More than less Total 1 year Assets: Cash and cash equivalents ................................................................................ Obligatory reserves .......................................................................................... Trading securities ............................................................................................. Amounts due from credit institutions ............................................................... Derivative financial assets................................................................................ Available-for-sale investment securities........................................................... Held-to-maturity securities............................................................................... Loans to customers........................................................................................... Samruk-Kazyna bonds ..................................................................................... Other assets ...................................................................................................... Liabilities: Amounts due to the Government and the National Bank ................................. Amounts due to credit institutions.................................................................... Derivative financial liabilities .......................................................................... Amounts due to customers ............................................................................... Debt securities outstanding............................................................................... Provisions......................................................................................................... Other liabilities................................................................................................. Net position ..................................................................................................... Accumulated discrepancy .............................................................................. 134,299 17 84,901 32,945 200 7,797 11,176 208,157 0 15,810 495,302 375,712 605,894 1,089 404,393 205,680 9,555 36,829 1,639,152 (1,143,850) (1,143,850) 0 19 0 34,623 8,276 16,198 (3,963) 540,278 517,413 11,846 1,124,690 461 194,809 1,377 278,031 1,352,163 23,402 352 1,850,595 (725,905) (1,869,755) 134,299 36 84,901 67,568 8,476 23,995 7,213 748,435 517,413 27,655 1,619,992 0 376,173 800,703 2,466 682,424 1,557,843 32,957 37,181 3,489,747 (1,869,755)

1 year or less Assets: Cash and cash equivalents ............................................................................... Obligatory reserves.......................................................................................... Trading securities............................................................................................. Amounts due from credit institutions............................................................... Derivative financial assets ............................................................................... Available-for-sale investment securities .......................................................... Loans to customers .......................................................................................... Samruk-Kazyna bonds..................................................................................... Other assets...................................................................................................... Liabilities: Amounts due to the Government and the National Bank................................. Amounts due to credit institutions ................................................................... Derivative financial liabilities.......................................................................... Amounts due to customers............................................................................... Debt securities outstanding .............................................................................. Provisions ........................................................................................................ Other liabilities ................................................................................................ Net position..................................................................................................... Accumulated discrepancy ............................................................................. 78,215 145 115,784 22,865 3,698 4,708 300,336 7,477 25,686 558,914 405,662 753,540 3,974 481,526 1,371,761 31,740 27,702 3,075,905 (2,516,991) (2,516,991)

2009 More than 1 year 0 0 0 8,579 22,282 14,311 740,437 504,769 1,371 1,291,749 933 82,844 0 174,437 296,841 27,387 132 582,574 709,175 (1,807,816)

Total 78,215 145 115,784 31,444 25,980 19,019 1,040,773 512,246 27,057 1,850,663 406,595 836,384 3,974 655,963 1,668,602 59,127 27,834 3,658,479 (1,807,816)

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1 year or less Assets: Cash and cash equivalents ................................................................................ Obligatory reserves........................................................................................... Trading securities ............................................................................................. Amounts due from credit institutions ............................................................... Derivative financial assets................................................................................ Available-for-sale investment securities........................................................... Loans to customers........................................................................................... Other assets ...................................................................................................... 87,893 24,173 128,150 71,925 655 3,810 851,289 15,994 1,183,889

2008 More than 1 year 0 39,881 0 13,249 20,995 16,672 765,774 7,006 863,577

Total 87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 23,000 2,047,466

Liabilities: Amounts due to the Government and the National Bank ................................. Amounts due to credit institutions.................................................................... Derivative financial liabilities .......................................................................... Amounts due to customers ............................................................................... Debt securities outstanding............................................................................... Provisions......................................................................................................... Other liabilities................................................................................................. Net position ..................................................................................................... Accumulated discrepancy ..............................................................................

125 708,182 16,689 536,302 722,510 54,294 33,930 2,072,032 (888,143) (888,143)

1,593 95,184 2,100 349,750 365,216 50,599 506 864,948 (1,371) (889,514) 2007 More than 1 year (KZT millions) 115,976 48,498 31,022 18,211 1,821,248 2,555 2,037,510 818 579,704 3,620 192,705 1,017,533 5,301 1,295 1,800,976 236,534 331,626

1,718 803,366 18,789 886,052 1,087,726 104,893 34,436 2,936,980 (889,514)

1 year or less Assets: Cash and cash equivalents................................................................................ Obligatory reserves .......................................................................................... Financial assets at fair value through profit or loss .......................................... Amounts due from credit institutions ............................................................... Derivative financial assets................................................................................ Available-for-sale investment securities........................................................... Loans to customers........................................................................................... Other assets ...................................................................................................... Liabilities: Due to government and central banks .............................................................. Amounts due from credit institutions ............................................................... Derivative financial liabilities .......................................................................... Amounts due to customers ............................................................................... Debt securities issued ....................................................................................... Provisions......................................................................................................... Other liabilities................................................................................................. Net position ..................................................................................................... Accumulated gap ............................................................................................

Total

99,723 52,266 112,175 59,091 375 8,211 558,562 16,299 906,702 95 255,600 1,908 459,803 66,912 5,276 22,016 811,610 95,092 95,092

99,723 168,242 112,175 107,589 31,397 26,422 2,379,810 18,854 2,944,212 913 835,304 5,528 652,508 1,084,445 10,577 23,311 2,612,586 331,626

Treasury Operations The Banks Treasury department provides open-market operations in order to ensure the efficient management of the Banks funds (for the Bank as a whole). The Treasury department achieves this purpose using foreign exchange (FOREX) and money market operations, and operations with securities, taking into consideration the policy of efficient internal and external risk management. The Bank is a trader of Government debt securities and a participant on the interbank money market. Other operations performed by the Treasury department include currency (including cash) trade

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operations, swap operations, the execution of repurchase agreements, reverse repurchase agreements, and forward, futures and options contracts. The Banks Treasury department also provides brokerage services on the local securities market to its clients. Foreign Currency Management Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in exchange rates. The Risk Committees limits on foreign exchange positions are based on those of the FMSA. The positions are monitored daily.

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The following table sets out the KZT equivalent amount of the Groups financial assets and liabilities denominated in KZT and foreign currencies as at the dates indicated:
As at 30 June 2010 Other foreign currency 2009 Other foreign currency As at 31 December 2008 Other foreign currency 2007 Other foreign currency

KZT Assets: Cash and cash equivalents ........................... Obligatory reserves ...................................... Trading securities......................................... Amounts due from credit institutions .......... Available for sale securities ......................... Held-to-maturity securities .......................... Loans to customers....................................... Bonds of NWF Samruk-Kazyna .................. Derivative financial assets ........................... Other assets .................................................. Liabilities: Amounts due to the Government and the NBK ......................................................... Amounts due to credit institutions ............... Amounts due to customers........................... Debt securities issued................................... Derivative financial obligations................... Provisions..................................................... Other liabilities............................................. Net balance sheet position ........................... 101,113 27,955 38,113 22,185 6,138 392,694 517,413 0 2,779 1,108,390

Total

KZT

Total KZT (KZT millions)

Total

KZT

Total

33,186 36 56,946 29,455 1,810 1,075 355,741 8,476 24,876 511,601

134,299 36 84,901 67,568 23,995 7,213 748,435 517,413 8,476 27,655 1,619,991

42,578 35,087 8,931 17,095 514,383 512,246 12,108 23,636 1,166,064

35,637 145 80,697 22,513 1,924 526,390 13,872 3,421 684,599

78,215 145 115,784 31,444 19,019 1,040,773 512,246 25,980 27,057 1,850,663

25,011 40,329 95,738 22,271 16,350 392,170 701 14,188 606,758

62,882 23,725 32,412 62,903 4,132 1,224,893 20,949 8,812 1,440,708

87,893 64,054 128,150 85,174 20,482 1,617,063 21,650 23,000 2,047,466

46,050 43,983 55,937 44,849 15,705 950,000 12,287 13,706 1,182,517

53,673 124,259 56,238 62,740 10,717 1,429,810 19,110 5,148 1,761,695

99,723 168,242 112,175 107,589 26,422 2,379,810 31,397 18,854 2,944,212

376,117 51,546 424,971 720,575 2,461 272 24,953 1,600,895 (492,505)

56 749,157 257,453 837,268 5 32,685 12,228 1,888,852 (1,377,251)

376,173 800,703 682,424 1,557,843 2,466 32,957 37,181 3,489,747 (1,869,756)

406,489 83,075 382,286 723,101 3,352 74 16,012 1,614,389 (448,325)

106 753,309 273,677 945,500 623 59,053 11,822 2,044,090 (1,359,491)

406,595 836,384 655,963 1,668,602 3,974 59,127 27,834 3,658,479 (1,807,816)

1,320 161,294 461,912 211,531 1,246 306 21,748 859,357 (252,599)

398 642,072 424,140 876,195 17,543 104,587 12,688 2,077,623 (636,915)

1,718 803,366 886,052 1,087,726 18,789 104,893 34,436 2,936,980 (889,514)

398 112,871 396,012 179,224 5,467 10,436 19,101 723,509 459,008

515 722,433 256,496 905,221 61 141 4,210 1,889,077 (127,382)

913 835,304 652,508 1,084,445 5,528 10,577 23,311 2,612,586 331,626

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The following table shows currencies, for which the Group had principal positions as at 31 December 2009 by cash assets and liabilities, and also by assumed cash flow. The analysis calculates the effect of a reasonably possible movement of the currency rate against the Tenge, with all other variables held constant on the income statement. Negative amounts reflect a potential net decrease in income and positive amounts reflect a potential net increase.
Banks forecast as at 31 December 2009 of the likely change in FX rate against KZT in % in 2010 -16.6/+16.6 -21.4/+21.4 -22.6/+22.6 -21.8/+21.8 -22.7/+2.7 -27.2/+27.2 -23.7/+23.7 Banks forecast as at 31 December 2008 of the likely change in FX rate against KZT in % in 2009 -15.4/+15.4 -15.2/+15.2 -8.3/+8.3 -16.4/+16.4 -22.4/+22.4 -15/+15 -23.1/+23.1 -23.2/+23.2 Banks forecast as at 31 December 2007 of the likely change in FX rate against KZT in % in 2008 -4/+4 -7/+7 -5/+5 -8/+8 -9/+9 -10/+10 -8/+8

Currency USD .................................................................. Euro .................................................................. RUB .................................................................. CHF .................................................................. JPY.................................................................... KGS .................................................................. PLN................................................................... GBP ..................................................................

Effect on pre-tax income as at 31 December 2009 forecast (KZT millions) 113.338/(113.338) 57.631/(57.631) 8.089/(8.089) 6.145/(6.145) 56.962/(56.962) 2.962/(2.962) 12.199/(12.199)

Effect on pre-tax income as at 31 December 2008 forecast (KZT millions) 61.315/(61,315) 22.811/(22,811) 1.043/(1,043) 3.624/(3,624) 47.122/(47,122) (517)/517 (2)/2 10.892/(10,892)

Effect on pre-tax income as at 31 December 2007 forecast (KZT millions) (5,591)/5.591 1,044/(1.044) (1,681)/1.681 1,609/(1.609) 831/(831) 792/(792) 3,476/(3.476)

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Regulation and monitoring of the net foreign currency positions of banks in Kazakhstan are carried out by the FMSA. The FMSA defines the net open foreign currency position as the difference between the Tenge equivalent of all foreign currency assets and all foreign currency liabilities. Foreign currency assets include all foreign currency claim accounts and the total value of its forward currency purchases. Foreign currency liabilities include all foreign currency liability accounts and the total value of its forward foreign currency sales. The Bank provides a report on the Banks net currency positions to the FMSA on a weekly basis. Since its establishment, the Banks management has attempted to maintain a currency position within current standards. At its weekly meetings, ALCO monitors the open foreign currency position in accordance with the prevailing market conditions and outlook, advises of the Banks position and implements the Banks strategy accordingly. The Bank is permitted to maintain open positions in currencies of countries with sovereign ratings of A or better at a level not exceeding 12.5 per cent., of equity capital, with an overall limit on all currencies not exceeding 25 per cent., of equity capital. The following table shows the net foreign currency positions of the Bank on an unconsolidated basis as at the dates indicated in the table:
As at 30 June 2010 (8,952) 73,8% (39,2)% As at 31 December 2008 298 6.6% 0.8%

Net long/(short) position (U.S.$. millions) ........................... Net position as a percentage of risk weighted capital ............ Net position as a percentage of foreign currency liabilities ...

2009 (7.751) 66.2% (30)%

2007 286 7.4% 2.1%

The Bank is a party to a number of forward contracts for the purchase or sale of certain amounts of foreign currency (typically U.S. Dollars) or precious metals at an agreed upon price in Tenge with delivery and settlement at a specified future date, which are used for hedging purposes in managing currency risks. Interest Rate Risk Risk resulting from changes in interest rates is caused by the fact that changes in interest rates will affect future cash flows or fair value of financial instruments. The following table demonstrates the sensitivity of the income statement of the Group on changes in interest rates. Other parameters are in constants. Sensitivity of the income statement means the impact of forecasted changes in interest rates on net interest income for one year, calculated based on financial assets and liabilities with a floating interest rate as at 31 December 2009. The sensitivity of equity is calculated by revaluing available-for-sale financial assets with a fixed rate as at 31 December 2009, taking into account forecasted changes in interest rates based on the assumption (for each of the following tables) that yield curve is parallel.
(Decrease)/ increase in basis points 31 December 2009 (basis points) -25/+100 -25/+100 -25/+100 -25/+100 -25/+100 Sensitivity of net interest income 31 December 2009 (KZT millions) 555/(2.219) 284/(1.138) (22)/91 72/(288) 411/(1.643) Sensitivity of equity 31 December 2009

Currency LIBOR: U.S.D. ....................................................................................... KZT .......................................................................................... Euro .......................................................................................... CHF .......................................................................................... JPY ...........................................................................................

12/(50) 87/(349) -

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Currency LIBOR: U.S.D. ....................................................................................... KZT .......................................................................................... Euro .......................................................................................... CHF .......................................................................................... JPY ...........................................................................................

(Decrease)/ increase in basis points 31 December 2008 (basis points) -59/+59 -59/+59 -59/+59 -59/+59 -59/+59

Sensitivity of net interest income 31 December 2008 (KZT millions) 2,372/(2,372) 1,699/(1,699) 1,080/(1,080) 177/(177) 804/(804)

Sensitivity of equity 31 December 2008

711/(711) 217/(217) -

The following table sets out the effective average interest rates by currencies for interest earning financial instruments as at the dates indicated:
As at 30 June 2010 Foreign KZT Currency Financial assets at fair value through profit or loss ....... Amounts due from other financial institutions ........ Available-for-sale securities Held-to-maturity securities . Loans to customers ............. SK Bonds............................ Amounts due to the NBK and the Government......... Amounts due to financial institutions ....................... Amounts due to customers.. Debt securities issued.......... 2009 Foreign KZT Currency As at 31 December 2008 Foreign KZT KZT Currency % 9.0 9.7 12.3 20.3 4.1 7.9 10.1 11.6 7.3 7.9 4.5 13.2 3.5 6.2 7.4 8.0 6.6 7.6 11.2 17.8 5.8 8.4 8.8 9.8 2007 Foreign Currency

7.7 11.5 8.6 19.4 18.3 7.1 7.0 7.0 7.3 11.6

6.8 9.9 10.5 9.4 26.0

11.3 8.6 14.9 15.6 7.3 7.8 9.3 8.2 11.6

12.5 5.0 11.9 17.5 5.6 6.0 9.1 7.8

5.9 10.1 3.7 13.0 4.3 7.1 6.3 9.2

4.3 3.0 6.9 7.0

As a result of the Restructuring, the Bank has liabilities with interest rates that are fixed for the maturity of liabilities. Risk related to share price changes is the risk that the fair value of a share will decrease due to changes in the level of share price. Risk related to share price changes pertains to investment and trade portfolios. The risk of the Group relating to share instruments is measured using the capital asset pricing model which examines the profitability of shares depending on the behaviour of the market (or of the index influencing the share) as a whole. The tables below demonstrate the effect on income and equity (due to changes in the fair value of equity instruments accounted by fair value through income and loss and available-for-sale) as a result of potential changes in share prices, with the usage of the capital assets determination model; other parameters are taken as constant. In the first table the model assesses the effects of positive movements in the relevant indices. In the second table the model assesses the effects of negative movements in the relevant indices.
Increase in indices % 46.21 23.19 23.29 47.21 60.63 As at 31 December 2009 Effect on profit Effect on equity before tax (KZT millions) (KZT millions) 899 74 5,792 4 1,071 28 284 -

Market Index KASE........................................................................................ MSCI World Index. .................................................................. FTSE......................................................................................... MICEX ..................................................................................... NYSE........................................................................................

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Market Index KASE........................................................................................ MSCI World Index. .................................................................. FTSE......................................................................................... MICEX ..................................................................................... NYSE........................................................................................

Decrease in indices % (46.21) (23.19) (23.29) (47.21) (60.63)

As at 31 December 2009 Effect on profit Effect on equity before tax (KZT millions) (KZT millions) (589) (38) (4,791) (4) (1,273) (28) (269) -

Operational Risk Operational risk includes risks related to a system failure, errors of personnel, fraud or external causes. When control systems cease to function, operational risk can damage reputation and may lead to legal proceedings and/or financial losses. The Group cannot eliminate operational risks, but it manages it by means of a control and track system. This control system involves implementing effective allocation of responsibilities, rights of access, authorisation and verification procedures, personnel training and evaluation procedures, including internal audits. The Bank introduced new operational risk management software in 2009 in order to build an effective risk management system in line with international standards. The Bank further introduced new risk management tools, such as risk maps, a database for damages in order to measure operational losses, improved risk self-assessment in its various departments and detailed reports in respect of operational risks. The new database allows the Bank to track in a timely manner the potential damages due to operational risks in order to prevent or mitigate such risks and to assess whether compensation is due for such risks from individuals or insurance companies. The database also allows the Bank to track operational risks and analyse the possibility of future risks. The Bank also hired outside consultants to develop and implement a business continuity management system, which was approved by the Board of Directors along with a crises management plan for the Bank, emergency situation action plan and activities recovery plans of each of the Banks key departments. Lending Policies and Procedures General The Banks credit approval process is based on applicable NBK and the FMSA regulations, as well as internal procedures established by the Management Board as approved by the Board of Directors. The FMSA regulations limit the exposure to any single borrower or group of borrowers to 10 per cent., of a banks equity for related parties and to 25 per cent., of a banks equity for non-related parties. The Bank will agree additional restrictions on single party and related party exposures under the New Notes. All applications for credit by corporate and retail customers must be submitted to the Bank on its standard forms. Depending on the type of borrower and industry sector, the application is reviewed at brand level if the borrower is an SME or an individual and by the Banks credit analysis and corporate business departments, if the borrower is a large corporation. After an application is received by the credit analysis and corporate business departments or the relevant branch (as the case may be) an expert opinion is prepared, which contains both a feasibility evaluation of the project to be financed and information on the financial standing, reputation and experience of the potential borrower. Simultaneously, the credit analysis and corporate business departments or the relevant branch make requests to the following departments for separate research: the Banks Economic Security Department is asked to obtain references from other banks and information from criminal records of the Interior Ministry; an outside firm is asked to make an independent assessment of the collateral being offered; and

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the Legal Department is asked to examine the potential borrowers documents for compliance with current legislation.

On the basis of the expert opinion and other reports the relevant credit analysis and corporate business departments conduct an independent risk assessment. All corporate customers of the Bank are assigned an internal credit rating by the Banks credit analysis and corporate business departments. Depending on the amount sought in the credit application, a credit application is examined by the appropriate credit decision-making body of the Bank for a final decision on the approval of the application as follows: the Credit Committee of each branch is authorised to take decisions within lending limits established for each branch by the Credit Committee of the Head Office; this authority varies depending on the size of the branch, quality of the loan portfolio and needs of the branchs business; the Retail Loans Credit Committee is responsible for improving the Banks retail loan portfolio structure and is authorised to take decisions on retail loans applications for short and long term financings up to U.S.$1,000,000 (or the equivalent); the Branch Network Credit Committee is authorised to take decisions on financings of up to U.S.$5,000,000 (or the equivalent) for investments and up to U.S.$10,000,000 (or the equivalent) for the replenishment of working capital; and the Head Office Credit Committee is authorised to take decisions on large credit contracts in excess of U.S.$5,000,000 (or the equivalent) for investments and up to U.S.$10,000,000 (or the equivalent) for the replenishment of working capital.

Credit Dossiers Under normal circumstances, the Bank creates a dossier of information for each loan that it provides, including original loan agreements, security and title documents as well as up to date financial statements supplied by borrowers, opinions prepared by internal Bank departments (e.g., Risk Management Department, Department of Economic Security, Legal Department and Division of Collateral Expertise), and on-going confirmations that the loans are used for the purposes provided under the original loan agreements. In the course of the managements review of the Groups loan portfolio in early 2009, it was discovered that several deficiencies existed in the existing credit dossiers. See Risk FactorsRisks Relating to the BankThe Banks credit dossiers have serious gaps and many documents are missing. In particular, the credit dossiers of loans provided to borrowers in the CIS businesses that were held by BTA Russia and BTA Ukraine have not been recovered or have exhibited deficiencies. The Bank currently is developing an electronic dossiers system, which will allow it to minimise some of the operational risks associated with credit dossiers. In addition, the Bank plans to store all original documents at a special storehouse with the Economic Security Department, and employees will work only with electronic dossiers to minimise risks of loss or substitution of client documents. The transition to a system of electronic dossiers is planned to be implemented during 2010-2011. Loan Supervision and Monitoring The Banks Department of Credit and Operational Risk, operates independently from the loan approval process and is responsible for monitoring the Groups loan portfolio and determining allowances and provisions. In order to determine adequate allowances and provisions, loans are classified by their perceived risk in accordance with criteria set out in the Banks policies and with the

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requirements of the FMSA and of IFRS. The Department of Credit and Operational Risk also conducts evaluations of other assets and off balance sheet contingent liabilities. In 2006, the Department of Credit and Operational Risk changed its methodology for the assessment of the quality of the Groups credit portfolio in line with FMSA requirements, reclassifying all loans in accordance with IAS 39 as at 31 December 2006. The assessment procedure was divided into individual assessment of the loans and collective assessment of the pool of loans. According to IAS 39, the losses relating to amortised financial assets are measured on the basis of the incurred loss model as opposed to the expected loss model. This means that the loss is recognised only if there is objective evidence of an event of loss. For the purposes of individual loan assessment, objective evidence of the impairment resulting from the event of loss is required. Thereafter, potential default risk is assessed and the amount due for repayment is calculated. For the purposes of the collective assessment, loans having similar credit risk characteristics are pooled together by sector, type of product, region, or otherwise. Reserves required to be made in respect of such pools of loans are estimated on the basis of the historic losses for the loans within the relevant pool over a specified period (the Bank currently uses the period from 2004 to 2008 as its base period). Historic losses are defined by reference to the amounts of loans outstanding and written off during the base period. The following table sets out certain information relating to the Groups loan portfolio, by classification as at 30 June 2010 in accordance with IAS 39 standards:
As at 30 June 2010 % of total Provisions loans (KZT millions) 82.7% 1,978,481 17.3% 36,960 100.0% 2,015,441 Provisions/ Indebtedness 86.6% 7.7% 72.9%

Indebtedness Individual loans ............................................................... Pooled loans..................................................................... Total loan portfolio ........................................................ 2,284,884 478,992 2,763,876

In classifying the Groups loan exposure, the Department of Credit and Operational Risk performs detailed credit reviews and assesses the borrowers financial condition and operating results to determine if these have deteriorated since the origination of the loan, the current performance of the borrower with regards to the timely repayment of principal and interest and whether any extensions of interest or principal payments have been granted or other modifications have been made to the original loan agreement, the quality and quantity of any collateral provided, the purpose of the loan and whether there has been any unauthorised use of the loan proceeds. In addition to these assessments, the Department of Credit and Operational Risk performs other analytical procedures and takes into consideration any macro and microeconomic factors specifically relating to the Kazakhstan economy and the relevant industry sector. The Department of Credit and Operational Risk controls the execution of loan policy and establishes risk limits by products, counteragents, transactions, branches and persons authorised to make lending decisions. The Department of Credit and Operational Risk provides weekly and monthly reports to the Banks management detailing all aspects of the Banks credit activity. Immediate action is taken by the departments having responsibility for supervising and monitoring loan repayments if any issue arises with respect to repayment of principal or accrued interest. The Banks determination of whether a repayment issue has arisen is based on a number of objective and subjective criteria, including changes to the borrowers turnover in accounts held by the Group, changes to the borrowers economic and financial activity giving rise to the suspicion that a loan is not being used for its intended purpose, applications to change credit terms, failure of the borrower to fulfil the terms and conditions of its loan agreement and refusal of a borrower to cooperate in providing updated information.

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The Banks Department of Credit and Operational Risk is also involved in overseeing the risk management activities of the target banks in which the Group holds an interest, including BTA Belarus, BTA Kazan, BTA Georgia and BTA Armenia. While these local banks maintain their own risk management division, their policies have been streamlined with those of the Bank and only the Bank has approval authority with respect to any loan in excess of defined limits. The Bank adopted detailed anti-money laundering policies, including extensive know-your-client regulations, in 1995. On 28 August 2009, the Government passed the law On counter measures to legalisation of income received in illegal ways (money laundering) and to financing of terrorism, which came into force from 9 March 2010. The Bank is currently reviewing its existing know your client and anti-money laundering, antiterrorism financing policies to ensure that its activities comply with the new law. Any overall deterioration in the quality of the Groups loan portfolio or increased exposure relating to off-balance sheet contingent liabilities is brought to the attention of the Banks Management Board. Non-Performing Loans Non-performing loans are loans where the payment of principal is past due and interest is past due for more than 90 days. The percentage of non-performing loans to gross loans was 66.6 per cent. as at 30 June 2010 and 64.6 per cent. as at 31 December 2009. As at 30 June 2010, the Groups gross loans decreased by 12.7 per cent., to KZT 2,763,876 million from KZT 3,164,181 million as at 31 December 2009. The provisions on loans decreased by 5.1 per cent. to KZT 2,015,441 million as at 30 June 2010 from KZT 2,123,408 million as at 31 December 2009. This decrease principally reflected the fact that the Bank wrote off problem and overdue loans corresponding to 2.4 per cent. of total gross loan portfolio. The Bank undertakes the following actions with regards to non performing loans: (i) devises an action plan for collection of such loans; (ii) conducts an analysis of the relevant companys financial results and activities; (iii) approves a debt repayment schedule considered to be realistic by both the Bank and the borrower; (iv) continuously monitors cash flows of the relevant company; and (v) requires additional collateral to secure such loans. As at 30 June 2010, the ratio of the Groups provisions to gross loans was 72.9 per cent., compared to 67.1 per cent., as at 31 December 2009. The action plans may consist of any one or more of the following actions by the Bank: (i) negotiation with the borrower to restructure the underlying debt obligation; (ii) pursuit of out-of-court enforcement against the collateral; (iii) out-of-court enforcement against the collateral with simultaneous judicial enforcement; (iv) enforcement against debtors of the borrower for amounts owed to the borrower; (v) initiation of bankruptcy proceedings against the borrower; and (vi) pursuit of remedies through other legal bodies. Ultimately, the Department of Problem Loans will decide on the appropriate action plan. The Recovery Units contain certain covenants relating to Recoveries in respect of non-performing Loans. (See Schedule 1 (Terms and Conditions of the New Notes), Annex 6 (Terms and Conditions of the Recovery Units)). In the event that the Bank pursues debt restructuring with the borrower, the Bank may take one or more of several actions in respect of the underlying loan agreement, including modifying or extending the repayment schedule, changing the interest rate on the loan, cancelling or suspending penalties and fines, providing a repayment grace period or exchanging the debt for an equity interest in the borrower. The Bank may also pursue business restructuring, which may include negotiating with the borrowers debtors to encourage repayment, transferring its claims to third parties and assisting the borrower to find new participants in its business. Finally, the Bank may assist the borrower with organisational restructuring, including transferring the borrowers fixed assets to leases to third parties or Affiliates of the Bank and providing guidance on asset management. In the course of the managements review of the Groups internal control processes in early 2009, it was discovered that deficiencies existed that may have contributed to increased levels of

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non-performing loans. See Risk FactorsRisks Relating to the BankInternal Control Weaknesses have been evidenced by several transactions in the past and other unusual transactions may be uncovered in the future. Failure by the Bank to adhere to their current internal control processes could lead to similar issues in the future. Provisioning Policy The provisions calculated for regulatory purposes for unconsolidated Banks compliance information forms are based on FMSA Methodology and differ from provisions calculated based on IFRS presented in the Groups consolidated Financial Statements. In determining provisions, the main difference between FMSA Methodology and IFRS is the treatment of collateral. According to the FMSA Methodology, provisions are created against amounts of principal of outstanding loans without taking into account accrued interest and without taking into account the value of collateral in the case of collateralised loans. With respect to the uncollateralised loans, banks must provide provisions equal to 5.0 per cent., of the loan amount in respect of each new loan. With respect to collateralised loans, the provisioning rate is zero per cent., for loans classified as standard, 5.0 per cent., for loans classified as doubtful 1st category, 10.0 per cent., for loans classified as doubtful 2nd category, 20.0 per cent., for loans classified as doubtful 3rd category, 25.0 per cent., for loans classified as doubtful 4th category, 50.0 per cent., for loans classified as doubtful 5th category, and 100.0 per cent., for loans classified as loss. In addition, according to the FMSA Methodology, banks are not required to create provisions against accrued interest. Under the IFRS methodology applied by the Bank, provisions are created against amounts of loans including accrued interest but less the discounted value of collateral in the case of collateralised loans. For IFRS, provisioning rates are determined based on the type of loan (retail or corporate) and the size of the loan. For retail loans and corporate loans not exceeding KZT 5,000 million, the Bank determines provisions based on the roll rate approach applied to homogenous pools of retail and SME loans, which takes into account the historical performance of each pool and does not take into account collateral value, as under the FMSA approach. See Loan Supervision and Monitoring. For corporate loans exceeding KZT 5,000 million, the Bank conducts an individual analysis of each borrowers cash flow and the market value of collateral in order to determine provisions. For insignificant loans (i.e., loans of less than KZT 5,000 million) as at 30 June 2010, the Bank assessed the level of impairment of such loans on an individual basis for calculation of fair market value. Write-off Policy The Bank writes-off loans that are past due by 360 days or more or at such earlier time as it is evident that a loss has been sustained and no amounts will be collected, in accordance with the conclusions of the Security Department and the Legal Department. Once a loan has been written-off or fully provisioned, the Security Department, the Problem Loans Department and Management for the Expert Assessment and Monitoring of Security for Credits will commence monitoring the loan and its collateral for a five year period.

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The following table sets out an analysis of the Groups allowance for loan impairments, including allowance in respect of amounts due from credit institutions, for the periods indicated:
For the six months ended 30 June 2009 2010 Beginning allowance balance ........................ Impairment charge for losses ......................... Write-offs ...................................................... Recoveries ..................................................... Foreign currency revaluation ......................... Amounts arising on business combination..... Ending allowance balance ........................... Write-offs ...................................................... Recoveries ..................................................... Net write-offs................................................ 2,175,865 102,076 (65,626) 5,479 (30,869) (90,780) 2,096,145 (65,626) 5,479 (60,147) For the year ended 31 December 2009 2008 2007 (KZT millions) 1,221,717 1,221,717 137,166 70,270 357,392 754,254 1,094,300 67,810 (7,191) (64,557) (10,529) (6,891) 1,039 3,433 4,712 5,723 258,161 261,550 (1,320) 2 (532) (2,612) 252 1,831,118 2,175,865 1,221,717 137,166 (7,191) (64,557) (10,529) (6,891) 4,712 5,723 3,433 1,039 (6,152) (61,124) (5,817) (1,168)

Net write-offs for the six months ended 30 June 2010 increased by 877.7 per cent., to KZT 60,147 million, compared to net write-offs of KZT 6,152 million as at 30 June 2009. The following table sets forth certain ratios of the Groups write-offs with respect to loans to customers for periods indicated:
For the six months ended 30 June 2009 2010 Percentage of net write-offs to gross loans (excluding accrued interest)............................... Percentage of net write-offs to the opening reserve balance .................................................. Percentage of recoveries to write-offs................... For the year ended 31 December 2009 2008 2007 (%) 2.11% 5.0% 5.3% 0.23% 4.5% 41.8% 0.03% 1.2% 87.6%

2.40% 2.8% 8.4%

0.21% 0.5% 14.4%

Net write-offs as a percentage of gross loans increased from 0.23 per cent. for the year ended 31 December 2008 to 2.11 per cent. for the year ended 31 December 2009, and from 0.21 per cent. for the six months ended 30 June 2009 to 2.40 per cent., for the six months ended 30 June 2010, reflecting the continuing deterioration in the Groups overall asset quality over the period. The ratio of recoveries to write-offs fluctuated throughout each of the years ended 31 December 2009 and 2008 and during the six months ended 30 June 2010. It is difficult to assess the reasons for this fluctuation due to the timing of a write-off and the date when a recovery is made. The discounting of bad loans is not permitted in Kazakhstan and accordingly the Bank must pursue other methods of recovery. There is no industry concentration in the Groups bad loans. The Bank continues to focus on improving its bad debt recovery ratio, although no assurance can be made that any significant improvement will be achieved in the future. Recovery of assets is currently being actively pursued and a number of decisions have already been received in favour of the Bank. For details of outstanding claims please see Recovery Assets. In addition, the debts of a number of clients of the Bank are being restructured to maximise recoveries while attempting to maintain strong and profitable relationships.

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RELATED PARTY TRANSACTIONS The Bank has uncovered a significant number of purported loans and related transactions that it considers to have been provided on preferred terms to companies which it believes are or may be connected with the former management, and for which the security provided was inadequate or nonexistent. The current management believes that these contracts were entered into on behalf of the Bank through actions of (and for the benefit of) the former management and their associates and in breach of various legal duties, including in relation to related party transactions, and in breach of the Banks internal regulations and controls. The Bank has commenced a number of actions against Mr Ablyazov, its former Chairman, other former senior management and numerous additional parties in relation to a significant number of transactions which it alleges to have involved, amongst other things, unlawful related party dealings. It is anticipated that further claims, relating to additional similar transactions, will be issued. See The BankAsset Recovery. In addition to the civil actions brought by the Bank, criminal proceedings are pending against Mr Ablyazov and others in Kazakhstan, Russia and Ukraine relating to a significant number of allegedly unlawful loans and other transactions entered into, or attempted to be entered into, on behalf of the Bank before February 2009. The Banks management continues to review the loan portfolio to determine if additional transactions were concluded with suspected related parties outside Kazakhstan. The Bank has established substantial provisions relating to some of these transactions, primarily including purported loans concerning projects in CIS countries. Following the completion of the Restructuring has implemented a numbe rof measures to improve its internal procedures relating to the approval of related party transactions, including adopting the New Corporate Governance Code and introducing periodic audits of the Banks compliance with its governance policies. For a description of the definition of related parties under IAS 24 Related Party Disclosure and quantitative disclosure on transactions with related parties, see Note 31 to the 2008 Annual Financial Statements and Note 33 to the 2009 Annual Financial Statements included elsewhere in this Information Memorandum. As at 30 June 2010 and 31 December 2009, the Group had the following transactions with related parties. (including affiliates and Samruk-Kazyna):
31 December 30 June 2010 2009 (unaudited) KZT (millions) 2,141 5,064 1,433 4,476 698 585 10 3 32,791 3,233 28,826 3,965 3,233 2,359 5,383 2,359 5,383 40,290 42,584 38,762 41,590 1,528 994 41,851 48,209 41,851 48,209 113 113 139 788 1 138 788

Loans outstanding, net ................................................................................................... Entities under common control .................................................................................... Key management personnel ......................................................................................... Other related parties..................................................................................................... Amounts due from credit institutions (deposits) .......................................................... Entities under common control .................................................................................... Associates .................................................................................................................... Amounts due from credit institutions (loans) ............................................................... Associates .................................................................................................................... Amounts due to credit institutions ................................................................................ Entities under common control .................................................................................... Associates .................................................................................................................... Trading securities ........................................................................................................... Entities under common control .................................................................................... Available-for-sale investment securities........................................................................ Entities under common control .................................................................................... Cash and cash equivalents.............................................................................................. Entities under common control .................................................................................... Associates ....................................................................................................................

224

SK Bonds ......................................................................................................................... Shareholders ................................................................................................................ Amounts due to customers ............................................................................................. Shareholders ................................................................................................................ Entities under common control .................................................................................... Key management personnel ......................................................................................... Other related parties..................................................................................................... Commitments and guarantees issued ............................................................................ Entities under common control .................................................................................... Associates .................................................................................................................... Key management personnel ......................................................................................... Commitments and guarantees received ........................................................................ Entities under common control .................................................................................... Associates ....................................................................................................................

30 June 2010 517,413 517,413 355,902 193,608 162,260 26 8 236 79 157 -

31 December 2009 512,246 512,246 358,206 165,829 192,345 25 7 155 94 58 3 314 80 234

Loans Outstanding As at 30 June 2010, the Group had net loans outstanding of KZT 1,433 million made to entities under common control, KZT 698 million to key management personnel and KZT 10 million to other related parties compared at 31 December 2009 to net loans outstanding of KZT 4,476 million to entities under common control, KZT 585 million to key management personnel and KZT 3 million to other related parties. The decrease in net outstanding loans to entities under common control is due to change in composition of Samruk-Kazynas Group as at 30 June 2010, some subsidiaries of Samruk-Kazyna dropped out in comparison with 31 December 2009. The increase in loans to key management personnel was primarily due to changes in key management personnel of the Group. The sharp increase in net outstanding loans to other related parties is due to changes in key management personnel of the Group, which influenced other related parties too. Amounts due from Credit Institutions The amounts due from credit institutions as deposits for entities under common control of KZT 28,826 million as at 30 June 2010 compared to no amounts due from credit institutions as deposits for entities under common control as at 31 December 2009 was due to the fact that the Group decreased its share in Temirbank, as a result of which, the Group no longer consolidated Temirbank as a subsidiary as at 30 June 2010. The amounts due from credit institutions as deposits for associates increased by 22.6 per cent. to KZT 3,965 million as at 30 June 2010 compared to KZT 3,233 million as at 31 December 2009, as a result of BTA Georgia entering into new agreements on placed amounts due from credit institutions. The amounts due from credit institutions as loans decreased by 56.2 per cent. to KZT 2,359 million as at 30 June 2010 from KZT 5,383 million as at 31 December 2009, due to provisions made on AMT Bank. Amounts Due to Credit Institutions The Group recognised KZT 38,762 million as at 30 June 2010 in comparison with KZT 41,590 million as at 31 December 2009 for amounts due to credit institutions in respect of entities under common control of the Group representing a decrease of 6.8 per cent. due to return of funds attracted from Damu. The amounts due to credit institutions in respect of associates increased by 53.7 per cent. to KZT 1,528 million as at 30 June 2010 from KZT 994 million as at 31 December 2009, due to the attraction of deposits from BTA Orix Leasing. SK Bonds As at 30 June 2010, the Group recognised KZT 517,413 million in comparison with KZT 512,246 million as at 31 December 2009 in respect of the SK Bonds acquired by the Bank in March 2009. The increase of 1.0 per cent. was due to the amortisation of the difference between nominal value of these debt securities and their fair value.

225

Trading Assets The Group recognised KZT 41,851 million as at 30 June 2010 comparing to KZT 48,209 million as at 31 December 2009 for trading assets in respect of entities under common control of the Group, representing a decrease of 13.2 per cent. Available-for-sale Investment Securities As at 30 June 2010, the Group recognised KZT 113 million as available-for-sale investment securities for entities under common control, mainly due to the decrease in the holding in Temirbank. Cash and cash equivalents Cash and cash equivalents of KZT 1 million as at 30 June 2010 for entities under common control compared to no cash and cash equivalents as at 31 December 2009 was due to all cash and cash equivalents being repaid as at 31 December 2009. As at 30 June 2010, cash and cash equivalents for associates were KZT 138 million in comparison with KZT 788 million as at 31 December 2009 representing a decrease of 82.5 per cent. as a result of repayment of short-term deposits of BTA Georgia. Amounts Due to Customers As at 30 June 2010, the Group had KZT 193,608 million in amounts due to its shareholder customers compared to KZT 165,829 million as at 31 December 2009. This sharp increase was due to the attraction of long-term deposits of Samruk-Kazyna. As at 30 June 2010, the Group had KZT 162,260 million in amounts due to customers for entities under common control compared to KZT 192,345 million as at 31 December 2009. The decrease of 15.6 per cent. was due to a change in the composition of Samruk-Kazynas Group as at 30 June 2010, some subsidiaries of Samruk-Kazyna dropped out in comparison with 31 December 2009. The amounts due to key management personnel and other related parties customers increased by KZT 1 million to KZT 26 million and KZT 8 million as at 30 June 2010, respectively, from KZT 25 million and KZT 7 million as at 31 December 2009. This increase with respect to key management personnel was due to changes in key management personnel of the Group and the increase in respect to other related parties was due to changes in key management personnel of the Group, which influenced other related parties too. Commitments and Guarantees Issued The commitments and guarantees issued with respect to entities under common control as at 30 June 2010 totalled KZT 79 million compared to KZT 94 million as at 31 December 2009. The increase of 16.0 per cent. was due to write-offs of issued guarantees of subsidiaries of Samruk-Kazyna. The commitments and guarantees issued to associates as at 30 June 2010 totalled KZT 157 million compared to KZT 58 million as at 31 December 2009. The increase of 170.7 per cent. was due to issuance of guarantees on BTA Belarus. As at 31 December 2009, commitments and guarantees issued constituted KZT 3 million, as compared to none as at 30 June 2010. This is attributed to changes in key management personnel. Commitments and Guarantees Received Due to write-offs of received guarantees of Samruk-Kazyna subsidiaries, no commitments or guarantees were received from entities under common control and associates as at 30 June 2010. In comparison, as at 31 December 2009 KZT 80 million of commitment and KZT 234 million of guarantees were received from entities under common control and associates.

226

The following table describes the income and expenses of the Group in relation to related party transactions for the six month periods ending 30 June 2010 and 2009:
Six-month period ended 30 June 30 June 2010 2009 (unaudited) KZT (minions) 74 31 74 31 385 500 349 435 36 65 18,067 10,462 18,067 10,462 1,660 484 1,371 289 484 (1,640) (1,473) (1,493) (1,321) (147) (152) (6,212) (3,695) (3,920) (2,322) (2,291) (1,352) (1) (14) (7) 1,903 2,001 1,903 2,001 2 2 2 58 2 58 11 11 (30) (30)

Interest income on deposits up to 90 days.............................................................................. Associates ............................................................................................................................. Interest income on loans.......................................................................................................... Entities under common control ............................................................................................. Key management personnel .................................................................................................. Interest income on SK Bonds.................................................................................................. Shareholders ......................................................................................................................... Interest income on due from credit institutions .................................................................... Entities under common control ............................................................................................. Associates ............................................................................................................................. Interest expense on due to credit institutions ........................................................................ Entities under common control ............................................................................................. Associates ............................................................................................................................. Interest expense on due to customers ..................................................................................... Shareholders ......................................................................................................................... Entities under common control ............................................................................................. Key management personnel .................................................................................................. Other related parties.............................................................................................................. Interest income on trading assets ........................................................................................... Entities under common control ............................................................................................. Interest income on available-for-sale investment securities ................................................. Entities under common control ............................................................................................. Fee and commission income.................................................................................................... Entities under common control ............................................................................................. Associates ............................................................................................................................. Other income............................................................................................................................ Associates ............................................................................................................................. Other expenses ......................................................................................................................... Associates .............................................................................................................................

Interest Income The Groups interest income on deposits of up to 90 days from associates increased by 138.7 per cent. from KZT 31 million for the six month period ended 30 June 2009 to KZT 74 million for the six month period ended 30 June 2010. This increase was primarily due to the new agreements on short-term deposits. The Groups interest income on loans decreased by 23.0 per cent. from KZT 500 million for the period ended 30 June 2009 to KZT 385 million for the period ended 30 June 2010. This decrease was largely attributable to the change in Samruk-Kazynas structure. Certain subsidiaries of the Group ceased to be under common control, accordingly, for the six month period ended 30 June 2010, Samruk-Kazyna recognised KZT 349 million, compared to KZT 435 million recognised by the Group as at 30 June 2009. The interest income on loans to the key management personnel decreased from KZT 65 million for the period ended 30 June 2009 to KZT 36 million for the period ended 30 June 2010. The decrease was due to repayment of loans and changes in key management personnel. Interest income on bonds of Samruk-Kazyna increased by 72.7 per cent. from KZT 10,462 million for the six month period ended 30 June 2009 to KZT 18,067 million for the six month period ended 30 June 2010. Samruk-Kazyna bonds were issued in February 2009; the increase reflects monthly increase of amortised value of bonds. Interest income on amounts due from credit institutions increased by 243.0 per cent. from KZT 484 million over the period ended 30 June 2009 to KZT 1,660 million for the period ended 30 June 2010. The increase was due to the fact that the Group recognised interest income of KZT 1,371 million for

227

the six months period ended 30 June 2010 for entities under common control. The increase in the amounts due from credit institutions and the increase in income for entities under common control was due to the fact that Temirbank was no longer considered to be a subsidiary of the Bank, as the Groups share in share capital of Temirbank decreased. This was partially offset by decreases in the amounts due to associates from KZT 484 million for the period ended 30 June 2009 to KZT 289 million for the period ended 30 June 2010 as a result of repayment of short-term deposits. Interest income on trading securities decreased by 4.9 per cent. from KZT 2,001 million for the six month period ended 30 June 2009 to KZT 1,903 million for the six month period ended 30 June 2010. Interest income on available-for-sale investment securities for the six month period ended 30 June 2010 was KZT 2 million. The Group recognised income due to the fact that Temirbank was considered to be an entity under common control. Interest Expense Interest expense on amounts due to credit institutions increased by 11.3 per cent. from KZT 1,473 million over the six month period ended 30 June 2009 to KZT 1,640 million for the six month period ended 30 June 2010. The increase in interest expenses due to entities under common control to KZT 1,493 million for the six month period ended 30 June 2010 from KZT 1,321 million for the six month period ended 30 June 2009 was due to the fact that loans attracted from Damu were reflected from February in 2009, and from January in 2010. This increase was offset by a decrease in the amounts due to associates from KZT 152 million for the six month period ended 30 June 2009 to KZT 147 million for the six month period ended 30 June 2010, as a result of repayment of attracted deposits. Interest expense on amounts due to customers increased sharply from KZT 3,695 million for the six month period ended 30 June 2009 to KZT 6,212 million for the six month period ended 30 June 2010. The increase was due to attraction of long-term deposits from the shareholders and entities under common control. Fee and Commission Income The Group had fees and commissions income from the entities under common control of KZT 2 million for the six month period ended 30 June 2010. This was due to changes in the structure of Samruk-Kazyna. The Group had fees and commissions income from the associates of KZT 58 million for the six month period ended 30 June 2009, this was attributable to the writing-off of a guarantee. Other Income and Expenses The Group recognised the income of KZT 11 million for the six month period ended 30 June 2010 due to commission income received from issuance of guarantee for AMT Bank. Due to the write-offs of received guarantees of Samruk-Kazyna subsidiaries, the expenses of associates for the six month period ended 30 June 2010 equalled zero, whereas such expenses totalled KZT 30 million for the six month period ended 30 June 2009.

228

PRICE RANGE OF SHARES The Banks Common Shares are currently listed on the non-listing category of the KASE. The Common Shares were accepted to the Official Listing on the KASE under category on 9 July 2003. On 1 September 2008, they were transferred to the first category of the KASE Official Listing and on 3 August 2009 to the third category of the KASE Official Listing. Trading in the Common Shares commenced on 2 February 2004. On 26 February 2010, the Common Shares were transferred from the third category of the KASE to the non-listing category of the KASE. In 2010 there has been no trading of Common Shares on the KASE. The following table sets out the average market prices of the Common Shares on a monthly basis in 2009. Where the price is not indicated for any month no trading took place during that month.
Average Market Price (Tenge) 14000 3850 3200 2700 3828 3000 2365 2805 2180 2220 1550

Month January 2009................................................................................................................................................ February 2009.............................................................................................................................................. March 2009.................................................................................................................................................. April 2009.................................................................................................................................................... May 2009..................................................................................................................................................... June 2009..................................................................................................................................................... July 2009 ..................................................................................................................................................... August 2009................................................................................................................................................. September 2009 ........................................................................................................................................... October 2009 ............................................................................................................................................... November 2009 ........................................................................................................................................... December 2009............................................................................................................................................

229

PRINCIPAL SHAREHOLDERS The following table sets out shareholding information on all direct holders of more than 3 per cent. of the Banks Common Shares as at the date of this Prospectus:
Number of Common Shares Name Samruk-Kazyna .................................................................................................................... 36,021,892,863 The Bank of New York Mellon as Depositary for the GDRs ............................................... 6,863,610,000 Percentage of Common Shares 81.48 15.53

Except as set out above, no beneficial owners of Common Shares and/or GDRs through either the Kazakhstan Central Depositary or The Bank of New York Mellon, as depositary for the GDRs, own 3 per cent. of more of the Banks Common Shares. The Bank and certain of its Subsidiaries hold the Banks own Shares. These shares are accounted for as treasury shares on the Banks balance sheet and as trading or investment securities in the relevant subsidiaries balance sheet. In the Annual Financial Statements all shares held by the Bank and its subsidiaries are accounted for as treasury shares. The holdings of the Bank and its Subsidiaries as at the date of the Prospectus are as set out in the following table:
Number of Common Shares 78,001 59,592,721 139 744,828 602,526 1,624 572,060 3,376,664 11,764,662 -

NAME The Bank ........................................................................................... Subsidiaries: BTA Securities .................................................................................. Pension Fund BTA Kazakhstan ......................................................... BTA Ipoteka ...................................................................................... London-Almaty.................................................................................. Pension Fund BTA Kazakhstan ........................................................ Zhetysu .............................................................................................. BTA Life ........................................................................................... BTA Insurance................................................................................... TuranAlem Finance ...........................................................................

Market Value Price Paid KZT millions 1,519 1,519 1,728 22 34 30 194 674 22 5,971 6 57 34 21 128 22

Samruk-Kazyna Samruk-Kazyna is wholly owned by the Government and is the national managing holding company for substantially all state enterprises. Samruk-Kazyna was created in 2008 pursuant to the Presidential Edict No. 669, dated 13 October 2008, and the Resolution of the Government No. 962, dated 17 October 2008, by way of the merger of JSC Kazakhstan Holding for Management of State Assets, Samruk and JSC Sustainable Development Fund Kazyna. Samruk-Kazyna is a joint stock company whose shares are held by the Ministry of Finances Committee of State Property and Privatisation on behalf of Kazakhstan. Samruk-Kazynas primary objective is to manage shares (participatory interests) of legal entities it owns with a goal of maximising long term value and increasing competitiveness of such legal entities in world markets. The governance of Samruk-Kazynas activities is subject to general corporate governance applicable to all joint stock companies in Kazakhstan. Accordingly, the corporate governance structure of Samruk-Kazyna is as follows: the Government, as the sole shareholder constitutes the supreme governing body, the Board of Directors constitutes the managing body, and the management board constitutes the executive body.

230

Members of Samruk-Kazynas Board of Directors are appointed by the Government, and its members are, among others, the Minister of Economy and Budget Planning, the Minister of Finance, the Minister of Energy and Mineral Resources, the Minister of Industry and Trade, independent directors and the Chairman of the management board of Samruk-Kazyna. The Board of Directors is chaired by the Prime Minister of Kazakhstan. On 2 February 2009, taking into account the growing deterioration of the Banks financial condition, the Government approved the FMSAs plan for Samruk-Kazyna to acquire a controlling stake in the Bank. On the same day, the Bank issued and Samruk-Kazyna purchased 25,246,343 Shares of the Bank at a price of 8,401 Tenge per share. As a result the Bank received additional capital of KZT 212,095 million and Samruk-Kazyna obtained 75.1 per cent. of the Banks authorised capital. Samruk-Kazyna Undertaking As a condition precedent to the Restructuring, Samruk-Kazyna executed the Samruk-Kazyna Undertaking. The Samruk-Kazyna Undertaking is in the form of a Deed Poll executed in favour of the GDR Holders, the Restructuring Creditors (and, for the avoidance of doubt, their transferees) and the New Notes Trustee, setting out the post-restructuring obligations of Samruk-Kazyna, which became effective on the Restructuring Date, and which will survive the Minority Protection Expiry Date in relation to the operation and management of the Bank and its relationship and obligations to the GDR Holders and other Restructuring Creditors. Pursuant to the Samruk-Kazyna Undertaking, Samruk-Kazyna undertakes to the GDR Holders, the Restructuring Creditors (and, for the avoidance of doubt, their direct and indirect transferees) and the New Notes Trustee that it will (inter alia): (a) exercise its voting rights in relation to the Shares held by it in order to procure that the Creditor Directors as nominated by the Steering Committee or in relation to any replacement Creditor Director subsequently nominated by the New Notes Trustee are appointed to the Board; not exercise its voting rights in relation to the Shares of the Bank held by it in order to remove either Creditor Director other than for incapacity or gross misconduct, in which event Samruk-Kazyna will use its reasonable endeavours to secure the prompt appointment of a replacement, nominated by the New Notes Trustee and no Qualified Majority decisions can be taken unless at least one Creditor Director is still a member of the Board; and procure that no Samruk-Kazyna Director votes in respect of any item listed as requiring a Qualified Majority under Restructuring Creditors as Shareholders of the Bank Shareholder/Board Approval Matters unless both Creditor Directors and at least one Independent Director have voted to approve the Qualified Majority Item, in which case the Samruk-Kazyna Directors may vote in favour of or against approving the Qualified Majority Item at their discretion.

(b)

(c)

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DESCRIPTION OF SHARE CAPITAL AND CERTAIN MATTERS OF KAZAKHSTAN LAW Share Capital The Banks authorised share capital consists of 55,258,029,745 Shares and 100,000 Preference Shares. As at the date of this Prospectus, the Bank had 44,209,411,924 Shares placed, all of which were fully paid. The Shares and the Preference Shares have no par value. All Shares are in registered form in the share register of the Bank, maintained by an independent third party registrar. The registrar is Centre DAR JSC, and its address is 565/8, Seifullina Avenue, 050012 Almaty, Republic of Kazakhstan. Ownership of the Shares is evidenced by an extract from the share register of the Bank. The Bank placed 100,000 Preference Shares in June 2008 for a value of KZT 304,503,430,078.18, and, in 2009, placed 25,246,343 Shares for KZT 516,597,957,621.18. Prior to the Restructuring, the Bank had 33,616,968 Shares placed at a value of KZT 516,597,957,621.18. As part of the Restructuring, the Bank placed a further 44,175,794,956 Common Shares increasing the number of placed Shares to 44,209,411,924 at a value of KZT 1,188,070,040,955.18. Summary of the Charter In conjunction with the Restructuring, the Bank adopted certain amendments to its Charter. The Charter provides that the Banks principal objective is to earn profit through providing banking services, to establish direct contacts with international financing institutions with the purpose of developing foreign economic relations and improving business cooperation with organisations of foreign countries. The Bank may issue Common Shares, Preference Shares and other securities convertible into shares. Subject to the provisions of the JSC Law and the Charter and without prejudice to any rights attached to any existing Shares or class of Shares, the Bank may issue Common Shares, Preference Shares and other securities convertible into shares. Subject to the provisions of the JSC Law and the Charter, the unissued Common Shares and issued Common Shares that have not yet been placed (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. Under the terms of the Charter, the Board of Directors is comprised of six directors. For a description of the approval and replacement procedures for the Directors, see Management and Corporate Governance Board of Directors. Samruk-Kazyna Undertaking As part of the Restructuring, certain undertakings were given by Samruk-Kazyna in favour of the Creditor Shareholders. These undertakings relate to (i) the corporate governance of the Bank (including certain minority shareholder protections which were ineligible for inclusion in the Charter), (ii) the share capital of the Bank, (iii) the tag-along rights of the Creditor Shareholders, and (iv) the drag-along rights of Samruk-Kazyna. Corporate Governance Pursuant to the terms of the Samruk-Kazyna Undertaking, Samruk-Kazyna undertook to procure (to the extent that it continues to own sufficient Common Shares to do so) that

232

that neither the Director nor the Creditor Director will be removed for a period of three years following the Restructuring Date except for reasons of incapacity or gross misconduct and that, if any such director is removed or resigns, a replacement CS Director or Creditor Director is elected to the Board of Directors; the Bank implements the procedure for the appointment and removal of the CS Director and Creditor Director summarised in Management and Corporate Governance Board of Directors; the Bank pays the remuneration and reasonable expenses of the CS Director and Creditor Director and provides them with a commercially reasonable directors indemnity insurance policy; the Bank does not pay any dividends on common shares, in cash or otherwise or make any other distributions (whether by way of redemption, acquisition or otherwise) in respect of its share capital, (i) in respect of the financial years ended 31 December 2009 to 31 December 2011 (inclusive) unless 50 per cent. of the indebtedness under the New Notes has been repaid or otherwise discharged and (ii) thereafter if such payment would reduce the Banks capital adequacy ratios (including K1 and K2) (under the FMSA rules as applicable on the issue date) to less than the amount which is one per cent. in addition to the regulatory minimum in respect of K1 and two per cent. in addition to the regulatory minimum in respect of K2; following the financial year ended 31 December 2011 to exercise its voting rights in relation to the Common Shares held by it with a view to procuring that no dividends are paid on Common Shares if such payment would cause the capital adequacy ratio then applicable to the Bank to be reduced to a level less than 2 per cent. above the minimum level specified by the applicable competent authority in Kazakhstan; no matter required to be approved by the General Meeting of Shareholders, as listed in the below table, but which is required by Kazakhstan law to be approved by the Board of Directors will be approved by the Board of Directors until such matter has first been approved by the General Meeting of Shareholders and vice versa; no matter required to be approved by a Super Majority Decision of the General Meeting of Shareholders, as listed in the below table, will be approved unless such a majority is reached; and no matter required to be approved by a Qualified Majority of the Board of Directors, as listed in the below table, will be approved unless such a majority is reached. APPROVAL MATTER RESERVED FOR: SHAREHOLDERS CONSTITUTIONAL DOCUMENTS BOARD OF DIRECTORS

1 2

Alteration of the Banks Charter. Any change to Governance Code. the Banks Corporate

Supermajority Supermajority

AUDITORS, ADVISERS AND PROCEDURES 3 Any change of the Banks Auditors or the Auditors terms of reference. Supermajority

233

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS Qualified

Any change of the special auditor (whose functions are to audit compliance of the Bank with the Banks Corporate Governance Code and internal procedures and controls and implementation of the Banks Business Plan, or any change to his terms of reporting and responsibilities. Any change to the Banks credit approval and decision-making procedures or lending policies or procedures. Approval of any of the Banks internal audit, risk management or compliance policies or procedures and amendments thereto. SECURITIES ISSUANCE OR AMENDMENTS

Qualified

Qualified

Voluntary de-listing of the Shares of the Bank or any member of the Group from the list of any stock exchange or adoption of decision to list the Shares. Issue of any ordinary or preference shares or securities or grant of any option to subscribe for shares or equity-linked securities or issue of convertible securities or entry into any agreement for the same. Any increase in the Banks authorised share capital. Purchase of its share capital or other securities or conversion of any of its shares or other securities other than as permitted under the terms of the New Instruments. Approval of any prospectus or any amendments to the prospectus for the issue of any ordinary or preference shares of the Bank.

Supermajority

Qualified

8A

Supermajority

Supermajority

10

Qualified

ADDITIONAL DEBT 11 Borrowing other than in the ordinary course of business and borrowing at rates above market rates. Qualified

234

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS Variable 1

12

Increasing the Banks liabilities by an aggregate amount in any twelve month period (by reference to, in the first Financial Year following the Restructuring Date, the aggregate liabilities described in the opening balance sheet delivered as a condition precedent to the Restructuring and, thereafter, the Banks most recent audited annual financial statements. To the extent not covered by item 12, increasing any of the Groups liabilities by an aggregate amount in any twelve month period (by reference to, in the first Financial Year following the Restructuring Date, the aggregate liabilities described in the opening balance sheet delivered as a condition precedent to the Restructuring and, thereafter, the Groups most recent audited annual financial statements. Creating or causing to be created any Security upon the whole or any part of the Banks present or future undertaking, assets or revenues (including uncalled capital) to secure any Financial Indebtedness or guarantee of Financial Indebtedness other than Permitted Security (excluding under (j) of that definition). To the extent not covered by item 14, creating or causing to be created any Security upon the whole or any part of the Groups present or future undertaking, assets or revenues (including uncalled capital) to secure any Financial Indebtedness other than a Permitted Security (excluding under (j) of that definition). The Bank providing any form of financial support (including but not limited to the grant of any loan, guarantee, indemnity or Security) in connection with any Bank Subsidiary entering into a transaction described in items 13 or 22.

Variable 1

13

Variable 3

14

Variable 1

Variable 1

15

Variable 3

16

Variable 1

Variable 1

BOARD / MANAGEMENT BOARD / EXECUTIVES 17 Changes to the absolute number of directors on the Board of the Bank. Supermajority

235

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS Qualified

18

Appointing or removing the Banks Chairman, or any member of the Banks Management Board including the Chief Executive Officer, Chief Operating Officer, Chief Compliance Officer, Chief Risk Officer and/or Chief Financial Officer. Entering into and/or amending any contract of employment or appointment with the Banks Chairman or approving or allowing the entry into and / or amendment of any contract of employment or appointment with any member of the Banks Management Board including the Chief Executive Officer, Chief Operating Officer, Chief Compliance Officer, Chief Risk Officer and/or Chief Financial Officer and the setting of salaries, terms of work, bonuses, incentives commissions and other emoluments of such persons. Terminating the employment of the Banks Chairman or approving or allowing the termination of employment of any member of the Banks Management Board including the Chief Executive Officer, Chief Operating Officer, Chief Compliance Officer, Chief Risk Officer and/or Chief Financial Officer. ACQUISITIONS/ DIVESTITURES/ ASSET SALES OR TRANSFERS

19

Qualified

20

Qualified

21

Acquisition by the Bank of any assets or property or shares/participatory interests in the charter capital of other entities or persons. In determining which approval level is required, the total value (per transaction or when aggregated with all other such acquisitions in the same Financial Year of the Bank) as a percentage of Net Assets of the Bank shall be determinative. The value of Net Assets shall be determined by reference to, in the first Financial Year following the Restructuring Date, the opening balance sheet delivered as a condition precedent to the Restructuring and thereafter, its more recent audited annual financial statements.

Variable 2

Variable 2

236

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS Variable 4

22

Acquisition by any member of the Group other than the Bank itself of any assets or property or shares/participatory interests in the charter capital of other entities or persons. In determining which approval level is required, the total value (per transaction or when aggregated with all other such acquisitions in the same Financial Year of the Bank) as a percentage of Net Assets of the Bank shall be determinative The value of Net Assets shall be determined by reference to, in the first Financial Year following the Restructuring Date, the opening balance sheet delivered as a condition precedent to the Restructuring and thereafter, its more recent audited annual financial statements.

23

The Bank participating in entering into, amending or varying any partnership, joint venture or profit/revenue sharing arrangement or agreement or any management contract. Any member of the Group other than the Bank participating in, entering into, amending or varying any partnership, joint venture or profit/revenue sharing arrangement or agreement or any management contract. The Bank entering into any merger. Any member of the Group other than the Bank entering into any merger. Disposal by the Bank of any (i) assets, (ii) property, (iii) undertaking, (iv) business or (v) shares/participatory interests in the charter capital of any legal entity, (excluding disposals made in the ordinary course of trading of the Bank) in any Financial Year (whether by one or more transactions) of more than 6.5% of the Banks total consolidated gross assets.

Variable 2

Variable 2

24

Variable 4

25 26

Variable 2

Variable 2 Variable 4

27

Supermajority

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APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS

The value of gross assets shall be determined by reference to, in the first Financial Year following the Restructuring Date, the opening balance sheet delivered as a Condition precedent to the Restructuring and, thereafter, its more recent audited annual financial statements. 28 Disposal by any member of the Group other than the Bank itself of any (i) assets, (ii) property, (iii) undertaking, (iv) business or (v) shares/participatory interests in the charter capital of any legal entity, (excluding disposals made in the ordinary course of trading) in any Financial Year (whether by one or more transactions) of more than 6.5% of the Groups total consolidated gross assets. The value of gross assets shall be determined by reference to, in the first Financial Year following the Restructuring Date, the opening balance sheet delivered as a condition precedent to the Restructuring and thereafter, its more recent audited annual financial statements delivered. BUSINESS PLAN AND ACCOUNTS 29 Making any material change to the nature or scope of the Groups business. The Bank adopting any new Business Plan or budget or making any material change to the banks existing Business Plan or budget. Otherwise than as required by law, materially amending its accounting or financial policies or reporting practices including but not limited to the provisioning, write-off policies and write-back practices. CONTRACTS 32 Entry into or completion of any interested-party transaction, that is a transaction with an Affiliate of the Bank as that term is defined under Article 64 of the Kazakh Joint Stock Company Law. Qualified (comprised of disinterested directors with respect to the relevant Related Party Transaction) Supermajority Qualified

30

Qualified

31

Qualified

238

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS Qualified

33

To the extent not covered by item 32 above, entry into or completion of: (a) any Significant Transaction with: (i) an Affiliate of the Bank as that term is defined under Article 64 of the Kazakh Joint Stock Company Law;

(ii) any shadow director or person exerting substantial influence over the Bank (Shadow Affiliate); (iii) any person who is related by blood, marriage, or adoption to an Affiliate or Shadow Affiliate including such persons spouse, civil partner, child, step-child or parent (each a Close Relative) or any spouse, former spouse, civil partner, child, step-child, parent, niece, nephew, uncle, aunt, lineal descendent or lineal ancestor, of any the Affiliate or Shadow Affiliate or of the Affiliates or Shadow Affiliates Close Relatives (together the Relatives); or (iv) the trustees (acting as such) of any trust of which any Affiliate, Shadow Affiliate or any of the Affiliates or Shadow Affiliates Relatives is a beneficiary or discretionary object; (v) any body corporate which any Affiliate, Shadow Affiliate or any Relative of the Affiliate or Shadow Affiliate is a director or together with any of the other aforesaid persons controls or directly or indirectly holds more than 10% of the shares in such body corporate, or any body corporate in the same group as that body corporate;

239

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS

(vi) any partnership which any Affiliate, Shadow Affiliate or any Relative of the Affiliate or Shadow Affiliate is a partner, (other than a transaction involving SK or any of its Subsidiaries) which involves aggregate payments or value of U.S.$5,000,000 or more; or (b) any Significant Transaction involving SK or any of its Subsidiaries which involves aggregate payments or value of U.S.$75,000,000 or more.

For these purposes, Significant Transaction means: (i) any intra-group borrowing or lending or guarantees, purchase, sale, transfer, assignment, lease, conveyance or exchange of any property or the rendering of any service or any similar transaction;

(ii) any agreement not on bona fide arms length terms; (iii) entry into any agreement (apart from an employment contract). 34 Any sale of the whole or any part of the Variable 1 Banks loan book (not constituting a Recovery Asset) at a discount. To the extent not covered by item 34, any sale of the whole or any part of any of the Banks Subsidiaries loan books (not constituting a Recovery Asset) at a discount. LENDING PRACTICES 36 Entry into any lending arrangement on terms other than terms which achieve a proper commercial return to the Group when compared against terms offered in the market by corporations similar to the Bank engaged in similar types of business. Qualified Variable 1

35

Variable 3

240

APPROVAL MATTER

RESERVED FOR: SHAREHOLDERS BOARD OF DIRECTORS

CAPITAL EXPENDITURE 37 Incurring or entering into any commitment to incur any capital expenditure if the estimated amount or aggregate value of capital commitments already incurred or contracted for by the Group when considered on a whole in that Financial Year exceeds the budgeted annual amount for that year by more than 5%. DIVIDENDS 38 Any Board decision to put a resolution before a general meeting of the Bank to approve the payment, making or declaring of any dividend in cash or in specie out of its profits, assets or reserves. REORGANISATIONS AND WINDING-UP 39 The Bank entering into any scheme of Supermajority arrangement, reorganisation, reconstruction or compromise or other arrangement with creditors. Taking any step to dissolve or wind-up the Supermajority Bank or Material Subsidiary or to commence any other procedure an effect of which would be to create a general moratorium with respect to proceedings by its creditors. LITIGATION 41 Commence or discontinue the prosecution or defence of, or settle any litigation or arbitration proceedings or claim, in each case where the amount claimed exceeds U.S.$30,000,000 (except in respect of debt collection in the ordinary course of business or applying for or defending an interim injunction where it is not practicable to obtain consent). Qualified Qualified Qualified

40

Tag-Along Rights The Samruk-Kazyna Undertaking provides that Shares allocated to Claimants under the Restructuring Plan will be subject to and benefit from the following tag along rights: Where Samruk-Kazyna (whether acting alone or in concert) is selling or otherwise disposing of less than 30 per cent. of the Shares, each Shareholder shall be entitled to a pro-rata tag along in respect of all or part (at its discretion) of the Shares corresponding to the GDRs held by it. The percentage of Shares (corresponding to a Shareholders GDRs) up to which such Shareholder may elect to tag-along

241

shall be equal to the percentage of Shares held by Samruk-Kazyna on the date of sale being sold by Samruk-Kazyna (and any persons with whom it is acting in concert). Where Samruk-Kazyna (and any persons with whom it is acting in concert) is disposing of 30 per cent. or more of the Shares (either in one or more transactions and for which purpose all sales and other disposals made by Samruk-Kazyna on or following the Restructuring Date (other than to the Bank or a Restructuring Creditor on the Restructuring Date) shall be aggregated), each such Shareholder shall be entitled to tag along in respect of all or part (at its discretion) of the Shares corresponding to the GDRs held by it. Provided an offer has been made to all Creditor Shareholders as required above and subject to those Creditor Shareholders who have elected to exercise the right to sell their Shares, Samruk-Kazyna shall be free to sell its Shares to any third party; provided, however, (i) the consideration at which such Shares are being purchased by such third party shall be at the same price per share as was offered to the Creditor Shareholders; and (ii) the other terms and conditions pursuant to which such third party purchases such Shares are substantially equivalent to (and in any event no more favourable than) the terms previously disclosed to Creditor Shareholders. The procedure for the exercise of tag-along rights by Creditor Shareholders that are holders of GDRs is set out in Condition 21 of the GDRs. See Terms and Conditions of the Regulation S GDRs Condition 21 (Tag Along Rights) and Terms and Conditions of the Rule 144A GDRs Condition 21 (Tag Along Rights). Drag Along Rights The terms and conditions of the Regulation S GDRs and the terms and conditions of the Rule 144A GDRs provide that Samruk-Kazyna has the benefit of drag-along rights against the Creditor Shareholders. If Samruk-Kazyna wishes to sell a majority of the Shares to any third party, Samruk-Kazyna shall have the option to require all of the Creditor Shareholders to sell all of the Shares corresponding to the GDRs held by them to the third party. Completion of the sale of such Shares shall be conditional upon (a) the drag along price being equal to or better than the fair market arms-length value as determined by an independent expert (being one of Deloitte, PriceWaterhouseCoopers, KPMG or Ernst & Young or an international investment bank), (b) Creditors Shareholders receiving no less per share than the price per Share received by Samruk-Kazyna and (c) the sale price being payable in cash or in a form immediately convertible into cash. The procedure for the exercise by Samruk-Kazyna of its drag-along rights is set out in Condition 22 of the GDRs. See Terms and Conditions of the Regulation S GDRs Condition 22 (Drag Along Rights) and Terms and Conditions of the Rule 144A GDRs Condition 22 (Drag Along Rights). Investors are warned that should Samruk-Kazyna elect to exercise its drag-along rights, pursuant to the terms and conditions of the Deposit Agreements, every holder of GDRs will be required to prove to the reasonable satisfaction of the Bank that it did not receive the GDRs held by it pursuant to the Restructuring if it does not want to be subject to the exercise of the drag-along rights. BTA Undertaking Pursuant to the terms of the BTA Undertaking, the Bank undertook to the Creditor Shareholders that it would comply in all material respects with the Charter and that it would not take any corporate action without obtaining all necessary shareholder or Board approvals set out in the Charter provided, however, that where compliance with the provisions of the Charter would breach the provisions of Kazakhstan law then in effect, the provisions of Kazakhstan law will prevail. 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 Shares present in person or by proxy has one vote. A

242

minority shareholder (that is, a shareholder having less than 10 per cent. of the voting Shares of the Bank) is permitted to join its votes with other shareholders on the terms and conditions to be set out in the agreement between the Bank and the registrar. Every holder of Shares present in person or by proxy shall have one vote for each fully paid Share of which he is the holder. 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 an adjourned 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 The JSC Law sets out the procedure for determining dividends that may be distributed by the Bank to its shareholders. Subject to the provisions of the JSC Law, the General Meeting of Shareholders may declare dividends to be paid to holders of the Common Shares by simple majority vote. Under the JSC Law, the Bank may distribute dividends to the holders of its Common Shares annually or based on its quarterly or semi-annual results (subject to all JSC Law requirements therefor). The JSC Law prohibits the accrual of dividends if a companys own capital is negative or would become negative as a result of such an accrual or if the Bank is insolvent under Kazakhstan bankruptcy legislation or would become so as a result of such an accrual. Except as provided by the rights and restrictions attached to any class of shares, the holders of the Banks Shares will, under the JSC Law, be entitled to participate in any surplus assets on a winding-up in proportion to their shareholdings. The Bank and Samruk-Kazyna have in the BTA Undertaking and the Samruk-Kazyna Undertaking, respectively, agreed to limit an dividends payable to shareholders to Permitted Dividends only, to the extent that to do so is within their respective powers and is lawful. Variation of Rights Under the JSC Law, the rights of holders of common and preference shares may be extended by a companys charter (although the Charter does not extend such rights), but these rights cannot be restricted. Transfer of Shares To transfer a Share on the over-the-counter market, the holder (or its representative) must sign a written order and submit it to the registrar or its nominee for execution, or give suitable electronic instructions as permitted by Kazakhstan law. The other party to the transaction or its nominee will execute a buy order by pairing it with a sell order. Transfer of Shares on the organised securities market must be done in accordance with the rules of such market. All dealings in the Shares must be registered by way of making entries in the personal accounts in the registry system or the nominees books and must also be registered in the unified system of registers maintained by the KCD. Legal title to a Share vests from the moment when the transaction is so registered (unless each party to the transaction has a different nominee, in which case legal title transfers at the moment when the transaction is registered in the personal accounts of each nominee in the KCD). An extract from the personal account of a shareholder in the registry system or a nominees books is evidence of that holders legal right to a Share. A registrar or its nominee can refuse to register a transfer of Shares if the documents submitted do not conform to legislative requirements and its internal requirements.

243

In addition, the FMSA has the right (by notifying the relevant issuer, the registrar and the KCD) to suspend trading in securities listed on the KASE 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. Authority to Allot Shares Under the JSC Law, the Board of Directors may issue and place Shares by a resolution of the Board of Directors. Any decision must state the number and the price of the Shares, the manner of subscription and qualification requirements to investors. Alteration of Share Capital The Bank may from time to time by a three-quarters majority vote of holders of the voting share capital of the Bank at a General Meeting of Shareholders (but by no other method) increase its authorised share capital. The Board of Directors may issue and place Shares up to the authorised number of Shares. Unpaid and Bought-Back Shares The JSC Law states that, until a Share is paid in full, the Bank must not instruct the registrar to credit the Share to the personal account of the would-be acquirer. Instead, the Share will be credited to the personal account of the Bank itself with the registrar. Therefore, a Share cannot be placed unless it is fully paid up. Shares which have been bought back by the Bank are credited to another special account of the Bank with the registrar. No dividends accrue or are payable on issued Shares that have not yet been placed or Shares bought back by the Bank. Such Shares are not counted for the purposes of determining a quorum and do not carry the right to vote. 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) using a valuation methodology which has been approved in advance by a General Meeting of Shareholders. Any such purchase must be effected with the consent of the relevant shareholder. Shares purchased by the Bank will be credited to the Banks 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 confirmation by the FMSA of the results of the placement of Shares. 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 issued Shares of the Bank, and the purchase price cannot exceed 10 per cent. of the size of the Banks own capital. Pre-emption Rights Under the JSC Law, a shareholder of the Bank has a pre-emptive right to acquire any newly placed Shares of the Bank (including newly issued Shares or Shares previously bought back). Accordingly, holders of Common Shares have pre-emptive rights on newly issued Common Shares or securities

244

convertible into Common Shares and holders of Preference Shares have pre-emptive rights on newly issued Preference Shares. However, according to the Banking Law such pre-emption rights are not available to Shareholders upon the conversion of securities and/or monetary obligations into the shares of a bank pursuant to such banks restructuring. Subject to the paragraph above, within 10 days from the date upon which the Bank takes a decision to issue new 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 new 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 such Shares (i.e., to exercise its pre-emptive right). Upon the expiry of such period, the right to submit such an application will lapse. The FMSA has in the past taken the position that persons not holding shares and therefore not disclosed in the register of the KCD, such as the holders of GDRs, are not entitled to the pre-emptive rights attaching to the underlying shares. Although the FMSA currently takes the position that holders of GDRs are entitled to such rights (and although there is nothing under current Kazakhstan law that would prevent GDR holders from exercising the pre-emptive rights that are attached to the underlying Shares), there is no guarantee that the FMSA will not reverse its position in the future. General Meetings of Shareholders The Board of Directors must convene and the Bank must hold extraordinary General Meetings of Shareholders and annual General Meetings of Shareholders in accordance with the requirements of the JSC Law. According to the Charter, an extraordinary General Meetings of Shareholders may be convened by the Board of Directors, a shareholder or group of shareholders acting on the basis of an agreement concluded between them who is aggregate owning ten per cent. or more of the voting rights to the Bank or a shareholder or group of shareholders holding in aggregate five per cent. or more of the voting rights in the Bank. Shareholders are entitled to receive not less than 30 (45 in the event of a meeting in absence pursuant to the absentee voting procedure) days notice of any general meeting. The General Meeting of Shareholders has exclusive competence to determine certain matters, including, but not limited to, the following: (a) (b) (c) (d) the introduction of amendments and supplements to, or the approval of new versions of, the Charter; the voluntary reorganisation or winding-up of the Bank, including any change in the Banks status as a Kazakhstan joint stock company; any increase in the amount of authorised Shares of the Bank or any change in the class of any authorised Shares of the Bank which have not been issued or placed; the determination of the scope and the expiry dates of the powers of the Board of Directors, the selection of the members of the Board of Directors and the early termination of their powers, as well as the determination of the amount and payment terms of remuneration to members of the Board of Directors; the appointment of an auditor of the Bank; the approval of annual financial statements and the amount of the annual dividend paid on Shares, if any; the determination of the conditions and procedures for converting the Banks securities or amending the rights attached to such securities; and

(e) (f) (g)

245

(h)

if such decision may not be taken by the Board of Directors, decisions on behalf of 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 of shareholders holding at least 75 per cent. of the voting share capital of the Bank. The General Meeting of Shareholders has the 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 In accordance with the Charter, the Board of Directors must comprise no fewer than nine persons, including four directors nominated by Samruk-Kazyna, two Creditor Directors nominated by the Steering Committee (one appointed on behalf of the holders of the Senior Dollar Notes and one appointed on behalf of the holders of the OID Notes) and three independent directors nominated by the Corporate Management and Appointments Committee. Members of the Board of Directors are 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. Except that Creditor Directors are appointed by the The quorum required for a duly convened meeting of the Board of Directors shall be 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 a simple majority of votes of the members present at the meeting. A General Meeting of Shareholders has the right to terminate at any time 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 has exclusive competence to determine certain matters including the following: the allotment of Shares, including the price, number and the manner of subscription of the Shares to be placed and the qualification requirements for investors; the powers of the Management Board, the selection of the chairman of the Management Board and the members of the Management Board, and the early termination of their powers; the remuneration and bonuses to be paid to the members of the Management Board; the execution of 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 Banks assets), transactions resulting in an increase of the Banks liabilities by an amount equal to or exceeding 10 per cent. of the Banks net worth, related party transactions or acquisitions of 10 per cent. or more of the voting shares of other legal entities; the establishment of the general terms and conditions of the Banks operations and approval of certain internal regulations; and the establishment of the Banks strategic plan, annual operation plan, annual budget, business plan and investment plan.

246

Remuneration of Directors The remuneration of the members of the Board of Directors shall be determined by the General Meeting of Shareholders. The chairman of the Board of Directors should inform shareholders of the amount and composition of the remuneration of directors and the members of the Management Board. Conflicts of Interest of Directors A member of the Board of Directors cannot participate in discussions or vote on any transaction between the Bank and: himself or any connected persons; any legal entity in which she/he or any connected persons has a material interest in, or is otherwise affiliated with; or any legal entity in which she/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 General Meeting of Shareholders and vote at the meeting will be prepared by the Banks 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 General 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 the Deposit Agreement. These GDR holders are also be able to exchange GDRs for Shares. Ownership of the Shares is also subject to certain restrictions under Kazakhstan law. Specifically (i) a legal entity registered in any of the offshore jurisdictions set out in a list of such jurisdictions published from time to time by the applicable competent authority in Kazakhstan or which has an affiliate registered in any such offshore jurisdiction, or (ii) natural persons who are participants or shareholders in such legal entities, may not directly or indirectly own voting shares in the capital of a Kazakhstan bank unless such Kazakhstan bank is a subsidiary of a foreign bank having a credit rating of A or above from certain rating agencies. Accordingly, holders of GDRs falling under (i) or (ii) above are not entitled to vote through the Depositary at General Meetings of Shareholders, cannot exchange GDRs into Shares and cannot own, hold or dispose of the Shares. A corporate shareholder that intends to participate in a General Meeting of Shareholders of the Bank should provide documentary evidence that its shareholders (participants) are not registered in any of the offshore jurisdictions referred to above if the Bank does not have such information on file already. A corporate shareholder that does not provide such evidence will not be allowed to participate in a General Meeting of Shareholders. If such evidence is found out to be untrue or if an individual participant in a corporate shareholder is registered in any of the offshore jurisdictions referred to, the following consequences will ensue: if a resolution of the General Meeting of Shareholders was passed by a majority of voting Shares (excluding the Shares in question) the resolution will be regarded as passed only if it would have been passed disregarding the votes attributable to the Shares in question; and if disregarding the votes attributable to the Shares in question means that the resolution would not have been passed, the resolution may be declared invalid upon a claim by the FMSA or any other interested party.

Although the Bank has been advised that such restrictions should not prevent a holder of Shares registered in any such jurisdiction (or which has an affiliate registered in such jurisdiction) from exercising or benefiting from other rights (including the right to receive dividends and pre-emptive rights in respect of the non-voting Shares) there is no guarantee that the FMSA or any other relevant

247

authority such as a Kazakhstan court will not take a different view thereby restricting all such holders of Shares from exercising or benefiting 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 the Shares. In addition, any natural 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 or bank holding company means a person directly or indirectly owning or holding 10 or 25 per cent. respectively, of the voting Shares or who can otherwise influence the decisions of the Bank on the basis of an agreement or otherwise as set out by the FMSAs 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 public information. Mandatory Offers Under the JSC Law a person who has acquired, either alone or jointly with its affiliated persons, 30 per cent. or more of the voting Shares is required to make an offer to the remaining shareholders to buy out their Shares at no less than the market price. Any failure by the acquirer to make such an offer would result in the acquirer being obligated to reduce its shareholding to not more than 29 per cent. Related Party Transactions Related party transactions should be approved by a 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 a majority of non-interested shareholders or by a simple majority vote if all shareholders are interested.

248

THE BANKING SECTOR IN KAZAKHSTAN Introduction Since mid-1994, the Government 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 (with the exception of the DBK, which has a special status and belongs to neither 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, the NBK and the FMSA have undertaken significant structural reforms in the banking sector, aimed at promoting consolidation in the banking sector and improving the overall stability of the system. Global financial instability and market dislocation have adversely affected the Kazakhstan banking sector, resulting in asset quality deterioration and reduced funding sources for Kazakhstan banks. Statistics published by the FMSA show the considerable asset quality deterioration in 2009, with non-performing loans in the banking sector increasing to 36.5 per cent. as at 1 January 2010 from 8.1 per cent. as at 1 January 2009. In 2009, the banking sector overall showed a net loss of KZT 2,834 billion (by way of comparison, the aggregate financial result for the banking sector as at the end of 2008 was a profit of KZT 10.7 billion) and assets of the banking sector also declined in that period. As of 1 November 2010 the share of bad loans in the Kazakhstan banking sector reduced to 33.6 per cent., and the aggregate financial result for the banking sector for the first ten months of 2010 was a profit of KZT 1,416 billion. The decline in the share of non-performing loans was primarily due to the write-off of a significant amount of bad loans, so for ten months of 2010, a portfolio of written-off loans on the banking system increased by KZT 607.4 billion to KZT 780.5 billion. A significant positive financial result for the banking system almost entirely provided by income on partial writing-off of the liabilities of the restructured banks (BTA, Alliance Bank, Temir Bank). The Government has taken a number of steps to support the Kazakhstan banking sector including significant capital injections. The Governments capital injections into the Kazakhstan banking sector are estimated at 6.4 per cent. of Kazakhstans GDP in 2009 compared, for example, to the United Kingdom and the United States where, according to the IMF, capital injections represented 6.4 per cent. and 2.9 per cent., respectively. The total amount of capital injected into the Kazakhstan banking sector was U.S.$7,214 million as at 30 September 2010 with a U.S.$/KZT exchange rate of 1:150). The Bank has been the principal beneficiary of this capital injection, with funds injected to acquire equity amounting to approximately U.S.$1.4 billion (approximately KZT 212,000 million) and further liquidity support converted into equity following the Restructuring amounting to approximately U.S.$4.3 billion (approximately KZT 645,000 million).

249

The table below shows the amount of funds of the National Fund of the Republic of Kazakhstan allocated to putting into effect the Plan of Joint Actions of the Government of Kazakhstan, the NBK and the FMSA for the Stabilisation of the Economy and the Financial System for 2009-2010, as of 30 September 2010:
No. 1 2 Destination of state support Capitalisation of banks ................................................. Resolving problems on the real estate market, incl.: .... Mortgage State Finance Programme ............................ Construction State Finance Programme ....................... SME State Finance Programme, including:.................. through second-tier banks............................................. through the Damu Fund................................................ Crediting of projects in the real sector of the economy Industrial Innovation Programme ................................. Agricultural State Finance Programme......................... Total funds of the National Fund of the Republic of Kazakhstan allocated to putting into effect the Plan of Joint Actions of the Government of Kazakhstan, the National Bank of Kazakhstan and the FMSA for the Stabilisation of the Economy and the Financial System for 2009-2010 (1+2+3+4+5+6): ....................................................... Financial support (exchange of bonds between Samruk-Kazyna and banks to be restructured) from Samruk-Kazyna which upon completion of the restructurings will be converted into the shares of the Bank and of JSC Alliance Bank, incl.: ...................... The Bank...................................................................... JSC Alliance Bank ....................................................... Total state support (7+8), incl.: ................................. financial sector (1+8) ................................................... Total state support as % of GDP for 2008, incl.:..... financial sector ............................................................. Allocated 332.1 360.0 120.0 240.0 120.0 117.0 3.0 144.0 120.0 120.0 Appropriated(1) (KZT billions) 332.1 241.2 120.0 121.2 120.0 117.0 3.0 144.0 10.6 120.0 % appropriated 100.0% 67.0% 100.0% 50.5% 100.0% 100.0% 100.0% 100.0% 8.8% 100.0%

4 5 6 7

1,196.1

967.9

80.9%

750.0 645.0 105.0 1,946.1 1,082.1 11.4% 6.4%

750.0 645.0 105.0 1,717.9 1,082.1 10.1% 6.4%

100.0% 100.0% 100.0% 88.3% 100.0%

____________ Note: (1) In the event of financial support from Samruk-Kazyna which upon completion of the restructurings will be converted into the shares of the Bank and of JSC Alliance Bank, the amount is treated as appropriated after conversion. Sources: FMSA, data of banks.

For a discussion of various risks associated with the banking sector and banking regulation in Kazakhstan, see Risk Factors Risks Relating to Operating within the Kazakhstan Banking Sector. The NBK 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 the Senate) and remove the NBKs Chairman, to appoint and remove the NBKs Deputy Chairmen upon the proposal of the Chairman, 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 as Chairman 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

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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 Kazakhstans financial markets and financial institutions, including banks, insurance companies, pension funds and pension asset management companies, as well as professional participants in 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, to apply sanctions to (where necessary) and to participate in the liquidation of, financial institutions. The administration of anti-monopoly legislation in Kazakhstan with respect to the banking sector was transferred from the FMSA to 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 the prior consent of the Competition Agency. Such thresholds for the purposes of regulated financial organisations are established jointly by the Competition Agency and the FMSA. Banking Supervision Capital Adequacy The FMSA refined its capital adequacy and credit exposure standards in September 2005, when it set limits and rules for calculating capital adequacy, single party exposure, liquidity ratios and open currency positions. In November 2005, the regulations regarding regulatory capital and risk management came into effect in Kazakhstan. These regulations represented a substantial step towards the implementation of the Basel Accord. In particular, these regulations introduced 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 included rules for calculating risk with respect to derivatives. As at 1 July 2009, the FMSA required banks to maintain a K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) capital adequacy ratio of 6.0 per cent. (with the K1-1 ratio increasing to 8.0 per cent. from 1 July 2012 and to 9.0 per cent. from 1 July 2013 and K1-2 ratio increasing to 9.0 per cent. from 1 July 2011), compared with the BIS Guidelines recommendation of 4.0 per cent. The FMSAs K2 (own capital to total assets weighted for risk) capital adequacy ratio requirement is 12.0 per cent. compared with the BIS Guidelines recommendation of 8.0 per cent. For banks with a bank holding company or a bank parent company among their shareholders and state-controlled banks the FMSAs K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) capital adequacy ratio requirement is reduced to 5.0 per cent. of total assets (with the K1-1 (Tier I capital to total assets) ratio increasing to 7.0 per cent. from 1 July 2012 and to 8.0 per cent. from 1 July 2013 and K1-2 (Tier I capital to total assets weighted for risk) ratio increasing to 8.0 per cent. from 1 July 2011) while the K2 (own capital to total assets weighted for risk ratio) is reduced to 10.0 per cent. of risk weighted assets. Furthermore, FMSA regulations require a bank which does not have amongst its shareholders an individual holding at least 10.0 per cent. of such banks shares to comply with higher capital adequacy ratios. Such ratios are 7.0 per cent. for the K1-1 (Tier I capital to total assets) and K1-2 (Tier I capital to total assets weighted for risk) ratios (with K1-1 ratio increasing to 9.0 per cent. staring from 1 July 2012 and to 10.0 per cent. starting from 1 July 2013 and with K1-2 ratio increasing to 10 per cent. starting from 1 July 2011) and 14.0 per cent. for the K2 (own capital to total assets weighted for risk) ratio. In February 2007, to reduce the risks associated with rapid growth in the external debt of Kazakhstan banks, the FMSA introduced amendments to the capital adequacy regulations which imposed limits

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on foreign borrowings or external liabilities which a bank can incur to a multiple of such banks own capital as calculated both including and excluding debt securities issued. These amendments mean that banks are not permitted to increase borrowings from non-domestic holders (subject to certain exceptions) to a level in excess of certain multiples of regulatory capital. If banks exceed the prescribed ratios they would have to either repay foreign sourced debt or increase their regulatory capital. The ratios that apply to the Bank currently 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) three 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 regulates problem asset classification and contingent obligations (similar to the World Banks Guidelines for Asset Classifications) and loan loss reserves. Reserve Requirements Starting in the second half of 2008, the NBK adopted a number of measures aimed at providing additional liquidity to banks. With effect from 3 March 2009, the minimum level at which second tier banks must maintain reserves has been decreased from 2.0 per cent. to 1.5 per cent. with respect to domestic liabilities and from 3.0 per cent. to 2.5 per cent. with respect to other liabilities. On 30 November 2009, the NBK Management Board reduced the obligatory reserve ratio requirement for the Bank to zero per cent. for both internal and external liabilities. The reduced ratio remained in effect until the Restructuring process was finalised. Since the completion of the restructuring process, the NBK obligatory reserve ratio requirements were restored for both internal and external liabilities, to 1.5% and 2.5% respectively. As at the date of this Prospectus, the Bank has complied with these statutory requirements. Deposit Insurance In December 1999, a self-funded domestic deposit insurance scheme, the KDIF, was established and as at 1 September 2010, 34 commercial banks, including subsidiaries of foreign banks and the Bank, were covered by the scheme (according to the KDIF). The insurance coverage is presently limited to personal deposits in any currency up to a maximum amount per customer of KZT 5 million at any given bank. Starting from 1 January 2012, the maximum guaranteed amount is scheduled to be reduced from KZT 5 million to KZT 1 million. 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 ValutTransit Bank as described below in The Banking Sector in Kazakhstan Banking Supervision Commercial Banks. Acquisition of Interests in Kazakhstan Banks Current legislation requires FMSA approval of any acquisition of a shareholding of 10.0 per cent. or more (whether held independently or jointly with another affiliated legal entity) in a Kazakhstan bank. Furthermore, a foreign entity must obtain a credit rating from one of the rating agencies which are recognised by the FMSA in order to hold 10.0 per cent. or more of a Kazakhstan bank. The rating of such an entity must be long term and not be less than (i) Kazakhstans sovereign rating (or equivalent); or (ii) if the entity is a financial institution, BB- (by S&P) or the equivalent, provided that the country in which the entity is domiciled has a rating of not less than BB- (by S&P) or the equivalent and the regulator of that country has an agreement on information exchange with the FMSA.

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Other Regulations In addition, in June 2006 the FMSA implemented measures to restrict Kazakhstan banks from having outstanding external short-term financings which exceed a banks regulatory capital. These measures may limit a banks 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 banks funding costs, an increase in its liquidity and interest rate risk or both. See Managements Discussion and Analysis of Results of Operations and Financial Condition Financial Condition as at 30 June 2010 and 31 December 2009 and 2008 Capital Adequacy. To address concerns about currency mismatches and more precisely, to manage banks liquidity, the FMSA has also tightened requirements regarding open/net currency positions and introduced various limits on 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 largely unchanged, these rules, among others, introduced more stringent requirements regarding the 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 increases its provisioning ratios. Commercial Banks In November 2001, the Government divested its remaining 33.3 per cent. stake in JSC Halyk Bank (formerly known as 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 2,100 million. In June 2005, the banking licence granted to JSC Nauryz Bank was terminated by the FMSA and this bank has been in the process of liquidation since 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, the FMSA revoked the banking licence of JSC ValutTransit Bank due to the violation of Kazakhstan law, improper performance of contractual obligations and breach of prudential standards. A decision on the mandatory liquidation of JSC ValutTransit 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 at 1 December 2009, the KDIF reported total payments of KZT 15,000 million to the depositors of JSC ValutTransit Bank and JSC Nauryz Bank and money was returned to more than 67,000 depositors of those banks. As of 7 December 2009 the liquidation commission of JSC ValutTransit Bank had satisfied claims of the KDIF (a creditor of the third priority) representing 23.6 per cent. of the total amount of indebtedness of the bank in respect of the third group of priority. As of 28 October 2009 the liquidation commission of JSC Nauryz Bank had satisfied claims of the KDIF (a creditor of the third priority) representing 88 per cent. of the total amount of indebtedness of the bank in respect of the third group of priority. The aggregate amount of the guarantee compensation for individual deposits to be paid by the Fund as at 1 July 2010 reached KZT 959.4 billion. At the same time financial resources of the Fund, accumulated in the special reserve, with 50 per cent. of the share capital, as at 1 July 2010 consisted of KZT 110.8 billion or 11.6 per cent. of the aggregate amount of compensation and 5.4 per cent. of the total amount of guaranteed deposits. According to data published by the FMSA, as at 1 November 2010, 29 of the 38 second-tier banks (excluding Zhilstroysberbank) had capital of over KZT 5 billion and eight banks had a capital of KZT 2 billion to KZT 5 billion. Since 1 October 2009, any bank whose own capital (i.e. shareholders equity) falls below KZT 5 billion (or KZT 2 billion for banks registered outside of Astana and Almaty) is required to apply to the FMSA for voluntary reorganisation into an organisation performing only limited banking operations. Starting from 1 July 2011 the minimum requirements for size of own capital are established at KZT 10 billion for banks, including

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newly-created banks, KZT 5 billion for residential construction savings banks and KZT 4 billion for banks registered and carrying out a significant part of their operations outside Astana and Almaty. 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 Kazakhstan 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 in the long term 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 Banks primary competitors in the corporate banking sector. Foreign banks also bring international experience in servicing customers and target the most attractive corporate customers of Kazakhstans domestic banks as well as foreign companies operating in Kazakhstan. As at 1 November 2010, there were 18 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 second-tier bank in which the following entities own or manage more than one third of its shares: (i) non-residents of the Republic of Kazakhstan; (ii) legal entities resident in the Republic of Kazakhstan more than one-third of shares in which are owned or managed by non-residents of the Republic of Kazakhstan; (iii) residents of the Republic of Kazakhstan who act as trustees to non-residents of the Republic of Kazakhstan. A number of foreign banks have opened representative offices in Kazakhstan, including JPMorgan Chase Bank N.A., Deutsche Bank AG, Commerzbank AG, ING Bank N.V., Landesbank Berlin AG and Socit Gnrale. According to data published by the FMSA, the total capital of commercial banks increased to KZT 1.2 billion as at 1 November 2010 compared to negative capital of KZT 978 billion as at 1 January 2010 and KZT 1,453 billion as at 1 January 2009. During such period, the total assets of such banks increased to KZT 12,134 billion as at 1 November 2010 from KZT 11,554 billion as at 1 January 2010 (compared to approximately KZT 11,890 billion as at 1 January 2009). The aggregate liabilities decreased to approximately KZT 10,918 billion as at 1 November 2010 from KZT 12,536 billion as at 1 January 2010 but still remained higher compared to KZT 10,437 billion as at 1 January 2009.

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TAXATION The following summary covers only certain taxation matters in Kazakhstan and does not cover taxation matters in any other jurisdiction. The following summary of certain Kazakhstan taxation matters is based on the laws and practice in force as at the date of this Prospectus and is subject to any changes in the 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 New Notes and Shares, and does not purport to deal with the tax consequences applicable to investors, some of which may be subject to special rules. Save as otherwise indicated, this summary addresses only the position of investors who do not have any connection with Kazakhstan other than a holding of New Notes or Shares. Each investor is urged to consult its own tax adviser as to the particular tax consequences to such investor, including the applicability and effect of tax laws or tax treaties in any relevant jurisdiction, and of pending or proposed changes in applicable tax laws as at the date of this Prospectus, and of any actual changes in applicable tax laws after such date, and to seek specialist Kazakhstan tax advice as necessary. This summary discusses the Kazakhstan tax consequences of the acquisition, ownership and disposal of New Notes and Shares. 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 mechanisms 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. Shares 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 the Shares. Therefore, under Kazakhstan tax law, holders of the Shares should be taxed only on their income earned from sources in Kazakhstan, rather than their worldwide income. References to holders of the Shares in this summary mean legal owners of such Shares. This summary assumes that no holders of the Shares are resident in Kazakhstan for tax purposes. 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. In addition, any income derived from the sale of the Shares through open trade on a Kazakhstan stock exchange or foreign stock exchange is tax exempt, provided that such Shares are admitted to the official lists of such stock exchanges at the time of sale. However, there is a risk that tax authorities in Kazakhstan may interpret applicable provisions of the Tax Code in a way to apply withholding tax to disposals to a Kazakhstan resident (or a non-resident with a permanent establishment in Kazakhstan) by a transferor registered in a country with a favourable tax regime (e.g., Cyprus, Liechtenstein, Luxembourg, Nigeria, Malta, Aruba, etc.). In this case, the applicable withholding tax rate will be in the amount of 20 per cent.

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Taxable Disposals of Shares Non-resident buyers and their successors (including recipients of gifts or inheritances) of the Shares are not subject to Kazakhstan income tax upon acquisition of the Shares. It is unclear from currently applicable tax regulations in Kazakhstan whether capital gains from the disposal of GDRs will be subject to taxation in Kazakhstan. Therefore, independent tax advice should be sought in relation to each disposal of GDRs. Holders of Shares who are resident in countries with which Kazakhstan has bilateral taxation treaties may be exempt from Kazakhstan withholding tax applicable to capital gains on the disposal of Shares. Taxation of Dividends Under the Tax Code, dividends paid on the Shares are exempt from any tax payment, reporting or compliance requirements in Kazakhstan if the Shares are admitted to the official list of a Kazakhstan stock exchange on the date of the accrual of such dividends. In addition, if a holder of the Shares has been holding such Shares for longer than three years, dividends payable on the Shares become exempt from any withholding tax in Kazakhstan starting from the fourth year of holding such shares. There is a risk that tax authorities in Kazakhstan may interpret applicable provisions of the Tax Code to apply withholding tax to dividends paid on GDRs which are not listed on a stock exchange operating in Kazakhstan at 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. or 20 per cent. if the recipient is registered in a country with a favourable tax regime. 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. Holders of Shares should not be subject to any other tax reporting, payment, registration or compliance requirements with respect to dividends paid on the Shares. Holders of Shares who are resident in countries with which Kazakhstan has bilateral taxation treaties may be entitled to a reduced rate of withholding tax. Depending on the country of residence and satisfaction of certain other conditions, the dividend withholding tax rates under Kazakhstans bilateral tax treaties in effect as at the date of this Prospectus may be between 5 per cent. and 15 per cent. Under bilateral tax treaties effective on the date of this Prospectus, reductions below 10 per cent. may be available only to beneficial owners that are legal entities. In order to avail themselves of this relief, eligible holders must provide the Bank with a document (legalised or apostilled) 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 the 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. Holders who are eligible for a lower withholding tax rate should later be able to claim a refund of overpaid tax from the Government. In doing so, they should provide the respective tax authority with a tax residence confirmation. New Notes Under Kazakhstan law as presently in effect, payments of interest on the New Notes to an individual who is a non-resident of Kazakhstan for tax purposes or to a legal entity that (i) is not established in accordance with the legislation of Kazakhstan, (ii) does not have its actual governing body (place of actual management) in Kazakhstan, (iii) does not maintain a permanent establishment in Kazakhstan and (iv) otherwise has no taxable presence in Kazakhstan (together, non-Kazakhstan holders) will be subject to withholding tax at a rate of 15 per cent.

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However, payments of interest on the New Notes to non-Kazakhstan holders registered in specified countries with a favourable tax regime (such as Cyprus, Liechtenstein, Luxembourg, Nigeria, Malta, Aruba and others) will be subject to the Kazakhstan withholding tax at a rate of 20 per cent. The payments of interest are tax exempt, provided that the New Notes are listed, as at the date of accrual of interest, on the official list of a stock exchange operating in the territory of Kazakhstan. Non-Kazakhstan holders who are resident in countries with which Kazakhstan has bilateral taxation treaties may be entitled to a reduced rate of withholding tax. In order to avail themselves of this relief, eligible holders must provide the Bank with a document (legalised or apostilled) issued by the tax authority of their country of residence confirming their tax residence in a treaty jurisdiction. Gains realised by non-Kazakhstan holders derived from the disposal, sale, exchange or transfer of the New Notes will be subject to withholding tax at a rate of 15 per cent. If the disposal of the New Notes 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 favourable tax regime, the net gain realised from such a disposal is subject to withholding tax in Kazakhstan at the rate of 20 per cent. Any capital gains of non-Kazakhstan residents in relation to the New Notes which are listed as of the date of sale on the official list of a stock exchange operating in the territory of Kazakhstan or a foreign stock exchange and sold through open trades on such stock exchanges are exempt from the withholding tax. Debt Cancellation Partial cancellation of indebtedness, including as a result of an exchange of the existing debt instruments into new instruments, would generally be a taxable event for the Bank. The Bank would be liable to pay tax at the rate of 20.0 per cent. on the amount of the cancelled indebtedness. However, the recent amendments to the Tax legislation provide that for the purposes of calculation of the taxable annual income; during 2010 the Bank can exclude the income from writing-off of the debt to creditors provided that such debt is included into the list of restructured liabilities contained in the Restructuring Plan approved by the court. Starting from 1 January 2011, the Bank may be required to record amounts for cancelled debt recognised as a profit and may have to pay corporate income tax over such amount. Under Kazakhstan law, an exchange of the existing debt instruments into new instruments of the Bank would not have any tax consequences for the investors.

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ISSUANCE AND TRANSFER RESTRICTIONS United States The New Notes, Shares and GDRs have not been and will not be registered under the 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 (i) to a person who is located outside the United States and is not a U.S. Person, in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act or (ii) in a transaction exempt from, or not subject to, the registration requirements of the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Any future sale, offer, pledge or transfer of the New Notes, Shares and GDRs will also be subject to (i) and (ii) above. Transfer Restrictions The New Notes, Shares and GDRs issued to persons in the United States are transferable in the United States only to QIBs in a transaction meeting the requirements of Rule 144A or outside the United States under Regulation S. Because of the following restrictions, such persons are advised to consult legal counsel prior to making any offer, resale, pledge or transfer of such New Notes, Shares and GDRs. Each subsequent purchaser or transferee of New Notes, Shares and GDRs in the United States or that is a U.S. Person will be deemed to have represented, agreed and acknowledged as follows: (i) the purchaser (a) is a QIB, (b) is acquiring the New Notes, Shares and GDRs for its own account or for the account of such a QIB and (c) such person is aware that the sale of the New Notes, Shares and GDRs to it is being made in reliance on Rule 144A; the New Notes, Shares and GDRs have not been and will not be registered under the Securities Act or any other securities laws and are being offered in transactions not involving any public offering in the United States; unless so registered, the New Notes, Shares and GDRs may not be reoffered, resold or otherwise transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any other applicable securities laws, except in accordance with the restrictions set forth above; it understands that the New Notes offered pursuant to an exemption from the Securities Act will be represented by a Restricted Global Note. Before any interest in any Restricted Global Note may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in an Unrestricted Global Note, it will be required to provide the Registrar with a written certification (in the form provided in the Agency Agreement) as to compliance with applicable securities laws; each Restricted Global Note and any Restricted Note Certificates issued in exchange for an interest in a Restricted Global Note will bear the same legend as set forth in above, unless the Bank determines otherwise in accordance with applicable law; and the Bank, the Registrar, the New Notes Trustee and the principal paying and transfer agent and their affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

(ii)

(iii)

(iv)

(v)

(vi)

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FORM OF THE NEW NOTES AND PROVISIONS RELATING TO SUCH NOTES IN GLOBAL FORM The following information relates to the form of the New Notes when in global form. 1. Form of the New Notes All New Notes are in registered form, without interest coupons attached. New Notes offered and sold outside the United States in reliance on Regulation S to persons who are not U.S. Persons are represented by interests in an Unrestricted Global Note, in definitive fully registered form, without interest coupons attached, which were deposited on or about the Closing Date with the Common Depositary as common depositary for Euroclear and Clearstream, Luxembourg, and registered in the name of its nominee, as nominee for such common depositary in respect of interests held through Euroclear and Clearstream, Luxembourg. New Notes allocated to Eligible Investors are represented by interests in a Restricted Global Note, in fully registered form, without interest coupons attached, which were registered in the name of a nominee of, and deposited with, a common depositary for Euroclear and Clearstream, Luxembourg. Each Restricted Global Note (and any Note Certificates issued in exchange therefor) is subject to certain restrictions on transfer contained in a legend appearing on the face of such Note as set forth under paragraph (4) in the section entitled Issuance and Transfer Restrictions. Each Restricted Global Note and each Unrestricted Global Note will have an ISIN number and a Common Code. Ownership of interests in the Restricted Global Notes and in the Unrestricted Global Notes will be limited to persons that have accounts with Euroclear and/or Clearstream, or persons that hold interests through such participants. For the purposes of the Restricted Global Notes and the Unrestricted Global Notes, any reference in the Conditions to Note Certificate or Note Certificates shall, except where the context otherwise requires, be construed so as to include the Restricted Global Notes or, as the case may be, the Unrestricted Global Notes and interests therein. 2. Notices So long as any New Note is represented by a Global Note and such Global Note is held on behalf of a clearing system, notices to the holder of such New Note may be given by delivery of the relevant notice to that clearing system for communication by it to entitled accountholders except that so long as the New Notes are listed on the Luxembourg Stock Exchange or the KASE and the rules of such Exchange so require, notices shall also be published in a leading newspaper having general circulation in Luxembourg and on the website of the Luxembourg Stock Exchange or in a leading newspaper having general circulation in Kazakhstan. 3. Transfers between Global Notes On or prior to the 40th day after the Closing Date, a beneficial interest in any Unrestricted Global Note may be transferred to a person who wishes to take delivery of such beneficial interest through the Restricted Global Note only upon receipt by the Registrar of a written certification from the transferor (in the form provided in the Agency Agreement) to the effect that such transfer is being made to a person whom the transferor reasonably believes is a QIB, in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction. After such 40th day, such certification requirements will no longer apply to such transfers, but such

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transfers will continue to be subject to the transfer restrictions contained in the legend appearing on the face of such Note, as set out in Issuance and Transfer Restrictions. A beneficial interest in a Restricted Global Note may also be transferred to a person who wishes to take delivery of such beneficial interest through the corresponding Unrestricted Global Note only upon receipt by the Registrar of a written certification from the transferor (in the form provided in the Agency Agreement) to the effect that such transfer is being made in accordance with Regulation S or Rule 144A (if available) under the Securities Act. Any beneficial interest in either a Restricted Global Note or any Unrestricted Global Note that is transferred to a person who takes delivery in the form of a beneficial interest in the other Global Note will, upon transfer, cease to be a beneficial interest in such Global Note and become a beneficial interest in the other Global Note and, accordingly, will thereafter be subject to the transfer restrictions set out in the section entitled Issuance and Transfer Restrictions and other procedures applicable to a beneficial interest in such other Global Note for so long as such person retains such an interest. 4. Exchange of Interests in Global Notes for Note Certificates A Global Note will become exchangeable, free of charge to the holder, in whole but not in part, for Note Certificates if (i) Euroclear or Clearstream, Luxembourg is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business or does in fact do so or (ii) an Event of Default occurs. In such circumstances, such Note Certificates will be registered in such names as Euroclear and Clearstream, Luxembourg shall direct in writing and the Bank will procure that the Registrar notify the holders as soon as practicable after the occurrence of the events specified in (i) and (ii). In the event that a Restricted Global Note is to be exchanged for Restricted Note Certificates or an Unrestricted Global Note is to be exchanged for Unrestricted Note Certificates, the relevant Global Note shall be exchanged in full for the relevant Note Certificates and the Bank will, without charge to the holder or holders thereof, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatever nature which may be levied or imposed in connection with such exchange, cause sufficient Note Certificates to be executed and delivered to the Registrar for completion, authentication and dispatch to the relevant Noteholders. On exchange, a person having an interest in a Global Note must provide the Registrar with (i) a written order containing instructions and such other information as the Bank and the Registrar may require to complete, execute and deliver such Note Certificates and (ii) in the case of a Restricted Global Note only, a fully completed, signed certification substantially to the effect that the exchanging holder is not transferring its interest at the time of such exchange or, in the case of a simultaneous sale pursuant to Rule 144A, a certification that the transfer is being made in compliance with the provisions of Rule 144A. Note Certificates issued in exchange for a beneficial interest in the Restricted Global Note shall bear the legends applicable to transfers pursuant to Rule 144A, as set out in Issuance and Transfer Restrictions. Restricted Note Certificates issued as described above will not be exchangeable for beneficial interests in a Unrestricted Global Note and Unrestricted Note Certificates issued as described above will not be exchangeable for beneficial interests in a Restricted Global Note. In addition to the requirements described under Form of the New Notes and Provisions Relating to Such Notes in Global Form Transfers between Global Notes above, the holder of a Note may transfer such Note only in accordance with the provisions of Conditions of the New Notes.

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Upon the transfer, exchange or replacement of a Restricted Note Certificate bearing the legend referred to in Issuance and Transfer Restrictions, or upon specific request for removal of the legend on a Restricted Note Certificate, the Bank will deliver only Restricted Note Certificates that bear such legend, or will refuse to remove such legend, as the case may be, unless there is delivered to the Bank and the Registrar such satisfactory evidence, which may include an opinion of counsel, as may reasonably be required by the Bank that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act. The Registrar will not register the transfer of any New Notes or exchange of interests in a Global Note for Note Certificates for a period of 15 days ending on the due date of any payment of principal or interest in respect of such New Notes. 5. Euroclear and Clearstream, Luxembourg Arrangements Custodial and depositary links were established between Euroclear and Clearstream to facilitate the issue of the New Notes and cross-market transfers of the New Notes associated with secondary market trading. Euroclear and Clearstream Euroclear and Clearstream each hold securities for participating organisations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes in accounts of such participants. Euroclear and Clearstream provide to their respective participants, among other things, services for safekeeping, administration, clearance and settlement of internationally-traded securities and securities lending and borrowing. Euroclear and Clearstream participants are financial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Euroclear and Clearstream have established an electronic bridge between their two systems across which their respective customers may settle trades with each other. Indirect access to Euroclear or Clearstream is also available to others, such as banks, brokers, dealers and trust companies which clear through or maintain a custodial relationship with a Euroclear or Clearstream participant, either directly or indirectly. Payments with respect to book-entry interests in the New Notes held through Euroclear or Clearstream will be credited, to the extent received by the Principal Paying and Transfer Agent, to the cash accounts of Euroclear or Clearstream participants in accordance with the relevant systems rules and procedures. General So long as Euroclear, Clearstream, Luxembourg or the nominee of their common depositary is the registered holder of a Global Note, Euroclear, Clearstream, Luxembourg or such nominee, as the case may be, will be considered the sole owner or holder of the New Notes represented by such Global Note for all purposes under the Agency Agreement, the New Notes Trust Deed and the New Notes. Payments of principal, interest and Additional Amounts, if any, in respect of Global Notes will be made to Euroclear, Clearstream, Luxembourg or such nominee, as the case may be, as the registered holder thereof. None of the Bank, the Trustee, the Principal Paying Agent or any agent or any Affiliate of any of the above or any person by whom any of the above is controlled for the purposes of the Securities Act will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

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Distributions of principal and interest with respect to book-entry interests in the New Notes held through Euroclear or Clearstream, Luxembourg will be credited, to the extent received by Euroclear or Clearstream, Luxembourg from the Principal Paying Agent, to the cash accounts of Euroclear or Clearstream, Luxembourg customers in accordance with the relevant systems rules and procedures. The laws of some states of the United States require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer interests in a Global Note to such persons will be limited. Because Euroclear and Clearstream, Luxembourg can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in a Global Note to pledge such interest to persons or entities which do not participate in the relevant clearing system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest. The holdings of book-entry interests in the New Notes in Euroclear and Clearstream, Luxembourg will be reflected in the book-entry accounts of each such institution. As necessary, the Registrar will adjust the amounts of New Notes on the Register for the accounts of the nominee of the Common Depositary to reflect the amounts of New Notes held through Euroclear and Clearstream, Luxembourg. Beneficial ownership in New Notes will be held through financial institutions as direct and indirect participants in Euroclear and Clearstream, Luxembourg. Interests in any Unrestricted Global Note and any Restricted Global Note will be in uncertificated book-entry form. Trading between Euroclear and/or Clearstream, Luxembourg Account Holders. Secondary market sales of book-entry interests in the New Notes held through Euroclear or Clearstream, Luxembourg to purchasers of book-entry interests in the New Notes through Euroclear or Clearstream, Luxembourg will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream, Luxembourg and will be settled using the procedures applicable to conventional eurobonds. Although the foregoing sets out the procedures of Euroclear and Clearstream, Luxembourg in order to facilitate the transfers of interests in the New Notes among participants of Euroclear and Clearstream, Luxembourg, neither Euroclear nor Clearstream, Luxembourg is under any obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. The information in this section concerning Euroclear and Clearstream, Luxembourg and their book entry systems has been obtained from sources the Bank believes to be reliable, but the Bank makes no representation or warranty with respect to this information. None of the Bank, the Trustee, the Principal Paying Agent or any of the agents or any affiliate of any of the above, or any person by whom any of the above is controlled for the purposes of the Securities Act, will have any responsibility for the performance by Euroclear and Clearstream, Luxembourg or their respective direct or indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations or for the sufficiency for any purpose of the arrangements described above. 6. Prescription Claims against the Bank in respect of principal and interest on a New Note while such New Note is represented by a Global Note will become void unless it is presented for payment within a period of ten years (in the case of principal) and five years (in the case of interest) from the appropriate Relevant Date (as defined in the relevant New Notes).

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7.

Meetings The holder of a Global Note will be treated as being two persons for the purposes of any quorum requirements of, or the right to demand a poll at, a meeting of holders of New Notes and, at any such meeting, as having one vote in respect of each U.S.$1,000 in principal amount in respect of U.S. Dollar denominated New Notes for which the Global Note may be exchanged.

8.

Purchase and Cancellation; Prepayments Cancellation of any Note required by the Conditions to be cancelled following its purchase and any prepayment will be effected by a reduction in the principal amount of the relevant Global Note as provided in the New Notes Trust Deed.

9.

Trustees Powers In considering the interests of holders of New Notes while a Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to such Global Note and may consider such interests as if such accountholders were the holder of the relevant Global Note.

10.

Put Option The put option in the Conditions of the New Notes may be exercised by the holder of the relevant Global Note giving notice to the Principal Paying Agent of the principal amount of such New Notes in respect of which the option is exercised and presenting the Global Note for endorsement of exercise within the time limits specified in such condition and as otherwise provided in the agency agreement for the New Notes.

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SUMMARY OF PROVISIONS RELATING TO THE GDRs WHILE IN MASTER FORM The GDRs are evidenced by (i) the Master Regulation S GDR in registered form and (ii) the Master Rule 144A GDR in registered form. Book-entry interests in GDRs held through Euroclear and Clearstream are represented by the Master Regulation S GDR registered in the name of The Bank of New York Depository (Nominees) Limited and deposited with The Bank of New York Mellon, London Branch, as common depositary for Euroclear and Clearstream. Book-entry interests in GDRs held through DTC are represented by the Master Rule 144A GDR registered in the name of Cede & Co., as nominee for DTC, which is held by the Depositary as custodian for DTC. The Master Regulation S GDR and the Master Rule 144A GDR 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 Regulation S GDRs and Terms and Conditions of the Rule 144A 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 Regulation S GDRs and the Terms and Conditions of the Rule 144A GDRs shall have the same meaning herein. So long as the GDSs are traded through the book-entry settlement systems of DTC, Euroclear and Clearstream, unless otherwise required by law, (i) all Rule 144A GDSs shall be evidenced by a single global GDR (the Rule 144A Master GDR), registered in the name of DTC or its nominee and held by DTC or a custodian for DTC on behalf of its participants, and no person acquiring Rule 144A GDSs shall receive or be entitled to receive delivery of certificated Rule 144A GDRs, (ii) all Regulation S GDSs shall be evidenced by a single global GDR (the Regulation S Master GDR), registered in the name of a nominee and held by a common depositary for Euroclear and Clearstream on behalf of its participants, and no person acquiring Regulation S GDSs shall receive or be entitled to receive delivery of certificated Regulation S GDRs, (iii) ownership of beneficial interests in the Rule 144A Master GDR will be shown on, and the transfer of such ownership will be effected only through, records maintained by (1) DTC or its nominee with respect to institutions having accounts with DTC (DTC Participants) or (2) DTC Participants, and (iv) ownership of beneficial interests in the Regulation S Master GDR will be shown on, and the transfer of such ownership will be effected only through, records maintained by (1) Euroclear and Clearstream with respect to institutions having accounts with Euroclear or Clearstream (Euroclear/Clearstream Participants) or (2) Euroclear/Clearstream Participants. Notwithstanding the foregoing, initial settlement of the Regulation S GDSs shall occur through and, during the Distribution Compliance Period, such Regulation S GDSs shall be required to remain in, the accounts maintained by Euroclear and Clearstream. The Depositary or its agent shall act as custodian for DTC and hold the Rule 144A Master GDR. Each Master GDR shall evidence the number of GDSs from time to time indicated in the records of the Depositary for such issuance and shall be endorsed with such legends required by the Depositary, the Bank, DTC, Euroclear or Clearstream, as the case may be. If any GDSs cease to settle through the book-entry settlement system or, if during the Distribution Compliance Period, either or both of Euroclear or Clearstream, do not make, or cease to make, its book-entry settlement system available for the GDSs, the Bank may make other arrangements acceptable to the Depositary for book-entry settlement of the GDSs or shall instruct the Depositary to make certificated GDRs, substantially in the Form of Regulation S GDR or Form of Rule 144A GDR, as the case may be, with such appropriate changes thereto and the Deposit Agreement as the Bank and the Depositary may agree, available to owners of beneficial interests in the Master GDRs upon appropriate instructions from the proper Holder of a Master GDR. Share Dividends and Other Distributions The Bank may make various types of distributions with respect to its securities. The Depositary has agreed that it will, to the extent practicable, pay to Holders the cash dividends or other distributions it or the Custodian receives on Shares or other Deposited Securities, after converting any cash received into U.S. dollars and, in all cases, making any necessary deductions provided for in the Deposit Agreement. Holders will receive these distributions in proportion to the number of underlying Shares

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that such Holders GDSs represent. Any U.S. dollars will be distributed by (i) cheques drawn on a bank in the United States for whole dollars and cents or (ii) in accordance with the usual practice between the Depositary and Clearstream or Euroclear, or DTC. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. To the extent that the Depositary determines in its discretion that any distribution is not practicable with respect to any Holder, the Depositary may make such distribution as it so determines is practicable, including the distribution of foreign currency, securities or property or it may retain such items, without paying interest on or investing them, on behalf of the Holder as Deposited Securities. Voting Rights As soon as practicable after receipt from the Bank of notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation materials (or a summary thereof), (b) that each such Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of law, be entitled to instruct it as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the GDSs held by such Holder and (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Bank and a provision that by providing voting instructions to the Depositary the person or entity providing such instructions will be deemed to have represented that (i) neither such person nor any person for whom they are acting is prohibited from voting pursuant to Clause 17.5 of the Banking Law, (ii) neither such person nor any person for whom such person is acting owns 10 per cent. or more of the outstanding Shares of the Bank or such person and/or person for whom the Holder is acting owns 10 per cent. or more of the outstanding Shares of the Bank and has obtained all relevant approvals required in connection therewith, (iii) that neither such person or the person for whom they are acting is associated with any Former Management of the Bank, and (iv) such person is not Samruk-Kazyna or an affiliate of Samruk-Kazyna and (d) that on the written notice of a Holder or beneficial owner of GDSs, in a form acceptable to the Bank, the Bank agrees to permit Holders and beneficial owners of GDSs to attend and speak (but not vote) at any such meetings. Upon receipt of instructions of such Holder in the manner and on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the GDSs in accordance with such instructions. The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities. Notwithstanding the aforementioned, the Depositary is not required to take any action under the Deposit Agreement with respect to voting at a particular meeting unless it shall have received an opinion from the Banks legal counsel to the effect that the voting arrangement set forth in the Deposit Agreement is valid and binding on Holders under Kazakhstan law and the Banks statutes and that the Depositary is permitted to exercise votes in accordance with the provisions of the Deposit Agreement and that in doing so the Depositary will not be deemed to be exercising voting discretion. If the Depositary is advised that it is not permitted by Kazakhstan law to exercise the voting rights in respect of the Shares differently (so that a portion of the Shares may be voted for a resolution and a portion of the Shares may be voted against a resolution) the Depositary shall, if the opinion referred to in the immediately preceding sentence 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. If the Depositary is advised in the opinion referred to above 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 Shares in accordance with the provisions of the Deposit Agreement, the Depositary shall not vote or cause to be voted such Shares.

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Notwithstanding anything to the contrary, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Shares if the taking of such action would violate U.S. legal prohibitions, English legal prohibitions (including, without limitation, the listing rules and prospectus rules of the UK Financial Services Authority and the admission and disclosure standards of the London Stock Exchange plc if the Bank is at such time listed on the London Stock Exchange plc) or Kazakh legal prohibitions (including without limitation the rules of the Kazakh Stock Exchange(s) on which the Shares are listed). In particular, prior to the Depositary being notified by the Bank in writing that the placement report in respect of new Shares has been approved by the FMSA, the Depositary shall have no obligation to take any such action. In the Deposit Agreement the Bank has agreed that it will not establish internal procedures that would prevent the Depositary from complying with, or that are inconsistent with, the terms and conditions of the voting provisions of the Deposit Agreement. There is no guarantee that Holders or beneficial owners of interests in a Master GDR generally or any Holder or beneficial owner in particular will receive the notice described above with sufficient time to enable such Holder to return any voting instructions to the Depositary in a timely manner. Exercise of Tag-Along Rights and Drag-Along Rights The Holders Tag-Along Rights and Samruk-Kazynas Drag-Along Rights shall be exercised in the manner set out in the Terms and Conditions of the Regulation S GDRs and the Terms and Conditions of the Rule 144 A GDRs. Surrender of GDRs Subject to the requirements of the Deposit Agreement and the provisions governing the Shares (including, without limitation, the Banks constitutional documents and applicable law), Holders and beneficial owners of interests in a Master GDR may seek to withdraw Shares represented by their GDSs and receive such Shares, upon payment of certain applicable fees, charges and taxes, and upon receipt of proper instructions and documentation by the Depositary. The Depositary may refuse to deliver Shares generally, or in one or more localities, if such refusal is deemed necessary or desirable by the Depositary, in good faith, at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the Deposit Agreement or for any other reason. Notwithstanding anything to the contrary contained in the Deposit Agreement or any GDR, the Depositary has agreed that it shall not (except on the instruction of the Bank) cancel GDSs (i) during any period when the transfer of Shares has been blocked on the account due to participation in any Shareholders meeting when notified by the Bank in writing that such suspension is necessary, or (ii) after the Bank has notified the Depositary in writing that the transfer of Shares has been blocked following notice of intended exercise by Samruk-Kazyna of its Drag-Along Rights (iii) the Bank notifies the Depositary in writing that delivery of Shares will not comply generally, or in one or more localities, with any applicable law or governmental or stock exchange regulations, or (iv) the Bank notifies the Depositary in writing that delivery of Shares will result in ownership of such Shares exceeding any limit under applicable Kazakh law or the Banks constitutional documents as notified by the Bank from time to time, or (v) in the case of GDSs represented by the Regulation S Master GDR or the Rule 144A Master GDR, during any period prior to the Bank notifying the Depositary in writing that the placement report in respect of the Shares represented by those GDSs has been approved by the FMSA, or (vi) in the case where the Bank has informed the Depositary that a placement report has been prepared in respect of any other new Shares represented by GDSs, then in relation to those GDSs, during any period prior to the Depositary being notified in writing that the placement report relating to those Shares has been approved by the FMSA. For the avoidance of doubt, the Depositary is not under any obligation to ascertain or determine whether or not any such delivery should be refused (including monitoring ownership levels amongst beneficial owners) and the Depositary shall not be liable for any loss, damage or other consequences arising from any such delivery. Also, for the avoidance of doubt, provided that it is complying with a written notification from the Bank, the Depositary shall not be liable for any loss, damage or other consequences arising from its refusal or delivery.

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In connection with any surrender of GDSs or an interest therein for withdrawal and the delivery or sale of the Deposited Securities evidenced thereby, the Depositary may require (i) electronic delivery of GDSs from the relevant DTC participant to the Depositarys DTC account (in the case of Rule 144A GDSs) or from the relevant Euroclear or Clearstream participant to the Depositarys Euroclear account (in the case of Regulation S GDSs), or (ii) proper endorsement in blank of certificated GDRs or duly executed instruments of transfer in blank, and a written order directing the Depositary to cause the Deposited Securities to be withdrawn and delivered to, or upon the written order of the Holder. The Depositary may deliver Deposited Securities at or from the Custodians office, or at the risk, expense and request of Holder and/or beneficial owner of an interest in a Master GDR, the Depositary may deliver Deposited Securities at such other place as such Holder or beneficial owner may request. Prior to each cancellation of GDSs, Holders and beneficial owners of interests in a Master GDR seeking to cancel such GDSs will be required to make certain certifications. By holding a GDR or an interest in the Master GDR, Holders and beneficial owners of interests in a Master GDR each understand and agree that the Depositary will have no obligation to procure the cancellation of GDSs and the delivery of Deposited Securities if in the opinion of the Depositary taxes, duties or other governmental charges will be owed by or on behalf of the Depositary or any of its agents (including, without limitation, the Custodian) on the cancellation of GDSs or the delivery of Deposited Securities, unless (a) the Depositary has established a procedure to ensure that an amount equal to any such taxes, duties and other governmental charges (plus any interest, fines and penalties thereon and/or with respect thereto) is paid to the Depositary at or prior to the time any such Deposited Securities are to be delivered or cancellation of GDSs is to be effected, (b) with respect to each cancellation of GDSs or delivery of Deposited Securities, the Depositary and its agents, and each of their respective officers, directors, representatives and affiliates, have each received such indemnifications and assurances as they each may require from the Bank, the Holder or beneficial owner of interests in a Master GDR requesting cancellation, and each person and/or entity to whom Deposited Securities are to be delivered, and (c) the Depositary agrees to so permit the cancellation of GDSs and the delivery of Deposited Securities. Holders and all persons holding GDRs or beneficial interests in the Master GDR understand that the Depositary has no obligation to establish any such procedures or cancel any GDSs and to deliver the Deposited Securities represented thereby. By holding a GDR (or an interest therein), Holders and all persons holding GDRs or beneficial interests in the Master GDR, waive any and all rights and claims each may now or hereinafter have against the Depositary or its agents in connection with any and all of their acts and omissions to act in connection therewith. Notices Notice to any Holder shall be deemed given when first mailed, first class postage prepaid, to the address of such Holder on the applicable GDR Register or received by such Holder. All notices shall be written, except that any notices in respect of electronic transfers of GDSs may be transmitted in accordance with practices then customarily used, which practices are currently as follows: The Master GDRs are governed by, and construed in accordance with, English law.

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INFORMATION RELATING TO THE DEPOSITARY The Depositary is The Bank of New York Mellon. 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 bank holding company. 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, New York, New York 10286. A copy of the Depositarys Articles, as amended, together with copies of The Bank of New York Mellon Corporations most recent quarterly financial statements and annual report are available for inspection at the principal office of the Depositary located at One Wall Street, New York, New York 10286 and at The Bank of New York Mellon, One Canada Square, London E14 5AL and will also be available at the offices of the Luxembourg Intermediary, The Bank of New York Mellon (Luxembourg) S.A. located at 2-4 rue Eugene Ruppert, Vertigo BuildingPolaris, L-2453 Luxembourg.

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THE RECOVERY ASSETS The Recovery Assets from which Recoveries are derived for distribution to the holders of the Recovery Unit consist of: Impaired Recovery Assets; Litigation Recoveries; and Tax Assets.

Please see Schedule 1 (Terms and Conditions of the New Notes), Annex 6 (Terms and Conditions of the Recovery Units) for a full description of the Recovery Units. Payments into the Collection Account Subject to the provisions of Recovery Payments below: To the extent any Recoveries are made by the Bank in US Dollars, half of such Recoveries will be paid into the Collection Account. However, interest accrued on amounts in the Collection Account will remain in its entirety in the Collection Account. To the extent that any Recoveries not denominated in US Dollars are made by the Bank, the Bank shall convert the Specified Percentage of such Recoveries into US Dollars and, once the net proceeds of such conversion exceed U.S.$ five million, pay the net proceeds into the Collection Account. To the extent that the Bank receives the benefit of any Relief, the Bank will pay an amount in US Dollars equal to the Specified Percentage of such benefit of Relief into the Collection Account. The Collection Account is an interest-bearing account situated in the United Kingdom and administered by The Bank of New York Mellon, London Branch. The Collection Account has been charged in favour of BNY Corporate Trustee Services Limited as trustee for the holders of the Recovery Units. Once Recoveries are paid into the Collection Account, they will remain there until paid to the holders of the Recovery Units. The Bank of New York Mellon is not permitted to invest in any manner the funds held in the Collection Account. Recovery Payments The amounts payable into the Collection Account in respect of Recoveries (subject as provided in the definition of Tax Assets) will be determined on a pre-tax basis and on an asset-by asset or pooled basis (as provided in the definition of Write-backs) by reference to the KPMG Provisions Report, the Recovery Assets Opening Report and the most recently delivered Quarterly Recovery Assets Management Report1 and a Recovery in relation to a Write Back comprising an accounting recovery shall be treated as received for the purposes of this paragraph only when the Bank obtains the cash or cash equivalent benefit of that Recovery. The Recovery Payments will be made pro rata to Unitholders on 30 September, 31 December, 31 March and 30 June of each year, commencing 31 December 2010 (each, a Recovery Payment Date) provided that: (i) Recovery Payments will only be made if and to the extent that the balance standing to the credit of the Collection Account exceeds U.S.$30 million in which case, the whole such balance shall be paid to Unitholders; the aggregate of the Recovery Payments made by the Bank shall not exceed the Reference Amount, which was initially U.S.$5,221,494,216; and

(ii)

These reports will be delivered only to the Trustee, and on a confidential basis.

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(iii)

in the period beginning on 1 July 2009 up to and including 31 December 2009, in 2010 and in 2011 no payment will be made by the Bank into the Collection Account in respect of any Recoveries unless they are realised or deemed obtained in cash (or, in the case of a Recovery in relation to a Write Back comprising an accounting recovery, the Bank obtains the cash or cash equivalent benefit of such Recovery) and in the relevant period such Recoveries exceed the following amounts: (A) (B) (C) for the period beginning on 1 July 2009 up to and including 31 December 2009, KZT 36 billion; for 2010, KZT 134 billion; and for 2011, KZT 103 billion.

Write-backs Recoveries in relation to Impaired Recovery Assets are defined in the Conditions as Write-backs. Write-backs consist of cash and accounting recoveries in relation to any Impaired Recovery Asset over and above net book value as at 30 June 2009 and by reference to all the Banks assets (including collection agency receivables and Related Party Debt) and the release or forgiveness of any liability of the Bank in settlement of the Banks claim in respect of any provisioned or written off assets. The Impaired Recovery Assets consist of provisioned or written off assets (including the principal amount of or interest on such assets) as at 30 June 2009 relating to customers of the Bank. The cash and accounting recoveries may be determined as follows: (A) on a pooled basis in relation to assets described in paragraph (iii)(C) below provided that the assets so pooled do not exceed six per cent. of the aggregate amount of provisions or amounts written off in relation to the original Impaired Recovery Assets calculated by reference to the KPMG Provisions Report2; and (B) in all other cases on an asset by asset basis;

(ii) the Impaired Recovery Assets are identified as at 30 June 2009 by reference to the KPMG Provisions Report; (iii) the amounts of Recoveries are calculated in relation to Impaired Recovery Assets by reference to cash or accounting recoveries over and above the net book value of such assets following provision or write off calculated in accordance with FMSA Methodology and, in particular: (A) in relation to corporate loans by reference to the provisions (or amounts written off) as calculated and noted in the KPMG Provisions Report (which provided that such provisions (and amounts written off) amounted in aggregate to KZT 1,846 billion); (B) in relation to corporate off balance sheet exposures including by reference to the provisions (or amounts written off) as calculated and noted in the KPMG Provisions Report (which provided that such provisions (and amounts written off) amounted in aggregate to KZT 119 billion); and (C) in relation to loans to small and medium enterprises and retail loans, by reference to the provisions (or amounts written off) as calculated and noted in the KPMG Provisions Report (which provided that such provisions (and amounts written off) amounted in aggregate to KZT 119 billion); (iv) Recoveries include:

This report has been prepared on a confidential basis. No such report has been or will be prepared in respect of the Litigation Recoveries or Tax Assets.

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(A) cash and accounting recoveries in respect of Impaired Recovery Assets (including, but not limited to, provisioned or written off amounts, interest, default and penalty interest, premiums, late payment amounts and principal payments, settlements and cash proceeds from assets (including amounts realised on collateral or security) and whether acquired by the Bank through litigation, settlement, auction or compromise, or write backs of any amounts in accordance with or permitted by applicable accounting standards or applicable regulatory capital requirements and any amounts received by reference to Impaired Recovery Assets consisting of loans written off prior to 30 June 2009); and (B) amounts received with respect to new loans (Recovery Assets Replacement Loans) entered into by way of amendment, restatement, novation of, or otherwise replacing, loans from time to time constituting Recoveries Assets. In determining whether a loan is a Recovery Assets Replacement Loan, all loans or arrangements entered into by the Bank after 30 June 2009 with borrowers or obligors with respect to Recoveries Assets (and/or with any of their Affiliates) constitute Recovery Assets Replacement Loans but only to the extent that such arrangements do not represent any amounts in addition to the amounts of existing loans; and (v) all such cash and accounting recoveries by reference to Impaired Recovery Assets are, on a pooled or asset by asset basis (as appropriate in accordance with (i) above) only treated as a Recovery to the extent that the aggregate amount of such recoveries by reference to such pool or asset exceeds the net book value of such pool or asset following provision or write down as referred to in (ii) and (iii) above. These Recoveries will be shared by the Bank with the holders of the Recovery Units as set out under Specified Percentages below. Impaired Recovery Assets comprising corporate credits The corporate credits comprised in the Impaired Recovery Assets consist of corporate loans and finance leases as follows: Corporate Loans: The Bank granted corporate loans to corporate customers who had a good business history, experience in their industry and an experienced management. The loans typically had terms ranging from one month to 20 years and bore interest rates of four to 25 per cent. per annum. The type of collateral required for these loans was determined on a case by case basis. The aggregate outstanding principal amount of corporate loans comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 2,054,914 million, with a net book value of KZT 211,368 million. KZT 1,548,101 million of such aggregate outstanding principal amount was secured, of which KZT 354,103 million was secured by real estate. The aggregate outstanding principal amount of corporate loans comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 1,979,686 million. KZT 1,494,144 million of such aggregate outstanding principal amount was secured, of which KZT 355,891 million was secured by real estate. Finance leases: The Bank financed (by way of finance leases) the acquisition of property, vehicles and equipment by corporate customers who had a good business history, experience in their industry and an experienced management. The leases typically had terms ranging from three to nine years and the rental payments on the leases reflected interest rates of five to 37 per cent. Customers were also required to provide between 10 and 50 per cent. of the purchase price of the leased property or other adequate collateral depending on the risks of the transaction in question. The aggregate outstanding amount of finance leases to corporate customers comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 16,436 million, with a net book value of KZT 13,459 million. KZT 16,029 million of such aggregate outstanding amount was secured, of which KZT 5,083 million was secured by real estate. The aggregate outstanding amount of finance leases to corporate customers comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 14,954 million. KZT 14,592 million of such aggregate outstanding amount was secured, of which KZT 5,087 million was secured by real estate.

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The aggregate outstanding amount of corporate credits comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 2,071,350 million, with a net book value of KZT 224,827 million. The aggregate outstanding amount of corporate credits comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 1,994,640 million. Impaired Recovery Assets comprising corporate off-balance sheet exposures The Impaired Recovery Assets include a number of off-balance sheet exposures. These are comprised as follows: Guarantees issued by the Bank: The Bank offered guarantees to corporate customers of the Bank who did not have any overdue debt to the Bank or any other banks, any outstanding tax liabilities or any other state duties due as at the date of application for the guarantee in question. The Bank accepted cash, deposits and property as collateral. The guarantees had terms ranging from two months to 10 years and bore commission rates of two to five per cent. per annum. The aggregate outstanding amount of guarantees comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 107,601 million, with a net book value of KZT 26,514 million. KZT 66,146 million of such aggregate outstanding amount was secured, of which KZT 4,164 million was secured by real estate. The aggregate outstanding amount of guarantees comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 35,530 million. KZT 33,529 million of such aggregate outstanding principal amount was secured, of which KZT 332 million was secured by real estate. Letters of Credit issued by the Bank: The Bank issued letters of credit to legal entities which had concluded agreements for supply of goods and services with third parties. Letters of credit amounting to KZT 99 million were partially secured by funds deposited in special bank accounts. The letters of credit had terms ranging from six months to 12 years and bore commission rates of three to six per cent. per annum. The aggregate outstanding amount of letters of credit comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 63,081 million, with a net book value of KZT 24,866 million. KZT 47,123 million of such aggregate outstanding amount was secured, of which KZT 2,826 million was secured by real estate. The aggregate outstanding amount of letters of credit comprised in the Impaired Recovery Assets as at 30 June 2010 amounted to KZT 6,478 million, all of which was secured and KZT 2,148 million of which was secured by real estate.

The aggregate outstanding amount of off-balance sheet exposures comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 170,682 million, with a net book value of KZT 51,380 million. The aggregate outstanding amount of off-balance sheet exposures comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 42,008 million. Impaired Recovery Assets comprising small and medium enterprise credits The small and medium enterprise (SME) credits comprised in the Impaired Recovery Assets consist of the following main lending products: Loans to SME customers: These loans were offered to licensed individual entrepreneurs and SME customers of the Bank with a good business history and at least six months experience in their industry. The loans typically had terms ranging from three months to 10 years and bore interest rates of eight to 19 per cent. per annum. The Bank accepted property, movables, cash, deposits and other liquid collateral for these loans. Collateral such as goods in turnover and future cash proceeds were accepted by the Bank provided that such collateral amounted to no more than 30 per cent. of the total value of the collateral provided by the customer in question. The aggregate outstanding principal amount of loans to SME customers comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 60,189 million, with a net book value of KZT 25,836 million. KZT 59,595 million of such aggregate outstanding principal amount was secured, of which KZT 30,207 million was secured by real estate. The aggregate outstanding principal amount of loans to SME customers comprised in the Impaired Recovery Assets as at 30

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June 2010 was KZT 41,687 million. KZT 41,320 million of such aggregate outstanding principal amount was secured, of which KZT 22,588 million was secured by real estate. Small business EBRD loans: These loans were issued by the Bank but financed by the European Bank of Reconstruction and Development (EBRD) using the EBRD financial analysis technique. These loans were offered to licensed individual entrepreneurs and SME customers of the Bank with a good business history and at least six to 12 months experience in their industry. The loans typically had terms ranging from three months to 10 years and bore interest rates of 11 to 20 per cent. per annum. The loans were typically required to be secured by cash, movables or real estate. The aggregate outstanding principal amount of small business EBRD loans comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 13,927 million, with a net book value of KZT 3,989 million. KZT 13,704 million of such aggregate outstanding principal amount was secured, of which KZT 9,900 million was secured by real estate. The aggregate outstanding principal amount of small business EBRD loans comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 11,705 million. KZT 11,606 million of such aggregate outstanding principal amount was secured, of which KZT 8,465 million was secured by real estate. Finance leases: The Bank financed (by way of finance leases) the acquisition of property by licensed individual entrepreneurs and SME customers of the Bank with a good business history and at least six months experience in their industry. The terms of the leases depended on the economic life of the leased property in question but were not less than three years or more than 20 years. The rental payments on the leases typically reflected interest rates of 11 to 16.5 per cent. per annum. The aggregate outstanding amount of finance leases to SME customers comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 2,286 million, with a net book value of KZT 582 million. KZT 2,080 million of such aggregate outstanding amount was secured, of which KZT 267 million was secured by real estate. The aggregate outstanding amount of finance leases to SME customers comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 1,878 million. KZT 1,836 million of such aggregate outstanding amount was secured, of which KZT 224 million was secured by real estate. Other SME Products: The aggregate outstanding amount of other SME products comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 3,119 million, with a net book value of KZT 924 million. KZT 3,046 million of such aggregate outstanding amount was secured, of which KZT 1,149 million was secured by real estate. The aggregate outstanding amount of other SME products comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 2,264 million. KZT 2,259 million of such aggregate outstanding amount was secured, of which KZT 679 million was secured by real estate.

The aggregate outstanding amount of SME credits comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 79,521 million, with a net book value of KZT 31,331 million. The aggregate outstanding amount of SME credits comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 57,534 million. Impaired Recovery Assets comprising retail loans The retail loans comprised in the Impaired Recovery Assets consist of the following loans: Residential mortgage loans: o The Bank offered residential mortgage loans to its customers at interest rates of 12 to 19 per cent. per annum and with terms ranging from a minimum of three years to a maximum of the number of years it took until the customer in question reached retirement age. To be eligible for a loan, the customer needed to be solvent and to have a good credit history. These loans required a down payment of at least 30 per cent. of the price of the real property they were intended to finance.

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The Bank was a participant of a government refinancing programme of residential mortgage loans funded by Samruk Kazyna. These loans typically had terms ranging from one to 20 years and interest rates of nine to 11 per cent. per annum.

The aggregate outstanding principal amount of residential mortgage loans comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 29,283 million, with a net book value of KZT 4,227 million. KZT 28,038 million of such aggregate outstanding principal amount was secured, of which KZT 21,081 million was secured by real estate. The aggregate outstanding principal amount of residential mortgage loans comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 26,755 million. KZT 25,770 million of such aggregate outstanding principal amount was secured, of which KZT 19,628 million was secured by real estate. Auto loans: The Bank issued loans to individuals to purchase new and used cars. To be eligible for an auto loan the individual needed to be solvent, have a good credit history and meet other legal requirements. The Bank also considered the applicants level of indebtedness when deciding whether to approve any application for an auto loan. These loans typically had terms ranging from six months to seven years and interest rates of 13.5 to 21 per cent. per annum. The Bank charged customers a commission of two per cent. of the loan amount as well as its standard commission for maintaining a loan account of 0.3 to 0.4 per cent. of the loan amount. The loan amount depended on the purchase price of the car being financed by the loan, and did not exceed 80 per cent. of the purchase price of the car. The aggregate outstanding principal amount of auto loans comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 5,355 million, with a net book value of KZT 1,361 million. KZT 5,277 million of such aggregate outstanding principal amount was secured, of which KZT 113 million was secured by real estate. The aggregate outstanding principal amount of auto loans comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 4,182 million. KZT 4,124 million of such aggregate outstanding principal amount was secured, of which KZT 87 million was secured by real estate. Credit lines: The Bank offered loans for consumer needs to its customers at interest rates of 16.0 to 21.5 per cent. per annum with terms ranging from one year to 10 years. The Bank accepted real estate and guarantees as collateral provided that the loan amount did not exceed 75 per cent. of the value of the collateral provided. To be eligible for a credit line, an individual needed to be solvent and have a good credit history. In addition the Bank charged customers a commission of two per cent. of the loan amount for arranging the loans. The aggregate outstanding principal amount of credit lines comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 37,375 million, with a net book value of KZT 8,583 million. KZT 35,094 million of such aggregate outstanding principal amount was secured, of which KZT 27,090 million was secured by real estate. The aggregate outstanding principal amount of credit lines comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 33,062 million. KZT 31,060 million of such aggregate outstanding principal amount was secured, of which KZT 24,113 million was secured by real estate. Other retail products: The aggregate outstanding amount of other retail products comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 19,438 million, with a net book value of KZT 8,195 million. KZT 11,197 million of such aggregate outstanding amount was secured, of which KZT 5,108 million was secured by real estate. The aggregate outstanding amount of other retail products comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 11,716 million. KZT 6,872 million of such aggregate outstanding amount was secured, of which KZT 4,598 million was secured by real estate.

The aggregate outstanding principal amount of retail loans comprised in the Impaired Recovery Assets as at 30 June 2009 was KZT 91,451 million, with a net book value of KZT 22,366 million. The aggregate outstanding amount of retail loans comprised in the Impaired Recovery Assets as at 30 June 2010 was KZT 75,715 million.

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Details of litigation relating to Impaired Recovery Assets The Banks Recovery Assets Department has filed claims in relation to a number of Impaired Recovery Assets. As at the date of this Prospectus, progress has been made in relation to certain Impaired Recovery Assets situated in the CIS and Kazakhstan as follows: Proceedings have been commenced in respect of 50 loans. To date, 54 of the following claims have been decided in favour of the Bank: Quantity of claims 21 3 18 18 60

Subject of judicial proceeding Debt collection Debt collection/foreclosure of the collateral property Foreclosure of the collateral property Other Total -

The judgments of the court on two of the above mentioned claims have been enforced in part. After lengthy negotiations, an agreement has been reached for the repayment of the principal amount of debt in respect of one of the above mentioned claims.

The table below sets out more detailed information on the status of ongoing judicial proceedings: Subject of judicial proceeding Bankruptcy of debtors Debt collection Debt collection/foreclosure of the collateral property Foreclosure of the collateral property Recognition of the deal / part of the deal invalid Recognition of the deal / part of the deal invalid and debt collection Challenging the decision of the court Challenging the actions of officials / authorised agencies Recognition and enforcement of the decisions Total Quantity of claims 17 16 2 43 2 5 2 2 2 91

In addition, the Banks Recovery Assets Department has filed an application with the appropriate investigative authorities of Kazakhstan, Russia and Ukraine, regarding 30 fraudulent loan applications. Criminal proceedings have been commenced with respect to most of those claims, and as at the date of this Prospectus 12 properties (relating to 26 borrowers) have been seized as a result of those criminal proceedings. As at the date of this Prospectus, notices of default and/or demands of repayment of debt have been sent to 35 debtors. There is ongoing correspondence and negotiation with 16 borrowers, aimed at resolving ongoing conflicts and the fulfilment of obligations owed by those borrowers to the Bank. Litigation Recoveries The Bank has undertaken to use its reasonable endeavours (with the full support of Samruk Kazyna) to maximise the recovery of any valuable asset of the Bank (including any claims available to it) whether in respect of debtors, former management or any other party whatsoever. The Bank has agreed to pursue a vigorous and transparent Recovery Programme aimed at maximising recovery of assets.

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Litigation Recoveries comprise any cash recoveries from, and the net proceeds of any sale of, any asset recovered through the Recovery Programme (to the extent that such cash recoveries are not also Impaired Recovery Assets or Tax Assets). The Bank has commenced a number of claims against its former management and individuals and entities connected with its former management. Details of these are provided in The Bank Property Recovery Efforts. These Recoveries will be shared by the Bank with the holders of the Recovery Units as set out under Specified Percentages below. Tax Assets Tax Assets comprise the benefit of any Reliefs obtained or deemed to have been obtained by the Bank where the Relief arises from a transaction or other event (including, without limitation, the recognition for accounting purposes of a loss or impairment in respect of any asset in the Recovery Assets Opening Report or in relation to the Litigation Recoveries) occurring in relation to or affecting the Bank on or prior to the Restructuring but not including the exclusion from taxation (by virtue of Article 3.1 of the Law of the Republic of Kazakhstan On Enactment of the Code of the Republic of Kazakhstan on Taxes and Other Mandatory Payments to the Budget (Tax Code) dated 10 December 2008) of the gains resulting from writing off and/or cancellation of indebtedness of the Bank carried out under the Restructuring. For the purposes of calculating the Tax Assets: (i) Relief includes (without limitation) any relief, loss, allowance, credit, set off, deduction or exemption for any Tax purpose, any right to repayment of Tax (including any repayment supplement), whether used in whole or in part; (ii) the benefit of a Relief will be deemed to have been obtained by the Bank in any case where (a) a member of the Group receives a repayment of Tax as a result of the use or set-off of a Tax Asset or would have received such a repayment had amounts paid pursuant to Payments into the Collection Account above been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan or (b) an amount of Tax payable by a member of the Group is reduced as a result of the use or set off of a Tax Asset or would have been reduced had amounts so paid been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan; (iii) the amount of any benefit of a Relief will be deemed to be the amount of the repayment of Tax (in a case falling within paragraph (ii)(a) above) or the amount of Tax saved (in a case falling within paragraph (ii)(b) above) and in both cases in making this calculation it will be assumed that (a) any amount to be paid in respect of Recoveries (other than in respect of Tax Assets) into the Collection Account is deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan, (b) any amount to be paid in respect of the receipt of the benefit of a Relief into the Collection Account is not deductible in computing the taxable profits of the Bank for the purposes of Tax in Kazakhstan and (c) the rate of corporate Tax in Kazakhstan is 15%; (iv) the benefit of a Relief will be deemed to have been obtained on (a) the date that the repayment is actually received or (in the case of a repayment that would have been received if amounts paid into the Collection Account had been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan) 30 days after the date on which the tax return in which repayment would have been claimed is agreed with the relevant Tax authorities or is otherwise settled or (b) the date on which that Tax would have been payable but for the use of the Relief (in a case falling within paragraph (ii)(b) above); and (v) any amount paid into the Collection Account in respect of Recoveries (other than Tax Assets) will be treated as deductible in the calendar year of payment into the Collection Account in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan.

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Tax assets should be calculated and paid based on taxable income (as reported in a tax return) and actual use of losses (including all amounts received rebounds) for the whole year, rather than for each transaction separately. For the purposes of calculating Reliefs, all benefits of a Relief will be deemed to have been realised in cash. Assuming a notional trading income of 100 Tenge for any year in which any Reliefs are deemed to be obtained, the calculation of Tax Assets due to holders of Recovery Units in that year (subject to the provisions of Recovery Payments above) is as follows: Tax Asset calculation BTA trading income Deductible expenditure Deemed taxable profit Deemed losses utilised Tax Asset, namely, 15% of 92.5 Payment to Creditors (50% of Tax Asset) 100 (7.5) 92.5 92.5 13.87 6.9

Tax losses and other benefits that may be available for use by other members of the Group shall be deemed received by the Bank only if such benefits lead to a tax refund for the Bank or reduce the Banks tax liabilities in some other way. Under Kazakhstan laws as at the date of this Prospectus, it is not possible for tax losses of other members of the Group to be used by the Bank. These Recoveries will be shared by the Bank with the holders of the Recovery Units as set out under Specified Percentages below. Specified Percentages The following table specifies the percentage of the Recoveries that will be distributed to the holders of the Recovery Units for each category of Recoveries: (i) (ii) (iii) (iv) Write-backs: Litigation Recoveries: Tax Assets: Interest on the Collection Account 50 per cent. 50 per cent. 50 per cent. 100 per cent.

Reporting Within 30 days of the end of each financial quarter, the Bank will provide the Trustee with quarterly management information concerning the Recovery Units including a review of the Recoveries Assets and details of any payments made to the holders of the Recovery Units.

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ADDITIONAL INFORMATION No Significant Change Except as described under Managements Discussion and Analysis of Results of Operations and Financial Condition Recent Developments, there has been no significant change in the financial or trading position of the Bank since 30 June 2010. Auditors Ernst & Young LLP, independent auditors (acting as an auditor under licence No. 0000003, given on 15 July 2005 by the Ministry of Finance of the Republic of Kazakhstan), Esentai Tower, 77/7, Al Farabi Avenue, Almaty, 050060 Republic of Kazakhstan, have audited the Annual Financial Statements and their audit reports are included on pages F-40, F-111 and F-181 of this Prospectus, respectively. Admission Expenses The estimated total expenses relating to the admission of the New Notes and the GDRs to trading are EUR 19,300. Documents Available Copies of the following documents are available free of charge to any person during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) from the date of this Prospectus for so long as any of the New Notes or the GDRs are listed on the official list of the Luxembourg Stock Exchange and are admitted to trading on the Euro MTF market, at the registered office of the Bank and on the Banks website at www.bta.kz/en/investor: the Charter; the audited consolidated financial statements of the Bank as at and for the years ended 31 December 2009, 2008 and 2007 and the reviewed interim consolidated financial statements of the Bank for the six-month period ended 30 June 2010; this Prospectus; the New Notes Trust Deed; and the Agency Agreement.

Information regarding the Senior Dollar Notes, the Dollar OID Notes, the Euro OID Notes, the Dollar Subordinated Notes and the Euro Subordinated Notes The Senior Dollar Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with a Common Code of 053298877 (Reg S) and 053298958 (Rule 144A). The International Securities Identification Number for the Senior Dollar Notes is XS0532988770 (Reg S) and XS0532989588 (Rule 144A). The Senior Dollar Notes bear interest at 10.75 per cent. on their outstanding principal amount and therefore, at the time of issue, the yield of the Senior Dollar Notes was U.S.$10,750 per annum per U.S.$100,000 in principal amount of the Senior Dollar Notes held. The Dollar Subordinated Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with a Common Code of 053299067 (Reg S) and 053299075 (Rule 144A). The International Securities Identification Number for the Dollar Subordinated Notes is XS0532990677 (Reg S) and XS0532990750 (Rule 144A).

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The Dollar Subordinated Notes bear interest at 7.20 per cent. on their outstanding principal amount and therefore, at the time of issue, the yield of the Dollar Subordinated Notes was U.S.$7,200 per annum per U.S.$100,000 in principal amount of the Dollar Subordinated Notes held. The Euro Subordinated Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with a Common Code of 053299083 (Reg S) and 053299091 (Rule 144A). The International Securities Identification Number for the Euro Subordinated Notes is XS0532990834 (Reg S) and XS0532990917 (Rule 144A). The Euro Subordinated Notes bear interest at 6.75 per cent. on their outstanding principal amount and therefore, at the time of issue, the yield of the Euro Subordinated Notes was 6,750 per annum per 100,000 in principal amount of the Euro Subordinated Notes held. The Dollar OID Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with Common Codes of 053298982 (Reg S) and 053299016 (Rule 144A). The International Securities Identification Numbers for the Dollar OID Notes are XS0532989828 (Reg S) and XS0532990164 (Rule 144A). The Dollar OID Notes bear interest at 3.70 per cent. per annum from 1 July 2010 to 1 July 2017 and 3.30 per cent. per annum thereafter, and, therefore, at the time of issue, the yield of the Dollar OID Notes was U.S.$3,700 per annum per U.S.$100,000 in principal amount of the Dollar OID Notes held. The Euro OID Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg with Common Codes of 053299024 (Reg S) and 053299059 (Rule 144A). The International Securities Identification Numbers for the Euro OID Notes are XS0532990248 (Reg S) and XS0532990594 (Rule 144A). The Euro OID Notes bear interest at 3.14 per cent. per annum from 1 July 2010 to 1 July 2017 and 2.74 per cent. per annum thereafter, and, therefore, at the time of issue, the yield of the Euro OID Notes was 3,140 per annum per 100,000 in principal amount of the Euro OID Notes held. Information regarding the Recovery Units The Recovery Units have been accepted for clearance through Euroclear and Clearstream, Luxembourg with a Common Code of 053299504 (Reg S) and 053299679 (Rule 144A). The International Securities Identification Number for the Recovery Units is XS0532995049 (Reg S) and XS0532996799 (Rule 144A). The Recovery Units do not bear any interest. The Recovery Units will be paid out of the Collection Account, which is funded by cash generated by the Recovery Assets. The Recovery Units are limited recourse obligations of the Bank, and the level of collateral of the Recovery Units will correspond to the amount of Recoveries. The Collection Account is administered by The Bank of New York Mellon, London Branch. All other functions regarding the administration of the Recovery Units will be performed by the Bank. Material Contracts The Bank is not a party to any material contract that might affect the Banks obligations under the New Notes. Resolutions The Board of Directors authorised the issuance of the New Notes on 14 July 2010. The Board of Directors authorised the issuance of the GDRs on 17 August 2010, and the issuance of the underlying shares was authorised by the Board of Directors on 4 August 2010.

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Financial Notices Financial notices concerning the Bank (such as dividend notices, rights issues, capital increases, etc.) as well as notices for general meetings will be published on the Luxembourg Stock Exchange website at www.bourse.lu. Listing Agent The Bank of New York Mellon (Luxembourg) S.A. is acting as intermediary between the Luxembourg Stock Exchange and persons connected with the listing of the New Notes and the GDRs.

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SCHEDULE 1TERMS AND CONDITIONS OF THE NEW NOTES Annex 1 Terms and Conditions of the Senior Dollar Notes The following is the text of the terms and conditions of the Senior Notes which, subject to amendment and completion, will be endorsed on each Note Certificate pertaining to the Senior Notes and will be attached and (subject to the provisions thereof) apply to the relevant Global Note: The U.S.$2,082,371,783 step up notes due 2018 (the Senior Dollar Notes or the Notes, which expression includes any further notes issued pursuant to Condition 16 (Further Issues) and forming a single series therewith) of BTA Bank (the Bank) are (a) constituted by, and subject to, and have the benefit of a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Notes (Noteholders) under the Trust Deed) and (b) the subject of an agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon as principal paying and transfer agent (the Principal Paying and Transfer Agent; which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Notes), Joint-Stock Company Citibank Kazakhstan as Kazakhstan paying and transfer agent (the Kazakhstan Paying and Transfer Agent; which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes) and The Bank of New York Mellon (Luxembourg) S.A. as registrar (the Registrar, which expression shall include any successor registrar appointed from time to time in connection with the Notes). Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The Noteholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. Terms defined in the Trust Deed shall, unless otherwise defined herein or the context requires otherwise, bear the same meanings herein. 1. Status The obligations under the Notes are unconditional, direct, unsubordinated and, subject as provided in Clause 8.1(c)(xxiv) (Negative Pledge) of the Trust Deed, unsecured obligations of the Bank, and will at all times rank at least pari passu amongst themselves and pari passu in right of payment with all other present and future (except as provided therein) unsubordinated, unsecured obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. 2. Form, Denomination and Title (a) Form and Denomination The Notes are in registered form, without interest coupons attached, and shall be serially numbered. Notes shall be issued in denominations of U.S.$1 and integral multiples of U.S.$1 in excess thereof (each denomination an authorised denomination).

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(b)

Title Title to the Notes will pass by transfer and registration as described in Conditions 3 (Registration) and 4 (Transfers). The holder (as defined below) of any Notes shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof) and no person shall be liable for so treating such holder.

In these Conditions, holder means the person in whose name a Note is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holders and Noteholders shall be construed accordingly. 3. Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Notes in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. 4. Transfers (a) Subject to Conditions 4(d) and 4(e), a Note may be transferred in whole or in part upon surrender of the relevant Note Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of an Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Note may not be transferred unless the principal amount of Notes transferred and (where not all of the Notes held by a holder are being transferred) the principal amount of the balance of Notes not transferred are authorised denominations. Transfer Forms are available from any Agent and the Bank upon the request of any holder. Within five business days of the surrender of a Note Certificate in accordance with Condition 4(a), the Registrar will register the transfer in question and deliver a new Note Certificate of alike principal amount to the Notes transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 4(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. The transfer of a Note will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. Noteholders may not require transfers to be registered during the period of 15 calendar days ending on the due date for any payment of principal or interest in respect of the Notes. All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of the Notes scheduled to the Agency Agreement,

(b)

(c)

(d)

(e)

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a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations. 5. Covenants The Noteholders will have the benefit of certain covenants contained in the Trust Deed relating to, amongst other things, restrictions on the creation of security interests, incurrence of indebtedness, conduct of business with related parties, acquisition and incorporation of subsidiaries, ability to enter into mergers and joint ventures, disposal of assets and payment of dividends. 6. Interest (a) Interest Accrual The Notes shall bear interest on their outstanding principal amount from 1 July 2010 to 1 January 2013 at the rate of 10.75 per cent. per annum, and 12.5 per cent. per annum thereafter (the Rate of Interest), payable in arrear on 1 January and 1 July in each year (each, an Interest Payment Date, and with the first Interest Payment Date falling on 1 January 2011), subject as provided in Condition 7 (Payments). Each period beginning on (and including) 1 July 2010 or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period. (b) Cessation of Interest Each Note will cease to bear interest from the due date for final redemption unless payment of principal is improperly withheld or refused, in which case it will continue to bear interest at such rate (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying and Transfer Agent or the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment). (c) Calculation of Interest for an Interest Period The amount of interest payable in respect of each Note for any Interest Period shall be calculated by applying the Rate of Interest to the principal amount of such Note, dividing the product by two and rounding the resulting figure to the nearest cent (half a cent being rounded upwards). (d) Calculation of Interest for any Other Period If interest is required to be calculated for any period other than an Interest Period, it will be calculated on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed. The determination of the amount of interest payable under Condition 6(c) (Calculation of Interest for an Interest Period) by the Principal Paying and Transfer Agent shall, in the absence of manifest error, be binding on all parties.

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7.

Payments (a) Principal Payments of principal in respect of the Notes will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or of any Agent. (b) Interest Payments of interest due on an Interest Payment Date will be made to the Persons shown in the Register at the close of business on the Record Date for such Interest Payment Date, subject to (in the case of interest payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or any Agent. Payments of all amounts other than as provided in Condition 7(a) (Principal) and this Condition 7(b) will be made as provided in these Conditions. (c) Record Date Each payment in respect of a Note will be made to the Person shown as the holder in the Register at the close of business (in the place of the Registrars specified office) on the business day before the due date for such payment (the Record Date). (d) Payments Each payment in respect of the Notes pursuant to Conditions 7(a) (Principal) and 7(b) (Interest) will be made by transfer to a United States Dollar account maintained by the payee with a bank in New York City. (e) Payments Subject to Fiscal Laws All payments in respect of the Notes are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 9 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of such payments. (f) Payment on a Business Day If the due date for payment of any amount in respect of any Note is not a business day in the place of the Specified Offices of the Principal Paying Agent, the holder thereof shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 7(f), business day means any day on which banks are open for business (including dealings in foreign currencies) in New York City, London and, in the case of surrender (or, in the case of partial payment only, endorsement) of a Note Certificate, in the place in which the Note Certificate is surrendered (or, as the case may be, endorsed). (g) Agents In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders. The Bank reserves the right (with prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or

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successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 14 (Notices). 8. Redemption and Purchase (a) Scheduled Redemption Unless previously redeemed or purchased and cancelled as provided below, subject as provided in Condition 7 (Payments), the Notes will be redeemed in eight equal semi-annual instalments3 on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2015 and the last such instalment being payable on 1 July 2018. The outstanding principal amount of each Note shall be reduced by any repayment of principal in accordance with these Conditions, including any instalment amount with effect from the related instalment payment date, unless the payment of the instalment is improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such instalment amount. Each Note shall be finally redeemed on due payment of the final instalment amount. (b) Redemption at the Option of the Noteholders Unless the Noteholders have previously by an Extraordinary Resolution (as defined in the Trust Deed) disapplied this Condition 8(b) in relation to the applicable Relevant Event, following the occurrence of a Relevant Event (as defined below), the Bank shall promptly, and in any event within five Business Days thereafter, give notice (the Relevant Event Notice) of such Relevant Event to the Noteholders (with a copy to the Trustee) in accordance with Condition 14 (Notices), which notice shall specify the date (which shall not be less than 30 days nor more than 60 days after the Relevant Event Notice (the Put Settlement Date)), on which the Bank shall, at the option of the holder of any Note, redeem such Note at its principal amount, together with interest accrued and unpaid to the Put Settlement Date. In order to exercise the option contained in this Condition 8(b), the holder of a Note must, not less than 15 days before the Put Settlement Date, deposit with any Paying Agent the relevant Note Certificate and a duly completed put option notice (a Put Option Notice) in the form obtainable from any Paying Agent. No Note Certificate, once deposited with a duly completed Put Option Notice in accordance with this Condition 8(b), may be withdrawn; provided, however, that if, prior to the Put Settlement Date, any such Note becomes immediately due and payable or payment of the redemption monies is improperly withheld or refused, such Note Certificate shall, without prejudice to the exercise of the Put Option, be returned to the holder by uninsured first class mail (airmail if overseas) at such address as may have been given by such Noteholder in the relevant Put Option Notice. The Trustee shall not be responsible for monitoring whether or not any Relevant Event has occurred and shall be entitled to assume unless it receives written notice to the contrary, that no Relevant Event has occurred. In the event that a Relevant Event occurs but no Relevant Event Notice is given by the Bank, the Bank shall be deemed to have given a Relevant Event Notice specifying a Put Settlement Date on the date which is 60 days after the occurrence of the
3

For the convenience of the reader of this Prospectus, the Bank will inform the Luxembourg Stock Exchange of the amount of each instalment once the amount is known and in any event prior to the payment of such instalment.

285

Relevant Event, unless such day is not a Business Day, in which event the Put Settlement Date shall be the immediately following Business Day thereafter. (c) Redemption at the Option of the Bank The Notes may be redeemed at the option of the Bank in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Noteholders and the Trustee in accordance with Condition 14 (Notices) (which notice shall be irrevocable), at their principal amount, together with interest accrued but unpaid to the date fixed for redemption as well as, if positive, the Make-Whole Amount (if any). Upon the expiry of any such notice as is referred to in this Condition 8(c), the Bank shall be bound to redeem the Notes in accordance with this Condition 8(c). (d) Purchase Subject to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, the Bank may at any time purchase or procure others to purchase for its account the Notes in the open market or otherwise and at any price. Notes so purchased may be held or resold (provided that such resale is in compliance with all applicable laws) or surrendered for cancellation at the option of the Bank, in compliance with Condition 8(e) (Cancellation of Notes). Any Notes so purchased, while held by or on behalf of the Bank or any member of the Group, shall not entitle the holder to vote at any meeting of Noteholders and shall not be deemed to be outstanding for the purposes of calculating quorum at such meetings. (e) Cancellation of Notes Unless otherwise permitted pursuant to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, all Notes which are redeemed or surrendered for cancellation pursuant to this Condition 8 (Redemption and Purchase) shall be cancelled and may not be reissued or resold. (f) Definitions As used in this Condition 8 (Redemption and Purchase): acting in concert means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the direct or indirect acquisition by any member or members of such group of shares in the Bank or of any of the assets of any member or members of the group, to obtain or consolidate control of the Bank. Affiliate of a person means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, that person. Business Day means a day other than a Saturday or Sunday on which commercial banks are open for business (including dealings in foreign currencies) in London and New York. Called Principal means the principal amount of the Notes to be redeemed. Change of Control means: (A) Samruk-Kazyna ceases to control the Bank (other than where it ceases to control the Bank (a) by transfer of control to a Permitted Transferee or (b) in

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connection with a Secondary Public Offering), where control of the Bank means: (i) the holding beneficially of more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or the power (whether by ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Bank, or

(ii)

(B)

any person or group of persons acting in concert (other than where (a) such person or persons are Permitted Transferees or (b) in connection with a Secondary Public Offering) gains control of the Bank where control means the power (whether by ownership of shares, proxy, contract, agency or otherwise) to: (i) (ii) appoint or remove all, or the majority, of the directors or other equivalent officers of the Bank; or give directions with respect to the operating and/or financial policies of the Bank with which the directors or other equivalent officers of the Bank are obliged to comply,

provided that any agreement whereby management of the Bank is transferred to a third party (the manager) that does not, in conjunction with any acquisition of shares in the Bank by such manager or its Affiliates (whether or not occurring at the same time), cause the government of the Republic of Kazakhstan to cease to own more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), will not constitute a Change of Control if (a) the Trustee and the Creditor Directors have been provided with an opinion in form and substance satisfactory to them of independent legal advisers of recognised standing to the effect that the management agreement, in conjunction with any acquisition of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), does not cause the government of the Republic of Kazakhstan (directly or indirectly) to cease to control the Bank or to have majority economic risk and/or benefit in the Bank and continues to allow the government of the Republic of Kazakhstan (directly or indirectly) to retain the sole right to exercise its rights as majority shareholders (including in relation to the appointment of directors), (b) the terms of the management agreement have been approved by a Qualified Majority and (c) the manager is a Permitted Transferee. Discounted Value means, with respect to the Called Principal of the Notes, the amount obtained by discounting the Remaining Scheduled Payments with respect to the Called Principal in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. Make-Whole Amount means an amount equal to the excess (if any) of: (a) (b) the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of the Notes; over the Called Principal of the Notes. OECD means the Organisation

287

for Economic Co-operation and Development. Permitted Transferee means a person which: (A)(i) is a bank or other financial institution subject to financial regulation in Russia, China, Hong Kong, Singapore or an OECD country; or (ii) is a sovereign wealth fund of Russia, China, Hong Kong, Singapore or an OECD country or any other Country which may otherwise be approved by a Qualified Majority of the Board; (B) has, in the case of a bank or other financial institution, a minimum credit rating from S&P of at least BBB or equivalent from Moodys or Fitch; (C) has, in the case of a bank or other financial institution, a minimum paid up share capital and reserves of at least U.S.$7 billion or, in the case of a sovereign wealth fund, assets of at least U.S.$7 billion; and (D) is not affiliated with any of the present or former shareholders or managers of the Bank. Redemption Date means the date on which any Note is redeemed either in whole or part. Reinvestment Yield means, with respect to the Called Principal: (a) (b) 250 basis points; plus the yield to maturity implied by: (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Redemption Date with respect to such Called Principal, on the display designated as PX1 on the Bloomberg Financial Markets Service (or such other display as may replace PX1 on Bloomberg Financial Markets Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Redemption Date; or if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Redemption Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Redemption Date,

(ii)

and such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life. Relevant Event means: (a) (b) a Change of Control; and/or any disposals (excluding those disposals made in the ordinary course of trading) in any financial year of more than 6.5 per cent. of the Groups total gross assets (determined by reference to the Banks most recent consolidated financial statements produced using IFRS).

288

Remaining Average Life means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing: (a) (b) such Called Principal; into the sum of the products obtained by multiplying (i) the principal component of each of the Remaining Scheduled Payments with respect to such Called Principal by (ii) the number of years (calculated to the nearest one-twelfth of a year) that will elapse between the Redemption Date with respect to such Called Principal and the due date of each such scheduled redemption.

Remaining Scheduled Payments means, with respect to the Called Principal, all payments of such Called Principal and interest thereon of the Notes to be redeemed that would have been due after the Redemption Date with respect to such Called Principal from their respective scheduled due dates to the final Redemption Date with respect to such Called Principal, provided that if such Redemption Date is not a date on which an interest payment is due to be made on the relevant instrument, the amount of the next succeeding scheduled interest payment shall be reduced by the amount of interest accrued to and required to be paid on the Redemption Date. Secondary Public Offering means any sale or public offering of any equity security (including any preference shares) in the Bank or receipts or similar securities representing such equity securities by way of flotation, public placing, listing or other public offering on any recognised international exchange. 9. Taxation (a) Taxation All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Note: (i) presented for payment by or on behalf of a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Note; or presented (in the case of a payment of principal or interest on redemption) for payment more than 30 days after the Relevant Date except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Note on the last day of such period of 30 days; or

(ii)

289

(iii)

to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to such Directive.

(iv)

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Note (subject to the exclusions set out in (i), (ii) and (iii) above) which has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount. If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Note. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Note means the date on which payment in respect of such Note first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Noteholders that such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to principal or interest shall be deemed to include instalments of principal as well as any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 9 (Taxation) or any undertaking given in addition to or in substitution of this Condition 9 (Taxation) pursuant to the Trust Deed. (d) Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 9 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction.

290

10.

Prescription Claims for principal and interest on redemption shall become void unless the relevant Note Certificates are surrendered for payment within ten years, and claims for interest due other than on redemption shall become void unless made within five years, of the appropriate Relevant Date.

11.

Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, give notice to the Bank that the Notes are and they shall become due and repayable at their principal amount together with accrued interest if any of the following events (each, an Event of Default) occurs and is continuing: (a) Non Payment the Bank fails to pay any amount of principal or interest in respect of the Notes when the same becomes due and payable and such default continues for a period of ten Business Days; or (b) Breach of Other Obligations the Bank is in default in the performance, or is otherwise in breach, of any covenant, obligation, undertaking or other agreement under the Senior Notes, the OID Notes, the Recovery Units or the Trust Deed (other than a default or breach specifically dealt with elsewhere in this Condition 11 (Events of Default)) and, where such default or breach is, in the opinion of the Trustee, capable of remedy, such default or breach is not remedied within 30 calendar days after notice thereof has been given to the Bank, by the Trustee, requiring the same to be remedied; or (c) Cross Default any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes (or becomes capable of being declared) due and payable prior to the due date for the payment thereof by reason of default of the Bank or the relevant Subsidiary (as the case may be), or is not paid when due nor within any originally applicable grace period, provided that the aggregate amount of, or commitment for, Financial Indebtedness referred to above exceeds U.S.$10,000,000 (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (d) Judgment Default any judgment, ruling, decree or surety bond for the payment of an aggregate amount of not less than U.S.$10,000,000 (or its equivalent in any other currency or currencies) is rendered or granted against and is binding on any member of the Group or any part of its assets and is neither paid when due nor within any originally applicable grace period provided; or (e) Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material

291

Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement or any step or procedure contemplated in paragraph (c) of the definition of Permitted Transaction; or (f) Creditors Process after the Restructuring Date, any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of not less than U.S.$10,000,000, and is not discharged or stayed within 45 days after commencement; or (g) Cessation of Business the Bank or any of its Material Subsidiaries suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business or its Banking Licence is revoked; or (h) Compulsory Acquisition the authority or ability of the Bank or any of its Material Subsidiaries to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction, vesting, divesting, compulsory acquisition or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets; or (i) Invalidity or Unenforceability (a) the validity of the Notes or any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter is contested by the Bank or the Bank denies its obligations under the Senior Notes, the OID Notes or the Subordinated Notes (whether by a general suspension of payments or a moratorium on the payment of debt or otherwise), the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter or it is or becomes unlawful for the Bank to perform or comply with all or any of its obligations set out in any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter, or all or any of the obligations of the Bank provided therein shall be or become unenforceable or invalid; or (b) the validity of the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter, is contested by the Bank or Samruk-Kazyna, or either of the Bank or Samruk-Kazyna denies or fails to perform its obligations within any applicable grace period as stated under the BTA Undertaking or the Samruk-Kazyna Undertaking (as the case may be) including, for the avoidance of doubt, in relation to the appointment or removal of any Creditor Director and, following the occurrence of any of those events specified in this

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Condition 11(i), the Trustee is of the opinion that such occurrence is materially prejudicial to the interests of the Noteholders. 12. Replacement of Notes If any Note is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. 13. Meetings of Noteholders; Modification and Waiver (a) Meetings of Noteholders The Trust Deed provides that all meetings of holders of the Notes will include holders of the KZT32,604,173,503 step up notes due 2018 (the KZT 2018 Notes) of the Bank and there shall be no provision for separate meetings of the holders of the Notes and of the holders of the KZT 2018 notes and that for purposes of determining a quorum and for voting purposes the KZT Notes shall be converted into U.S. Dollars at the Reference Rate applicable as at the date of issuance of the Notes. Accordingly, all references in this Condition 13 (Meetings of Noteholders; Modification and Waiver) to Notes and Noteholders shall be deemed to include the KZT 2018 Notes and the holders of such notes, as the case may be. The Trust Deed contains provisions for convening meetings of Noteholders to consider any matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than one tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the aggregate principal amount of the Notes for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Notes form a quorum (a special quorum resolution). A meeting to consider proposals to approve or reject a candidate nominated by any Noteholder or by the Bank, as the case may be, for the position of Creditor Director or to require the resignation of any Creditor Director (each, a Creditor Director matter) may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than 5 per cent. of the aggregate principal amount of the outstanding Notes and the quorum at any meeting convened to vote on a Creditor Director matter will be two or more persons being or representing not less than five per cent. of the aggregate principal amount of the Notes for the time being outstanding or, at any adjourned

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meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes for the time being outstanding so held or represented. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not. (b) Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of Noteholders who for the time being are entitled to receive notice of a meeting of the Noteholders under the Trust Deed, or (ii) if such Noteholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three quarters of the aggregate principal amount of the outstanding Notes. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders. (c) Modification Without Noteholders Consent The Trustee may, without the consent of the Noteholders, agree (i) to any modification of the Notes (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which, in the opinion of the Trustee, will not be materially prejudicial to the interests of Noteholders and (ii) to any modification of the Notes (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Noteholders, authorise or waive any proposed breach or breach of the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Noteholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Noteholders in accordance with Condition 14 (Notices). 14. Notices (a) To the Noteholders Notices to Noteholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Notes are listed on an Approved Stock Exchange4 (as defined in the Trust Deed) and the relevant Stock Exchange so requires, notices to the Noteholders shall be published in a leading newspaper having general circulation in the jurisdiction of the Approved Stock Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97, Dzholdasbekov str., md Samal-2, Almaty, 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department (or at such other addresses and for such other attentions as may have been notified to the Noteholders in accordance
4

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

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with Condition 14(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business. (c) To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business. 15. Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Noteholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Notes or for the performance by the Bank of its obligations under or in respect of the Notes or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including but not limited to those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Noteholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Noteholder shall be entitled to claim, from the Bank (in the case of a Noteholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders. (c) Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one fifth in principal amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such

295

certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions or the Trust Deed and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein. (d) Failure to Act No Noteholder may proceed directly against the Bank unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing. (e) Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, two separate notices shall be published in two leading newspapers one of which will have general circulation in the jurisdiction of the Approved Stock Exchange. (f) Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Noteholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Notes and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligations assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice

296

thereof shall be given by the Bank to the Noteholders in accordance with Condition 14 (Notices). 16. Further Issues The Bank may from time to time, without the consent of the Noteholders and in accordance with the Trust Deed, create and issue further Notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest). 17. Currency Indemnity If any sum due from the Bank in respect of the Notes under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Notes or in respect thereof under the Trust Deed, the Bank shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action. 18. Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act. 19. Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Notes, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law. (b) Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Notes or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a

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national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. (c) Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 19(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts of England, as more particularly described in Condition 19(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s). (d) Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 19(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Noteholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 19(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law. (e) Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum. (f) Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law. (g) Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 19(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes.

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(h)

Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

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Annex 2 Terms and Conditions of the Dollar OID Notes The following is the text of the terms and conditions of the Dollar OID Notes which, subject to amendment and completion, will be endorsed on each Note Certificate pertaining to the Dollar OID Notes and will be attached and (subject to the provisions thereof) apply to the relevant Global Note: The U.S.$384,848,130 Fully Accreted Principal Amount of Original Discount Notes due 2021 (the Dollar OID Notes or the Notes, which expression includes any further notes issued pursuant to Condition 17 (Further Issues) and forming a single series therewith) of BTA BANK JSC (the Bank), are (a) constituted by, and subject to, and have the benefit of a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Notes (Noteholders) under the Trust Deed) and (b) the subject of an agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon as principal paying and transfer agent (the Principal Paying and Transfer Agent, which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Notes), Joint-Stock Company Citibank Kazakhstan as Kazakhstan paying and transfer agent (the Kazakhstan Paying and Transfer Agent, which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes) and The Bank of New York Mellon (Luxembourg) S.A. as registrar (the Registrar, which expression shall include any successor registrar appointed from time to time in connection with the Notes). Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The Noteholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. Terms defined in the Trust Deed shall, unless otherwise defined herein or the context requires otherwise, bear the same meanings herein. 1. Definitions In these Conditions: Accreted Principal Amount has the meaning provided in Condition 7(a) (Accretion of Principal) and in respect of any Note means the relevant Noteholders pro rata shares of the aggregate Accreted Principal Amount of the Notes; Fully Accreted Principal Amount means U.S.$384,848,130, being an amount equal to the principal amount of Designated Financial Indebtedness (as defined in the Information Memorandum) in respect of which the Notes are initially allocated, and Fully Accreted Principal Amount in respect of any Note shall mean the relevant Noteholders pro rata share thereof; Initial Principal Amount means U.S.$175,760,143, being an amount equal to 45.67% of the principal of and agreed interest on the Designated Financial Indebtedness in respect of which the Notes are initially allocated; and

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Net Accreted Principal Amount has the meaning provided in Condition 9(a) (Scheduled Redemption) and in respect of any Note means the holders pro rata share of the aggregate Net Accreted Principal Amount of the Notes. 2. Status The obligations under the Notes are unconditional, direct, unsubordinated and, subject as provided in Clause 8.1(c)(xxiv) (Negative Pledge) of the Trust Deed, unsecured obligations of the Bank, and will at all times rank at least pari passu amongst themselves and pari passu in right of payment with all other present and future (except as provided therein) unsubordinated, obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. 3. Form and Title (a) Form The Notes are in registered form, without interest coupons attached, and shall be serially numbered. Each Note shall be issued in respect of a specified Fully Accreted Principal Amount, with a minimum Fully Accreted Principal Amount of $100. (b) Title Title to the Notes will pass by transfer and registration as described in Conditions 4 (Registration) and 5 (Transfers). The holder (as defined below) of any Notes shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof) and no person shall be liable for so treating such holder. In these Conditions, holder means the person in whose name a Note is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holders and Noteholders shall be construed accordingly. 4. Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Notes in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. 5. Transfers (a) Notes shall be transferable in integral multiples of U.S.$1 of Fully Accreted Principal Amount. Subject to Conditions 5(d) and 5(e), a Note may be transferred in whole or in part upon surrender of the relevant Note Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of any Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided that a Note may not be transferred in part unless both the Fully Accreted Principal Amount being transferred and that being retained is not less than U.S.$100. Transfer Forms are available from any Agent and the Bank upon the request of any holder.

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(b)

Within five business days of the surrender of a Note Certificate in accordance with Condition 5(a), the Registrar will register the transfer in question and deliver a new Note Certificate of alike principal amount to the Notes transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 5(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. Transfer of a Note will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. Noteholders may not require transfers to be registered during the period of 15 calendar days ending on the due date for any payment of principal or interest in respect of the Notes. All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of the Notes scheduled to the Agency Agreement, a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.

(c)

(d)

(e)

6.

Covenants The Noteholders will have the benefit of certain covenants contained in the Trust Deed relating to, amongst other things, restrictions on the creation of security interests, incurrence of indebtedness, conduct of business with related parties, acquisition and incorporation of subsidiaries, ability to enter into mergers and joint ventures, disposal of assets and payment of dividends.

7.

Interest and Principal (a) Accretion of Principal The Initial Principal Amount in respect of the Notes shall accrete by an amount of U.S.$9,503,999 on each Interest Payment Date. Accordingly, the Accreted Principal Amount of the Notes at any time means the Initial Principal Amount together with the sum of all such accretions up to (and including) that time so that as from (and including) the last scheduled Interest Payment Date, the Accreted Principal Amount of the Notes shall equal their Fully Accreted Principal Amount.

302

The aggregate amounts of principal and interest payable on any Interest Payment Date and the aggregate Accreted Principal Amount and the aggregate Net Accreted Principal Amount on any Interest Payment date in relation to the Notes and in respect of the Interest Period following the relevant Interest Payment Date shall be as set out in the following table: Relevant Interest Payment Date 1 July 2010 1 January 2011 1 July 2011 1 January 2012 1 July 2012 1 January 2013 1 July 2013 1 January 2014 1 July 2014 1 January 2015 1 July 2015 1 January 2016 1 July 2016 1 January 2017 1 July 2017 1 January 2018 1 July 2018 1 January 2019 1 July 2019 1 January 2020 1 July 2020 1 January 2021 1 July 2021 (b) Aggregate Accreted Principal Amount 175,760,143 185,264,142 194,768,142 204,272,141 213,776,141 223,280,140 232,784,139 242,288,139 251,792,138 261,296,138 270,800,137 280,304,137 289,808,136 299,312,135 Aggregate Principal Repayments Aggregate Net Accreted Principal Amount Interest paid on the relevant Interest Payment Date

308,816,135 318,320,134 327,824,134 337,328,133 346,832,132 356,336,132 365,840,131 375,344,131 384,848,130

Interest Accrual

38,602,017 39,959,731 41,543,731 43,444,531 45,820,531 48,988,530 53,740,530 72,748,529

175,760,143 185,264,142 194,768,142 204,272,141 213,776,141 223,280,140 232,784,139 242,288,139 251,792,138 261,296,138 270,800,137 280,304,137 289,808,136 299,312,135 308,816,135 279,718,117 249,262,386 217,222,654 183,282,123 146,965,591 107,481,060 63,244,530 -

3,251,562 3,427,386 3,603,210 3,779,034 3,954,858 4,130,682 4,306,506 4,482,330 4,658,154 4,833,978 5,009,802 5,185,626 5,361,450 5,537,274 5,095,466 4,615,348 4,112,829 3,584,173 3,024,155 2,424,932 1,773,437 1,043,534

The Notes shall bear interest on their Net Accreted Principal Amount from 1 July 2010 up to but excluding 1 July 2017 (the Amortisation Date) at the rate of 3.70 per cent. per annum (the Initial Rate of Interest) and thereafter until 1 July 2021 at the rate of 3.30 per cent. per annum (the Subsequent Rate of Interest). Interest is payable in arrear on 1 January and 1 July in each year commencing on 1 January 2011 (each, an Interest Payment Date and with the first Interest Payment Date falling on 1 January 2011), subject as provided in Condition 8 (Payments). Each period beginning on (and including) 1 July 2010 or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period. (c) Cessation of Interest Each Note will cease to bear interest from the due date for final redemption unless payment of principal is improperly withheld or refused, in which case it will continue to bear interest at such rate (as well after as before judgment) until whichever is the

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earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying and Transfer Agent or the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment). (d) Calculation of Interest for an Interest Period The amount of interest payable in respect of each Note for any Interest Period shall be calculated by applying the Initial or the Subsequent Rate of Interest (as the case may be) to the Net Accreted Principal Amount of such Note applicable to the relevant Interest Period, dividing the product by two and rounding the resulting figure to down to the nearest cent. (e) Calculation of Interest for any Other Period If interest is required to be calculated for any period other than an Interest Period, it will be calculated on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed. The determination of the amount of interest payable under Condition 7(d) (Calculation of Interest for an Interest Period) by the Principal Paying and Transfer Agent shall, in the absence of manifest error, be binding on all parties. 8. Payments (a) Entitlements of Noteholders Each holder of Notes shall be entitled to its pro rata share of principal or interest paid on the Notes based upon the ratio which the Fully Accreted Principal Amount of Notes held by such holder bears to the Fully Accreted Principal Amount of all the Notes. (b) Principal Payments of principal in respect of the Notes will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or of any Agent. (c) Interest Payments of interest due on an Interest Payment Date will be made to the Persons shown in the Register at the close of business on the Record Date for such Interest Payment Date, subject to (in the case of interest payable on redemption) upon surrender (or, in the case of partial payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or any Agent. Payments of all amounts other than as provided in Condition 8(b) (Principal) and this Condition 8(c) will be made as provided in these Conditions. (d) Record Date Each payment in respect of a Note will be made to the Person shown as the holder in the Register at the close of business (in the place of the Registrars specified office) on the business day before the due date for such payment (the Record Date).

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(e)

Payments Each payment in respect of the Notes pursuant to Conditions 8(b) (Principal) and 8(c) (Interest) will be made by transfer to a United States Dollar account maintained by the payee with a bank in New York City. Amounts payable shall be rounded down to the nearest cent.

(f)

Payments Subject to Fiscal Laws All payments in respect of the Notes are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 10 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of such payments.

(g)

Payment on a Business Day If the due date for payment of any amount in respect of any Note is not a business day in the place of the Specified Offices of the Principal Paying Agent, the holder thereof shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 8(g), business day means any day on which banks are open for business (including dealings in foreign currencies) in New York City, London and, in the case of surrender (or, in the case of partial payment only, endorsement) of a Note Certificate, in the place in which the Note Certificate is surrendered (or, as the case may be, endorsed).

(h)

Agents In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders. The Bank reserves the right (with prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 15 (Notices).

9.

Redemption and Purchase (a) Scheduled Redemption Unless previously redeemed or purchased and cancelled as provided below, subject as provided in Condition 8 (Payments), the Notes will be redeemed in eight semi-annual instalments5, with the first such instalment being payable on the Interest Payment Date that falls in January 2018 and the remaining instalments being payable on each Interest Payment Date thereafter. As provided in Condition 7(a) (Accretion of Principal), the outstanding principal amount of each instalment of principal shall be equal to the applicable Net Accreted Principal Amount as at the day prior to the

For the convenience of the reader of this Prospectus, the Bank will inform the Luxembourg Stock Exchange of the amount of each instalment once the amount is known and in any event prior to the payment of such instalment.

305

relevant Interest Payment Date divided by the number of instalments (including the one in question) remaining until (and including) the last instalment. The outstanding Accreted Principal Amount of each Note (as accreted in accordance with Condition 7(a) (Accretion of Principal)) shall be reduced by any repayment of principal in accordance with these Conditions with effect from the related instalment payment date, such reduced Accreted Principal Amount being referred to herein as the Net Accreted Principal Amount, unless the payment of the instalment is improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such instalment amount. Each Note shall be finally redeemed on due payment of the final instalment amount. (b) Redemption for Tax Reasons The Notes may be redeemed at the option of the Bank in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Noteholders (which notice shall be irrevocable) at their Fully Accreted Principal Amount, together with interest accrued but unpaid to the date fixed for redemption, if, immediately before giving such notice, the Bank satisfies the Trustee that (i) the Bank will become obliged to pay, on the next date on which any amount would be payable with respect to the Notes, additional amounts, as provided or referred to in Condition 10 (Taxation), to any greater extent than would have been required had such a payment been required to be made on the date of the Claimants Meeting, as a result of any change in, or amendment to, the laws or regulations of the Republic of Kazakhstan or any political subdivision or any authority thereof having power to tax therein, or any change in the application or official interpretation of such laws or regulations (including a ruling by a court of competent jurisdiction, but excluding any such change or amendment which obliges the Bank to pay additional amounts in respect of Notes held by or on behalf of a person resident, domiciled or organised in the Republic of Kazakhstan), which change or amendment becomes effective on or after the date of the Claimants Meeting and (ii) such obligation cannot be avoided by the Bank taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Bank would be obliged to pay such additional amounts if a payment in respect of the Notes were then due. Prior to the publication of any notice of redemption pursuant to this Condition 9(b), the Bank shall deliver or procure that there is delivered to the Trustee a certificate signed by two directors of the Bank stating that the Bank is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Bank so to redeem have occurred and an opinion in form and substance satisfactory to the Trustee of independent legal advisers of recognised standing to the effect that the Bank has or will become obliged to pay such additional amounts as a result of such change or amendment. The Trustee shall be entitled to accept, without further enquiry, such certificate and opinion as sufficient evidence of the satisfaction of the circumstances set out in (i) and (ii) above, in which event these shall be conclusive and binding on the Noteholders. Upon the expiry of any such notice as is referred to in this Condition 9(b), the Bank shall be bound to redeem the Notes in accordance with this Condition 9(b). (c) Redemption at the Option of the Noteholders Unless the Noteholders have previously by an Extraordinary Resolution (as defined in the Trust Deed) disapplied this Condition 9(c) (Redemption at the Option of the Noteholders) in relation to the applicable Relevant Event, following the occurrence of a Relevant Event (as defined below), the Bank shall promptly, and in any event within five Business Days thereafter, give notice (the Relevant Event Notice) of

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such Relevant Event to the Noteholders (with a copy to the Trustee) in accordance with Condition 15 (Notices), which notice shall specify the date (which shall not be less than 30 days nor more than 60 days after the Relevant Event Notice (the Put Settlement Date)), on which the Bank shall, at the option of the holder of any Note, redeem such Note at its Net Accreted Principal Amount together with interest accrued and unpaid to the Put Settlement Date. In order to exercise the option contained in this Condition 9(c), the holder of a Note must, not less than 15 days before the Put Settlement Date, deposit with any Paying Agent the relevant Note Certificate and a duly completed put option notice (a Put Option Notice) in the form obtainable from any Paying Agent. No Note Certificate, once deposited with a duly completed Put Option Notice in accordance with this Condition 9(c), may be withdrawn; provided, however, that if, prior to the Put Settlement Date, any such Note becomes immediately due and payable or, upon due presentation of any such Note Certificate on the Put Settlement Date, payment of the redemption monies is improperly withheld or refused, such Note Certificate shall, without prejudice to the exercise of the Put Option, be returned to the holder by uninsured first class mail (airmail if overseas) at such address as may have been given by such Noteholder in the relevant Put Option Notice. The Trustee shall not be responsible for monitoring whether or not any Relevant Event has occurred and shall be entitled to assume, unless it receives written notice to the contrary, that no Relevant Event has occurred. In the event that a Relevant Event occurs but no Relevant Event Notice is given by the Bank, the Bank shall be deemed to have given a Relevant Event Notice specifying a Put Settlement Date on the date which is 60 days after the occurrence of the Relevant Event, unless such day is not a Business Day, in which event the Put Settlement Date shall be the immediately following Business Day thereafter. (d) Purchase Subject to the covenant set out in the Trust Deed, entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, the Bank may at any time purchase or procure others to purchase for its account the Notes in the open market or otherwise and at any price. Notes so purchased may be held or resold (provided that such resale is in compliance with all applicable laws) or surrendered for cancellation at the option of the Bank, in compliance with Condition 9(e) (Cancellation of Notes). Any Notes so purchased, while held by or on behalf of the Bank or any member of the Group shall not entitle the holder to vote at any meeting of Noteholders and shall not be deemed to be outstanding for the purposes of calculating quorum at such meetings. (e) Cancellation of Notes Unless otherwise permitted pursuant to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, all Notes which are redeemed or surrendered for cancellation pursuant to this Condition 9 (Redemption and Purchase) shall be cancelled and may not be reissued or resold. (f) Definitions As used in this Condition 9 (Redemption and Purchase): acting in concert means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the direct or indirect acquisition by any member or members of such group of shares in the Bank or of any of the assets of any member or members of the group, to obtain or consolidate Control of the Bank.

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Affiliate of a person means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, that person. Business Day means a day other than a Saturday or Sunday on which commercial banks are open for business (including dealings in foreign currencies) in London and New York. Change of Control means: (a) Samruk-Kazyna ceases to control the Bank (other than where it ceases to control the Bank (a) by transfer of control to a Permitted Transferee or (b) in connection with a Secondary Public Offering), where control of the Bank means: (i) the holding beneficially of more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or the power (whether by ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Bank; or

(ii)

(b)

Any person or group of persons acting in concert (other than where (a) such person or persons are Permitted Transferees or (b) in connection with a Secondary Public Offering) gains control of the Bank where control means the power (whether by ownership of shares, proxy, contract, agency or otherwise) to: (i) (ii) appoint or remove all, or the majority, of the directors or other equivalent officers of the Bank; or give directions with respect to the operating and/or financial policies of the Bank with which the directors or other equivalent officers of the Bank are obliged to comply,

provided that any agreement whereby management of the Bank is transferred to a third party (the manager) that does not, in conjunction with any acquisition of shares in the Bank by such manager or its Affiliates (whether or not occurring at the same time), cause the government of the Republic of Kazakhstan to cease to own more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), will not constitute a Change of Control if (a) the Trustee and the Creditor Directors have been provided with an opinion in form and substance satisfactory to them of independent legal advisers of recognised standing to the effect that the management agreement, in conjunction with any acquisition of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), does not cause the government of the Republic of Kazakhstan (directly or indirectly) to cease to control the Bank or to have majority economic risk and/or benefit in the Bank and continues to allow the government of the Republic of Kazakhstan (directly or indirectly) to retain the sole right to exercise its rights as majority shareholders (including in

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relation to the appointment of directors), (b) the terms of the management agreement have been approved by a Qualified Majority and (c) the manager is a Permitted Transferee. OECD means the Organisation for Economic Co-operation and Development. Permitted Transferee means a person which: (A)(i) is a bank or other financial institution subject to financial regulation in Russia, China, Hong Kong, Singapore or an OECD country; or (ii) is a sovereign wealth fund from Russia, China, Hong Kong, Singapore or an OECD country or any other country which may otherwise be approved by a Qualified Majority of the Board; (B) has, in the case of a bank or other financial institution, a minimum credit rating from S&P of at least BBB or equivalent from Moodys or Fitch; (C) has, in the case of a bank or other financial institution, a minimum paid up share capital and reserves of at least U.S.$7 billion or, in the case of a sovereign wealth fund, assets of at least U.S.$7 billion; and (D) is not affiliated with any of the present or former shareholders or managers of the Bank. Relevant Event means: (a) (b) a Change of Control; and/or any disposals (excluding those disposals made in the ordinary course of trading) in any financial year of more than 6.5 per cent. of the Groups total gross assets (determined by reference to the Banks most recent consolidated financial statements calculated in accordance with IFRS).

Secondary Public Offering means any sale or public offering of any equity security (including any preference shares) of the Bank or receipts or similar securities representing such equity securities by way of flotation, public placement, listing or other public offering on any recognised international exchange. 10. Taxation (a) Taxation All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Note: (i) presented for payment by or on behalf of a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Note;

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(ii)

presented (in the case of a payment of principal or interest on redemption) for payment more than 30 days after the Relevant Date except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Note on the last day of such period of 30 days; to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to such Directive.

(iii)

(iv)

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Note (subject to the exclusions set out in (i), (ii) and (iii) above) which has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount. If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Note. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Note means the date on which payment in respect of such Note first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Noteholders that such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to principal or interest shall be deemed to include instalments of principal as well as any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 10 (Taxation) or any undertaking given in addition to or in substitution of this Condition 10 (Taxation) pursuant to the Trust Deed.

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(d)

Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 10 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction.

11.

Prescription Claims for principal and interest on redemption shall become void unless the relevant Note Certificates are surrendered for payment within ten years, and claims for interest due other than on redemption shall become void unless made within five years, of the appropriate Relevant Date.

12.

Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, give notice to the Bank that the Notes are and shall become due and repayable at their Net Accreted Principal Amount together with accrued interest if any of the following events (each, an Event of Default) occurs and is continuing: (a) Non Payment the Bank fails to pay any amount of principal or interest in respect of the Notes when the same becomes due and payable and such default continues for a period of ten Business Days; or (b) Breach of Other Obligations the Bank is in default in the performance, or is otherwise in breach, of any covenant, obligation, undertaking or other agreement under the Senior Notes, the OID Notes, the Recovery Units or the Trust Deed (other than a default or breach specifically dealt with elsewhere in this Condition 12 (Events of Default)) and, where such default or breach is, in the opinion of the Trustee, capable of remedy, such default or breach is not remedied within 30 calendar days after notice thereof has been given to the Bank by the Trustee, requiring the same to be remedied; or (c) Cross Default any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes (or becomes capable of being declared) due and payable prior to the due date for the payment thereof by reason of default of the Bank or the relevant Subsidiary (as the case may be), or is not paid when due nor within any originally applicable grace period, provided that the aggregate amount of, or commitment for, Financial Indebtedness referred to above exceeds U.S.$10,000,000 (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (d) Judgment Default any judgment, ruling, decree or surety bond for the payment of an aggregate amount of not less than U.S.$10,000,000 (or its equivalent in any other currency or currencies) is rendered or granted against and is binding on any member of the Group or any part of its assets and is neither paid when due nor within any originally applicable grace period provided; or

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(e)

Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement or any step or procedure contemplated in paragraph (c) of the definition of Permitted Transaction; or

(f)

Creditors Process after the Restructuring Date, any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of not less than U.S.$10,000,000, and is neither discharged nor stayed within 45 days after commencement; or

(g)

Cessation of Business the Bank or any of its Material Subsidiaries suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business or its Banking Licence is revoked; or

(h)

Compulsory Acquisition the authority or ability of the Bank or any of its Material Subsidiaries to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction, vesting, divesting, compulsory acquisition or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets; or

(i)

Invalidity or Unenforceability (a) the validity of the Notes or any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter is contested by the Bank or the Bank denies its obligations under the Senior Notes, the OID Notes or the Subordinated Notes (whether by a general suspension of payments or a moratorium on the payment of debt or otherwise), the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter or it is or becomes unlawful for the Bank to perform or comply with all or any of its obligations set out in any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the

312

Charter, or all or any of the obligations of the Bank provided therein shall be or become unenforceable or invalid; or (b) the validity of the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter, is contested by the Bank or Samruk-Kazyna, or either of the Bank or Samruk-Kazyna denies or fails to perform its obligations within any applicable grace period as stated under the BTA Undertaking or the Samruk-Kazyna Undertaking (as the case may be) including, for the avoidance of doubt, in relation to the appointment or removal of any Creditor Director and, following the occurrence of any of those events specified in this Condition 12(i), the Trustee is of the opinion that such occurrence is materially prejudicial to the interests of the Noteholders. 13. Replacement of Notes If any Note is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. 14. Meetings of Noteholders; Modification and Waiver (a) Meetings of Noteholders The Trust Deed provides that all meetings of holders of the Notes will include holders of the EUR437,110,856 Fully Accreted Principal Amount of Original Discount Notes due 2021 of the Bank (the EUR 2021 Notes) and there shall be no provision for separate meetings of holders of the Notes and of holders of the EUR 2021 Notes and that for purposes of determining a quorum and for voting purposes the EUR 2021 Notes shall be converted into U.S. Dollars at the applicable Reference Rate applicable as at the date of issuance of the Notes. Accordingly, all references in this Condition 14 (Meetings of Noteholders; Modification and Waiver) to Notes and Noteholders shall be deemed to include the EUR 2021 Notes and the holders of such notes as the case may be. The Trust Deed contains provisions for convening meetings of Noteholders to consider any matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than one tenth of the Fully Accreted Principal Amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the Fully Accreted Principal Amount of the Notes for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the Fully Accreted Principal Amount of the Notes for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate Fully Accreted Principal Amount

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of the outstanding Notes form a quorum (a special quorum resolution). A meeting to consider proposals to approve or reject a candidate nominated by any Noteholder or by the Bank, as the case may be, for the position of Creditor Director or to require the resignation of any Creditor Director (each, a Creditor Director matter) may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than five per cent. of the aggregate Fully Accreted Principal Amount of the outstanding Notes and the quorum at any meeting convened to vote on a Creditor Director matter will be two or more persons being or representing not less than five per cent. of the aggregate Fully Accreted Principal Amount of the Notes for the time being outstanding or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the Fully Accreted Principal Amount of the Notes for the time being outstanding so held or represented. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not. (b) Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of the Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed, or (ii) if such Noteholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three quarters of the aggregate Fully Accreted Principal Amount of the outstanding Notes. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders. (c) Modification Without Noteholders Consent The Trustee may, without the consent of the Noteholders, agree (i) to any modification of the Notes (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which in the opinion of the Trustee, will not be materially prejudicial to the interests of Noteholders and (ii) to any modification of the Notes (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Noteholders, authorise or waive any proposed breach or breach of the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Noteholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Noteholders in accordance with Condition 15 (Notices). 15. Notices (a) To the Noteholders Notices to Noteholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Notes are listed on an Approved Stock Exchange6 (as defined in the Trust Deed) and the
6

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

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relevant Stock Exchange so requires, notices to the Noteholders shall be published in a leading newspaper having general circulation in the jurisdiction of the Approved Stock Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97, Dzholdasbekov str., md Samal-2, Almaty, 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department (or at such other addresses and for such other attentions as may have been notified to the Noteholders in accordance with Condition 15(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business. (c) To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business. 16. Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Noteholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Notes or for the performance by the Bank of its obligations under or in respect of the Notes or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including but not limited to those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Noteholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Noteholder shall be entitled to claim, from the Bank (in the case of a Noteholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders.

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(c)

Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one fifth in Fully Accreted Principal Amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 12 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 12 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions or the Trust Deed and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein. (d) Failure to Act No Noteholder may proceed directly against the Bank unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing. (e) Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any

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Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, two separate notices shall be published in two leading newspapers one of which will have general circulation in the jurisdiction of the Approved Stock Exchange. (f) Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Noteholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Notes and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligations assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice thereof shall be given by the Bank to the Noteholders in accordance with Condition 15 (Notices). 17. Further Issues The Bank may from time to time, without the consent of the Noteholders and in accordance with the Trust Deed, create and issue further Notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest). 18. Currency Indemnity If any sum due from the Bank in respect of the Notes under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Notes or in respect thereof under the Trust Deed, the Bank shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action. 19. Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act. 20. Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Notes, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law.

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(b)

Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Notes or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply.

(c)

Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 20(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts of England, as more particularly described in Condition 20(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s).

(d)

Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 20(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Noteholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 20(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

(e)

Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum.

(f)

Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in

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writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law. (g) Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 20(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes. (h) Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

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Annex 3 Terms and Conditions of the Euro Original Issue Discount Notes The following is the text of the terms and conditions of the Euro Original Issue Discount Notes which, subject to amendment and completion, will be endorsed on each Note Certificate pertaining to the Euro Original Issue Discount Notes and will be attached and (subject to the provisions thereof) apply to the relevant Global Note: The EUR437,110,856 Fully Accreted Principal Amount of Original Discount Notes due 2021 (the Euro OID Notes or the Notes, which expression includes any further notes issued pursuant to Condition 17 (Further Issues) and forming a single series therewith) of BTA BANK JSC (the Bank), are (a) constituted by, and subject to, and have the benefit of a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Notes (Noteholders) under the Trust Deed) and (b) the subject of an agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon as principal paying and transfer agent (the Principal Paying and Transfer Agent, which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Notes), Joint-Stock Company Citibank Kazakhstan as Kazakhstan paying and transfer agent (the Kazakhstan Paying and Transfer Agent, which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes)and The Bank of New York Mellon (Luxembourg) S.A. as registrar (the Registrar, which expression shall include any successor registrar appointed from time to time in connection with the Notes). Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The Noteholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. Terms defined in the Trust Deed shall, unless otherwise defined herein or the context requires otherwise, bear the same meanings herein. 1. Definitions In these Conditions: Accreted Principal Amount has the meaning provided in Condition 7(a) (Accretion of Principal) and in respect of any Note means the relevant Noteholders pro rata shares of the aggregate Accreted Principal Amount of the Notes; Fully Accreted Principal Amount means EUR437,110,856, being an amount equal to the principal amount of Designated Financial Indebtedness (as defined in the Information Memorandum) in respect of which the Notes are initially allocated, and Fully Accreted Principal Amount in respect of any Note shall mean the relevant Noteholders pro rata share thereof; Initial Principal Amount means EUR199,628,531, being an amount equal to 45.67% of the principal of and agreed interest on the Designated Financial Indebtedness in respect of which the Notes are initially allocated; and

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Net Accreted Principal Amount has the meaning provided in Condition 9(a) (Scheduled Redemption) and in respect of any Note means the holders pro rata share of the aggregate Net Accreted Principal Amount of the Notes. 2. Status The obligations under the Notes are unconditional, direct, unsubordinated and, subject as provided in Clause 8.1(c)(xxiv) (Negative Pledge) of the Trust Deed, unsecured obligations of the Bank, and will at all times rank at least pari passu amongst themselves and pari passu in right of payment with all other present and future (except as provided therein) unsubordinated, obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law. 3. Form and Title (a) Form The Notes are in registered form, without interest coupons attached, and shall be serially numbered. Each Note shall be issued in respect of a specified Fully Accreted Principal Amount, with a minimum Fully Accreted Principal Amount of EUR 100. (b) Title Title to the Notes will pass by transfer and registration as described in Conditions 4 (Registration) and 5 (Transfers). The holder (as defined below) of any Notes shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof) and no person shall be liable for so treating such holder. In these Conditions, holder means the person in whose name a Note is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holders and Noteholders shall be construed accordingly. 3. Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Notes in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. 5. Transfers (a) Notes shall be transferable in integral multiples of EUR 1 of Fully Accreted Principal Amount. Subject to Conditions 5(d) and 5(e), a Note may be transferred in whole or in part upon surrender of the relevant Note Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of any Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided that a Note may not be transferred in part unless both the Fully Accreted Principal Amount being transferred and that being retained is not less than EUR 100. Transfer Forms are available from any Agent and the Bank upon the request of any holder.

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(b)

Within five business days of the surrender of a Note Certificate in accordance with Condition 5(a), the Registrar will register the transfer in question and deliver a new Note Certificate of alike principal amount to the Notes transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 5(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. Transfer of a Note will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. Noteholders may not require transfers to be registered during the period of 15 calendar days ending on the due date for any payment of principal or interest in respect of the Notes. All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of the Notes scheduled to the Agency Agreement, a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.

(c)

(d)

(e)

6.

Covenants The Noteholders will have the benefit of certain covenants contained in the Trust Deed relating to, amongst other things, restrictions on the creation of security interests, incurrence of indebtedness, conduct of business with related parties, acquisition and incorporation of subsidiaries, ability to enter into mergers and joint ventures, disposal of assets and payment of dividends.

7.

Interest and Principal (a) Accretion of Principal The Initial Principal Amount in respect of the Notes shall accrete by an amount of EUR10,794,651 on each Interest Payment Date. Accordingly, the Accreted Principal Amount of the Notes at any time means the Initial Principal Amount together with the sum of all such accretions up to (and including) that time so that as from (and including) the last scheduled Interest Payment Date, the Accreted Principal Amount of the Notes shall equal their Fully Accreted Principal Amount. The aggregate amounts of principal and interest payable on any Interest Payment Date and the aggregate Accreted Principal Amount and the aggregate Net Accreted Principal Amount on any Interest Payment Date in relation to the Notes and in respect of the Interest Period following the relevant Interest Payment Date shall be as set out in the following table:

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Relevant Interest Payment Date 1 July 2010 1 January 2011 1 July 2011 1 January 2012 1 July 2012 1 January 2013 1 July 2013 1 January 2014 1 July 2014 1 January 2015 1 July 2015 1 January 2016 1 July 2016 1 January 2017 1 July 2017 1 January 2018 1 July 2018 1 January 2019 1 July 2019 1 January 2020 1 July 2020 1 January 2021 1 July 2021 (b)

Aggregate Accreted Principal Amount 199,628,531 210,423,182 221,217,833 232,012,484 242,807,136 253,601,787 264,396,438 275,191,089 285,985,740 296,780,391 307,575,042 318,369,694 329,164,345 339,958,996 350,753,647 361,548,298 372,342,949 383,137,600 393,932,251 404,726,903 415,521,554 426,316,205 437,110,856 Interest Accrual

Aggregate Principal Repayments

43,844,206 45,386,299 47,185,407 49,344,338 52,043,000 55,641,217 61,038,543 82,627,845

Aggregate Net Accreted Principal Amount 199,628,531 210,423,182 221,217,833 232,012,484 242,807,136 253,601,787 264,396,438 275,191,089 285,985,740 296,780,391 307,575,042 318,369,694 329,164,345 339,958,996 350,753,647 317,704,092 283,112,444 246,721,688 208,172,002 166,923,652 122,077,086 71,833,194 -

Interest paid on the relevant Interest Payment Date 3,134,167 3,303,644 3,473,120 3,642,596 3,812,072 3,981,548 4,151,024 4,320,500 4,489,976 4,659,452 4,828,928 4,998,404 5,167,880 5,337,356 4,805,325 4,352,546 3,878,640 3,380,087 2,851,956 2,286,854 1,672,456 984,114

The Notes shall bear interest on their Net Accreted Principal Amount from 1 July 2010 up to but excluding 1 July 2017 (the Amortisation Date) at the rate of 3.14 per cent. per annum (the Initial Rate of Interest) and thereafter until 1 July 2021 at the rate of 2.74 per cent. per annum (the Subsequent Rate of Interest). Interest is payable in arrear on 1 January and 1 July in each year commencing on 1 January 2011 (each, an Interest Payment Date and with the first Interest Payment Date falling on 1 January 2011), subject as provided in Condition 8 (Payments). Each period beginning on (and including) 1 July 2010 or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period. (c) Cessation of Interest Each Note will cease to bear interest from the due date for final redemption unless payment of principal is improperly withheld or refused, in which case it will continue to bear interest at such rate (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying and Transfer Agent or the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment). (d) Calculation of Interest for an Interest Period The amount of interest payable in respect of each Note for any Interest Period shall be calculated by applying the Initial or the Subsequent Rate of Interest (as the case may

323

be) to the Net Accreted Principal Amount of such Note applicable to the relevant Interest Period, dividing the product by two and rounding the resulting figure to down to the nearest cent. (e) Calculation of Interest for any Other Period If interest is required to be calculated for any period other than an Interest Period, it will be calculated on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed. The determination of the amount of interest payable under Condition 7(d) (Calculation of Interest for an Interest Period) by the Principal Paying and Transfer Agent shall, in the absence of manifest error, be binding on all parties. 8. Payments (a) Entitlements of Noteholders Each holder of Notes shall be entitled to its pro rata share of principal or interest paid on the Notes based upon the ratio which the Fully Accreted Principal Amount of Notes held by such holder bears to the Fully Accreted Principal Amount of all the Notes. (b) Principal Payments of principal in respect of the Notes will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or of any Agent. (c) Interest Payments of interest due on an Interest Payment Date will be made to the Persons shown in the Register at the close of business on the Record Date for such Interest Payment Date, subject to (in the case of interest payable on redemption) upon surrender (or, in the case of partial payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or any Agent. Payments of all amounts other than as provided in Condition 8(b) (Principal) and this Condition 8(c) will be made as provided in these Conditions. (d) Record Date Each payment in respect of a Note will be made to the Person shown as the holder in the Register at the close of business (in the place of the Registrars specified office) on the business day before the due date for such payment (the Record Date). (e) Payments Each payment in respect of the Notes pursuant to Conditions 8(b) (Principal) and 8(c) (Interest) will be made by transfer to a Euro account maintained by the payee with a bank in a city in which banks have access to the TARGET System. Amounts payable shall be rounded down to the nearest cent. (f) Payments Subject to Fiscal Laws All payments in respect of the Notes are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions

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of Condition 10 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of such payments. (g) Payment on a Business Day If the due date for payment of any amount in respect of any Note is not a business day in the place of the Specified Offices of the Principal Paying Agent, the holder thereof shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 8(g), business day means any day on which banks are open for business (including dealings in foreign currencies) in the place of the Specified Offices of the Principal Paying Agent and which is a business day on which the TARGET System is operating and, in the case of surrender (or, in the case of partial payment only, endorsement) of a Note Certificate, in the place in which the Note Certificate is surrendered (or, as the case may be, endorsed). (h) Agents In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders. The Bank reserves the right (with prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 15 (Notices). 9. Redemption and Purchase (a) Scheduled Redemption Unless previously redeemed or purchased and cancelled as provided below, subject as provided in Condition 8 (Payments), the Notes will be redeemed in eight semi-annual instalments7, with the first such instalment being payable on the Interest Payment Date that falls in January 2018 and the remaining instalments being payable on each Interest Payment Date thereafter. As provided in Condition 7(a) (Accretion of Principal), the outstanding principal amount of each instalment of principal shall be equal to the applicable Net Accreted Principal Amount as at the day prior to the relevant Interest Payment Date divided by the number of instalments (including the one in question) remaining until (and including) the last instalment. The outstanding Accreted Principal Amount of each Note (as accreted in accordance with Condition 7(a) (Accretion of Principal)) shall be reduced by any repayment of principal in accordance with these Conditions with effect from the related instalment payment date, such reduced Accreted Principal Amount being referred to herein as the Net Accreted Principal Amount, unless the payment of the instalment is
7

For the convenience of the reader of this Prospectus, the Bank will inform the Luxembourg Stock Exchange of the amount of each instalment once the amount is known and in any event prior to the payment of such instalment.

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improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such instalment amount. Each Note shall be finally redeemed on due payment of the final instalment amount. (b) Redemption for Tax Reasons The Notes may be redeemed at the option of the Bank in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days notice to the Noteholders (which notice shall be irrevocable) at their Fully Accreted Principal Amount, together with interest accrued but unpaid to the date fixed for redemption, if, immediately before giving such notice, the Bank satisfies the Trustee that (i) the Bank will become obliged to pay, on the next date on which any amount would be payable with respect to the Notes, additional amounts, as provided or referred to in Condition 10 (Taxation), to any greater extent than would have been required had such a payment been required to be made on the date of the Claimants Meeting, as a result of any change in, or amendment to, the laws or regulations of the Republic of Kazakhstan or any political subdivision or any authority thereof having power to tax therein, or any change in the application or official interpretation of such laws or regulations (including a ruling by a court of competent jurisdiction, but excluding any such change or amendment which obliges the Bank to pay additional amounts in respect of Notes held by or on behalf of a person resident, domiciled or organised in the Republic of Kazakhstan), which change or amendment becomes effective on or after the date of the Claimants Meeting and (ii) such obligation cannot be avoided by the Bank taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Bank would be obliged to pay such additional amounts if a payment in respect of the Notes were then due. Prior to the publication of any notice of redemption pursuant to this Condition 9(b), the Bank shall deliver or procure that there is delivered to the Trustee a certificate signed by two directors of the Bank stating that the Bank is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Bank so to redeem have occurred and an opinion in form and substance satisfactory to the Trustee of independent legal advisers of recognised standing to the effect that the Bank has or will become obliged to pay such additional amounts as a result of such change or amendment. The Trustee shall be entitled to accept, without further enquiry, such certificate and opinion as sufficient evidence of the satisfaction of the circumstances set out in (i) and (ii) above, in which event these shall be conclusive and binding on the Noteholders. Upon the expiry of any such notice as is referred to in this Condition 9b), the Bank shall be bound to redeem the Notes in accordance with this Condition 9(b). (c) Redemption at the Option of the Noteholders Unless the Noteholders have previously by an Extraordinary Resolution (as defined in the Trust Deed) disapplied this Condition 9(c) (Redemption at the Option of the Noteholders) in relation to the applicable Relevant Event, following the occurrence of a Relevant Event (as defined below), the Bank shall promptly, and in any event within five Business Days thereafter, give notice (the Relevant Event Notice) of such Relevant Event to the Noteholders (with a copy to the Trustee) in accordance with Condition 15 (Notices), which notice shall specify the date (which shall not be less than 30 days nor more than 60 days after the Relevant Event Notice (the Put Settlement Date)), on which the Bank shall, at the option of the holder of any Note, redeem such Note at its Net Accreted Principal Amount together with interest accrued and unpaid to the Put Settlement Date. In order to exercise the option contained in this Condition 9(c), the holder of a Note must, not less than 15 days before the Put Settlement Date, deposit with any Paying Agent the relevant Note Certificate and a

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duly completed put option notice (a Put Option Notice) in the form obtainable from any Paying Agent. No Note Certificate, once deposited with a duly completed Put Option Notice in accordance with this Condition 9(c), may be withdrawn; provided, however, that if, prior to the Put Settlement Date, any such Note becomes immediately due and payable or, upon due presentation of any such Note Certificate on the Put Settlement Date, payment of the redemption monies is improperly withheld or refused, such Note Certificate shall, without prejudice to the exercise of the Put Option, be returned to the holder by uninsured first class mail (airmail if overseas) at such address as may have been given by such Noteholder in the relevant Put Option Notice. The Trustee shall not be responsible for monitoring whether or not any Relevant Event has occurred and shall be entitled to assume, unless it receives written notice to the contrary, that no Relevant Event has occurred. In the event that a Relevant Event occurs but no Relevant Event Notice is given by the Bank, the Bank shall be deemed to have given a Relevant Event Notice specifying a Put Settlement Date on the date which is 60 days after the occurrence of the Relevant Event, unless such day is not a Business Day, in which event the Put Settlement Date shall be the immediately following Business Day thereafter. (d) Purchase Subject to the covenant set out in the Trust Deed, entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, the Bank may at any time purchase or procure others to purchase for its account the Notes in the open market or otherwise and at any price. Notes so purchased may be held or resold (provided that such resale is in compliance with all applicable laws) or surrendered for cancellation at the option of the Bank, in compliance with Condition 9(e) (Cancellation of Notes). Any Notes so purchased, while held by or on behalf of the Bank or any member of the Group, shall not entitle the holder to vote at any meeting of Noteholders and shall not be deemed to be outstanding for the purposes of calculating quorum at such meetings. (e) Cancellation of Notes Unless otherwise permitted pursuant to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities, all Notes which are redeemed or surrendered for cancellation pursuant to this Condition 9 (Redemption and Purchase) shall be cancelled and may not be reissued or resold. (f) Definitions As used in this Condition 9 (Redemption and Purchase): acting in concert means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate, through the direct or indirect acquisition by any member or members of such group of shares in the Bank or of any of the assets of any member or members of the group, to obtain or consolidate Control of the Bank. Affiliate of a person means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, that person. Business Day means a day other than a Saturday or Sunday on which commercial banks are open for business (including dealings in foreign currencies) in London and New York and if on that day a payment in or a purchase of Euro is made which is also a TARGET Day.

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Change of Control means: (A) Samruk-Kazyna ceases to control the Bank (other than where it ceases to control the Bank (a) by transfer of control to a Permitted Transferee or (b) in connection with a Secondary Public Offering), where control of the Bank means: (i) the holding beneficially of more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or the power (whether by ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Bank, or

(ii)

(B)

Any person or group of persons acting in concert (other than where (a) such person or persons are Permitted Transferees or (b) in connection with a Secondary Public Offering) gains control of the Bank where control means the power (whether by ownership of shares, proxy, contract, agency or otherwise) to: (i) (ii) appoint or remove all, or the majority, of the directors or other equivalent officers of the Bank; or give directions with respect to the operating and/or financial policies of the Bank with which the directors or other equivalent officers of the Bank are obliged to comply,

provided that any agreement whereby management of the Bank is transferred to a third party (the manager) that does not, in conjunction with any acquisition of shares in the Bank by such manager or its Affiliates (whether or not occurring at the same time), cause the government of the Republic of Kazakhstan to cease to own more than 50 per cent. of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), will not constitute a Change of Control if (a) the Trustee and the Creditor Directors have been provided with an opinion in form and substance satisfactory to them of independent legal advisers of recognised standing to the effect that the management agreement, in conjunction with any acquisition of the issued share capital of the Bank (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital), does not cause the government of the Republic of Kazakhstan (directly or indirectly) to cease to control the Bank or to have majority economic risk and/or benefit in the Bank and continues to allow the government of the Republic of Kazakhstan (directly or indirectly) to retain the sole right to exercise its rights as majority shareholders (including in relation to the appointment of directors), (b) the terms of the management agreement have been approved by a Qualified Majority and (c) the manager is a Permitted Transferee. OECD means the Organisation for Economic Co-operation and Development. Permitted Transferee means a person which: (A)(i) is a bank or other financial institution subject to financial regulation in Russia, China, Hong Kong, Singapore or an OECD country; or (ii) is a sovereign wealth fund from Russia, China, Hong Kong, Singapore or an OECD country or any other country which may otherwise be approved by a Qualified Majority of the Board; (B) has, in the case of a bank or other

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financial institution, a minimum credit rating from S&P of at least BBB or equivalent from Moodys or Fitch; (C) has, in the case of a bank or other financial institution, a minimum paid up share capital and reserves of at least U.S.$7 billion or, in the case of a sovereign wealth fund, assets of at least U.S.$7 billion; and (D) is not affiliated with any of the present or former shareholders or managers of the Bank. Relevant Event means: (A) (B) a Change of Control; and/or any disposals (excluding those disposals made in the ordinary course of trading) in any financial year of more than 6.5 per cent. of the Groups total gross assets (determined by reference to the Banks most recent consolidated financial statements calculated in accordance with IFRS).

Secondary Public Offering means any sale or public offering of any equity security (including any preference shares) of the Bank or receipts or similar securities representing such equity securities by way of flotation, public placement, listing or other public offering on any recognised international exchange. 10. Taxation (a) Taxation All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Note: (i) presented for payment by or on behalf of a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Note; presented (in the case of a payment of principal or interest on redemption) for payment more than 30 days after the Relevant Date except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Note on the last day of such period of 30 days; to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such

(ii)

(iii)

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beneficiary, settlor, member or beneficial owner been the holder of the Note; or (iv) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to such Directive.

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Note (subject to the exclusions set out in (i), (ii) and (iii) above) which has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount. If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Note. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Note means the date on which payment in respect of such Note first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Noteholders that such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to principal or interest shall be deemed to include instalments of principal as well as any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 10 (Taxation) or any undertaking given in addition to or in substitution of this Condition 10 (Taxation) pursuant to the Trust Deed. (d) Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 10 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction. 11. Prescription Claims for principal and interest on redemption shall become void unless the relevant Note Certificates are surrendered for payment within ten years, and claims for interest due other than on redemption shall become void unless made within five years, of the appropriate Relevant Date.

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12.

Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, give notice to the Bank that the Notes are and shall become due and repayable at their Net Accreted Principal Amount together with accrued interest if any of the following events (each, an Event of Default) occurs and is continuing: (a) Non Payment the Bank fails to pay any amount of principal or interest in respect of the Notes when the same becomes due and payable and such default continues for a period of ten Business Days; or (b) Breach of Other Obligations the Bank is in default in the performance, or is otherwise in breach, of any covenant, obligation, undertaking or other agreement under the Senior Notes, the OID Notes, the Recovery Units or the Trust Deed (other than a default or breach specifically dealt with elsewhere in this Condition 12 (Events of Default)) and, where such default or breach is, in the opinion of the Trustee, capable of remedy, such default or breach is not remedied within 30 calendar days after notice thereof has been given to the Bank by the Trustee, requiring the same to be remedied; or (c) Cross Default any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes (or becomes capable of being declared) due and payable prior to the due date for the payment thereof by reason of default of the Bank or the relevant Subsidiary (as the case may be), or is not paid when due nor within any originally applicable grace period, provided that the aggregate amount of, or commitment for, Financial Indebtedness referred to above exceeds U.S.$10,000,000 (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (d) Judgment Default any judgment, ruling, decree or surety bond for the payment of an aggregate amount of not less than U.S.$10,000,000 (or its equivalent in any other currency or currencies) is rendered or granted against and is binding on any member of the Group or any part of its assets and is neither paid when due nor within any originally applicable grace period provided; or (e) Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material

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Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement or any step or procedure contemplated in paragraph (c) of the definition of Permitted Transaction; or (f) Creditors Process after the Restructuring Date, any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of not less than U.S.$10,000,000, and is neither discharged nor stayed within 45 days after commencement; or (g) Cessation of Business the Bank or any of its Material Subsidiaries suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business or its Banking Licence is revoked; or (h) Compulsory Acquisition the authority or ability of the Bank or any of its Material Subsidiaries to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction, vesting, divesting, compulsory acquisition or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets; or (i) Invalidity or Unenforceability (a) the validity of the Notes or any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter is contested by the Bank or the Bank denies its obligations under the Senior Notes, the OID Notes or the Subordinated Notes (whether by a general suspension of payments or a moratorium on the payment of debt or otherwise), the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter or it is or becomes unlawful for the Bank to perform or comply with all or any of its obligations set out in any document in relation to the Notes entered into pursuant to the Restructuring, the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter, or all or any of the obligations of the Bank provided therein shall be or become unenforceable or invalid; or (b) the validity of the BTA Undertaking, the Samruk-Kazyna Undertaking or the Charter, is contested by the Bank or Samruk-Kazyna, or either of the Bank or Samruk-Kazyna denies or fails to perform its obligations within any applicable grace period as stated under the BTA Undertaking or the Samruk-Kazyna Undertaking (as the case may be) including, for the avoidance of doubt, in relation to the appointment or removal of any Creditor Director and, following the occurrence of any of those events specified in this Condition 12(i), the Trustee is of the opinion that such occurrence is materially prejudicial to the interests of the Noteholders. 13. Replacement of Notes If any Note is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses

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incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. 14. Meetings of Noteholders; Modification and Waiver (a) Meetings of Noteholders The Trust Deed provides that all meetings of holders of the Notes will include holders of the U.S.$384,848,130 Fully Accreted Principal Amount of Original Discount Notes due 2021 of the Bank (the U.S. Dollar 2021 Notes) and there shall be no provision for separate meetings of holders of the Notes and of holders of the U.S. Dollar 2021 Notes and that for purposes of determining a quorum and for voting purposes the Notes shall be converted into U.S. Dollars at the applicable Reference Rate applicable as at the date of issuance of the Notes. Accordingly, all references in this Condition 14 (Meetings of Noteholders; Modification and Waiver) to Notes and Noteholders shall be deemed to include the U.S. Dollar 2021 Notes and the holders of such notes, as the case may be. The Trust Deed contains provisions for convening meetings of Noteholders to consider any matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than one tenth of the Fully Accreted Principal Amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the Fully Accreted Principal Amount of the Notes for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the Fully Accreted Principal Amount of the Notes for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate Fully Accreted Principal Amount of the outstanding Notes form a quorum (a special quorum resolution). A meeting to consider proposals to approve or reject a candidate nominated by any Noteholder or by the Bank, as the case may be, for the position of Creditor Director or to require the resignation of any Creditor Director (each, a Creditor Director matter) may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than five per cent. of the aggregate Fully Accreted Principal Amount of the outstanding Notes and the quorum at any meeting convened to vote on a Creditor Director matter will be two or more persons being or representing not less than five per cent. of the aggregate Fully Accreted Principal Amount of the Notes for the time being outstanding or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the Fully Accreted Principal Amount of the Notes for the time being outstanding so held or represented. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not.

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(b)

Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of the Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed, or (ii) if such Noteholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three quarters of the aggregate Fully Accreted Principal Amount of the outstanding Notes. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.

(c)

Modification Without Noteholders Consent The Trustee may, without the consent of the Noteholders, agree (i) to any modification of the Notes (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which in the opinion of the Trustee, will not be materially prejudicial to the interests of Noteholders and (ii) to any modification of the Notes (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Noteholders, authorise or waive any proposed breach or breach of the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Noteholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Noteholders in accordance with Condition 15 (Notices).

15.

Notices (a) To the Noteholders Notices to Noteholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Notes are listed on an Approved Stock Exchange8 (as defined in the Trust Deed) and the relevant Stock Exchange so requires, notices to the Noteholders shall be published in a leading newspaper having general circulation in the jurisdiction of the Approved Stock Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97, Dzholdasbekov str., md Samal-2, Almaty, 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department (or at such other addresses and for such other attentions as may have been notified to the Noteholders in accordance with Condition 15(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business.

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

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(c)

To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business.

16.

Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Noteholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Notes or for the performance by the Bank of its obligations under or in respect of the Notes or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including but not limited to those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Noteholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Noteholder shall be entitled to claim, from the Bank (in the case of a Noteholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders. (c) Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one fifth in Fully Accreted Principal Amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered

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into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 12 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 12 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions or the Trust Deed and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein. (d) Failure to Act No Noteholder may proceed directly against the Bank unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing. (e) Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, two separate notices shall be published in two leading newspapers one of which will have general circulation in the jurisdiction of the Approved Stock Exchange. (f) Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Noteholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Notes and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligations assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice thereof shall be given by the Bank to the Noteholders in accordance with Condition 15 (Notices).

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17.

Further Issues The Bank may from time to time, without the consent of the Noteholders and in accordance with the Trust Deed, create and issue further Notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest).

18.

Currency Indemnity If any sum due from the Bank in respect of the Notes under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Notes or in respect thereof under the Trust Deed, the Bank shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action.

19.

Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act.

20.

Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Notes, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law. (b) Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Notes or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply.

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(c)

Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 20(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts of England, as more particularly described in Condition 20(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s).

(d)

Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 20(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Noteholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 20(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

(e)

Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum.

(f)

Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law.

(g)

Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 20(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes.

(h)

Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of

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execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

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Annex 4 Terms and Conditions of the Dollar Subordinated Notes The following is the text of the terms and conditions of the Dollar Subordinated Notes which, subject to amendment and completion, will be endorsed on each Note Certificate pertaining to the Subordinated Dollar Notes and will be attached and (subject to the provisions thereof) apply to the relevant Global Note: The U.S.$496,631,368 7.2 per cent. notes due 2025 (the Dollar Subordinated Notes or the Notes, which expression includes any further notes issued pursuant to Condition 16 (Further Issues) and forming a single series therewith) of BTA BANK JSC (the Bank) are (a) constituted by, and subject to, and have the benefit of a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Notes (Noteholders) under the Trust Deed) and (b) the subject of an agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon as principal paying and transfer agent (the Principal Paying and Transfer Agent; which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Notes), Joint-Stock Company Citibank Kazakhstan (the Kazakhstan Paying and Transfer Agent; which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes) and The Bank of New York Mellon (Luxembourg) S.A. as registrar (the Registrar, which expression shall include any successor registrar appointed from time to time in connection with the Notes). Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The Noteholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. Terms defined in the Trust Deed shall, unless otherwise defined herein or the context requires otherwise, bear the same meanings herein. 1. Status It is the intention of the Bank that the Notes be regarded as Tier 2 capital for the purposes of the FMSA Guidance. Subject to exceptions provided by mandatory applicable law, the payment obligations under the Notes constitute direct, unconditional, unsecured and subordinated obligations of the Bank and shall, in case of (i) the bankruptcy in the Republic of Kazakhstan (bankrotstvo) of the Bank; (ii) the Bank being granted (provisional) suspension of payments in the Republic of Kazakhstan (moratoriy na udovletvoreniye zadolzhennosti) (such situation hereinafter being referred to as a Moratorium); or (iii) dissolution of the Bank in the Republic of Kazakhstan (likvidatsiya)) rank: (A) subordinate and junior only to present and future indebtedness of the Bank which by or under its terms ranks senior, or does not rank subordinate to, any indebtedness or other obligations of the Bank; (B) pari passu amongst themselves and with any other present and future indebtedness which ranks by or under its own terms or otherwise pari passu with subordinated indebtedness or other obligations of the Bank; and (C) senior to equity securities of the Bank and to any other present and future

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indebtedness which ranks by or under its own terms or otherwise, subordinate or junior to the Notes of the Bank. By virtue of such subordination (i) payments to holders of Notes will, in the case of bankruptcy or dissolution of the Bank or in the event of a Moratorium with respect to the Bank, only be made after all payment obligations of the Bank ranking senior to such Notes have been satisfied; (ii) any right of set-off by a holder of Notes in respect of any amount owed to such holder by the Bank under or in connection with such Notes shall be excluded; and (iii) each holder of Notes shall, by virtue of being the holder of such Notes, be deemed to have waived all such rights of set-off. 2. Form, Denomination and Title (a) Form and Denomination The Notes are in registered form, without interest coupons attached, and shall be serially numbered. Notes shall be issued in denominations of U.S.$1 and integral multiples of U.S.$1 in excess thereof (each denomination an authorised denomination). (b) Title Title to the Notes will pass by transfer and registration as described in Conditions 3 (Registration) and 4 (Transfers). The holder (as defined below) of any Notes shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof) and no person shall be liable for so treating such holder. In these Conditions, holder means the person in whose name a Note is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holders and Noteholders shall be construed accordingly. 3. Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Notes in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. 4. Transfers (a) Subject to Conditions 4(d) and 4(e), a Note may be transferred in whole or in part upon surrender of the relevant Note Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of an Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Note may not be transferred unless the principal amount of Notes transferred and (where not all of the Notes held by a holder are being transferred) the principal amount of the balance of Notes not transferred are authorised denominations. Transfer Forms are available from any Agent and the Bank upon the request of any holder. Within five business days of the surrender of a Note Certificate in accordance with Condition 4(a), the Registrar will register the transfer in question and deliver a new

(b)

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Note Certificate of alike principal amount to the Notes transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 4(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. (c) The transfer of a Note will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. Noteholders may not require transfers to be registered during the period of 15 calendar days ending on the due date for any payment of principal or interest in respect of the Notes. All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of the Notes scheduled to the Agency Agreement, a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.

(d)

(e)

5.

Covenants The Noteholders will have the benefit of certain covenants contained in the Trust Deed.

6.

Interest (a) Interest Accrual The Notes shall bear interest on their outstanding principal amount from 1 July 2010 at the rate of 7.2 per cent. per annum (the Rate of Interest), payable in arrear on 1 January and 1 July in each year (each, an Interest Payment Date and with the first Interest Payment Date falling on 1 January 2011), subject as provided in Condition 7 (Payments). Each period beginning on (and including) 1 July 2010 or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period. (b) Cessation of Interest Each Note will cease to bear interest from the due date for final redemption unless payment of principal is improperly withheld or refused, in which case it will continue to bear interest at such rate (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying and Transfer Agent or the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).

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(c)

Calculation of Interest for an Interest Period The amount of interest payable in respect of each Note for any Interest Period shall be calculated by applying the Rate of Interest to the principal amount of such Note, dividing the product by two and rounding the resulting figure to the nearest cent (half a cent being rounded upwards).

(d)

Calculation of Interest for any Other Period If interest is required to be calculated for any period other than an Interest Period, it will be calculated on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed. The determination of the amount of interest payable under Condition 6(c) (Calculation of Interest for an Interest Period) by the Principal Paying and Transfer Agent shall, in the absence of manifest error, be binding on all parties.

7.

Payments (a) Principal Payments of principal in respect of the Notes will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or of any Agent. (b) Interest Payments of interest due on an Interest Payment Date will be made to the Persons shown in the Register at the close of business on the Record Date for such Interest Payment Date, subject to (in the case of interest payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or any Agent. Payments of all amounts other than as provided in Condition 7(a) (Principal) and this Condition 7(b) (Interest) will be made as provided in these Conditions. (c) Record Date Each payment in respect of a Note will be made to the Person shown as the holder in the Register at the close of business (in the place of the Registrars specified office) on the business day before the due date for such payment (the Record Date). (d) Payments Each payment in respect of the Notes pursuant to Conditions 7(a) (Principal) and 7(b) (Interest) will be made by transfer to a United States Dollar account maintained by the payee with a bank in New York City. (e) Payments Subject to Fiscal Laws All payments in respect of the Notes are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 9 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of such payments. (f) Payment on a Business Day If the due date for payment of any amount in respect of any Note is not a business day in the place of Specified Officer of the Principal Paying Agent, the holder thereof

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shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 7(f) (Payment on a Business Day), business day means any day on which banks are open for business (including dealings in foreign currencies) in New York City, London and, in the case of surrender (or, in the case of partial payment only, endorsement) of a Note Certificate, in the place in which the Note Certificate is surrendered (or, as the case may be, endorsed). (g) Agents In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders. The Bank reserves the right (with prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 14 {Notices). 8. Redemption and Purchase (a) Scheduled Redemption Unless previously redeemed as provided below, subject as provided in Condition 7 (Payments), the Notes will be redeemed in ten equal semi-annual instalments on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2021 and the last such instalment being payable on 1 July 2025. The outstanding principal amount of each Note shall be reduced by any instalment amount, with effect from the related instalment payment date, unless payment of the instalment is improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such instalment amount. Each Note shall be finally redeemed on due payment of the final instalment amount. (b) Purchase Subject to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities and the Bank obtaining all necessary approvals and consents and compliance with all applicable laws and regulations, the Bank may purchase or procure others to purchase for its account the Notes in the open market or otherwise and at any price. Notes so purchased may be held or resold (provided that such resale is in compliance with all applicable laws). Any Notes so purchased, while held by or on behalf of the Bank or any other member of the Group, shall not entitle the holder to vote at any meeting of Noteholders and shall not be deemed to be outstanding for the purposes of calculating quorum at such meetings.

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9.

Taxation (a) Taxation All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Note: (i) presented for payment by or on behalf of a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Note; or presented (in the case of a payment of principal or interest on redemption) for payment more than 30 days after the Relevant Date except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Note on the last day of such period of 30 days; or to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to such Directive.

(ii)

(iii)

(iv)

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Note (subject to the exclusions set out in (i), (ii) and (iii) above) which has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount.

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If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Note. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Note means the date on which payment in respect of such Note first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Noteholders that such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to principal or interest shall be deemed to include instalments of principal as well as any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 9 (Taxation) or any undertaking given in addition to or in substitution of this Condition 9 (Taxation) pursuant to the Trust Deed. (d) Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 9 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction. 10. Prescription Claims for principal and interest on redemption shall become void unless the relevant Note Certificates are surrendered for payment within ten years, and claims for interest due other than on redemption shall become void unless made within five years, of the appropriate Relevant Date. 11. Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, file a petition for the winding up of the Bank if any of the following events (each, an Event of Default) occurs and is continuing and, in the case of (b) or (c) below the Notes have become due and payable as hereinafter provided: (a) Non Payment the Bank fails to pay any amount of principal or interest in respect of the Notes when the same becomes due and payable and such default continues for a period of ten Business Days; or (b) Cross Default any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes (or becomes capable of being declared) due and payable prior to the due date for the payment thereof by reason of default of the Bank or the relevant Subsidiary (as the case may be), or is not paid when due nor within any originally

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applicable grace period, provided that the aggregate amount of, or commitment for, Financial Indebtedness referred to above exceeds U.S.$10,000,000 (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (c) Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement, save that on the occurrence and continuation of an event specified in Condition 11(b) (Cross Default), provided that action has been taken (whether by the Trustee or the Senior Noteholders or the OID Noteholders) to accelerate the obligations of the Bank with respect to all outstanding Financial Indebtedness which is unsubordinated, the Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, give notice to the Bank that the Notes are and they shall become due and repayable at their principal amount together with accrued interest. 12. Replacement of Notes If any Note is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. 13. Meetings of Noteholders; Modification and Waiver (a) Meetings of Noteholders The Trust Deed provides that all meetings of holders of the Notes will include holders of the EUR28,237,359 6.75 per cent. Notes due 2025 of the Bank (the EUR 2025 Notes) and the KZT7,396,248,930 11.20 per cent. Notes due 2025 of the Bank (the KZT 2025 Notes) and there shall be no provision for separate meetings of holders of the Notes, holders of the EUR 2025 Notes and holders of the KZT 2025 Notes and

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that for purposes of determining a quorum and for voting purposes the EUR 2025 Notes and the KZT 2025 shall be converted into U.S. Dollars at the Reference Rate applicable as at the date of issuance of the Notes. Accordingly, all references in this Condition 13 to Notes and Noteholders shall be deemed to include the EUR 2025 Notes and the KZT 2025 Notes and the holders of such notes, as the case may be. The Trust Deed contains provisions for convening meetings of Noteholders to consider any matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than one tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the aggregate principal amount of the Notes for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Notes form a quorum (a special quorum resolution). Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not. (b) Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed or (ii) if such Noteholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three quarters of the aggregate principal amount of the outstanding Notes. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders. (c) Modification Without Noteholders Consent The Trustee may, without the consent of the Noteholders, agree (i) to any modification of the Notes (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which, in the opinion of the Trustee, will not be materially prejudicial to the interests of Noteholders and (ii) to any modification of the Notes (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Noteholders, authorise or waive any proposed breach or breach of the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Noteholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Noteholders in accordance with Condition 14 (Notices).

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14.

Notices (a) To the Noteholders Notices to Noteholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Notes are listed on the an Approved Stock Exchange9 (as defined in the Trust Deed), and the relevant Stock Exchange so requires, notices to the Noteholders shall be published in a leading newspaper having general circulation in the jurisdiction of such Approved Stock Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97, Dzholdasbekov str., md Samal-2, Almaty, 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department (or at such other addresses and for such other attentions as may have been notified to the Noteholders in accordance with Condition 14(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business. (c) To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business.

15.

Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Noteholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Notes or for the performance by the Bank of its obligations under or in respect of the Notes or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including but not limited to those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Noteholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

349

Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Noteholder shall be entitled to claim, from the Bank (in the case of a Noteholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders. (c) Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one fifth in principal amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions or the Trust Deed and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein.

350

(d)

Failure to Act No Noteholder may proceed directly against the Bank unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing.

(e)

Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, two separate notices shall be published in two leading newspapers one of which will have general circulation in the jurisdiction of the Approved Stock Exchange.

(f)

Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Noteholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Notes and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligations assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice thereof shall be given by the Bank to the Noteholders in accordance with Condition 14 (Notices).

16.

Further Issues The Bank may from time to time, without the consent of the Noteholders and in accordance with the Trust Deed, create and issue further Notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest).

17.

Currency Indemnity If any sum due from the Bank in respect of the Notes under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Notes or in respect thereof under the Trust Deed, the Bank shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action.

351

18.

Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act.

19.

Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Notes, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law. (b) Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Notes or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two-party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. (c) Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 19(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts of England, as more particularly described in Condition 19(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s). (d) Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 19(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Noteholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 19(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

352

(e)

Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum.

(f)

Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law.

(g)

Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 19(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes.

(h)

Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

353

Annex 5 Terms and Conditions of the Euro Subordinated Notes The following is the text of the terms and conditions of the Subordinated Euro Notes which, subject to amendment and completion, will be endorsed on each Note Certificate pertaining to the Subordinated Euro Notes and will be attached and (subject to the provisions thereof) apply to the relevant Global Note: The EUR28,237,359 6.75 per cent. notes due 2025 (the Euro Subordinated Notes or the Notes, which expression includes any further notes issued pursuant to Condition 16 (Further Issues) and forming a single series therewith) of BTA BANK JSC (the Bank) are (a) constituted by, and subject to, and have the benefit of a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Notes (Noteholders) under the Trust Deed) and (b) the subject of an agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon as principal paying and transfer agent (the Principal Paying and Transfer Agent; which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Notes) Joint-Stock Company Citibank Kazakhstan (the Kazakhstan Paying and Transfer Agent; which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes) and The Bank of New York Mellon (Luxembourg S.A.) as registrar (the Registrar, which expression shall include any successor registrar appointed from time to time in connection with the Notes). Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and subject to their detailed provisions. The Noteholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. Terms defined in the Trust Deed shall, unless otherwise defined herein or the context requires otherwise, bear the same meanings herein. 1. Status It is the intention of the Bank that the Notes shall be treated as Tier 2 capital for the purposes of the FMSA Guidance. Subject to exceptions provided by mandatory applicable law, the payment obligations under the Notes constitute direct, unconditional, unsecured and subordinated obligations of the Bank and shall, in case of (i) the bankruptcy in the Republic of Kazakhstan (bankrotstvo) of the Bank; (ii) the Bank being granted (provisional) suspension of payments in the Republic of Kazakhstan (moratoriy na udovletvoreniye zadolzhennosti) (such situation hereinafter being referred to as a Moratorium); or (iii) dissolution of the Bank in the Republic of Kazakhstan (likvidatsiya)) rank: (A) subordinate and junior only to present and future indebtedness of the Bank which by or under its terms ranks senior, or does not rank subordinate to, any indebtedness or other obligations of the Bank; (B) pari passu amongst themselves and with any other present and future indebtedness which ranks by or under its own terms or otherwise pari passu with subordinated indebtedness or other obligations of the Bank; and (C) senior to equity securities of the Bank and to any other present and future

354

indebtedness which ranks by or under its own terms or otherwise, subordinate or junior to the Notes of the Bank. By virtue of such subordination (i) payments to holders of Notes will, in the case of bankruptcy or dissolution of the Bank or in the event of a Moratorium with respect to the Bank, only be made after all payment obligations of the Bank ranking senior to such Notes have been satisfied; (ii) any right of set-off by a holder of Notes in respect of any amount owed to such holder by the Bank under or in connection with such Notes shall be excluded; and (iii) each holder of Notes shall, by virtue of being the holder of such Notes, be deemed to have waived all such rights of set-off. 2. Form, Denomination and Title (a) Form and Denomination The Notes are in registered form, without interest coupons attached, and shall be serially numbered. Notes shall be issued in denominations of EUR 1 and integral multiples of EUR 1 in excess thereof (each denomination an authorised denomination). (b) Title Title to the Notes will pass by transfer and registration as described in Conditions 3 (Registration) and 4 (Transfers). The holder (as defined below) of any Notes shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof) and no person shall be liable for so treating such holder. In these Conditions, holder means the person in whose name a Note is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holders and Noteholders shall be construed accordingly. 3. Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Notes in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Noteholder in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. 4. Transfers (a) Subject to Conditions 4(d) and 4(e), a Note may be transferred in whole or in part upon surrender of the relevant Note Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of an Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Note may not be transferred unless the principal amount of Notes transferred and (where not all of the Notes held by a holder are being transferred) the principal amount of the balance of Notes not transferred are authorised denominations. Transfer Forms are available from any Agent and the Bank upon the request of any holder. Within five business days of the surrender of a Note Certificate in accordance with Condition 4(a), the Registrar will register the transfer in question and deliver a new

(b)

355

Note Certificate of alike principal amount to the Notes transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 4(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. (c) The transfer of a Note will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. Noteholders may not require transfers to be registered during the period of 15 calendar days ending on the due date for any payment of principal or interest in respect of the Notes. All transfers of Notes and entries on the Register are subject to the detailed regulations concerning the transfer of the Notes scheduled to the Agency Agreement, a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations.

(d)

(e)

5.

Covenants The Noteholders will have the benefit of certain covenants contained in the Trust Deed.

6.

Interest (a) Interest Accrual The Notes shall bear interest on their outstanding principal amount from 1 July 2010 at the rate of 6.75 per cent. per annum (the Rate of Interest), payable in arrear on 1 January and 1 July in each year (each, an Interest Payment Date and with the first Interest Payment Date falling on 1 January 2011), subject as provided in Condition 7 (Payments). Each period beginning on (and including) 1 July 2010 or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period. (b) Cessation of Interest Each Note will cease to bear interest from the due date for final redemption unless payment of principal is improperly withheld or refused, in which case it will continue to bear interest at such rate (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Notes up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying and Transfer Agent or the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).

356

(c)

Calculation of Interest for an Interest Period The amount of interest payable in respect of each Note for any Interest Period shall be calculated by applying the Rate of Interest to the principal amount of such Note, dividing the product by two and rounding the resulting figure to the nearest cent (half a cent being rounded upwards).

(d)

Calculation of Interest for any Other Period If interest is required to be calculated for any period other than an Interest Period, it will be calculated on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed. The determination of the amount of interest payable under Condition 6(c) (Calculation of Interest for an Interest Period) by the Principal Paying and Transfer Agent shall, in the absence of manifest error, be binding on all parties.

7.

Payments (a) Principal Payments of principal in respect of the Notes will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or of any Agent. (b) Interest Payments of interest due on an Interest Payment Date will be made to the Persons shown in the Register at the close of business on the Record Date for such Interest Payment Date, subject to (in the case of interest payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of the Registrar or any Agent. Payments of all amounts other than as provided in Condition 7(a) (Principal) and this Condition 7(b) will be made as provided in these Conditions. (c) Record Date Each payment in respect of a Note will be made to the Person shown as the holder in the Register at the close of business (in the place of the Registrars specified office) on the business day before the due date for such payment (the Record Date). (d) Payments Each payment in respect of the Notes pursuant to Conditions 7(a) (Principal) and 7(b) (Interest) will be made by transfer to a Euro account maintained by the payee with a bank in a city in which banks have access to the TARGET System. (e) Payments Subject to Fiscal Laws All payments in respect of the Notes are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 9 (Taxation). No commissions or expenses shall be charged to the Noteholders in respect of such payments. (f) Payment on a Business Day If the due date for payment of any amount in respect of any Note is not a business day in the place of Specified Offices of the Principal Paying Agent, the holder thereof

357

shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 7(f), business day means any day on which banks are open for business (including dealings in foreign currencies) in the place of the Specified Offices of the Principal Paying Agent and which is a business day on which the TARGET System is operating and, in the case of surrender (or, in the case of partial payment only, endorsement) of a Note Certificate, in the place in which the Note Certificate is surrendered (or, as the case may be, endorsed). (g) Agents In acting under the Agency Agreement and in connection with the Notes, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders. The Bank reserves the right (with prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 14 (Notices). 8. Redemption and Purchase (a) Scheduled Redemption Unless previously redeemed as provided below, subject as provided in Condition 7 (Payments), the Notes will be redeemed in ten equal semi-annual instalments on 1 January and 1 July of each year, with the first such instalment being payable on 1 January 2021 and the last such instalment being payable on 1 July 2025. The outstanding principal amount of each Note shall be reduced by any instalment amount, with effect from the related instalment payment date, unless payment of the instalment is improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such instalment amount. Each Note shall be finally redeemed on due payment of the final instalment amount. (b) Purchase Subject to the covenant set out in the Trust Deed entitled Restrictions on amendments to the Banks Charter or change in share capital and on the repurchase of securities and the Bank obtaining all necessary approvals and consents and compliance with all applicable laws and regulations, the Bank may at any time purchase or procure others to purchase for its account the Notes in the open market or otherwise and at any price. Notes so purchased may be held or resold (provided that such resale is in compliance with all applicable laws). Any Notes so purchased, while held by or on behalf of the Bank or any other member of the Group, shall not entitle the holder to vote at any meeting of Noteholders and shall not be deemed to be outstanding for the purposes of calculating quorum at such meetings.

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9.

Taxation (a) Taxation All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Noteholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Note: (i) presented for payment by or on behalf of a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Note; presented (in the case of a payment of principal or interest on redemption) for payment more than 30 days after the Relevant Date except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Note on the last day of such period of 30 days; to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Note; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to such Directive.

(ii)

(iii)

(iv)

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Note (subject to the exclusions set out in (i), (ii) and (iii) above) which has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount.

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If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Note. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Note means the date on which payment in respect of such Note first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Noteholders that, such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to principal or interest shall be deemed to include instalments of principal as well as any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Condition 9 (Taxation) or any undertaking given in addition to or in substitution of this Condition 9 (Taxation) pursuant to the Trust Deed. (d) Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 9 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction. 10. Prescription Claims for principal and interest on redemption shall become void unless the relevant Note Certificates are surrendered for payment within ten years, and claims for interest due other than on redemption shall become void unless made within five years, of the appropriate Relevant Date. 11. Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, file a petition for the winding up of the Bank if any of the following events (each, an Event of Default) occurs and is continuing and, in the case of (ii) or (iii) below the Notes have become due and payable as hereinafter provided: (a) Non Payment the Bank fails to pay any amount of principal or interest in respect of the Notes when the same becomes due and payable and such default continues for a period of ten Business Days; or (b) Cross Default any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes (or becomes capable of being declared) due and payable prior to the due date for the payment thereof by reason of default of the Bank or the relevant Subsidiary (as the case may be), or is not paid when due nor within any originally

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applicable grace period, provided that the aggregate amount of, or commitment for, Financial Indebtedness referred to above exceeds U.S.$10,000,000 (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (c) Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement, save that on the occurrence and continuation of an event specified in Condition 11(b) (Cross Default), provided that action has been taken (whether by the Trustee or the Senior Noteholders or the OID Noteholders) to accelerate the obligations of the Bank with respect to all outstanding Financial Indebtedness which is unsubordinated, the Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall, give notice to the Bank that the Notes are and they shall become due and repayable at their principal amount together with accrued interest. 12. Replacement of Notes If any Note is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. 13. Meetings of Noteholders; Modification and Waiver (a) Meetings of Noteholders The Trust Deed provides that all meetings of holders of the Notes will include holders of the U.S.$496,631,368 7.20 per cent. Notes due 2025 of the Bank (the U.S. Dollar 2025 Notes) and holders of the KZT7,396,248,930 11.2 per cent. Notes due 2025 of the Bank (the KZT 2025 Notes) and there shall be no provision for separate meetings of holders of the Notes, holders of the U.S. Dollar 2025 Notes and holders of the KZT 2025 Notes and that for purposes of determining a quorum and for voting purposes the Notes and the KZT 2025 Notes shall be converted into U.S. Dollars at

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the Reference Rate applicable as at the date of issuance of the Notes. Accordingly, all references in this Condition 13 to Notes and Noteholders shall be deemed to include the U.S. Dollar 2025 Notes and the KZT 2025 Notes and the holders of such notes, as the case may be. The Trust Deed contains provisions for convening meetings of Noteholders to consider any matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Noteholders holding not less than one tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the aggregate principal amount of the Notes for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Notes form a quorum (a special quorum resolution). Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders, whether present or not. (b) Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed or (ii) if such Noteholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three quarters of the aggregate principal amount of the outstanding Notes. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders. (c) Modification Without Noteholders Consent The Trustee may, without the consent of the Noteholders, agree (i) to any modification of the Notes (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which, in the opinion of the Trustee, will not be materially prejudicial to the interests of Noteholders and (ii) to any modification of the Notes (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Noteholders, authorise or waive any proposed breach or breach of the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Noteholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Noteholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Noteholders in accordance with Condition 14 (Notices).

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14.

Notices (a) To the Noteholders Notices to Noteholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Notes are listed on an Approved Stock Exchange10 (as defined in the Trust Deed), and the relevant Stock Exchange so requires, notices to the Noteholders shall be published in a leading newspaper having general circulation in the jurisdiction of such Approved Stock Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97, Dzholdasbekov str., md Samal-2, Almaty, 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department (or at such other addresses and for such other attentions as may have been notified to the Noteholders in accordance with Condition 14(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business. (c) To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business.

15.

Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Noteholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Notes or for the performance by the Bank of its obligations under or in respect of the Notes or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including but not limited to those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Noteholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

10

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Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Noteholder shall be entitled to claim, from the Bank (in the case of a Noteholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders. (c) Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Notes, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one fifth in principal amount of the outstanding Notes or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance which could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 11 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein.

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(d)

Failure to Act No Noteholder may proceed directly against the Bank unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing.

(e)

Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, two separate notices shall be published in two leading newspapers one of which will have general circulation in the jurisdiction of the Approved Stock Exchange.

(f)

Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Noteholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Notes and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligations assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice thereof shall be given by the Bank to the Noteholders in accordance with Condition 14 (Notices).

16.

Further Issues The Bank may from time to time, without the consent of the Noteholders and in accordance with the Trust Deed, create and issue further Notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest).

17.

Currency Indemnity If any sum due from the Bank in respect of the Notes under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Notes or in respect thereof under the Trust Deed, the Bank shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action.

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18.

Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act.

19.

Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Notes, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law. (b) Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Notes or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two-party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. (c) Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 19(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts of England, as more particularly described in Condition 19(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s). (d) Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 19(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Noteholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 19(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

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(e)

Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum.

(f)

Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law.

(g)

Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 19(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes.

(h)

Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

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Annex 6 Terms and Conditions of the Recovery Units The following is the text of the terms and conditions of the Recovery Units which, subject to amendment and completion, will be endorsed on each Unit Certificate pertaining to the Recovery Units and will be attached and (subject to the provisions thereof) apply to the relevant Global Note. The $5,221,494,216 aggregate initial Reference Amount of Recovery Units (the Recovery Units or the Units), issued by JSC BTA Bank (the Bank) are (a) constituted by, and subject to, and have the benefit of, a trust deed dated 25 August 2010 (as amended or supplemented from time to time, the Trust Deed) between the Bank and BNY Corporate Trustee Services Limited, as trustee (the Trustee, which expression includes all persons for the time being appointed as trustee for the holders of the Units (Unitholders) under the Trust Deed) and (b) the subject of (i) a paying agency agreement dated 25 August 2010 (as amended or supplemented from time to time, the Agency Agreement) between the Bank, the Trustee, The Bank of New York Mellon, as principal paying and transfer agent (the Principal Paying and Transfer Agent, which expression includes any successor or additional paying and transfer agents appointed from time to time in connection with the Units), Joint-Stock Company Citibank Kazakhstan as Kazakhstan paying and transfer agent

(the Kazakhstan Paying and Transfer Agent, which expression includes any successor or additional Kazakhstan paying and transfer agents appointed from time to time in connection with the Notes) and The Bank of New York Mellon (Luxembourg) S.A., as registrar (the
Registrar which expression shall include any successor registrar appointed from time to time in connection with the Units) and (ii) a cash management agreement dated 25 August 2010 (as amended or supplemented from time to time, the Cash Management Agreement) between the Bank, the Trustee and The Bank of New York Mellon, as cash manager (the Cash Manager which expression shall include any successor cash manager appointed from time to time in connection with the Units). Certain provisions of these Conditions are summaries of the Trust Deed, the Agency Agreement and the Cash Management Agreement and are subject to their detailed provisions. The Unitholders are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed, the Agency Agreement and the Cash Management Agreement are available for inspection during normal business hours at the Specified Offices (as defined in the Agency Agreement) of the Principal Paying and Transfer Agent. Copies are also available for inspection during normal business hours at the registered office for the time being of the Trustee. References herein to the Agents are to the Registrar and the Paying and Transfer Agents and any reference to an Agent is to any one of them. 1. Definitions Terms not defined in these Conditions shall have the meaning set out in the Trust Deed and for the purposes of these Conditions: Adjusted Principal Amount has the meaning given to it in Condition 9(c) (Adjusted Principal Amount); Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company. Bank Group means the Bank, BTA Finance Luxembourg S.A., TuranAlem Finance B.V. and LLP TuranAlem Finance. Base Case Model means the financial model titled BTA Bank-BP-Revised PCTS@18 04 2010 Sent Deloitte sent to Deloitte at about 8.00 p.m. London time on 18 April 2010.

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Charged Property means all the property and rights of the Bank which are subject to the Charge and Assignment (as defined in Condition 2(c) (Security); Collection Account means the account controlled by the Trustee and with a bank in London, opened in the name of the Bank in accordance with the Trust Deed and into which the Bank shall pay the Specified Percentage of any and all Recoveries pursuant to Condition 6(a) (Collection Account and Conversion);11 Deferred Settlement Date means, after a Valuation Rejection Notice has been delivered pursuant to Condition 9 (Valuation) 30 June 2022; FMSA means the Agency of the Republic of Kazakhstan on the Regulation and Supervision of the Financial Market and Financial Organisations; FMSA Methodology means IFRS adjusted to reflect the FMSAs requirements for preparation of financial statements for regulatory purposes; Group means the Bank and its consolidated Subsidiaries from time to time; Impaired Recovery Assets has the meaning given to it in the definition of Write-backs; IFRS means international financial reporting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant statements; Information Memorandum means the Information Memorandum dated 1 May 2010 published by the Bank in connection with the Restructuring (and as supplemented from time to time); Initial Settlement Date means 30 June 2020; KPMG Provisions Report12 means the report prepared by KPMG in relation to the Impaired Recovery Assets, dated 12 November 2009; Litigation Recoveries means any cash recoveries from, and the net proceeds of any sale of, any asset recovered through the Recovery Programme (to the extent that such cash recoveries are not also Impaired Recovery Assets or Tax Assets); Quarterly Recovery Assets Management Report13 means the quarterly management information report on the ongoing performance of the Recoveries Assets to be prepared by the Bank; Recoveries means Write-backs, Litigation Recoveries, the recoveries on Tax Assets and interest on the Collection Account; Recoveries Assets means the Impaired Recovery Assets, the Litigation Recoveries and the Tax Assets; Recovery Assets Auditor means an auditor appointed by the Bank (whose identity and terms of appointment shall have received Qualified Majority Approval and retained amongst other things to review the Recoveries Assets Opening Report and the Quarterly Recovery Assets Management Reports;
The Collection Account has been charged in favour of the Trustee. A Cash Manager (who is as (at the date of this Prospectus) also the account bank in respect of the Collection Account) has been appointed to operate and manage the Collection Account pursuant to a Cash Management Agreement entered into between the Bank, the Cash Manager and the Trustee. 12 The Quarterly Recovery Assets Management Report, Recovery Assets Opening Reort and KPMG Provision Report have not eeen and shall not be available to anyone other than the Trustee on a confidential basis. 13 The Quarterly Recovery Assets Management Report, Recovery Assets Opening Reort and KPMG Provision Report have not eeen and shall not be available to anyone other than the Trustee on a confidential basis.
11

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Recovery Assets Opening Report14 means the initial due diligence report prepared by the Bank, based on the KPMG Provisions Report and other sources of information as necessary particularly in relation to the small and medium enterprises and retail loans portfolios and subject to review by the Recovery Assets Auditor for the purpose of, amongst other things, quantifying the Recoveries; Recovery Assets Replacement Loans has the meaning given in the definition of Write-backs; Recovery Payment Date has the meaning given to it in Condition 7 (Recovery Payments); Recovery Payments means, in relation to the outstanding Units and in respect of all Recoveries arising during a Recovery Units Payment Period, the Specified Percentage of such Recoveries payable pursuant to Condition 7 (Recovery Payments); Recovery Programme has the meaning provided in Condition 6(e) (Pursuit of Recoveries); Recovery Units Payment Period means each period beginning on (and including) the Reference Date or any Recovery Payment Date and ending on (but excluding) the next Recovery Payment Date; Reference Amount means the aggregate principal amount of the Units, namely an amount equal to (i) the aggregate principal amount of Designated Financial Indebtedness subject to the Restructuring and in respect of which Recovery Units are issued minus (ii) the aggregate principal amount (converted into Dollars at the Spot Rate of Exchange two Business Days (as defined in Condition 6(a)(Collection Account and Conversion)) before the Reference Date) of the Senior Notes and Subordinated Notes issued under Senior Packages 1 and 2 (as defined and described in the Information Memorandum), the cash paid under those Packages and the Initial Principal Amount (converted into Dollars as aforesaid) of the OID Notes (for the avoidance of doubt, (i) minus (ii) being $5,221,494,216) minus (iii) the aggregate amount from time to time of all Recovery Payments made; Residual Amount means (i) the value of any residual potential recoveries that may be made from the Impaired Recovery Assets and the Recovery Programme and (ii) any residual potential value in the Tax Assets, as at the Valuation Date and determined as such in accordance with Condition 9 (Valuation); Reference Date means 1 July 2010; Restructuring means the restructuring of the indebtedness of the Bank Group as described in the Information Memorandum; Security Interests means the security interests created in favour of the Trustee in relation to the Collection Account and the Cash Management Agreement pursuant to the Trust Deed; Settlement Date means the Initial Settlement Date or, if a Valuation Rejection Notice has been delivered pursuant to Condition 9 (Valuation), the Deferred Settlement Date; Specified Percentage means the following percentages in relation to the following Recoveries: (i) (ii) Cash and Accounting Recoveries, Litigation Recoveries and Tax Assets: 50 per cent. Interest on the Collection Account: 100 per cent.

The Quarterly Recovery Assets Management Report, Recovery Assets Opening Reort and KPMG Provision Report have not been and shall not be available to anyone other than the Trustee on a confidential basis.

14

370

Spot Rate of Exchange means the spot rate of exchange quoted by SB HSBC Bank Kazakhstan JSC (or any other internationally recognised financial institution providing such quotations) for the purchase of United States Dollars with the relevant currency at or about 11:00 a.m. Almaty time on the relevant day; Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same); Tax Assets means the benefit of any Reliefs obtained or deemed to have been obtained by the Bank where the Relief arises from a transaction or other event (including, without limitation, the recognition for accounting purposes of a loss or impairment in respect of any asset in the Recovery Units Opening Report15 or in relation to the Litigation Recoveries) occurring in relation to or affecting the Bank on or prior to the Restructuring but not including, for the avoidance of doubt, the exclusion from taxation (by virtue of Article 3.1 of the Law of the Republic of Kazakhstan On Enactment of the Code of the Republic of Kazakhstan on Taxes and Other Mandatory Payments to the Budget (Tax Code) dated 10 December 2008) of the gains resulting from writing off and/or cancellation of indebtedness of the Bank effected pursuant to the Restructuring on the Restructuring Effective Date and for these purposes: (i) Relief shall include (without limitation) any relief, loss, allowance, credit, set off, deduction or exemption for any Tax purpose, any right to repayment of Tax (including any repayment supplement) and any reference to the use or set off of a Relief shall be construed accordingly and shall include use or set-off in part; the benefit of a Relief shall be deemed to have been obtained by the Bank in any case where (a) a member of the Group receives a repayment of Tax as a result of the use or set-off of a Tax Asset or would have received such a repayment had amounts paid pursuant to Condition 6(a) (Collection Account and Conversion) been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan or (b) an amount of Tax payable by a member of the Group is reduced as a result of the use or set off of a Tax Asset or would have been so reduced had amounts so paid been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan; the amount of any benefit of a Relief shall be deemed to be the amount of the repayment of Tax (in a case falling within paragraph (ii)(a) above) or the amount of Tax saved (in a case falling within paragraph (ii)(b) above) and in both cases in making this calculation it shall be assumed that (a) any amount to be paid in respect of Recoveries (other than in respect of Tax Assets) pursuant to Condition 6(a) (Collection Account and Conversion) is deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan, (b) any amount to be paid in respect of the receipt of the benefit of a Relief pursuant to Condition 6(a) (Collection Account and Conversion) is not deductible in computing the taxable profits of the Bank for the purposes of Tax in Kazakhstan and (c) the rate of corporate Tax in Kazakhstan is 15%; the benefit of a Relief shall be deemed to have been obtained on (a) the date that the repayment is actually received or (in the case of a repayment that would have been received if amounts paid pursuant to Condition 6(a) (Collection Account and Conversion) had been deductible in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan) 30 days after the date on which the tax return in which repayment would have been claimed is agreed with the relevant Tax authorities

(ii)

(iii)

(iv)

15

This is the same as Recovery Assets Opening Report

371

or is otherwise settled or (b) the date on which that Tax would have been payable but for the use of the Relief (in a case falling within paragraph (ii)(b) above); and (v) any amount paid pursuant to Condition 6(a) (Collection Account and Conversion) in respect of Recoveries (other than Tax Assets) shall be treated as deductible in the calendar year of payment to the Collection Account in computing the taxable profits of the Bank for purposes of Tax in Kazakhstan

and, for the purposes hereof, all benefits of a Relief shall be deemed to have been realised in cash: Valuation Date means the date (the Initial Valuation Date) falling three months prior to the Initial Settlement Date or, where a Valuation Rejection Notice has been delivered pursuant to Condition 9 (Valuation), the date (the Deferred Valuation Date) falling three months prior to the Deferred Settlement Date; Valuation Rejection Notice has the meaning given to it in Condition 9(b) (Valuation Rejection Notice); and Write-backs means cash and accounting recoveries in relation to any provision or write-off of any asset (including any provision or write-off in respect of the principal amount of or interest on any asset written off or any provisioned asset) (each an Impaired Recovery Asset) over and above net book value as at (or any such recovery where the asset has been written off as at or prior to) 30 June 2009 and by reference to all the Banks assets (including collection agency receivables and Related Party Debt) and the release or forgiveness of any liability of the Bank in settlement of the Banks claim in respect of any such asset, where: (i) such cash and accounting recoveries may be determined: (A) on a pooled basis in relation to assets described in paragraph (iii)(C) below provided that the assets so pooled do not exceed six per cent. of the aggregate amount of provisions or amounts written off in relation to the original Impaired Recovery Assets calculated by reference to the KPMG Provisions Report; and in all other cases on an asset-by-asset basis;

(B) (ii) (iii)

the Impaired Recovery Assets shall be identified as at 30 June 2009 by reference to the KPMG Provisions Report; the amounts of Recoveries shall be calculated in relation to Impaired Recovery Assets by reference to cash or accounting recoveries over and above the net book value of such assets following provision or write-off calculated in accordance with FMSA Methodology and, in particular: (A) in relation to corporate loans by reference to the provisions (or amounts written off) as calculated and noted in the KPMG Provisions Report (which provided that such provisions (and amounts written off) amounted in aggregate to KZT1,846 billion); in relation to corporate off balance sheet exposures including by reference to the provisions (or amounts written off) as calculated and noted in the KPMG Provisions Report (which provided that such provisions (and amounts written off) amounted in aggregate to KZT119 billion); and in relation to loans to small and medium enterprises and retail loans, by reference to the provisions (or amounts written off) as calculated and noted by KPMG in Appendix 6 to the KPMG Provisions Report (which provided

(B)

(C)

372

that such provisions (and amounts written off) amounted in aggregate to KZT119 billion); (iv) Recoveries will include: (A) cash and accounting recoveries in respect of Impaired Recovery Assets (including, but not limited to, provisioned or written off amounts, interest, default and penalty interest, premiums, late payment amounts and principal payments, settlements and cash proceeds from assets (including amounts realised on collateral or security) and whether acquired by the Bank through litigation, settlement, auction or compromise, or write-backs of any amounts in accordance with or permitted by applicable accounting standards or applicable regulatory capital requirements and any amounts received by reference to Impaired Recovery Assets consisting of loans written off prior to 30 June 2009); and amounts received with respect to new loans (Recovery Assets Replacement Loans) entered into by way of amendment, restatement, novation of, or otherwise replacing, loans from time to time constituting Recoveries Assets and in determining whether a loan is a Recovery Assets Replacement Loan, all loans or arrangements entered into by the Bank after 30 June 2009 with borrowers or obligors with respect to Recoveries Assets (and/or with any of their Affiliates) shall constitute Recovery Assets Replacement Loans but only to the extent that such arrangements do not represent any amounts in addition to the amounts of existing loans; and

(B)

(v)

all such cash and accounting recoveries by reference to Impaired Recovery Assets shall, on a pooled or asset-by-asset basis (as appropriate in accordance with (i) above) only be treated as a Recovery to the extent that the aggregate amount of such recoveries by reference to such pool or asset exceeds the net book value of such pool or asset following provision or write-down as referred to in (ii) and (iii) above.

2.

Status (a) Status Prior to and Including the Settlement Date This Condition 2(a) applies to all amounts payable pursuant to the Units other than amounts specified in Condition 2(b) from and including the Reference Date up to and including the earlier of the date when the Reference Amount is reduced to zero and the Settlement Date. The Units constitute direct, general, unconditional and, subject to and in accordance with the Trust Deed, Condition 2(c) (Security) and Condition 6(b) (Preservation of Security Interests) and Condition 2(b) (Status of Adjusted Principal Amount) secured obligations of the Bank. The Units rank at all times without preference or priority pari passu among themselves. (b) Status of Adjusted Principal Amount Provided that the Reference Amount has previously not been reduced to zero, payment of the Adjusted Principal Amount shall constitute an unconditional, unsubordinated and secured obligation of the Bank which will at all times rank at least pari passu among themselves and pari passu in right of payment with all other present and future unsubordinated obligations of the Bank, save only for such obligations as may be preferred by mandatory provisions of applicable law.

373

(c)

Security This Condition 2(c) applies to the Units from and including the Reference Date up to and including the earlier of the date when the Reference Amount is reduced to zero and the Settlement Date. As continuing security for the payment of all sums due under the Units, and subject always to Condition 2(a) (Status Prior to and Including the Settlement Date), the Bank will, in favour of the Trustee, for itself and on trust for the Unitholders, in accordance with the terms of the Trust Deed, charge with full title guarantee and by way of a first fixed charge all monies held from time to time in the Collection Account and assign with full title guarantee all its right, title and interest in, to and under the Cash Management Agreement and the Collection Account and all sums derived therefrom (the Charge and Assignment). In certain circumstances, the Trustee may (subject to it being indemnified, prefunded or secured to its satisfaction) be required by Unitholders holding at least 20 per cent. of the principal amount of the Units outstanding or by an Extraordinary Resolution of the Unitholders to exercise its powers under the Trust Deed arising under the Charge and Assignment. If at any time, any Recovery Payment is due and payable but has not been paid, the Trustee may apply any balance standing to the credit of the Collection Account in and towards payment of such Recovery Payment.

3.

Form, Denomination and Title (a) Form and Denomination The Units are in registered form, without interest coupons attached, and shall be serially numbered. Units shall be issued in integral multiples of one Unit, each of which shall represent an initial Reference Amount of $1. (b) Title Title to the Units will pass by transfer and registration as described in Conditions 4 (Registration) and 5 (Transfers). The holder (as defined below) of any Units shall (except as otherwise required by law or as ordered by a court of competent jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon (other than a duly executed transfer thereof in the form endorsed thereon) or any notice of any previous loss or theft thereof), and no person shall be liable for so treating such holder. In these Conditions, holder means the person in whose name a Unit is registered in the Register (as defined below) (or, in the case of joint holders, the first named thereof) and holding, holders and Unitholders shall be construed accordingly.

4.

Registration The Bank shall procure that the Registrar will maintain a register (the Register) at the Specified Office of the Registrar in respect of the Units in accordance with the provisions of the Agency Agreement. A certificate (each, a Unit Certificate) will be issued to each Unitholder in respect of its registered holding. The Unit Certificates will be numbered serially, each with an identifying number, which will be recorded in the Register.

374

5.

Transfers (a) Subject to Conditions 5(d) and 5(e), a holding of Units may be transferred in whole or in part upon surrender of the relevant Unit Certificate, with the endorsed form of transfer (the Transfer Form) duly completed, at the Specified Office of an Agent, together with such evidence as the Registrar or (as the case may be) such Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided that only whole numbers of Units may be transferred and (where not all of the Units held by a holder are being transferred), both the number of Units not transferred and the number of Units being transferred is not less than one Unit. Transfer Forms are available from any Agent and the Bank upon the request of any holder. Within five business days of the surrender of a Unit Certificate in accordance with Condition 5(a), the Registrar will register the transfer in question and deliver a new Unit Certificate in respect of a like number of the Units transferred to each relevant holder at its Specified Office or (as the case may be) the Specified Office of any Agent or (at the request and risk of any such relevant holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant holder. In this Condition 5(b), business day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Agent has its Specified Office. The transfer of a Unit will be effected without charge by the Registrar or any Agent but against such indemnity as the Registrar or (as the case may be) such Agent may require in respect of any tax or other duty of whatsoever nature, which may be levied or imposed in connection with such transfer. Unitholders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or Recovery Payments in respect of the Units. All transfers of Units and entries on the Register are subject to the detailed regulations concerning the transfer of the Units scheduled to the Agency Agreement, a copy of which will be made available as specified in the preamble to these Conditions. The regulations may be changed by the Bank with the prior written approval of the Trustee and the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Unitholder who requests in writing a copy of such regulations.

(b)

(c)

(d)

(e)

6.

Covenants The Unitholders will have the benefit of certain covenants in the Trust Deed relating to, amongst other things, restrictions on the creation of security interests, incurrence of indebtedness, disposal of assets and payment of dividends. In addition, the Bank covenants as follows: (a) Collection Account and Conversion Promptly following receipt of any Recoveries in US Dollars the Bank shall deposit the Specified Percentage of such amount into the Collection Account. Promptly following receipt of the benefit of any Relief, the Bank shall pay an amount in US Dollars (effecting any necessary currency exchange at the Spot Rate of Exchange) equal to the Specified Percentage of such benefit of Relief into the Collection Account.

375

The Bank shall, within 10 Business Days of receipt of any Recoveries that are not in U.S. Dollars, convert the Specified Percentage of such Recoveries into U.S. Dollars at the Spot Rate of Exchange and deposit the net proceeds of conversion into the Collection Account, provided that the Bank shall be under no obligation to convert any such Recoveries into U.S. Dollars or deposit any amounts into the Collection Account until such net proceeds exceed U.S.$5 million (determined by reference to the Spot Rate of Exchange for the relevant currencies). In this Condition 6(a) Business Day means a day other than a Saturday or a Sunday on which commercial banks are open for business (including dealings in foreign currencies) in Almaty, London and New York City. The amount payable in respect of Recoveries shall (subject as provided in the definition of Tax Assets) be determined on a pre-tax basis and on an asset-by asset or pooled basis (as provided in the definition of Write-backs) by reference to the KPMG Provisions Report, the Recovery Assets Opening Report and the most recently delivered Quarterly Recovery Assets Management Report and a Recovery in relation to a Write Back comprising an accounting recovery shall be treated as received for the purposes of this paragraph (a) only when the Bank obtains the cash or cash equivalent benefit thereof. (b) Preservation of Security Interests The Bank shall ensure that the Security Interests created in the Trust Deed shall at all times be in full force and effect. In addition, the Bank shall not take or omit to take any action that would have the result of materially impairing the Security Interests created in the Trust Deed, and the Bank shall not grant any person other than the Trustee for the benefit of the Unitholders any interests whatsoever with respect to the Charged Property. (c) No Netting Off Other than in respect of assets to be pooled in accordance with paragraph (i)(A) of the definition of Write-backs, Recoveries will not be netted off against any asset of the Bank which has been written off or in respect of which a provision has been created or increased. (d) Information and Review Covenants (i) Production of Quarterly Management Information: The Bank shall, within 30 days of the end of each financial quarter, provide to the Trustee and the Recovery Assets Auditor a quarterly management information report (the Quarterly Recovery Assets Management Report) on the ongoing performance of Recoveries Assets such report to include details of: (A) (B) amounts paid out to Unitholders in the previous financial quarter; the nature of the Recoveries made (including a loan-by-loan breakdown showing the loans by reference to which Recoveries were made) and the amount thereof (calculated in accordance with FMSA Methodology), including whether they constituted a payment of principal or interest; reports from each of: (1) (2) the Legal Department; the Non-Performing Loan Department; and

(C)

376

(3)

the Department of Restructuring of Assets,

of the Bank as to Recoveries Assets and Recoveries and related activities by reference to the immediately preceding financial quarter and planned during the subsequent two financial quarters; (D) (E) (F) updating reports from international legal and financial advisers with respect to their continuing engagement in the Recovery Programme; any Recovery Assets Replacement Loans made during the previous financial quarter or currently under negotiation or proposed; and any other loans made or contracted to borrowers or other debtors with respect to Recoveries Assets (or parties connected with them) during the previous financial quarter or currently under negotiation or proposed.

(ii)

Quarterly independent review of ongoing operation and monitoring of the Recoveries Assets: The Bank shall procure that the Recovery Assets Auditor will carry out an ongoing quarterly review covering: (A) independent sample testing of: (1) loans constituting Recoveries Assets and Recovery Assets Replacement Loans to confirm existence, completeness and accuracy of records; and Recoveries made by reference to them including in the case of sales of portfolios of Recovery Assets, an audit of the attribution of consideration proceeds to particular assets and in particular whether values have been correctly ascertained or otherwise fixed by reference to individual assets in the context of portfolio sales;

(2)

(B) (C)

loans to Related Parties; quarterly Recoveries Assets and Recoveries valuations and appropriate accounting treatment of Recoveries Assets in accordance with FMSA Methodology, to include controls over the use of calculation models and spreadsheets, and regarding the use of third parties for any valuation services provided; key controls over the Recoveries Assets and Recoveries, such as bank reconciliations, calculation of interest, provisions for losses and intercompany reconciliations; controls (in particular in relation to compliance by the Bank with Section 6(a) (Collection Account and Conversion)) over the translation of foreign exchange assets and payments made in foreign exchange and controls over any foreign exchange hedging being performed including authorisation in each case in relation to the Recoveries Assets and Recoveries; key systems controls in relation to the pursuit of Recoveries and Recoveries Assets including the set-up of new users and segregation of duties; disaster recovery and business continuity plans;

(D)

(E)

(F)

(G)

377

(H) (I)

review of management information reporting to Recovery Unit Trustee; physical security of loan documentation relating to Recoveries Assets, including the controls in relation to access to documentation such as the use of logs for receipt and return of documentation; dual control over payments relating to Recoveries Assets and Recoveries; access controls over key payment systems relating to Recoveries Assets and Recoveries; controls regarding, and review of, the calculation of payments due to each Unitholder and the Bank; the clear and formal documentation of all material aspects of the activities noted above; and review of any management letter from the Banks Auditor to the Bank relating to any of the above.

(J) (K) (L) (M) (N)

The Bank shall comply with the recommendations of the Recovery Assets Auditor with respect to any of the above, including, in particular, any recommendations to the effect that Recoveries (accounting or cash) by reference to any Recoveries Assets (on an asset-by-asset basis) were, or should have been accounted for as having been, higher. (e) Pursuit of Recoveries (i) The Bank shall with the full support of Samruk-Kazyna, use its reasonable endeavours to maximise the recovery of any valuable asset of the Bank (including any claims available to it) whether in respect of debtors, former management or any other party whatsoever (and in any event act in compliance with its duties under Kazakhstan law and regulation and with international best practice), it being understood and agreed that a vigorous and transparent asset recovery programme (the Recovery Programme) aimed at maximising recovery is of fundamental importance to the Bank, its shareholders and creditors and shall be pursued in their interests alone and, to the fullest extent possible, in a manner consistent with the Base Case Model. The Bank shall ensure that unless otherwise agreed by the Trustee it shall continue to engage appropriate professional advisers in respect of the Recovery Programme and that it will engage or continue to engage such other experts as are appropriate having regard to its duties as set out above. It shall also ensure, without limitation, that it maintains a sufficient team of in-house experts and other staff to support the Recovery Programme; The Bank shall: (A) take all reasonable steps, including (without limitation) the making of any claims, elections, surrenders, notices or consorts necessary to ensure that Tax Assets are realised on the earliest date possible; keep proper records and accounts in relation to Recoveries and Recoveries Assets, and actions taken to recover them; make such records and accounts freely available to the Recovery Assets Auditor and provide to the Recovery Assets Auditor

(ii)

(iii)

(B) (C)

378

equivalent access to such records and accounts and to personnel of the Bank regarding Recoveries Assets as it would to its auditors; (D) (E) not further provide against or write-off any Recoveries Asset without providing full justification thereof to the Recovery Assets Auditor; before entering into any Recovery Assets Replacement Loan, provide complete copies of all documentation relating thereto (and the Recovery Asset(s) it is to replace) to the Recovery Assets Auditor (together with supporting credit information, including a business plan and historic financial information relating to the debtor(s) and details of any security to be provided in connection therewith, for review by the Recovery Assets Auditor and the reporting of the results of such review to the Trustee; not reschedule any Recovery Asset by way of amendment or replacement (by way of a Recovery Assets Replacement Loan or otherwise) or otherwise without review by the Recovery Assets Auditor and the reporting of the results of such review to the Trustee; and pay all costs and expenses of the Recovery Assets Auditor.

(F)

(G) (f)

Recovery Sub-Committee (i) Subject to the provision of confidentiality agreements in a form satisfactory to the Bank, members of the Recovery Sub-Committee of the Bank shall be provided with quarterly reports by the Bank in relation to the progress of the Recovery Programme and upon receipt of such reports the Recovery Sub-Committee shall have the opportunity to comment and/or make recommendations in respect of the Recovery Programme. It is intended that the reporting process shall provide full transparency to the Recovery Sub-Committee. The Recovery Sub-Committee shall act solely as an advisory and consultative body in respect of the Recovery Programme and the Bank, acting through the Board, shall be obliged to consider the Recovery Sub-Committees recommendations in good faith and shall not take any material decision regarding Recoveries without first having sought recommendations in that regard from the Recovery Sub-Committee.

(ii)

(g)

Segregation The Impaired Recovery Assets will be segregated for accounting purposes in the Banks financial statements and for servicing and monitoring purposes in the accounting books and records of the Bank.

7.

Recovery Payments In the period commencing on the Reference Date and ending on the Settlement Date, the Bank shall make Recovery Payments pro rata to Unitholders on 30 September, 31 December, 31 March and 30 June of each year, commencing 31 December 2010 (each, a Recovery Payment Date) provided that: (i) Recovery Payments will only be made if and to the extent that the balance standing to the credit of the Collection Account exceeds U.S.$30 million in which case, the whole such balance shall be paid to Unitholders;

379

(ii) (iii)

the aggregate of the Recovery Payments made by the Bank shall not exceed the Reference Amount; and

notwithstanding any other provisions herein, in the period beginning on 1 July 2009 up to and including 31 December 2009, in 2010 and in 2011 no payment will be made by the Bank into the Collection Account in respect of any Recoveries unless they are realised or deemed obtained in cash (or, in the case of a Recovery in relation to a Write Back comprising an accounting recovery, the Bank obtains the cash or cash equivalent benefit thereof) and in the relevant period such Recoveries exceed the following amounts:
(A) (B) (C) for the period beginning on 1 July 2009 up to and including 31 December 2009, KZT36 billion; for 2010, KZT134 billion; and for 2011, KZT103 billion.

On the making of any Recovery Payment, the balance of the Reference Amount with respect to the Units shall be reduced by the amount of such Recovery Payment with effect from the relevant Recovery Units Payment Date, unless the Recovery Payment is improperly withheld or refused, in which case such amount shall remain outstanding until the date of payment of such Recovery Payment. The Bank shall calculate the Reference Amount and shall inform the Noteholders of the balance of the Reference Amount on each Recovery Units Payment Date. The calculation by the Bank of the Reference Amount shall, absent manifest error, be final and binding on the Trustee and the Noteholders. For the avoidance of doubt if the balance of the Reference Amount is reduced to zero: (A) (B) (C) 8. no further Recovery Payments shall be made by the Bank after such date; the Security Interest shall be released and discharged in accordance with the Trust Deed; and the Bank shall have no further obligations in respect of the Recovery Units.

Payments (a) Recovery Payments Recovery Payments will be made from the Collection Account to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) at the Specified Office of the Registrar or of any Agent pro rata by reference to Units held respectively by the Unitholders. (b) Adjusted Principal Amount Payments of the Adjusted Principal Amount in respect of the Units will be made to the Persons shown in the Register at the close of business on the relevant Record Date (as defined below) upon surrender of the relevant Unit Certificates at the Specified Office of the Registrar or of any Agent. (c) Record Date Each payment in respect of a Unit will be made to the Person shown as the holder in the Register at the opening of business (in the place of the Registrars specified office) on the fifteenth day before the due date for such payment (the Record Date)

380

in accordance with Condition 8(a) (Recovery Payments) or 8(b) (Adjusted Principal Amount) above, as the case may be. (d) Payments Each payment in respect of the Units pursuant to Conditions 8(a) (Recovery Payments) and 8(b) (Adjusted Principal Amount) will be made by wire transfer to a United States Dollar account maintained by the payee with a bank in New York City. The amount of any payment to a Unitholder will be its proportionate share of the aggregate Recovery Payments or, as the case may be, the aggregate Adjusted Principal Amount payable on the relevant payment date, with fractions of a cent being rounded down to the nearest cent. (e) Payments Subject to Fiscal Laws All payments in respect of the Units are subject in all cases to any applicable or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 11 (Taxation). No commissions or expenses shall be charged to the Unitholders in respect of such payments. (f) Payment on a Business Day If the due date for payment of any amount in respect of any Unit is not a business day in the place of the Specified Office of the Principal Paying Agent, the holder thereof shall not be entitled to payment in such place of the amount due until the next succeeding business day in such place. A holder of a Unit shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for a payment not being a business day. In this Condition 8(g), business day means any day on which banks are open for business (including dealings in foreign currencies) in New York City, London and, in the case of surrender of a Unit Certificate, in the place in which the Unit Certificate is surrendered (or, as the case may be, endorsed). (g) Agents In acting under the Agency Agreement and in connection with the Units, the Agents act solely as agents of the Bank and (to the extent provided therein) the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Unitholders. The Bank reserves the right (with the prior written approval of the Trustee) at any time to vary or terminate the appointment of any Agent and to appoint a successor principal paying and transfer agent or registrar and additional or successor agent or agents; provided, however, that the Bank shall at all times maintain a principal paying and transfer agent with a specified office in a European member state, that will not be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, and a registrar. Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Unitholders in accordance with Condition 16 (Notices). 9. Valuation (a) Valuation To the extent that on the Valuation Date there are any Units outstanding and the Reference Amount has not been reduced to zero in accordance with Condition 7 (Recovery Payments), the Bank shall during January or February 2020 appoint up to three independent valuers of recognised standing (and satisfactory to the Trustee) to value the Recoveries Assets and the Residual Amount (after taking into account any

381

Recovery Payments actually made including on or after the Initial Valuation Date) as at the Initial Valuation Date. The Bank shall notify the Trustee in writing of the identity of any person it approaches in connection with the performance of any such valuation and the identity and terms of appointment of each valuer prior to such appointment. When more than one valuer has been appointed, the Residual Amount notified to the Trustee shall be the average value provided by such valuers. The valuation shall be carried out on a discounted cash flow basis and the Residual Amount shall be communicated by the Bank to the Trustee in writing no later than 45 days prior to the Initial Settlement Date. (b) Valuation Rejection Notice Either of the Bank or the Trustee may, by no later than the date which falls 30 days prior to the Initial Settlement Date, serve to the other a notice (a Valuation Rejection Notice) stating that it is dissatisfied with the outcome of the valuation of the Residual Amount. If a Valuation Rejection Notice is served, the Bank shall during January or February 2022 appoint up to three independent valuers of recognised standing (and satisfactory to the Trustee) to value the Recoveries Assets and determine the Residual Amount (after taking into account any Recovery Payments actually made including on or after the Valuation Date) as at the Deferred Valuation Date. The Bank shall notify the Trustee in writing of the identity of any person it approaches in connection with the performance of any such valuation and the identity and terms of appointment of each valuer prior to such appointment. When more than one valuer has been appointed, the Residual Amount notified to the Trustee shall be the average value provided by such valuers. The valuation shall be carried out on a discounted cash flow basis and the Valuation Date and the Residual Amount shall be communicated by the Bank to the Trustee in writing no later than 45 days prior to the Deferred Settlement Date. (c) Adjusted Principal Amount After the valuation, the aggregate principal amount outstanding in respect of the Units shall be adjusted for all purposes (including for the purposes of Condition 10 (Redemption and Purchase)) to be an amount equal to the lesser of (i) the balance of the Reference Amount and (ii) the aggregate of the relevant Specified Percentages of the Residual Amount, any amounts required to be but not as yet paid to the Collection Account and moneys standing to the credit of the Collection Account. The principal amount of the Units as so adjusted, is referred to as the Adjusted Principal Amount. 10. Redemption and Purchase (a) Scheduled Redemption The Adjusted Principal Amount of the Units will be redeemed in full on the Settlement Date.16

The Luxembourg Stock Exchange and the Noteholders will be informed of the Settlement date by notices from the Bank.

16

382

(b)

Purchase Subject as otherwise provided in the Trust Deed, the Bank may at any time purchase or procure others to purchase for its account the Units in the open market or otherwise and at any price. Units so purchased may be held or resold (provided that such resale is in compliance with all applicable laws) or surrendered for cancellation at the option of the Bank, in compliance with Condition 10(c) (Cancellation of Units). Any Units so purchased, while held by or on behalf of the Bank, shall not entitle the holder to vote at any meeting of Unitholders and shall not be deemed to be outstanding for the purposes of calculating the quorum at any such meeting.

(c)

Cancellation of Units Unless otherwise permitted by the Trust Deed, all Units which are redeemed or surrendered for cancellation pursuant to this Condition 10 (Redemption and Purchase) shall be cancelled and may not be reissued or resold.

11.

Taxation (a) Taxation All Recovery Payments as well as payments of principal (including the Adjusted Principal Amount) in respect of the Units shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by or within the Republic of Kazakhstan or any other jurisdiction from or through which payment is made, or in any case, any political subdivision or any authority thereof or therein having power to tax (each, a Taxing Jurisdiction), unless such withholding or deduction is required by law. In that event, the Bank shall pay such additional amounts as will result in the receipt by the Unitholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any Unit: (i) of a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Unit by reason of the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such holder, if such holder is an estate, a trust, a partnership or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein other than the mere holding of such Unit; or presented for a payment of the Adjusted Principal Amount more than 30 days after the Relevant Date, except to the extent that the relevant holder would have been entitled to such additional amounts if it had presented such Unit on the last day of such period of 30 days; or to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the Unit; or

(ii)

(iii)

383

(iv)

where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 200348/EC or any law implementing or complying with, or introduced to conform to such Directive.

In the event that the foregoing obligation to pay additional amounts is for any reason unenforceable against the Bank, the Bank shall pay to any holder of a Unit (subject to the exclusions set out in (i), (ii) and (iii) above) that has received a payment subject to deduction or withholding as aforesaid, upon written request of such holder (subject to the exclusions set out in (i), (ii) and (iii) above), and provided that reasonable supporting documentation is provided, an amount equal to the amount withheld or deducted, so that the net amount received by such holder after such payment would not be less than the net amount the holder would have received had such deduction or withholding not taken place. Any payment made pursuant to this paragraph shall be considered an additional amount. If, at any time, the Bank is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Bank shall promptly notify the Trustee in writing, and shall deliver to the Trustee, within 30 days after it has made such payment to the applicable authority, a written certificate to the effect that it has made such payment to such authority of all amounts so required to be deducted or withheld in respect of each Unit. (b) Relevant Date As used in these Conditions, Relevant Date in respect of any Unit means the date on which payment in respect of such Unit first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which notice is duly given to the Unitholders that such payment will be made, provided that payment is in fact made. (c) Additional Amounts Any reference in these Conditions to Recovery Payments, principal or the Adjusted Principal Amount shall be deemed to include any additional amounts in respect of the Recovery Payments, principal or Adjusted Principal Amount (as the case may be) which may be payable under this Condition 11 (Taxation) or any undertaking given in addition to or in substitution of this Condition 11 (Taxation) pursuant to the Trust Deed. (d) Taxing Jurisdiction If the Bank becomes subject at any time to any taxing jurisdiction other than the Republic of Kazakhstan, references in this Condition 11 (Taxation) to the Republic of Kazakhstan shall be construed as references to the Republic of Kazakhstan and/or such other jurisdiction. 12. Prescription Claims for Recovery Payments and for the Adjusted Principal Amount on redemption shall become void unless the relevant Unit Certificates are surrendered for payment within ten years of the appropriate Relevant Date. 13. Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of not less than one fifth in principal amount of the Units then outstanding or if so directed by an

384

Extraordinary Resolution (subject in each case to being indemnified or provided with security or pre-funded to its satisfaction) shall: (a) give notice to the Bank that the Units are and they shall become due and repayable in an aggregate amount equivalent to the higher of (1) the Reference Amount and (2) the aggregate of (A) amounts standing to the credit of the Collection Account and (B) amounts by reference to Recoveries realised in cash and required to be but not yet paid to the Collection Account; and/or exercise or direct the Trustee to exercise any or all of its rights, remedies, powers or discretions under the Trust Deed in respect of the Collection Account,

(b)

if any of the following events (each, an Event of Default) occurs and is continuing: (i) Non Payment the Bank fails to pay any amount due on the Units when the same becomes due and payable and such default continues for a period of ten Business Days; or (ii) Breach of Other Obligations the Bank is in default in the performance, or is otherwise in breach, of any provision of the Units or in relation to the Charged Property (other than a default or breach specifically dealt with elsewhere in this Condition 13 (Events of Default)) and, where such default or breach is, in the opinion of the Trustee, capable of remedy, such default or breach is not remedied within 30 calendar days after notice thereof has been given to the Bank, by a Unitholder or the Trustee, requiring the same to be remedied; or (iii) Cross Acceleration any Financial Indebtedness of the Group is declared to be or otherwise becomes due and payable prior to the due date for the payment thereof by reason of an event of default (howsoever described), provided that the aggregate amount of Financial Indebtedness referred to above exceeds U.S.$10 million (or its equivalent in any other currency or currencies (as determined by the Trustee)); or (iv) Insolvency (A) the Bank or any of its Material Subsidiaries: (1) is unable or admits its inability to pay its debts as they fall due or is deemed or declared to be unable to pay its debts under applicable law; (2) suspends or threatens to suspend making payments on any of its debts by reason of actual or anticipated financial difficulties; or (3) commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness generally; (B) the value of the assets of the Bank or any of its Material Subsidiaries is less than its liabilities (taking into account contingent and prospective liabilities); (C) a moratorium is declared in respect of any Financial Indebtedness of the Bank or any of its Material Subsidiaries; or (D) any corporate action, legal proceedings or other procedure or step is taken in relation to: (1) the suspension of payments or a moratorium in relation to the indebtedness of or the winding-up, bankruptcy, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Bank or any of its Material Subsidiaries; (2) a composition, compromise, assignment or arrangement with the creditors of the Bank or any of its Material Subsidiaries; or (3) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Bank or any of its Material Subsidiaries or any of their assets, or any analogous procedure or step is taken in any jurisdiction, provided that sub-paragraph (D) shall not apply to any

385

winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days after commencement; or (v) Creditors Process any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of not less than U.S.$10 million and is not discharged or stayed within 45 days after commencement; or (vi) Invalidity or Unenforceability the validity of the Units is contested by the Bank or the Bank denies its obligations under the Units (whether by a general suspension of payments or a moratorium on the payment of debt or otherwise), or it is or becomes unlawful for the Bank to perform or comply with all or any of its obligations set out in the Units or all or any of the obligations of the Bank provided therein shall be or become unenforceable or invalid. 14. Replacement of Unit Certificates If any Unit Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying and Transfer Agent and the Agent, subject to all applicable laws and Stock Exchange requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Bank may reasonably require. Mutilated or defaced Unit Certificates must be surrendered before replacements will be issued. 15. Meetings of Unitholders; Modification and Waiver (a) Meetings of Unitholders The Trust Deed contains provisions for convening meetings of Unitholders to consider any matters relating to the Units, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Trustee or the Bank, or by the Trustee upon the request in writing of Unitholders holding not less than one-tenth of the aggregate principal amount of the outstanding Units. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing a clear majority of the aggregate principal amount of the Units for the time being outstanding, or, at any adjourned meeting, two or more persons being or representing Unitholders whatever the principal amount of the Units for the time being outstanding so held or represented; provided, however, that certain proposals (including any proposal to change any date fixed for payment of any amount in respect of the Units, to reduce any amount payable on any date in respect of the Units, to alter the method of calculating the amount of any payment in respect of the Units or the date for any such payment, to change the currency of payment under the Units or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution) (a special quorum resolution) may only be sanctioned by an Extraordinary Resolution passed at a meeting of Unitholders at which two or more persons holding or representing not less than three quarters or at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Units form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Unitholders, whether present or not. The Trust Deed contains provisions for convening meetings of holders of the Units with holders of notes of other series issued under the Trust Deed if the Trustee so decides.

386

(b)

Written Resolution A resolution in writing will take effect as if it were an Extraordinary Resolution if it is signed (i) by or on behalf of all of Unitholders who for the time being are entitled to receive notice of a meeting of Unitholders under the Trust Deed or (ii) if such Unitholders have been given at least 21 clear days notice of such resolution, by or on behalf of persons holding three-quarters of the aggregate principal amount of the outstanding Units. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Unitholders.

(c)

Modification Without Unitholders Consent The Trustee may, without the consent of the Unitholders, agree (i) to any modification of the Units (including these Conditions) or the Trust Deed (other than in respect of a matter requiring a special quorum resolution), which, in the opinion of the Trustee, will not be materially prejudicial to the interests of Unitholders and (ii) to any modification of the Units (including these Conditions) or the Trust Deed, which is of a formal, minor or technical nature or to correct a manifest error. In addition, the Trustee may, without the consent of the Unitholders, authorise or waive any proposed breach or breach of the Units or the Trust Deed (other than a proposed breach or breach relating to the subject of a matter requiring a special quorum resolution) if, in the opinion of the Trustee, the interests of the Unitholders will not be materially prejudiced thereby. Any such modification, waiver or authorisation shall be binding on the Unitholders and, unless the Trustee agrees otherwise, shall be promptly notified to the Unitholders in accordance with Condition 16 (Notices).

16.

Notices (a) To the Unitholders Notices to Unitholders will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day (not being a Saturday or a Sunday) after the date of mailing. In addition, so long as the Units are listed on an Approved Stock Exchange17 or the Kazakhstan Stock Exchange and the relevant Stock Exchange so requires, notices to the Unitholders shall be published in a leading newspaper having general circulation in the country of such Exchange. Any such notice shall be deemed to have been given on the date of first publication. (b) To the Bank Notices to the Bank will be deemed to be validly given if delivered to the Bank at 97 Dzholdasbekov str., md Samal-2, Almaty 050051, Kazakhstan and clearly marked on their exterior Loan and Capital Markets Department(or at such other addresses and for such other attentions as may have been notified to the Unitholders in accordance with Condition 16(a)) and will be deemed to have been validly given at the opening of business on the next day on which the Banks principal offices, as applicable, are open for business.

For the convenience of the reader of this Prospectus, the Approved Stock Exchange as at the date of this Prospectus is the Luxembourg Stock Exchange. So long as the Notes are listed thereon, and the Luxembourg Stock Exchange so requires, notices to Noteholders may be published on the website of the Luxembourg Stock Exchange at www.bourse.lu. If any notice is published in this way there is no requirement for the notice to be published in a leading newspaper.

17

387

(c)

To the Trustee and Agents Notices to the Trustee or any Agent will be deemed to have been validly given if delivered to the registered office, for the time being, of the Trustee or the Specified Office, for the time being, of such Agent, as the case may be, and will be validly given on the next day on which such office is open for business.

17.

Trustee (a) Indemnification Under the Trust Deed, the Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Unitholders. In addition, the Trustee is entitled to enter into business transactions with the Bank and any entity relating to the Bank without accounting for any profit. The Trustees responsibilities are solely those of trustee for the Unitholders on the terms of the Trust Deed. Accordingly, the Trustee makes no representations and assumes no responsibility for the validity or enforceability of the Units or for the performance by the Bank of its obligations under or in respect of the Units or the Trust Deed, as applicable. (b) Exercise of Power and Discretion In connection with the exercise of any of its powers, trusts, authorities or discretions (including, but not limited to, those referred to in these Conditions and the Trust Deed), the Trustee shall have regard to the interests of the Unitholders as a class and, in particular, shall not have regard to the consequences of such exercise for individual Unitholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or taxing jurisdiction. The Trustee shall not be entitled to require, and no Unitholder shall be entitled to claim, from the Bank (in the case of a Unitholder), the Trustee any indemnification or payment in respect of any tax consequence of any such exercise upon individual Unitholders. (c) Enforcement; Reliance The Trustee may at any time, at its discretion and without notice, institute such proceedings as it thinks fit to enforce its rights under the Trust Deed in respect of the Units, but it shall not be bound to do so unless: (i) it has been so requested in writing by the holders of a least one-fifth in principal amount of the outstanding Units or has been so directed by an Extraordinary Resolution; and it has been indemnified or provided with security or pre-funded to its satisfaction.

(ii)

The Trust Deed provides that the Trustee may, at any time, or, in making any determination under these Conditions or the Trust Deed, act on the opinion or advice of, or information obtained from, any expert, auditor, lawyer or professional entity, without further enquiry or evidence. In particular, the Trust Deed provides that the Trustee may rely on certificates or reports from auditors whether or not such certificate or report or any engagement letter or other document entered into by the Bank and the auditors contains any limit on liability (monetary or otherwise) of the auditors and provides further that nothing shall require the Trustee to enter into or to agree to be bound by the terms of any engagement letter or other document entered

388

into by the Bank or any such auditor. If such evidence is relied upon, the Trustees determination shall be conclusive and binding on all parties, and the Trustee will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience that may result from it so acting. Until the Trustee has actual or express knowledge to the contrary, the Trustee may assume that no Event of Default or event or circumstance that could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 13 (Events of Default) become an Event of Default has occurred. The Trust Deed provides that the Bank is required to deliver to the Trustee, pursuant to, and in the circumstances detailed in, the Trust Deed, a certificate signed by the Chairman of the Management Board that there has not been and is not continuing any Event of Default, an event or circumstance that could with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 13 (Events of Default) become an Event of Default, or other breach of the Trust Deed. The Trustee shall be entitled to rely without liability on such certificates. The Trustee shall not be responsible for monitoring any of the covenants and obligations of the Bank set out in these Conditions and shall be entitled to rely upon the information provided pursuant to these Conditions and the Trust Deed and to assume, unless it receives actual notice to the contrary, that the Bank is complying with all covenants and obligations imposed upon it, respectively, herein and therein. (d) Failure to Act No Unitholder may proceed directly against the Bank or enforce the Security Interests unless the Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is continuing. (e) Retirement and Removal Any Trustee may retire at any time on giving at least two months written notice to the Bank without giving any reason or being responsible for any costs occasioned by such retirement, and the Unitholders may by Extraordinary Resolution remove any Trustee, provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, it will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee. In the event of any change of the Trustee, notices thereof shall be published as provided in Condition 16(a) (To the Unitholders). (f) Substitution The Trust Deed contains provisions to the effect that the Trustee may (without the consent of the Unitholders) agree on such terms as it may specify to the substitution of the Banks successor in business in place of the Bank as issuer and principal obligor in respect of the Units and as principal obligor under the Trust Deed, subject to all relevant conditions of the Trust Deed having been complied with (including an unconditional guarantee by the Bank of the obligation assumed by the substitute). Not later than 14 days after compliance with the aforementioned requirements, notice thereof shall be given by the Bank to the Unitholders in accordance with Condition 16 (Notices).

389

18.

Currency Indemnity If any sum due from the Bank in respect of the Units under the Trust Deed or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions, the Trust Deed or such order or judgment into another currency (the second currency) for the purpose of making or filing a claim or proof against the Bank, obtaining an order or judgment in any court or other tribunal or enforcing any order or judgment given or made in respect of the Units or in respect thereof under the Trust Deed, the Bank shall indemnify each Unitholder, on the written demand of such Unitholder addressed to the Bank and delivered to the Bank or to the Specified Office of the Principal Paying and Transfer Agent or the Agent having its Specified Office in London, against any loss suffered as a result of any discrepancy between the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and the rate or rates of exchange at which such Unitholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. This indemnity constitutes a separate and independent obligation of the Bank and shall give rise to a separate and independent cause of action.

19.

Contracts (Rights of Third Parties) Act 1999 No Person shall have any right to enforce any term or condition of the Units under the Contracts (Rights of Third Parties) Act 1999, but this does not affect the right or remedy of any Person which exists or is available apart from such Act.

20.

Governing Law; Arbitration and Jurisdiction (a) Governing Law The Trust Deed, the Units, the Agency Agreement and any non-contractual obligations arising out of or in connection therewith are governed by, and shall be construed in accordance with, English law. (b) Arbitration The Bank agrees that any claim, dispute or difference of whatever nature arising under, out of or in connection with the Units or the Trust Deed (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with the Trust Deed) (a Dispute), shall be referred to and finally settled by arbitration in accordance with the rules of the London Court of International Arbitration (LCIA) (the Rules) as at present in force and as modified by this Condition, which Rules shall be deemed incorporated into this Condition. The number of arbitrators shall be three, one of whom shall be nominated by the Bank, one by the Trustee and the third of whom, who shall act as Chairman, shall be nominated by the two party nominated arbitrators, provided that if the third arbitrator has not been nominated within 30 days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. The parties may nominate and the LCIA may appoint arbitrators from among the nationals of any country, whether or not a party is a national of that country. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. (c) Trustees Option At any time before the Trustee has nominated an arbitrator to resolve any Dispute(s) pursuant to Condition 20(b) (Arbitration), the Trustee, at its sole option, may elect by notice in writing to the Bank that such Dispute(s) shall instead be heard by the courts

390

of England, as more particularly described in Condition 20(d) (Jurisdiction). Following any such election, no arbitral tribunal shall have jurisdiction in respect of such Dispute(s). (d) Jurisdiction In the event that the Trustee serves a written notice of election in respect of any Dispute(s) pursuant to Condition 20(c) (Trustees Option), the Bank agrees for the benefit of the Trustee and the Unitholders that the courts of England shall have jurisdiction to hear and determine any such Dispute(s) and, for such purposes, irrevocably submits to the jurisdiction of such courts. Subject to Condition 20(b) (Arbitration), nothing in this Condition shall (or shall be construed so as to) limit the right of the Trustee to bring proceedings (Proceedings) for the determination of any Dispute(s) in any other court of competent jurisdiction, nor shall the bringing of such Proceedings in any one or more jurisdictions preclude the bringing of Proceedings by the Trustee in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law. (e) Appropriate Forum The Bank has irrevocably waived any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and agrees not to claim in any Proceedings that any such court is not a convenient or appropriate forum. (f) Agent for Service of Process The Bank has agreed that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX or, if different, its registered office for the time being. If for any reason the Bank does not have such an agent in England, it will promptly appoint a substitute process agent and notify in writing the Trustee of such appointment. If such person is not or ceases to be effectively appointed to accept service of process on behalf of the Bank, the Bank shall, on the written demand of the Trustee, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Trustee shall be entitled to appoint such a person by written notice to the Bank. Nothing herein shall affect the right to serve process in any other manner permitted by law. (g) Consent to Enforcement, etc. The Bank has consented generally in respect of any Disputes (or Proceedings in accordance with Condition 20(d) (Jurisdiction)) to the giving of any relief or the issue of any process in connection with such Disputes or Proceedings, including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be given in such Proceedings or in connection with such Disputes. (h) Waiver of Immunity To the extent that the Bank may in any jurisdiction claim for itself or its respective assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed in any such jurisdiction to the Bank, or its assets or revenues, the Bank has agreed, in connection with any Disputes or Proceedings, not to claim and have irrevocably waived such immunity to the full extent permitted by the laws of such jurisdiction.

391

SCHEDULE 2 TERMS AND CONDITIONS OF THE REGULATION S GDRS The following terms and conditions (except for paragraphs in italics) will be endorsed on each certificate representing Regulation S GDRs. THE BANK OF NEW YORK MELLON, a national banking association organized under the laws of the United States, as depositary hereunder (the Depositary), hereby certifies that _______________ is the registered holder of [the number indicated on the records of the Depositary of] Global Depositary Shares (GDSs), each (subject to paragraph (13)) representing 500 ordinary shares (including the rights to receive Shares described in paragraph (1), Shares and, together at any time with all Shares at such time deposited under the Deposit Agreement, hereinafter defined, and any and all other Shares, securities, cash or property at such time held for the account of the Depositary in respect or in lieu of such deposited Shares and other Shares, securities, property and cash, the Deposited Securities), of BTA BANK JSC, a corporation organized under the laws of the Republic of Kazakhstan and its successors (the Bank), deposited under the Deposit Agreement dated as of 23 August 2010 (as amended from time to time, the Deposit Agreement) between the Bank and the Depositary. The Deposit Agreement is deemed executed in London, England and, together with the global depositary receipts issued thereunder (GDRs), will be governed by and construed in all respects in accordance with English law. 1. Issuance of GDRs: Pre-Release; Initial and Certain Continuing Representations and Covenants This GDR is one of the GDRs issued under the Deposit Agreement. Subject to the Deposit Agreement and paragraphs (4) and (7), the Depositary may so issue GDRs or adjust its records to increase the number of GDSs evidenced by the Master GDR only against deposit of: (a) Shares in form satisfactory to the Custodian; (b) rights to receive Shares from the Bank or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or (c) in accordance with the next paragraph of this paragraph (1). In its capacity as Depositary, the Depositary shall not lend Shares or GDSs; provided, however the Depositary may execute and deliver GDSs 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 deliver Shares upon the receipt and cancellation of GDSs, 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 GDSs in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation and agreement from the person to whom GDSs or Deposited Securities are to be delivered (the Pre-Releasee) that such person, or its customer, (i) owns or represents the owner of the corresponding Deposited Securities or GDSs to be remitted (as the case may be), (ii) assigns all beneficial right, title and interest in such Deposited Securities or GDSs (as the case may be) to the Depositary in its capacity as such and for the benefit of the Holders, and (iii) will not take any action with respect to such GDSs or Deposited Securities (as the case may be) that is inconsistent with the transfer of beneficial ownership (including without the consent of the Depositary, disposing of such GDSs or Deposited Securities, 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 GDSs 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 GDSs 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 limit for the purpose of general

392

application. The Depositary will also set dollar limits with respect to Pre-Release transactions hereunder with any particular Pre-Releasee 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-Releasees obligations in connection herewith, including the Pre-Releasees obligation to deliver Shares and/or other securities or GDSs upon termination of a Pre-Release transaction anticipated hereunder (and shall not, for the avoidance of doubt, constitute Deposited Securities 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 any Pre-Release of Rule 144A GDSs or Rule 144A Shares is to be made pursuant to this provision shall be required to deliver to the Depositary a duly executed and completed certificate substantially in the form set out in Exhibit C-1. The person to whom any Pre-Release of Regulation S GDSs 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 Exhibit D-1. At the request, risk and expense of the person depositing Shares, the Depositary may accept Shares for forwarding to the Custodian and may deliver certificated GDRs, if then available pursuant to Section 2 of the Deposit Agreement, at a place other than the Transfer Office. Every person depositing Shares under the Deposit Agreement represents and warrants that such Shares are validly issued and outstanding, fully paid, nonassessable and free of pre-emptive rights, and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Shares and issuance of GDRs or adjustment of the Depositarys records in respect of the Master GDR. Additionally, every person depositing Shares under the Deposit Agreement either (i) represents and warrants that neither such person nor the person to whom GDSs will be directly or beneficially delivered on issuance thereof is a resident of Kazakhstan or (ii) to the extent such person or the person to whom GDSs will be directly or beneficially delivered on issuance thereof is a resident of Kazakhstan, represents and warrants that the undersigned has notified the Depositary of such and, in connection with any fees and other amounts payable under the Deposit Agreement with respect to such GDSs, has or will pay such fees and other amounts with appropriate gross-up for any taxes deducted, withheld or required to be withheld or paid in connection therewith. The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to accept for such deposit any Shares identified by the Bank in order to facilitate the Banks compliance with such Act. Neither the Depositary nor the Custodian, nor any nominee or person on their behalf, shall (i) accept for deposit under the Deposit Agreement any Rule 144A GDRs evidencing Rule 144A GDSs issued pursuant to the Deposit Agreement or Shares withdrawn pursuant to the Deposit Agreement or (ii) issue GDSs or GDRs (or adjust the records of the Depositary in respect of the Master GDR) against delivery thereof, for so long as such Rule 144A GDSs, Rule 144A GDRs or Shares are or may be deemed restricted securities within the meaning of Rule 144 under the Securities Act. The Depositary shall be entitled to deal with any 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.

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2.

Withdrawal of Deposited Securities Subject to the Deposit Agreement and paragraphs (4), (5) and (7) and to the provisions of or governing Deposited Securities (including the Banks constitutional documents or applicable law), upon (i) surrender of any GDSs evidenced hereby by (a) electronic delivery of GDSs from the Euroclear/Clearstream Participant (as defined in Section 2(b) of the Deposit Agreement) account of a beneficial owner of an interest in the Master GDR to the Depositarys Euroclear/Clearstream Participant account, if certificated GDRs are then not available pursuant to Section 2 of the Deposit Agreement, or (b) delivery of certificated GDRs (properly endorsed in blank or accompanied by proper instruments of transfer, satisfactory to the Depositary) evidencing GDSs by the Holder (as defined in paragraph (3) hereof) to the Depositary at the Transfer Office, if certificated GDRs are then available pursuant to Section 2 of the Deposit Agreement, in either case for the withdrawal of Deposited Securities represented thereby, (ii) receipt by the Depositary of a written order (a Withdrawal Order) from or on behalf of such beneficial owner or Holder, as the case may be, directing the Depositary to deliver the Deposited Securities represented by such GDSs at the Custodians office to or to the order of the persons designated therein and (iii) with respect to withdrawals during the Distribution Compliance Period (and thereafter if the certification required in Exhibit D-2 (iv) is required to be provided), receipt by the Depositary of an executed certification substantially in the form of Exhibit D-2 annexed to the Deposit Agreement (or in such other form as the Bank shall approve) or an electronic certification through Euroclear or Clearstream, as the case may be, in lieu of such certification set forth in Exhibit D-2 by or on behalf of such beneficial owner or Holder, as the case may be, such beneficial owner or Holder, as the case may be, is entitled to delivery at, or to the extent in dematerialized form from, the Custodians office of the Deposited Securities represented by such GDSs to or to the order of the persons named in such Withdrawal Order. At the request, risk and expense of such beneficial owner or Holder, the Depositary may deliver such Deposited Securities at such other place outside the United States as may have been requested in the Withdrawal Order provided that the Depositary may deliver Shares prior to the receipt of GDSs for withdrawal of Deposited Securities, including GDSs which were issued under (1) above but for which Shares may not have been received (until such GDSs are actually deposited, Pre released Shares) only if all the conditions in (1) above related to such Pre-Release are satisfied). After the Distribution Compliance Period, delivery of Shares represented by GDSs or other Deposited Securities upon surrender of GDSs as provided herein may also be subject to delivery to the Depositary of such written certification and agreement as the Bank and Depositary may require. A Regulation S GDR surrendered may be required by the Depositary to be properly endorsed in blank or accompanied by properly executed instruments of transfer in blank. Prior to expiration of the Distribution Compliance Period, no Holder may transfer GDSs or Shares represented thereby to, or for the account of, a Qualified Institutional Buyer (QIB) unless such Holder (i) withdraws such Shares in accordance with the Deposit Agreement and (ii) instructs the Depositary to deliver the Shares so withdrawn to or for the account of the Custodian under the Deposit Agreement for issuance thereunder of Rule 144A GDSs to or for the account of such Qualified Institutional Buyer. Issuance of such Rule 144A GDSs shall be subject to the terms and conditions of the Deposit Agreement and the Rule 144A GDR, including with respect to the deposit of Shares and the issuance of Rule 144A GDSs, including delivery of the duly executed and completed written certificate and agreement required under the Deposit Agreement and the Rule 144A GDR, by or on behalf of the person who will be the beneficial owner of such Rule 144A GDSs, representing that such person is a Qualified Institutional Buyer and agreeing that it will comply with the restrictions on transfer set forth in the Deposit Agreement and the Rule 144A GDR and to payment of the fees, charges and taxes provided therein. The Depositary may refuse to deliver Deposited Securities generally, or in one or more localities, if such refusal is deemed necessary or desirable by the Depositary, in good faith, at

394

any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the Deposit Agreement or for any other reason. Notwithstanding anything to the contrary contained in the Deposit Agreement or any GDR the Depositary shall not (except on the instruction of the Bank) cancel GDSs (i) during any period when the transfer of Shares has been blocked on the account due to participation in any shareholders meeting of the Bank when notified by the Bank in writing that such suspension is necessary, or (ii) after the Bank has notified the Depositary in writing that the transfer of Shares has been blocked following notice of intended exercise by Samruk-Kazyna of its Drag-Along Rights, or (iii) the Depositary is notified by the Bank in writing that delivery of Deposited Securities will not comply generally, or in one or more localities, with any applicable law or governmental or stock exchange regulations, or (iv) the Depositary is notified by the Bank in writing that delivery of Deposited Securities will result in ownership of such Shares exceeding any limit under applicable Kazakh law or the Charter as notified to the Depositary by the Bank from time to time, or (v) in the case of GDSs represented by the Regulation S Master GDR or the Rule 144A Master GDR, during any period prior to the Depositary being notified in writing by the Bank that the Placement Report in respect of the Shares represented by those GDSs has been approved by the FMSA, or (vi) in the case where the Depositary has been informed by the Bank that a Placement Report has been prepared in respect of any other new Shares represented by GDSs, then in relation to those GDSs, during any period prior to the Depositary being notified in writing that the Placement Report relating to those Shares has been approved by the FMSA. For the avoidance of doubt, in the absence of any such notification from the Bank, the Depositary is not under any obligation to ascertain or determine whether or not any such delivery should be refused (including monitoring ownership levels amongst beneficial owners) and the Depositary shall not be liable for any loss, damage or other consequences arising from any such delivery. Also, for the avoidance of doubt, provided that it is complying with a written notification from the Bank, the Depositary shall not be liable for any loss, damage or other consequences arising from its refusal or delivery. By holding a GDR or an interest in the Master GDR, Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR each understands and agrees that the Depositary will have no obligation to procure the cancellation of GDSs and the delivery of Deposited Securities if in the opinion of the Depositary taxes, duties or other governmental charges will be owed by or on behalf of the Depositary or any of its agents (including, without limitation, the Custodian) on the cancellation of GDSs or the delivery of Deposited Securities, unless (a) the Depositary has established a procedure to ensure that an amount equal to any such taxes, duties and other governmental charges (plus any interest, fines and penalties thereon and/or with respect thereto) is paid to the Depositary at or prior to the time any such Deposited Securities are to be delivered or cancellation of GDSs is to be effected, (b) with respect to each cancellation of GDSs or delivery of Deposited Securities, the Depositary and its agents, and each of their respective officers, directors, representatives and affiliates, have each received such indemnifications and assurances as they each may require from the Bank, the holder of GDRs or GDSs requesting cancellation, and each person and/or entity to whom Deposited Securities are to be delivered, and (c) the Depositary agrees to so permit the cancellation of GDSs and the delivery of Deposited Securities. Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR, understand that the Depositary has no obligation to establish any such procedures or cancel any GDSs and to deliver the Deposited Securities represented thereby. By holding a GDR (or an interest therein), Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR, waive any and all rights and claims each may now or hereinafter have against the Depositary or its agents in connection with any and all of their acts and omissions to act in connection therewith.

395

3.

Transfers of GDRs The Depositary or its agent will keep, at a designated transfer office (the Transfer Office), (a) a register (the GDR Register) for the registration, registration of transfer, combination and split-up of GDRs, which at all reasonable times will be open for inspection by Holders and the Bank for the purpose of communicating with Holders in the interest of the business of the Bank or a matter related to the Deposit Agreement and (b) facilities for the delivery and receipt of GDRs. Subject to the restrictions on transfer appearing hereon, title to this GDR (and to the Deposited Securities represented by the GDSs evidenced hereby) when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person or persons in whose name this GDR is registered on the GDR Register (the Holder) as the absolute owner hereof for all purposes and neither the Depositary nor the Bank will have any obligation or be subject to any liability under the Deposit Agreement to any holder of a GDR, unless such holder is the Holder thereof. Subject to paragraphs (4) and (5) and the restrictions on transfer appearing hereon, this GDR is transferable on the GDR Register and may be split into other GDRs or combined with other GDRs into one GDR, evidencing the aggregate number of GDSs surrendered for split-up or combination, by the Holder hereof or by such Holders duly authorized attorney upon surrender of this GDR at the Transfer Office properly endorsed or accompanied by proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the GDR Register at any time or from time to time when deemed expedient by it. Following completion of the Offering of GDSs, a registration statement on Form F-6 under the Securities Act relating to the GDSs may be filed with the U.S. Securities and Exchange Commission (the SEC). Any such registration statement will not be filed and would not be declared effective until after the date which is the latest of the commencement of the original offering of the GDSs issued hereunder, the original issue date of the GDSs issued hereunder and the issue date with respect to any additional GDSs, if any, issued to cover over-allotments, to the date 40 days after such date (such 40 day period being the Distribution Compliance Period). Prior to expiration of the Distribution Compliance Period, no Holder may transfer GDSs or Shares represented thereby to, or for the account of, a qualified institutional buyer (within the meaning of Rule 144A, a QIB). On each transfer of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR on such transfer shall be deemed to represent that such person (a) is not Samruk-Kazyna or an affiliate of Samruk-Kazyna , (b) does not hold, and after giving effect to such transfer will not hold, more than 10% of the Banks share capital (unless such person has obtained all relevant approvals), and (c) is not associated with the Former Management of the Bank.

4.

Certain Limitations Prior to the issue, registration, registration of transfer, split-up or combination of any GDR, the adjustment of the Depositarys records in respect of the Master GDR, the delivery of any distribution in respect thereof, or the withdrawal of any Deposited Securities, and from time to time in the case of clause (b)(ii) of this paragraph (4), the Bank, the Depositary or the Custodian may require: (a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7); (b) the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature, and (ii) such other information, including without limitation information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this GDR (including without limitation the restrictions on transfer

396

appearing hereon), as it may deem necessary or proper; (c) in case of a transfer of Shares other than Shares of the New Share Offering, a certified copy of the Acknowledgment Letter; (d) where applicable, a purchase/sale contract or other similar document relating to the transfer of the Shares, in each case in a form satisfactory to the Custodian, and delivery to the Custodian of evidence satisfactory to the Custodian that irrevocable instructions have been given to cause such Shares to be transferred to such account, in any case accompanied by delivery to the Custodian or the Depositary, as the case may be, and (e) compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement. The acceptance of deposits of Shares, the adjustment of the Depositarys records in respect of the Master GDR, the issuance, registration, registration of transfer, split-up or combination of GDRs or the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the GDR Register, the Kazakh Depository or any register for Deposited Securities is closed or when any such action is deemed advisable by the Depositary. In the event that the Bank receives a notice from the FMSA or otherwise becomes aware from any public source that any Share Offering is cancelled or suspended by the FMSA, it shall promptly notify the Depositary of such event in writing, but no later than 2 Business Days from the receipt of such notice or other public announcement. The Bank will notify the Depositary in writing of the number of (i) New Shares or Shares, as the case may be, which have been or are to be cancelled or suspended, (ii) the number of deposited Shares which have been or are to be cancelled or suspended, (iii) the number of GDSs to be cancelled or suspended (if it is possible to identify the GDSs issued over the cancelled or suspended Shares). Upon receipt of this notice and on payment by or on behalf of the Bank or other relevant persons (if applicable) to the Depositary or its nominee of the amount of the subscription monies paid in respect of the deposited Shares which are to be cancelled or suspended, the Depositary will, as soon as practicable, give notice to the Holders in accordance with the provisions of the Deposit Agreement of the cancellation or suspension of such number of GDSs as is notified to the Depositary by the Bank (if it is possible to identify the GDSs issued over the cancelled Shares), and will cancel or suspend such number of GDSs as were identified as issued over the cancelled Shares or will partially cancel all of the GDSs outstanding on a pro rata basis or the Depositary will carry out an adjustment to the outstanding GDSs on such other basis as the Depositary determines is practicable in its sole discretion. To the extent that the Depositary receives any such subscription amount from or on behalf of the Bank or other relevant persons (if applicable), the Depositary will promptly distribute such amount to the Holders of the GDSs cancelled (if it is possible to identify the GDSs issued over the cancelled Shares) or pro rata to the proportions of GDSs cancelled, as the case may be. 5. Taxes If any tax or other governmental charge shall become payable by or on behalf of the Custodian or the Depositary with respect to this GDR, any Deposited Securities represented by the GDSs evidenced hereby or any distribution thereon or payment made in respect thereof, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary. The Depositary may refuse to effect any registration, registration of transfer, split-up or combination hereof, any adjustment of its records in respect of the Master GDR or any withdrawal of such Deposited Securities until such payment is made. The Depositary may also deduct from any distribution hereon, or may sell (by public or private sale) for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of GDSs evidenced hereby to reflect any such sales of Shares. Notwithstanding the foregoing, to the extent any tax, stamp duty or other governmental charge is or becomes payable in connection with, or in any way related to, any deposit of Shares under the Deposit Agreement by the Bank or the handling of said Shares by the Custodian or the initial issue of GDSs to

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Holders following the deposit of Shares under the Deposit Agreement by the Bank, or the listing or quotation of the GDSs, the Bank agrees to remain liable for, and to pay, such tax, stamp duty or other governmental charge. To the extent the Bank does not timely pay such taxes, stamp duty or other governmental charge and the Depositary is required to pay such amounts, the Depositary may look to collecting such amounts from Holders and Holders will then have a right to be reimbursed by the Bank in respect of any such taxes, stamp duty or other governmental charges which the Bank agreed under this paragraph to pay but which it failed to timely pay. In connection with any distribution on Deposited Securities to Holders, the Bank will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Bank, and the Depositary and the Custodian will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian. If the Depositary determines that any distribution in property other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the Holders entitled thereto. Subject to the Banks obligation to pay and remain liable for any tax, stamp duty or other governmental charge payable in connection with, or in any way related to, the initial deposit of Shares by the Bank pursuant to the restructuring of the Bank or the handling of said Shares by the Custodian or the initial issue of GDSs to Holders following the initial deposit of Shares by the Bank pursuant to the restructuring of the Bank as described in the above paragraph, or the listing or quotation of the GDSs, for which the Bank does not have a right to be indemnified by the Holders, each Holder of a GDR or an interest therein agrees to indemnify the Depositary, the Bank, the Custodian and any of their respective directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest (including, without limitation, out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained as well as for any capital gains and/or value added taxes) any of which are owing on or in connection with the GDSs, the transfer thereof, any distribution or payment thereon and/or the delivery of Deposited Securities. The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that: (i) the Bank is the sole and exclusive tax agent in Kazakhstan in respect of the Shares (and any other Deposited Securities) and the GDSs; (ii) in its capacity as tax agent, the Bank has sole responsibility for making all required tax payments and withholdings made and to be made on or in respect of the Shares (and any other Deposited Securities) represented by the GDSs, for applying the proper rates of withholding or other tax to all such payments, and for otherwise performing all obligations required of a tax agent under Kazakhstan laws, rules and regulations in connection with all such payments and withholdings; and (iii) neither the Depositary nor any of its agents will act or be deemed to act as a tax agent in connection with, nor shall either of them otherwise have any responsibilities or obligations whatsoever for complying with any withholding or other tax requirements related to, any payments owing or made on or in respect of the Shares (and any other Deposited Securities) represented by the GDSs. Without limiting the generality of the foregoing, the Bank agrees that it has sole responsibility for advising the Depositary and the Custodian(s) as to the certifications, documentation, forms and other information required to be received by the Bank from Holders, and the timing thereof, to enable the Bank to determine the rate of withholding at source applicable to payments made by the Bank with respect to Shares (and any other Deposited Securities) represented by GDSs evidenced by eligible Holders GDRs. The Bank confirms that it has obtained and will at all times continue to obtain such independent tax advice as it deems necessary and advisable with regard to any

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and all withholding and tax requirements relating to the Shares (and any other Deposited Securities) represented by the GDSs as well as with respect to the GDSs, in each case under Kazakhstan laws, rules and regulations, and with respect to the Banks role as tax agent under Kazakhstan laws, rules and regulations and in accordance with the Deposit Agreement and the GDRs. 6. Disclosure of Interests To the extent that the provisions of or governing any Deposited Securities may require disclosure of or impose limits on beneficial or other ownership of Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR agree to comply with all such disclosure requirements and ownership limitations and to cooperate with the Depositary in the Depositarys compliance with any Bank instructions in respect thereof, and the Depositary will use reasonable efforts to comply with such Bank instructions. The Bank reserves the right to instruct non-complying Holders and all non-complying persons holding GDRs and/or GDSs or beneficial interests in the Master GDR to deliver their GDSs for cancellation and withdrawal of the Deposited Securities so as to permit the Bank to deal directly with the Holder thereof as a holder of Shares and Holders agree to comply with such instructions. Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR agree to promptly disclose in writing to the Bank if at any time it holds 10% or more of the share capital of the Bank. The Depositary agrees to cooperate with the Bank in its efforts to inform Holders of the Banks exercise of its rights under this paragraph and agrees to consult with, and provide reasonable assistance without risk, liability or expense on the part of the Depositary, to the Bank on the manner or manners in which it may enforce such rights with respect to any Holder. 7. Charges of Depositary The Depositary shall be entitled to charge the following remuneration and to receive the following remuneration and reimbursement (such remuneration and reimbursement being payable on demand) in respect of its services under the Deposit Agreement and the terms of the GDSs: (a) From the Holders (i) for the issue of GDSs or the cancellation of GDSs upon the withdrawal of Deposited Securities: U.S.$5.00 or less per 100 GDSs (or portion thereof) issued or cancelled; 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; for issuing GDR certificates in definitive registered form (other than pursuant to paragraph (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; for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Securities: a fee of U.S.$0.05 or less per GDS for each such dividend or distribution; in respect of any issue of rights or distribution of Shares (whether or not evidenced by GDSs) or other securities or other property (other than cash)

(ii)

(iii)

(iv)

(v)

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upon exercise of any rights, any free distribution, stock dividend or other distribution: U.S.$5.00 or less per 100 outstanding GDSs (or portion thereof) for each such issue of rights, dividend or distribution; (vi) (vii) 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 GDS; a fee of U.S.$0.05 or less per GDS (or portion thereof) per calendar year for depositary services which shall be payable as provided in paragraph (ix) below; a fee of U.S.$0.01 or less per GDS per annum for local share registry inspection and related services by the Depositary or the Custodian or their respective agents, which shall be payable as provided in paragraph (ix) below; and any other charge payable by the Depositary, any of the Depositarys agents, including the Custodian, or the agents of the Depositarys agents, in connection with the servicing of Shares or other Deposited Securities (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),

(viii)

(ix)

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, including: (a) reimbursement of such fees, charges, expenses and taxes as are incurred by the Depositary and/or any of the Depositarys agents (including, without limitation, the Custodian), and any and all fees, charges and expenses imposed by, or otherwise owing to, the Kazakh Depository; and (b) payment of a sum sufficient to pay or reimburse the Depositary for payment of any charges (grossed up for any applicable taxes owing or otherwise withheld) imposed by the Kazakh Stock Exchanges or any other stock exchange, provided that the Bank shall pay and remain liable for any tax, stamp duty or other governmental charge payable in connection with, or in any way related to, the initial deposit of the Shares by the Bank pursuant to the restructuring of the Bank or the handling of such Shares by the Custodian or the initial issue of GDSs to Holders following the initial deposit of the Shares by the Bank pursuant to the restructuring of the Bank as described in paragraph 5 and for any costs and charges imposed by the Kazakh Stock Exchange or other stock exchanges on the listing or quotation of the GDSs. The Bank will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Bank and the Depositary, except (i) stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, GDRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), (iv) expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency), and (v) payment of a sum sufficient to pay or reimburse the Depositary for payment of

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any charges imposed by the Kazakh Stock Exchanges or any other stock exchange (other than charges imposed on the listing or quotation of the GDSs which have been or will be paid by the Bank). Such charges may at any time and from time to time be changed by agreement between the Bank and the Depositary. 8. Available Information The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Bank, which are both received by the Depositary or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian. The Depositary will forward copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Bank. Until the expiration of the Distribution Compliance Period, whenever the Bank is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934 or exempt from reporting pursuant to Rule 12g3-2(b) under such Act, the Bank shall provide the information described in Rule 144A(d)(4) under the Securities Act of 1933 to, upon the request of, any Holder, beneficial owner of an interest in the Master GDR or holder of Shares, any prospective purchaser of GDSs designated by such Holder or beneficial owner or any prospective purchaser of Shares designated by such holder. 9. Execution This GDR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. 10. Distributions on Deposited Securities Subject to paragraphs (4), (5) and (7), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holders address shown on the GDR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by GDSs evidenced by such Holders GDRs: (a) Cash Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (Cash), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositarys fees and expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time, and (4) making any sale by public or private means in any commercially reasonable manner; provided, however, that in the event that any of the deposited Shares is not entitled, by reason of its date of issuance, or otherwise, to receive the full amount of such cash dividend or distribution, the Depositary shall make appropriate adjustments in the amounts distributed to the Holders of the GDRs issued in respect of such Shares; and provided, further, that in the event that the Bank or the Depositary shall be required to withhold and does withhold from any cash dividend or other cash distribution in respect of any

401

Deposited Securities an amount on account of taxes, the amount distributed on the GDRs issued in respect of such Deposited Securities shall be reduced accordingly. (b) Shares (i) Additional GDRs evidencing whole GDSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a Share Distribution), provided that, so long as certificated GDRs are not then available under Section 2 of the Deposit Agreement, in lieu of mailing such additional GDRs, the Depositary will credit the relevant Euroclear or Clearstream account with appropriate notifications thereof, and adjust its records in respect of the Master GDR to reflect additional whole GDSs representing Shares available to the Depositary resulting from a Share Distribution, and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional GDSs if additional GDRs were issued therefor, as in the case of Cash. (c) Rights (i) Warrants or other instruments (or interests therein which may be electronically credited to the relevant Euroclear or Clearstream account, as the case may be) in the discretion of the Depositary representing rights to acquire additional GDSs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (Rights), to the extent that the Bank timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Bank has no obligation to so furnish such evidence), or (ii) to the extent the Bank does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Bank does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse). (d) Other Distributions (i) Securities or property available to the Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (Other Distributions), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. Such U.S. dollars available will be distributed by (i) checks drawn on a bank in the United States or (ii) in accordance with the usual practice between the Depositary and Clearstream or Euroclear, as the case may be, in either case for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. 11. Record Dates The Depositary may fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Bank) for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the GDR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect

402

of Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of or be affected by other matters and, only such Holders shall be so entitled or obligated. 12. Voting of Deposited Securities Subject to the next paragraphs hereof, as soon as practicable after receipt from the Bank of notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation materials (or a summary thereof), (b) that each Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of law, rule and/or regulation, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the GDSs evidenced by such Holders GDRs, (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Bank and a provision that by providing voting instructions to the Depositary the person or entity providing such instructions will be deemed to have represented that (i) neither such person nor any person for whom they are acting is prohibited from voting pursuant to Clause 17.5 of the Banking Law, (ii) neither such person nor any person for whom such person is acting owns 10% or more of the outstanding Shares of the Bank or such person and/or person for whom the Holder is acting owns 10% or more of the outstanding Shares of the Bank and has obtained all relevant approvals required in connection therewith, (iii) that neither such person or the person for whom they are acting is associated with any Former Management of the Bank, and (iv) such person is not Samruk-Kazyna or an affiliate of Samruk-Kazyna and (d) that on the written notice of a Holder or beneficial owner of GDSs, in a form acceptable to the Bank, the Bank agrees to permit Holders and beneficial owners of GDSs to attend and speak (but not vote) at any such meetings. Upon receipt of instructions of a Holder on such record date in the manner and on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the GDSs evidenced by such Holders GDRs in accordance with such instructions. The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities. There is no guarantee that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable such Holder to return any voting instructions to the Depositary in a timely manner. The Depositary shall not be required to take any action required by this paragraph (12) unless it shall have received an opinion from the Banks 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 paragraph (12) but that in doing so the Depositary will not be deemed to be exercising voting discretion. If the Depositary is advised 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 the immediately preceding sentence 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. If the Depositary is advised in the opinion referred to above 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 Securities in

403

accordance with paragraph (12), the Depositary shall not vote or cause to be voted such Deposited Securities. Notwithstanding anything else contained in this GDR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. legal prohibitions, English legal prohibitions (including, without limitation, the listing rules and prospectus rules of the UK Financial Services Authority and the admission and disclosure standards of the London Stock Exchange plc if the Bank is at such time listed on the London Stock Exchange plc) or Kazakh legal prohibitions (including without limitation the rules of the Kazakh Stock Exchange(s) on which the Shares are listed). In particular, prior to the Depositary being notified in writing by the Bank that the Placement Report in respect of the New Shares has been approved by the FMSA, the Depositary shall have no obligation to take any such action. The Bank agrees that it shall not establish internal procedures that would prevent the Depositary from complying with, or that are inconsistent with, the terms and conditions of this paragraph (12). 13. Changes Affecting Deposited Securities Subject to paragraphs (4) and (5), the Depositary may, in its discretion, amend this GDR or distribute additional or amended GDRs (with or without calling this GDR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person, irrespective of whether such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, and to sell by public or private sale any property received in connection with) any recapitalisation, reorganisation, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Bank, and to the extent the Depositary does not so amend or exchange this GDR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each GDS evidenced by this GDR shall automatically represent its pro rata interest in the Deposited Securities as then constituted. 14. Exoneration The Depositary, the Bank, their agents and each of them shall: (a) incur no liability if any present or future law, rule, regulation, fiat, order or decree of the United States, the Republic of Kazakhstan or any other country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Banks charter, any act of God, war, terrorism or other circumstance beyond its control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the Deposit Agreement or this GDR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof); (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this GDR and the Deposit Agreement without gross negligence or bad faith; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this GDR; (d) except in the case of any action, suit or other proceeding in respect of the Deposit Agreement, any GDSs or Deposited Securities, or this GDR, which is commenced by or otherwise involves the Depositary, in the case of the Bank and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees

404

and disbursements of counsel) and liability be furnished as often as may be required; (e) not be liable for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or beneficial owner of an interest in the Master GDR, or any other person believed by it to be competent to give such advice or information, and (f) in the case of the Depositary and its agents, incur no liability by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or this GDR (including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable). The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise. The Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any Custodian that is not a branch or affiliate of The Bank of New York Mellon. The Depositary and its agents may rely and shall be protected in acting upon any notice, request, direction or other document or communication believed by them to be genuine and to have been signed or presented by the proper party or parties. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary shall be under no obligation to inform Holders or any other holders of an interest in a GDS about the requirements of Kazakhstan law, rules or regulations or any changes therein or thereto. The Depositary and its agents may own and deal in any class of securities of the Bank and its affiliates and in GDS. Notwithstanding anything to the contrary set forth in the Deposit Agreement or a GDR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any GDR or GDRs or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. None of the Depositary, the Custodian or the Bank shall be liable for the failure by any Holder or beneficial owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holders or beneficial owners income tax liability. The Depositary and the Bank shall not incur any liability for any tax consequences that may be incurred by Holders and/or any persons holding GDRs and/or GDSs or beneficial interests in the Master GDR on account of their ownership of the GDRs or GDSs. The Depositary shall not incur any liability for the content of any information submitted to it by or on behalf of the Bank for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of this Deposit Agreement or for the failure or timeliness of any notice from the Bank. The Bank has agreed to indemnify the Depositary and its agents under certain circumstances. Neither the Depositary nor any of its agents shall be liable to Holders or beneficial owners of interests in GDSs (including those evidenced by the Master GDR) or any other persons or entities for (i) any act or omission to act on the part of the Bank, Samruk-Kazyna or any of their respective agents (including, without limitation, their officers, directors, representatives and affiliates) or (ii) for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought. The Depositary shall not be obliged to distribute GDSs representing such Shares, Shares, other securities or other property deposited under the terms of the GDSs or make any offer of any such rights or sell any securities corresponding to any such rights with respect to which (as notified to the Depositary by the Bank) 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 order for the Depositary to receive from the Bank Shares or other securities to be deposited under the terms of the GDSs, or in order for Shares, other

405

securities or other property to be distributed or subscribed under the terms of the GDSs, or to offer any rights or sell any securities represented by such rights relevant to any Deposited Securities, and such authorisation, consent, registration or permit or such report has not been obtained or filed, as the case may be, and the Depositary shall have no duties to obtain any such authorisation, consent, registration or permit, or to file any such report. Notwithstanding any other terms of the Deposit Agreement or the terms of the GDRs or GDSs: (a) In acting, hereunder the Depositary shall have only those duties, obligations and responsibilities expressly specified in the Deposit Agreement and the terms of the GDSs and, other than holding the Deposited Property for the benefit of Holders as bare trustee, does not assume any relationship of trust for or with the Holders or owners of GDSs or any other person. Neither the Depositary, the Custodian, the Bank, 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 GDSs if, by reason of any provision of any present or future law or regulation of any relevant jurisdiction 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, 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 the terms of the GDSs provide shall or may be done or performed; nor shall any of them incur any liability to any Holder or owner of GDRs or GDSs or any other person with an interest in any GDRs or GDSs by reason of any exercise of, or failure to exercise, any voting rights attached to the Deposited Securities or any of them or any other discretion or power provided for in this 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). Neither the Depositary nor any of its agents 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 GDSs or any other person, by reason of having accepted as valid or not having rejected any certificate for Shares or GDSs 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 the terms of the GDSs. 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 Securities (including, without prejudice to the generality of the foregoing, the conversion of any part of the Deposited Securities or cash from one currency to another), may at any time hold or be interested in GDSs 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 Securities from one currency to another and on any sales of property) without accounting to Holders or any other person for any profit arising therefrom.

(b)

(c)

(d)

406

(e)

The Depositary shall endeavour to effect any such sale as is referred to or contemplated in the terms of the GDSs or any such conversion as is referred to in the terms of the GDSs in accordance with the Depositarys 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. 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 the terms of the GDSs. The Depositary shall have no responsibility whatsoever to the Bank, any Holders, or any owner of GDSs or any other person as regards any deficiency which might arise because the Depositary is subject to any tax in respect of the Deposited Securities or any part thereof or any income therefrom or any proceeds thereof. 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 the Deposit Agreement or the terms applicable to the GDSs, be obliged to have regard to the consequence thereof for the Holders or the owners of GDSs or any other person. 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. 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 may reasonably object, 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 terms of the GDSs, including power to sub-delegate, and subject to such regulations as the Depositary may in the interests of the Holders think fit, provided that no objection from the Bank to any such delegation as aforesaid may be made to a person whose financial statements are consolidated with those of the Depositarys ultimate holding company. 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. 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 the proceedings 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 Banks 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 provision 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.

(f)

(g)

(h)

(i)

(j)

407

(k)

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. Notwithstanding anything to the contrary contained herein or in the terms of the GDSs, 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. No provision of the Deposit Agreement or the terms of the GDSs 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 right or powers. Without prejudice to the previous sentence, the Depositary shall to the extent reasonably practicable notify the Bank of any instance known to the Depositary where the Bank should prefund the Depositary or provide adequate indemnity and/or security to the Depositary in connection with the Deposit Agreement or the terms of the GDSs. No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement or the terms of the GDSs.

(l)

(m)

(n) 15.

Resignation and Removal of Depositary; the Custodian The Depositary may resign as Depositary by written notice of its election so to do delivered to the Bank, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Bank by no less than 90 days prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may appoint substitute or additional Custodians and the term Custodian refers to each Custodian or all Custodians as the context requires. So long as a Custodian shall be the Bank or an affiliate thereof, the Bank agrees to take any and all actions necessary to ensure that the Custodian (i) complies with the provisions of any custody agreement entered into between the Custodian and THE BANK OF NEW YORK MELLON, (ii) follows any and all instructions provided to the Custodian by the Depositary consistent herewith and/or with such custody agreement, and (iii) complies with the provisions of the Deposit Agreement applicable thereto.

16.

Amendment The GDRs and the Deposit Agreement may be amended by the Bank and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise materially prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to the Holders. Every Holder of a GDR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such GDR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any

408

amendment impair the right of the Holder of any GDR to surrender such GDR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body or regulatory body or authority should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of GDR to ensure compliance therewith, the Bank and the Depositary may amend or supplement the Deposit Agreement and the GDR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance. Notice of any amendment to the Deposit Agreement or form of GDRs shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders to retrieve or receive the text of such amendment. 17. Termination Subject to paragraph (22), the Deposit Agreement may not be terminated by the Bank prior to the Minority Protection Expiry Date. The Depositary may, and shall at the written direction of the Bank, terminate the Deposit Agreement and this GDR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder within 45 days of the date of such resignation, or (ii) been removed as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder on the 90th day after the Banks notice of removal was first provided to the Depositary. After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this GDR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the expiration of six months from the date so fixed for termination, the Depositary shall sell the Deposited Securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of GDRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this GDR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Bank shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents. 18. Appointment Each Holder and each person holding an interest in GDSs, upon acceptance of any GDSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be bound by the terms of the Deposit Agreement and the applicable GDR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable GDR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable GDR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

409

19.

Deed Poll To the extent the law, rules and/or regulations governing the Deposit Agreement and/or the GDRs issued hereunder would result in (i) Holders not being deemed a party to the Deposit Agreement, (ii) Holders, owners of GDRs and owners of beneficial interests in the Master GDRs or persons holding interests in GDSs not being bound by the provisions of the Deposit Agreement or the GDRs, the Bank agrees that the Deed Poll (a form of which is attached as Exhibit E to the Deposit Agreement) executed by the Bank in favour of such Holders, owners and persons provides that, if the Bank fails to perform the obligations imposed on it by certain specified provisions of the Deposit Agreement, any Holder, owner or person 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 GDSs of which he is the Holder relate.

20.

Registration of Shares; Kazakh Share Register The Bank agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue the appointment of a Kazakh Share Registrar, in full force and effect for so long as any GDSs remain outstanding under the Deposit Agreement or the Deposit Agreement remains in force. The Bank agrees that it shall: (i) take such action as is reasonably necessary to ensure the accuracy and completeness of all information set forth in the Share Register; (ii) provide or use its reasonable efforts to cause the Kazakh Share Registrar to provide to the Depositary, the Custodian and their respective agents, Kazakh Depository unrestricted access to the Share Register during ordinary business hours in Almaty, the Republic of Kazakhstan, in such manner and upon such terms and conditions as the Depositary, in its reasonable discretion, may deem appropriate, to permit the Depositary, the Custodian and their respective agents to regularly reconcile the number of Deposited Securities registered in the name of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the terms of the Deposit Agreement and, in connection therewith, to provide the Depositary, the Custodian and their respective agents, upon request, with a duplicate extract from the Share Register duly certified by the Kazakh Share Registrar (or some other evidence of verification which the Depositary, in its reasonable discretion, deems sufficient); (iii) use its reasonable efforts to cause the Kazakh Depository and the Kazakh Share Registrar promptly (and, in any event, within three (3) Business Days in Almaty, the Republic of Kazakhstan, of the Kazakh Depository and the Kazakh Share Registrars receipt of such documentation as may be required by applicable law and regulation and the reasonable and customary internal regulations of the Kazakh Depository and the Kazakh Share Registrar, or as soon as practicable thereafter) to effect the re-registration of ownership of Shares in the Share Register and the book-entry system of the Kazakh Depository in connection with any deposit or withdrawal of Shares or other Deposited Securities under the Deposit Agreement; (iv) permit and use its reasonable efforts to cause the Kazakh Depository and the Kazakh Share Registrar to permit each of the Depositary and the Custodian to register any Shares held hereunder in the name of the Depositary, the Custodian or their respective nominees (who may be non-residents of the Republic of Kazakhstan); and (v) use its reasonable efforts to cause the Kazakh Depository and the Kazakh Share Registrar promptly to notify the Depositary in writing at any time that the Kazakh Share Registrar (A) eliminates the name of a shareholder of the Bank from the book-entry system of the Kazakh Depository or the Share Register or otherwise alters a shareholders interest in the Shares and such shareholder alleges to the Bank or the Kazakh Depository or the Kazakh Share Registrar or publicly that such elimination or alternation is unlawful; (B) no longer will be able materially to comply with, or has engaged in conduct that indicates it will not materially comply with, the provisions of the Deposit Agreement relating to it; (C) refuses to re-register shares in the name of a particular purchaser and such purchaser (or its respective seller) alleges that such non-registration or refusal is unlawful; (D) holds Shares of the Bank for its own account; or (E) has materially

410

breached the provisions of the Deposit Agreement relating to it and has failed to cure such breach within a reasonable time. In connection with the Deposit Agreement, the Bank agrees that it shall be solely liable for any act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar (other than such act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar arising in connection with any negligence, bad faith, fraud or wilful default of the Depositary, or the Depositarys directors, employees, agents ((other than the Custodian)) or affiliates) and that the Bank shall be solely liable for the unavailability of Deposited Securities or for the failure of the Depositary to make any distribution of cash or other distributions with respect thereto as a result of (i) any act or failure to act of the Bank or its agents, the Kazakh Depository, the Kazakh Share Registrar (other than such act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar arising in connection with any negligence, bad faith, fraud or wilful default of the Depositary or its directors, employees, agents ((other than the Custodian)) or affiliates), or their respective directors, employees, agents (other than the Custodian) or affiliates, (ii) any provision of any present or future Charter or any other instrument of the Bank governing the Deposited Securities, or (iii) any provision of any securities issued or distributed by the Bank, or any offering or distribution thereof. The Bank and the Depositary agree that, for the purposes of the rights and obligations under the Deposit Agreement of the parties thereto, the records of the Depositary shall be controlling for all purposes with respect to the number of Shares or other Deposited Securities which should be registered in the name of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the terms of the Deposit Agreement; provided, however, that the Depositary agrees that it shall, and shall cause the Custodian to, at any time and from time to time take any and all action necessary to ensure the accuracy and completeness of all information set forth in the records of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the Deposit Agreement with respect to Shares or other Deposited Securities registered in the name of any of them. The Depositary agrees that it will instruct the Custodian to maintain custody of all duplicate share extracts (or other evidence of verification) provided to the Depositary, the Custodian or their respective agents. In the event of any material discrepancy between the records of the Depositary or the Custodian and the Share Register, then, if the Depositary has knowledge of such discrepancy, the Depositary shall notify the Bank promptly. In event of discrepancy between the records of the Depositary or the Custodian and the Kazakh Depository or the Share Register, as the case may be, the Bank agrees that (whether or not it has received any notification from the Depositary) it will (i) use its reasonable efforts to cause the Kazakh Depository or Kazakh Share Registrar, as the case may be, to reconcile its records to the records of the Depositary and/or the Custodian (as directed by the Depositary) and to make such corrections or revisions in the book-entry system of the Kazakh Depository and Share Register as may be necessary in connection therewith, and (ii) to the extent the Bank is unable to so reconcile such records, and the number of Shares reflected in the records of the Kazakh Depository or the Kazakh Share Registrar differs by more than one-half of one percent from the number of Shares reflected in the records of the Depositary or the Custodian, promptly instruct the Depositary to notify the Holders of the existence of such discrepancy. Upon receipt of the Banks instruction to notify the Holders of such discrepancy, the Depositary shall give such notification promptly to the Holders (it being understood that the Depositary at any time may give such notification to the Holders, whether or not it has received instructions from the Bank) and shall promptly cease issuing GDSs until such time as, in the opinion of the Depositary, such records have been appropriately reconciled. 21. Tag Along Rights (a) The Holders Tag-Along Rights are set out in the Samruk-Kazyna Undertaking (the Samruk-Kazyna Undertaking) executed and delivered by JSC National Welfare

411

Fund Samruk-Kazyna (Samruk-Kazyna) in favour of inter alia the Holders in connection with the debt restructuring of the Bank. (b) Exercise of Tag-Along Rights To the extent Samruk-Kazyna proposes to dispose of Shares up to and including the Minority Protection Expiry Date thereby entitling any holder of Shares to enforce tag-along rights (Tag-Along Rights) as set out in the Samruk-Kazyna Undertaking, the Bank shall provide the Depositary with: (a) a copy of the tag along offer of Samruk-Kazyna specifying the total number of Shares being sold, the tag along sale price per Share (Tag Price) (or in the case of a public offering, the estimated sale price per Share) and all other material terms of the proposed Share disposal (the Tag-Along Offer); (b) a notice to be provided to Holders (the Tag-Along Informational Notice) that (i) instructs Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that in order to request the exercise of any tag-along rights they might otherwise possess, such Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR will be required to give a blocking instruction to Euroclear, Clearstream or DTC (as applicable) in relation to the GDSs representing Shares for which such Holders and/or persons wish to request the exercise Tag Along Rights and provide both the Depositary and the Bank with proof of such blocking along with a properly executed certification in the form set forth in Exhibit C-2 or D-218 thereof and must timely comply with the provisions of the Deposit Agreement related to the withdrawal of Deposited Securities and cancellation of GDSs and the exercise of Tag-Along Rights, (ii) informs Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that in order to request the exercise of Tag-Along Rights, such Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR must provide the Bank and Samruk-Kazyna (within 21 calendar days of service by Samruk-Kazyna of the Tag Along Offer) with a notice (the Tag-Along Participation Request Notice) specifying that such Holder and/or person holding GDRs and/or GDSs or beneficial interests in the Master GDR wish to exercise its Tag Along Rights and includes such other information as the Bank may reasonably require (including, but not limited to, confirmation of participant accounts, the number of GDSs held by such participants, and disclosure of the beneficial owner of such GDSs etc.), and (iii) provides Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR with the address to which the Tag-Along Participation Request Notice and other information contemplated in (ii) above shall be delivered to the Bank; and (c) an instruction to request Euroclear, Clearstream or DTC to block GDRs and/or GDSs within such systems as requested by Holders and to provide a list to the Bank and the Depositary of all settlement system participants holding GDRs and GDSs at the time such blocking instructions take effect and details of the GDRs and GDSs held and (if relevant) blocked by each such participant at such time. Upon receipt of such notices the Depositary shall forward copies of the notices described in (a) and (b) to the Holders. Each Holder wishing to request that Tag-Along Rights are enforced against Samruk-Kazyna in respect of Shares represented by GDSs held by such Holder shall send the Bank within 21 calendar days of receipt of such notices a Tag-Along Participation Notice and shall give a blocking instruction to Euroclear, Clearstream or DTC (as applicable) in relation to GDRs or GDSs held by such Holder. The Bank shall promptly (a) review all Tag-Along Participation Request Notices received on a timely basis, (b) notify the Depositary of all Holders eligible for enforcement of Tag-Along Rights against
18

When Certificates C-2 and D-2 are delivered by Holders in the context of the exercise of the Tag-Along Rights, Holders will not be required to make any certification about the transferee (including any certification pursuant to Clause (ii)(b)(iv) of the Certificates) or compliance by the transferee with any law or regulation.

412

Samruk-Kazyna, the number of deposited Shares of each such Holder in respect of which such Tag-Along Rights are to be exercised, the DTC/Euroclear/Clearstream accounts of those Holders whose GDSs correspond to Shares subject to the Tag-Along Rights, the identity of the person to whom the relevant deposited Shares are to be transferred pursuant to the exercise of the Tag-Along Rights, and any other details and information required by the Depositary in order to procure the transfer of deposited Shares to such person and otherwise process the transaction. All Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that deliver a Tag-Along Participation Request Notice to the Depositary shall be deemed to have requested withdrawal of the deposited Shares referred to in such Tag-Along Participation Request Notice and delivery of such Shares to the person identified by the Bank in its notice to the Depositary as the person to whom the relevant Shares are to be transferred pursuant to the exercise of the Tag-Along Rights, subject to receipt by the Depositary of the consideration attributable to the sale of the Shares subject to the Tag-Along Rights (Tag Consideration) in full, and to have instructed the Depositary to cancel such GDSs and deduct any fees, expenses and charges owing under the Deposit Agreement from the Tag Consideration received by the Depositary on account of participation in the Tag-Along Rights. Upon receipt by the Depositary of the Tag Consideration and certification in the form set out in Exhibit C-2 or Exhibit D-2 (as applicable) given by or on behalf of the person who will be the beneficial owner of the deposited Shares following withdrawal, (a) the Tag Consideration shall be converted subject to the same terms as conversion of cash distributions pursuant to paragraph 10(a) above, and the Depositary shall distribute the net proceeds therefrom (less the fees, expenses and charges owing on the cancellation of GDSs and otherwise) to the Holders entitled thereto, (b) the GDSs representing the deposited Shares subject to the Tag-Along Rights shall be cancelled, and (c) the deposited Shares subject to the Tag-Along Rights shall be delivered to the person identified by the Bank as the person to whom the relevant deposited Shares are to be transferred. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR acknowledges and agrees that the ability to transfer GDRs or GDSs will be restricted until completion of the process for the exercise of Tag-Along Rights, and that the Depositary is authorized to take any and all actions as may be appropriate to facilitate such process, including to give such instructions to Euroclear, Clearstream or DTC. (c) The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that at no time is the Depositary acting as, and at no time will the Depositary be, an intermediate owner of GDRs, GDSs and that any act or omission to act on the part of the Depositary in respect of the exercise of any Tag-Along Rights will be solely on behalf of Holders and beneficial owners of GDSs and not on behalf of the Depositary or any of its agents.

22.

Drag-Along Rights (a) If Samruk-Kazyna (whether acting alone or in concert) wishes to transfer a majority of the Shares in the Bank under a bona fide arms length offer to one or more persons (Drag-Along Purchaser), then Samruk-Kazyna shall have the option (subject to certain conditions) to require Holders to transfer all of the Shares corresponding to their GDRs to the Drag-Along Purchaser as set out herein (Drag-Along Rights). Samruk-Kazynas Drag-Along Rights may be enforced against any Holder. Where the consideration for the sale of such shares is in a form other than cash, Samruk-Kazyna must procure that an amount in cash equivalent to the value determined by an independent expert is undertaken (by a party with a credit rating of BBB- or better from Standard & Poors) to be paid to the Holders on completion of

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such sale or transfer (such undertaking to be in a form satisfactory to the Depositary and to be provided as a condition precedent to the effectiveness of such transfer). The exercise of the Drag-Along Rights shall be subject to: (i) the condition that the Drag-Along Price is equal to or better than the fair market arms-length value as determined by an independent expert (being one of Deloitte, PricewaterhouseCoopers, KPMG or Ernst & Young or an international investment bank) appointed by Samruk-Kazyna and whose costs and expenses shall be borne by the Bank; the condition that the each relevant Holder receives no less per Share than the price per Share received by Samruk-Kazyna; and the sale price per Share is payable exclusively in cash or in a form immediately convertible into cash which the independent expert confirms is of at least equal value to the consideration provided to Samruk-Kazyna per Share and such consideration is paid or delivered at completion of such transfer. To the extent the Depositary receives anything other than cash on account of the Drag-Along Rights, pursuant to the Deposit Agreement, the Depositary shall endeavour to sell the consideration received and, if sold, Holders will be entitled to the net proceeds, if any, from the sale thereof.

(ii) (iii)

Samruk-Kazyna may exercise the Drag-Along Rights by giving a written notice (a Drag-Along Notice) to the Depositary specifying the proposed drag-along sale price per Share the (Drag-Along Price) at least 45 days prior to completion of such transfer. The Depositary shall as soon as reasonably practicable following receipt of a Drag-Along Notice from Samruk-Kazyna provide such information to the Holders. A Drag-Along Notice shall lapse if Samruk-Kazyna has not completed the sale of Shares to the Drag-Along Purchaser within 90 Business Days of giving the Drag-Along Notice. Samruk-Kazyna may give further Drag-Along Notices following the lapse of any particular Drag -Along Notice. (b) Exercise of Drag-Along Rights To the extent Samruk-Kazyna shall exercise its Drag-Along Rights with respect to the Shares as set out in Clause 22(a) above, the Bank shall provide the Depositary with: (a) a copy of the written notice of exercise of Drag-Along Rights from Samruk-Kazyna (Drag-Along Notice) specifying that all of the Shares corresponding to GDSs are to be sold, the Drag-Along Price and all other material terms of the proposed Share disposal (the Drag-Along Offer), and (b) an instruction to request Euroclear, Clearstream or DTC to block all transfers of GDRs and/or GDSs within such systems and to provide a list to the Bank, Samruk-Kazyna and the Depositary of all settlement system participants holding GDRs and GDSs at the time such blocking instructions take effect and details of the GDRs and GDSs held by each such participant at such time. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR shall remain subject to the provisions of this Clause 22, and, subject to compliance by the Bank and Samruk-Kazyna with the provisions of this Clause 22, the deposited Shares subject to the Drag-Along Rights shall be delivered to the person(s) identified by the Bank as the Drag-Along Purchaser(s) to whom the relevant deposited Shares are to be transferred. Upon receipt of such notices the Depositary shall forward copies of the notice described in (a) to the Holders. The Bank shall promptly notify the Depositary of the identity of the person(s) who are the Drag-Along Purchaser(s) to whom the relevant

414

deposited Shares are to be transferred pursuant to the exercise of the Drag-Along Rights, and such other details and information required by the Depositary in order to procure the transfer of the deposited Shares to such person(s) and otherwise process the transfer. All Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR shall, upon receipt by the Depositary of the Drag-Along Notice, be deemed to have requested the withdrawal of the deposited Shares and delivery of such Shares to the person(s) identified by the Bank as the person(s) to whom the relevant Shares are to be transferred pursuant to the exercise of the Drag-Along Rights, subject to receipt by the Depositary of the consideration attributable to the sale of the Shares subject to the Drag-Along Rights (Drag Consideration) in full, and to have instructed the Depositary to cancel such GDSs and deduct any fees, expenses and charges owing under the Deposit Agreement from the Drag Consideration received by the Depositary on account of exercise of the Drag-Along Rights. Upon receipt by the Depositary of: (a) the Drag Consideration in full in respect of all dragged Shares, (b) certification in the form set out in Exhibit C-2 or Exhibit D-2 (as applicable) from each Drag-Along Purchaser, and (c) confirmation from the Bank that each of the conditions for the exercise of the Drag-Along Rights as set out in Clause 22(a) above have been fully satisfied, the Drag-Along Notice has not lapsed and the sale of the Shares held by Samruk-Kazyna to the person(s) identified by the Bank as the Drag-Along Purchaser(s) has been completed, then (i) the Drag Consideration shall be converted subject to the same terms as conversion of cash distributions pursuant to paragraph 10(a) above, and the Depositary shall distribute the net proceeds therefrom (less the fees, expenses and charges owing on the cancellation of GDSs and otherwise) pro rata to the Holders, (ii) the GDSs representing the deposited Shares subject to the Drag-Along Rights shall be cancelled, and (iii) the deposited Shares subject to the Drag-Along Rights shall be delivered to the person(s) identified by the Bank as the Drag-Along Purchaser(s). Following distribution of the Drag-Along Consideration to the Holders (less fees, expenses and charges owing on the cancellation of GDSs and otherwise), cancellation of all GDSs and delivery of the deposited Shares to the person(s) identified by the Bank as the Drag-Along Purchaser(s), the Bank shall be deemed to have terminated the Deposit Agreement in accordance with the provisions of paragraph (17) of each GDR and the Depositary will notify Holders of such termination and follow the provisions of said paragraph (17) with respect thereto. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR acknowledges and agrees that the ability to transfer GDRs or GDSs will be restricted until completion of the process for the exercise of Drag-Along Rights, and that the Depositary is authorized to take any and all actions as may be appropriate to facilitate such process, including to give such instructions to Euroclear, Clearstream or DTC. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR irrevocably appoints the Bank as its true and lawful attorney with full power and authority in its name or otherwise and on its behalf to consider, settle, approve, execute, sign and deliver all agreements, documents, certificates and instruments (whether as a deed or not) which the Bank (acting reasonably) considers necessary or desirable to give effect to the transfers of the Shares pursuant to the exercise of the Drag-Along Rights by Samruk-Kazyna. If a Drag-Along Notice does lapse, the Depositary and the Bank shall use reasonable endeavours to procure that the GDSs are unblocked.

415

(c)

The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that at no time is the Depositary acting as, and at no time will the Depositary be, an intermediate owner of GDRs, GDSs and that any act or omission to act on the part of the Depositary in respect of the exercise of any Drag-Along Rights will be solely on behalf of Holders and beneficial owners of GDSs and not on behalf of the Depositary or any of its agents.

23.

Additional Representations and Covenants of Holders and beneficial owners of GDSs By holding a GDR or an interest in the Master GDR, Holders and beneficial owners of GDSs (including any interests therein) acknowledge that the Shares represented hereby are subject to the Tag-Along Rights and Drag-Along Rights contemplated by paragraph (21) and (22) hereof. In addition to any other representations, warranties and covenants set forth in the Deposit Agreement and the GDRs, each Holder and beneficial owner of GDSs shall be deemed to have represented, warranted and covenanted as follows: (a) the person or entity providing voting instructions for use by the Depositary in accordance herewith will be deemed to have represented that (i) neither such person nor any person for whom they are acting is prohibited from voting pursuant to Clause 17.5 of the Banking Law, (ii) neither such person nor any person for whom such person is acting owns 10% or more of the outstanding Shares of the Bank or such person and/or person for whom the Holder is acting owns 10% or more of the outstanding Shares of the Bank and has obtained all relevant approvals required in connection therewith, (iii) that neither such person or the person for whom they are acting is associated with any Former Management of the Bank, and (iv) such person is not Samruk-Kazyna or an affiliate of Samruk-Kazyna; On each issuance of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR shall be deemed to represent (i) as a result of the issuance of GDSs neither such persons holdings nor the holdings for the person for whom such person is acting will exceed 10% of the Banks share capital or if it will exceed 10% that the person and such person for whom the person is acting has obtained all relevant approvals, (ii) neither the person nor any person for whom the person is acting is either Samruk-Kazyna or an affiliate of Samruk-Kazyna, and (iii) neither the person nor any person for whom the person is acting is associated with the Former Management of the Bank; On each transfer of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR on such transfer shall be deemed to represent that such person (i) is not Samruk-Kazyna or an affiliate of Samruk-Kazyna, (ii) does not hold, and after giving effect to such transfer will not hold, more than 10% of the Banks share capital (unless such person has obtained all relevant approvals), and (iii) is not associated with the Former Management of the Bank; With respect to any cancellation of GDSs, the person or entity receiving deposited Shares on such cancellation will be deemed to have represented that neither such person nor the person for whom it is acting (a) is prohibited from holdings Shares of the Bank pursuant to Clause 17.5 of the Banking Law, or (b) is associated with the Former Management of the Bank; and to promptly disclose in writing to the Bank if at any time it holds 10% or more of the share capital of the Bank.

(b)

(c)

(d)

(e)

416

24.

Meeting Requests Upon receiving a notice (Collation Request) from one or more Holders where (i) each such Collation Request certifies that in aggregate the Holders sending such Collation Request hold at least 1% of all GDSs in issue, (ii) such Collation Request instructs the Depositary to send to all Holders a notice (Collation Notice) inviting Holders to instruct the Depositary by way of a further notice (Meeting Request Notice) to request a general meeting of the Bank, and (iii) the Collation Request attaches forms of Collation Notice, the Meeting Request Notice and a notice (Requisition Notice) which the Depositary will forward to the Bank upon receipt of Meeting Request Notices from Holders holding GDSs corresponding to the required number of Shares, the Depositary shall distribute a Collation Notice with the form of Meeting Request Notice to each Holder. Upon receipt of Meeting Request Notices from Holders who certify that in the aggregate they hold GDSs corresponding to 5 per cent. or more of the outstanding Shares of the Bank, the Depositary shall forward a Requisition Notice to the Bank on behalf of the instructing Holders.

25.

Governing Law; Consent to Jurisdiction; Arbitration This GDR and the GDSs, and any non-contractual obligations arising out of or in connection with this GDR or the GDSs, will be governed by and construed in all respects in accordance with English law. Any dispute, controversy or cause of action arising out of or in connection with this GDR, including any question regarding its scope, existence, validity or termination, shall be referred to and finally resolved by arbitration in accordance with the Rules of the London Court of International Arbitration (the LCIA). The seat of the arbitration shall be London, England, and the language of the arbitration shall be English. The number of arbitrators shall be three, one of whom shall be nominated by the claimant(s), one by the respondent(s) and the third of whom, who shall act as chairman, shall be nominated by the two party-nominated arbitrators, provided that if the third arbitrator has not been nominated within thirty days of the nomination of the second party-nominated arbitrator, such third arbitrator shall be appointed by the LCIA. Sections 45 and 69 of the Arbitration Act of England of 1996 shall not apply. An arbitral tribunal constituted under this GDR may, unless consolidation would prejudice the rights of any party, consolidate an arbitration hereunder with arbitration under the Deposit Agreement, the other Master GDR and/or the Deed Poll if the arbitration proceedings raise common questions of law or fact. If two or more arbitral tribunals issue consolidation orders, the order issued first shall prevail. In the event that the Depositary is made a party to any litigation, arbitration or other proceeding (whether administrative or judicial) 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, the Bank has agreed in the Deposit Agreement, upon notice from the Depositary, to fully cooperate with the Depositary in connection with such litigation, arbitration or proceeding.

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SCHEDULE 3TERMS AND CONDITIONS OF THE RULE 144A GDRS The following terms and conditions (except for paragraphs in italics) will be endorsed on each certificate representing Rule 144A GDRs. THE BANK OF NEW YORK MELLON, a national banking association organized under the laws of the United States, as depositary hereunder (the Depositary), hereby certifies that [Cede & Co., as nominee of The Depository Trust Company,] is the registered holder of [the number indicated on the records of the Depositary of] Global Depositary Shares (GDSs), each (subject to paragraph (13)) representing 500 ordinary shares (including the rights to receive Shares described in paragraph (1), Shares and, together at any time with all Shares at such time deposited under the Deposit Agreement, hereinafter defined, and any and all other Shares, securities, cash or property at such time held for the account of the Depositary in respect or in lieu of such deposited Shares and other Shares, securities, property and cash, the Deposited Securities), of BTA BANK JSC, a corporation organized under the laws of the Republic of Kazakhstan and its successors (the Bank), deposited under the Deposit Agreement dated as of 23 August 2010 (as amended from time to time, the Deposit Agreement) between the Bank and the Depositary. The Deposit Agreement is deemed executed in London, England and, together with the global depositary receipts issued thereunder (GDRs), will be governed by and construed in all respects in accordance with English law. 1. Issuance of GDRs; Pre-Release; Initial and Certain Continuing Representations and Covenants This GDR is one of the GDRs issued under the Deposit Agreement. Subject to the Deposit Agreement and paragraphs (4) and (7), the Depositary may so issue GDRs or adjust its records to increase the number of GDSs evidenced by the Master GDR only against deposit of: (a) Shares in form satisfactory to the Custodian; (b) rights to receive Shares from the Bank or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or (c) in accordance with the next paragraph of this paragraph (1). In its capacity as Depositary, the Depositary shall not lend Shares or GDSs; provided however the Depositary may execute and deliver GDSs 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 deliver Shares upon the receipt and cancellation of GDSs, 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 GDSs in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation and agreement from the person to whom GDSs or Deposited Securities are to be delivered (the Pre-Releasee) that such person, or its customer, (i) owns or represents the owner of the corresponding Deposited Securities or GDSs to be remitted (as the case may be), (ii) assigns all beneficial right, title and interest in such Deposited Securities or GDSs (as the case may be) to the Depositary in its capacity as such and for the benefit of the Holders, and (iii) will not take any action with respect to such GDSs or Deposited Securities (as the case may be) that is inconsistent with the transfer of beneficial ownership (including without the consent of the Depositary, disposing of such GDSs or Deposited Securities, 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 GDSs 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 GDSs 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 limit for the purpose of general

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application. The Depositary will also set dollar limits with respect to Pre-Release transactions hereunder with any particular Pre-Releasee 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-Releasees obligations in connection herewith, including the Pre-Releasees obligation to deliver Shares and/or other securities or GDSs upon termination of a Pre-Release transaction anticipated hereunder (and shall not, for the avoidance of doubt, constitute Deposited Securities 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 any Pre-Release of Rule 144A GDSs or Rule 144A Shares is to be made pursuant to this provision shall be required to deliver to the Depositary a duly executed and completed certificate substantially in the form set out in Exhibit C-1. The person to whom any Pre-Release of Regulation S GDSs 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 Exhibit D-1. At the request, risk and expense of the person depositing Shares, the Depositary may accept Shares for forwarding to the Custodian and may deliver certificated GDRs, if then available pursuant to Section 2 of the Deposit Agreement, at a place other than the Transfer Office. Every person depositing Shares under the Deposit Agreement represents and warrants that such Shares are validly issued and outstanding, fully paid, nonassessable and free of pre emptive rights, and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Shares and issuance of GDRs or adjustment of the Depositarys records in respect of the Master GDR. Additionally, every person depositing Shares under the Deposit Agreement either (i) represents and warrants that neither such person nor the person to whom GDSs will be directly or beneficially delivered on issuance thereof is a resident of Kazakhstan or (ii) to the extent such person or the person to whom GDSs will be directly or beneficially delivered on issuance thereof is a resident of Kazakhstan, represents and warrants that the undersigned has notified the Depositary of such and, in connection with any fees and other amounts payable under the Deposit Agreement with respect to such GDSs, has or will pay such fees and other amounts with appropriate gross up for any taxes deducted, withheld or required to be withheld or paid in connection therewith. The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to accept for such deposit any Shares identified by the Bank in order to facilitate the Banks compliance with such Act. The Depositary shall be entitled to deal with any 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. 2. Withdrawal of Deposited Securities Subject to the Deposit Agreement and paragraphs (4), (5) and (7) and to the provisions of or governing Deposited Securities (including the Banks constitutional documents or applicable law), upon (i) surrender of any GDSs evidenced hereby by (a) electronic delivery of GDSs from the DTC Participant (as defined in Section 2(b) of the Deposit Agreement) account of a beneficial owner of an interest in the Master GDR to the Depositarys DTC Participant account, if certificated GDRs are then not available pursuant to Section 2 of the Deposit Agreement, or (b) delivery of certificated GDRs (properly endorsed in blank or accompanied

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by proper instruments of transfer, satisfactory to the Depositary) evidencing GDSs by the Holder (as defined in paragraph (3) hereof) to the Depositary at the Transfer Office, if certificated GDRs are then available pursuant to Section 2 of the Deposit Agreement, in either case for the withdrawal of Deposited Securities represented thereby, (ii) receipt by the Depositary of a written order (a Withdrawal Order) from or on behalf of such beneficial owner or Holder, as the case may be, directing the Depositary to deliver the Deposited Securities represented by such GDSs at, or to the extent in dematerialized form from, the Custodians office to or to the order of the persons designated therein, and (iii) receipt by the Depositary of an executed certification substantially in the form of Exhibit C-2 annexed to the Deposit Agreement (or in such other form as the Bank shall approve) or an electronic certification through DTC, Euroclear or Clearstream, as the case may be, in lieu of such certification set forth in Exhibit C-2 by or on behalf of such beneficial owner or Holder, as the case may be, such beneficial owner or Holder, as the case may be, is entitled to delivery at, or to the extent in dematerialized form from, the Custodians office of the Deposited Securities represented by such GDSs to or to the order of the persons named in such Withdrawal Order provided that the Depositary may deliver Shares prior to the receipt of GDSs for withdrawal of Deposited Securities, including GDSs which were issued under (1) above but for which Shares may not have been received (until such GDSs are actually deposited, Pre-Released Shares) only if all the conditions in (1) above related to such Pre-Release are satisfied). At the request, risk and expense of such beneficial owner or Holder, the Depositary may deliver such Deposited Securities at such other place outside the United States as may have been requested in the Withdrawal Order. The Depositary may refuse to deliver Deposited Securities generally, or in one or more localities, if such refusal is deemed necessary or desirable by the Depositary, in good faith, at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the Deposit Agreement or for any other reason. Notwithstanding anything to the contrary contained in the Deposit Agreement or any GDR the Depositary shall not (except on the instruction of the Bank) cancel GDSs (i) during any period when the transfer of Shares has been blocked on the account due to participation in any shareholders meeting of the Bank when notified by the Bank in writing that such suspension is necessary, or (ii) after the Bank has notified the Depositary in writing that the transfer of Shares has been blocked following notice of intended exercise by Samruk-Kazyna of its Drag-Along Rights, or (iii) the Depositary is notified by the Bank in writing that delivery of Deposited Securities will not comply generally, or in one or more localities, with any applicable law or governmental or stock exchange regulations, or (iv) the Depositary is notified by the Bank in writing that delivery of Deposited Securities will result in ownership of such Shares exceeding any limit under applicable Kazakh law or the Charter as notified to the Depositary by the Bank from time to time, or (v) in the case of GDSs represented by the Regulation S Master GDR or the Rule 144A Master GDR, during any period prior to the Depositary being notified in writing by the Bank that the Placement Report in respect of the Shares represented by those GDSs has been approved by the FMSA, or (vi) in the case where the Depositary has been informed by the Bank that a Placement Report has been prepared in respect of any other new Shares represented by GDSs, then in relation to those GDSs, during any period prior to the Depositary being notified in writing that the Placement Report relating to those Shares has been approved by the FMSA. For the avoidance of doubt, in the absence of any such notification from the Bank, the Depositary is not under any obligation to ascertain or determine whether or not any such delivery should be refused (including monitoring ownership levels amongst beneficial owners) and the Depositary shall not be liable for any loss, damage or other consequences arising from any such delivery. Also, for the avoidance of doubt, provided that it is complying with a written notification from the Bank, the Depositary shall not be liable for any loss, damage or other consequences arising from its refusal or delivery.

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By holding a GDR or an interest in the Master GDR, Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR each understands and agrees that the Depositary will have no obligation to procure the cancellation of GDSs and the delivery of Deposited Securities if in the opinion of the Depositary taxes, duties or other governmental charges will be owed by or on behalf of the Depositary or any of its agents (including, without limitation, the Custodian) on the cancellation of GDSs or the delivery of Deposited Securities, unless (a) the Depositary has established a procedure to ensure that an amount equal to any such taxes, duties and other governmental charges (plus any interest, fines and penalties thereon and/or with respect thereto) is paid to the Depositary at or prior to the time any such Deposited Securities are to be delivered or cancellation of GDSs is to be effected, (b) with respect to each cancellation of GDSs or delivery of Deposited Securities, the Depositary and its agents, and each of their respective officers, directors, representatives and affiliates, have each received such indemnifications and assurances as they each may require from the Bank, the holder of GDRs or GDSs requesting cancellation, and each person and/or entity to whom Deposited Securities are to be delivered, and (c) the Depositary agrees to so permit the cancellation of GDSs and the delivery of Deposited Securities. Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR, understand that the Depositary has no obligation to establish any such procedures or cancel any GDSs and to deliver the Deposited Securities represented thereby. By holding a GDR (or an interest therein), Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR, waive any and all rights and claims each may now or hereinafter have against the Depositary or its agents in connection with any and all of their acts and omissions to act in connection therewith. 3. Transfers of GDRs The Depositary or its agent will keep, at a designated transfer office (the Transfer Office), (a) a register (the GDR Register) for the registration, registration of transfer, combination and split-up of GDRs, which at all reasonable times will be open for inspection by Holders and the Bank for the purpose of communicating with Holders in the interest of the business of the Bank or a matter related to the Deposit Agreement and (b) facilities for the delivery and receipt of GDRs. Subject to the restrictions on transfer appearing hereon, title to this GDR (and to the Deposited Securities represented by the GDSs evidenced hereby) when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person or persons in whose name this GDR is registered on the GDR Register (the Holder) as the absolute owner hereof for all purposes and neither the Depositary nor the Bank will have any obligation or be subject to any liability under the Deposit Agreement to any holder of a GDR, unless such holder is the Holder thereof. Subject to paragraphs (4) and (5) and the restrictions on transfer appearing hereon, this GDR is transferable on the GDR Register and may be split into other GDRs or combined with other GDRs into one GDR, evidencing the aggregate number of GDSs surrendered for split-up or combination, by the Holder hereof or by such Holders duly authorized attorney upon surrender of this GDR at the Transfer Office properly endorsed or accompanied by proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the GDR Register at any time or from time to time when deemed expedient by it. On each transfer of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR on such transfer shall be deemed to represent that such person (a) is not Samruk-Kazyna or an affiliate of Samruk-Kazyna, (b) does not hold, and after giving effect to such transfer will not hold, more than 10% of the Banks share capital (unless such person has obtained all relevant approvals), and (c) is not associated with the Former Management of the Bank.

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4.

Certain Limitations Prior to the issue, registration, registration of transfer, split-up or combination of any GDR, the adjustment of the Depositarys records in respect of the Master GDR, the delivery of any distribution in respect thereof, or the withdrawal of any Deposited Securities, and from time to time in the case of clause (b)(ii) of this paragraph (4), the Bank, the Depositary or the Custodian may require: (a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7); (b) the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature, and (ii) such other information, including without limitation information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this GDR (including without limitation the restrictions on transfer appearing hereon), as it may deem necessary or proper; (c) in case of a transfer of Shares other than Shares of the New Share Offering, a certified copy of the Acknowledgment Letter; (d) where applicable, a purchase/sale contract or other similar document relating to the transfer of the Shares, in each case in a form satisfactory to the Custodian, and delivery to the Custodian of evidence satisfactory to the Custodian that irrevocable instructions have been given to cause such Shares to be transferred to such account, in any case accompanied by delivery to the Custodian or the Depositary, as the case may be, and (e) compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement. The acceptance of deposits of Shares, the adjustment of the Depositarys records in respect of the Master GDR, the issuance, registration, registration of transfer, split-up or combination of GDRs or the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the GDR Register, the Kazakh Depository or any register for Deposited Securities is closed or when any such action is deemed advisable by the Depositary. In the event that the Bank receives a notice from the FMSA or otherwise becomes aware from any public source that any Share Offering is cancelled or suspended by the FMSA, it shall promptly notify the Depositary of such event in writing, but no later than 2 Business Days from the receipt of such notice or other public announcement. The Bank will notify the Depositary in writing of the number of (i) New Shares or Shares, as the case may be, which have been or are to be cancelled or suspended, (ii) the number of deposited Shares which have been or are to be cancelled or suspended, (iii) the number of GDSs to be cancelled or suspended (if it is possible to identify the GDSs issued over the cancelled or suspended Shares). Upon receipt of this notice and on payment by or on behalf of the Bank or other relevant persons (if applicable) to the Depositary or its nominee of the amount of the subscription monies paid in respect of the deposited Shares which are to be cancelled or suspended, the Depositary will, as soon as practicable, give notice to the Holders in accordance with the provisions of the Deposit Agreement of the cancellation or suspension of such number of GDSs as is notified to the Depositary by the Bank (if it is possible to identify the GDSs issued over the cancelled Shares), and will cancel or suspend such number of GDSs as were identified as issued over the cancelled Shares or will partially cancel all of the GDSs outstanding on a pro rata basis or the Depositary will carry out an adjustment to the outstanding GDSs on such other basis as the Depositary determines is practicable in its sole discretion. To the extent that the Depositary receives any such subscription amount from or on behalf of the Bank or other relevant persons (if applicable), the Depositary will promptly distribute such amount to the Holders of the GDSs cancelled (if it is possible to identify the GDSs issued over the cancelled Shares) or pro rata to the proportions of GDSs cancelled, as the case may be.

5.

Taxes If any tax or other governmental charge shall become payable by or on behalf of the Custodian or the Depositary with respect to this GDR, any Deposited Securities represented

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by the GDSs evidenced hereby or any distribution thereon or payment made in respect thereof, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary. The Depositary may refuse to effect any registration, registration of transfer, split-up or combination hereof, any adjustment of its records in respect of the Master GDR or any withdrawal of such Deposited Securities until such payment is made. The Depositary may also deduct from any distribution hereon, or may sell (by public or private sale) for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of GDSs evidenced hereby to reflect any such sales of Shares. Notwithstanding the foregoing, to the extent any tax, stamp duty or other governmental charge is or becomes payable in connection with, or in any way related to, any deposit of Shares under the Deposit Agreement by the Bank or the handling of said Shares by the Custodian or the initial issue of GDSs to Holders following the deposit of Shares under the Deposit Agreement by the Bank, or the listing or quotation of the GDSs, the Bank agrees to remain liable for, and to pay, such tax, stamp duty or other governmental charge. To the extent the Bank does not timely pay such taxes, stamp duty or other governmental charge and the Depositary is required to pay such amounts, the Depositary may look to collecting such amounts from Holders and Holders will then have a right to be reimbursed by the Bank in respect of any such taxes, stamp duty or other governmental charges which the Bank agreed under this paragraph to pay but which it failed to timely pay. In connection with any distribution on Deposited Securities to Holders, the Bank will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Bank, and the Depositary and the Custodian will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian. If the Depositary determines that any distribution in property other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the Holders entitled thereto. Subject to the Banks obligation to pay and remain liable for any tax, stamp duty or other governmental charge payable in connection with, or in any way related to, the initial deposit of Shares by the Bank pursuant to the restructuring of the Bank or the handling of said Shares by the Custodian or the initial issue of GDSs to Holders following the initial deposit of Shares by the Bank pursuant to the restructuring of the Bank, or the listing or quotation of the GDSs, as described in the above paragraph, for which the Bank does not have a right to be indemnified by the Holders, each Holder of a GDR or an interest therein agrees to indemnify the Depositary, the Bank, the Custodian and any of their respective directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest (including, without limitation, out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained as well as for any capital gains and/or value added taxes) any of which are owing on or in connection with the GDSs, the transfer thereof, any distribution or payment thereon and/or the delivery of Deposited Securities. The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that: (i) the Bank is the sole and exclusive tax agent in Kazakhstan in respect of the Shares (and any other Deposited Securities) and the GDSs; (ii) in its capacity as tax agent, the Bank has sole responsibility for making all required tax payments and withholdings made and to be made on or in respect of the Shares (and any other Deposited Securities) represented by the GDSs, for applying the proper rates of withholding or other tax

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to all such payments, and for otherwise performing all obligations required of a tax agent under Kazakhstan laws, rules and regulations in connection with all such payments and withholdings; and (iii) neither the Depositary nor any of its agents will act or be deemed to act as a tax agent in connection with, nor shall either of them otherwise have any responsibilities or obligations whatsoever for complying with any withholding or other tax requirements related to, any payments owing or made on or in respect of the Shares (and any other Deposited Securities) represented by the GDSs. Without limiting the generality of the foregoing, the Bank agrees that it has sole responsibility for advising the Depositary and the Custodian(s) as to the certifications, documentation, forms and other information required to be received by the Bank from Holders, and the timing thereof, to enable the Bank to determine the rate of withholding at source applicable to payments made by the Bank with respect to Shares (and any other Deposited Securities) represented by GDSs evidenced by eligible Holders GDRs. The Bank confirms that it has obtained and will at all times continue to obtain such independent tax advice as it deems necessary and advisable with regard to any and all withholding and tax requirements relating to the Shares (and any other Deposited Securities) represented by the GDSs as well as with respect to the GDSs, in each case under Kazakhstan laws, rules and regulations, and with respect to the Banks role as tax agent under Kazakhstan laws, rules and regulations and in accordance with the Deposit Agreement and the GDRs. 6. Disclosure of Interests To the extent that the provisions of or governing any Deposited Securities may require disclosure of or impose limits on beneficial or other ownership of Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR agree to comply with all such disclosure requirements and ownership limitations and to cooperate with the Depositary in the Depositarys compliance with any Bank instructions in respect thereof, and the Depositary will use reasonable efforts to comply with such Bank instructions. The Bank reserves the right to instruct non-complying Holders and all non-complying persons holding GDRs and/or GDSs or beneficial interests in the Master GDR to deliver their GDSs for cancellation and withdrawal of the Deposited Securities so as to permit the Bank to deal directly with the Holder thereof as a holder of Shares and Holders agree to comply with such instructions. Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR agree to promptly disclose in writing to the Bank if at any time it holds 10% or more of the share capital of the Bank. The Depositary agrees to cooperate with the Bank in its efforts to inform Holders of the Banks exercise of its rights under this paragraph and agrees to consult with, and provide reasonable assistance without risk, liability or expense on the part of the Depositary, to the Bank on the manner or manners in which it may enforce such rights with respect to any Holder. 7. Charges of Depositary The Depositary shall be entitled to charge the following remuneration and to receive the following remuneration and reimbursement (such remuneration and reimbursement being payable on demand) in respect of its services under the Deposit Agreement and the terms of the GDSs: (a) From the Holders (i) for the issue of GDSs or the cancellation of GDSs upon the withdrawal of Deposited Securities: U.S.$5.00 or less per 100 GDSs (or portion thereof) issued or cancelled; for issuing GDR certificates in definitive registered form in replacement for mutilated, defaced, lost, stolen or destroyed GDR certificates: a sum per

(ii)

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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 paragraph (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; for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Securities: a fee of U.S.$0.05 or less per GDS for each such dividend or distribution; in respect of any issue of rights or distribution of Shares (whether or not evidenced by GDSs) 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 GDSs (or portion thereof) for each such issue of rights, dividend or distribution; 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 GDS; a fee of U.S.$0.05 or less per GDS (or portion thereof) per calendar year for depositary services which shall be payable as provided in paragraph (ix) below; a fee of U.S.$0.01 or less per GDS per annum for local share registry inspection and related services by the Depositary or the Custodian or their respective agents, which shall be payable as provided in paragraph (ix) below; and any other charge payable by the Depositary, any of the Depositarys agents, including the Custodian, or the agents of the Depositarys agents, in connection with the servicing of Shares or other Deposited Securities (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),

(iv)

(v)

(vi) (vii)

(viii)

(ix)

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, including: (a) reimbursement of such fees, charges, expenses and taxes as are incurred by the Depositary and/or any of the Depositarys agents (including, without limitation, the Custodian), and any and all fees, charges and expenses imposed by, or otherwise owing to, the Kazakh Depository; and (b) payment of a sum sufficient to pay or reimburse the Depositary for payment of any charges (grossed up for any applicable taxes owing or otherwise withheld) imposed by the Kazakh Stock Exchanges or any other stock exchange, provided that the Bank shall pay and remain liable for any tax, stamp duty or other governmental charge payable in connection with, or in any way related to, the initial deposit of the Shares by the Bank pursuant to the restructuring of the Bank or the handling of such Shares by the Custodian or the initial issue of GDSs to Holders following the initial deposit of the Shares by the Bank pursuant to the restructuring of the Bank as described in paragraph 5 and for any costs and charges imposed by the Kazakh Stock Exchange or other stock exchanges on the listing or quotation of the GDSs.

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The Bank will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Bank and the Depositary, except (i) stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, GDRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), (iv) expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency), and (v) payment of a sum sufficient to pay or reimburse the Depositary for payment of any charges imposed by the Kazakh Stock Exchanges or any other stock exchange (other than charges imposed on the listing or quotation of the GDSs which have been or will be paid by the Bank). Such charges may at any time and from time to time be changed by agreement between the Bank and the Depositary. 8. Available Information The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Bank, which are both received by the Depositary or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian. The Depositary will forward copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Bank. Whenever the Bank is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934 or exempt from reporting pursuant to Rule 12g3-2(b) under such Act, the Bank shall provide the information described in Rule 144A(d)(4) under the Securities Act of 1933 to, upon the request of, any Holder, beneficial owner of an interest in the Master GDR or holder of Shares, any prospective purchaser of GDSs designated by such Holder or beneficial owner or any prospective purchaser of Shares designated by such holder. 9. Execution This GDR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. 10. Distributions on Deposited Securities Subject to paragraphs (4), (5) and (7), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holders address shown on the GDR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by GDSs evidenced by such Holders GDRs: (a) Cash Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (Cash), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositarys fees and expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a

426

reasonable basis, (2) transferring foreign currency or U.S. dollars by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time, and (4) making any sale by public or private means in any commercially reasonable manner; provided, however, that in the event that any of the deposited Shares is not entitled, by reason of its date of issuance, or otherwise, to receive the full amount of such cash dividend or distribution, the Depositary shall make appropriate adjustments in the amounts distributed to the Holders of the GDRs issued in respect of such Shares; and provided, further, that in the event that the Bank or the Depositary shall be required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed on the GDRs issued in respect of such Deposited Securities shall be reduced accordingly. (b) Shares (i) Additional GDRs evidencing whole GDSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a Share Distribution), provided that, so long as certificated GDRs are not then available under Section 2 of the Deposit Agreement, in lieu of mailing such additional GDRs, the Depositary will credit DTC, with appropriate notifications thereof, and adjust its records in respect of the Master GDR to reflect additional whole GDSs representing Shares available to the Depositary resulting from a Share Distribution, and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional GDSs if additional GDRs were issued therefor, as in the case of Cash. (c) Rights (i) Warrants or other instruments (or interests therein which may be electronically credited to DTC) in the discretion of the Depositary representing rights to acquire additional GDSs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (Rights), to the extent that the Bank timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Bank has no obligation to so furnish such evidence), or (ii) to the extent the Bank does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Bank does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse). (d) Other Distributions (i) Securities or property available to the Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (Other Distributions), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. Such U.S. dollars available will be distributed by (i) checks drawn on a bank in the United States or (ii) in accordance with the usual practice between the Depositary and Clearstream or

427

Euroclear, or DTC, as the case may be, in either case for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. 11. Record Dates The Depositary may fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Bank) for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the GDR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of or be affected by other matters and, only such Holders shall be so entitled or obligated. 12. Voting of Deposited Securities Subject to the next paragraphs hereof, as soon as practicable after receipt from the Bank of notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation materials (or a summary thereof), (b) that each Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of law, Rule and/or regulation, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the GDSs evidenced by such Holders GDRs, (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Bank and a provision that by providing voting instructions to the Depositary the person or entity providing such instructions will be deemed to have represented that (i) neither such person nor any person for whom they are acting is prohibited from voting pursuant to Clause 17.5 of the Banking Law, (ii) neither such person nor any person for whom such person is acting owns 10% or more of the outstanding Shares of the Bank or such person and/or person for whom the Holder is acting owns 10% or more of the outstanding Shares of the Bank and has obtained all relevant approvals required in connection therewith, (iii) that neither such person or the person for whom they are acting is associated with any Former Management of the Bank, and (iv) such person is not Samruk-Kazyna or an affiliate of Samruk-Kazyna and (d) that on the written notice of a Holder or beneficial owner of GDSs, in a form acceptable to the Bank, the Bank agrees to permit Holders and beneficial owners of GDSs to attend and speak (but not vote) at any such meetings. Upon receipt of instructions of a Holder on such record date in the manner and on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the GDSs evidenced by such Holders GDRs in accordance with such instructions. The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities. There is no guarantee that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable such Holder to return any voting instructions to the Depositary in a timely manner. The Depositary shall not be required to take any action required by this paragraph (12) unless it shall have received an opinion from the Banks 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 paragraph (12) but that in doing so the Depositary will not be deemed to be exercising voting discretion. If the Depositary is advised that it is not permitted by Kazakhstan law to exercise the voting rights in respect of the deposited Shares differently (so

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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 the immediately preceding sentence 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. If the Depositary is advised in the opinion referred to above 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 Securities in accordance with paragraph (12), the Depositary shall not vote or cause to be voted such Deposited Securities. Notwithstanding anything else contained in this GDR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. legal prohibitions, English legal prohibitions (including, without limitation, the listing rules and prospectus rules of the UK Financial Services Authority and the admission and disclosure standards of the London Stock Exchange plc if the Bank is at such time listed on the London Stock Exchange plc) or Kazakh legal prohibitions (including without limitation the rules of the Kazakh Stock Exchange(s) on which the Shares are listed). In particular, prior to the Depositary being notified in writing by the Bank that the Placement Report in respect of the New Shares has been approved by the FMSA, the Depositary shall have no obligation to take any such action. The Bank agrees that it shall not establish internal procedures that would prevent the Depositary from complying with, or that are inconsistent with, the terms and conditions of this paragraph (12). 13. Changes Affecting Deposited Securities Subject to paragraphs (4) and (5), the Depositary may, in its discretion, amend this GDR or distribute additional or amended GDRs (with or without calling this GDR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person, irrespective of whether such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, and to sell by public or private sale any property received in connection with) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Bank, and to the extent the Depositary does not so amend or exchange this GDR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each GDS evidenced by this GDR shall automatically represent its pro rata interest in the Deposited Securities as then constituted. 14. Exoneration The Depositary, the Bank, their agents and each of them shall: (a) incur no liability if any present or future law, rule, regulation, fiat, order or decree of the United States, the Republic of Kazakhstan or any other country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Banks charter, any act of God, war, terrorism or other circumstance beyond its control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act

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which the Deposit Agreement or this GDR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof); (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this GDR and the Deposit Agreement without gross negligence or bad faith; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this GDR; (d) except in the case of any action, suit or other proceeding in respect of the Deposit Agreement, any GDSs or Deposited Securities, or this GDR, which is commenced by or otherwise involves the Depositary, in the case of the Bank and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; (e) not be liable for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or beneficial owner of an interest in the Master GDR, or any other person believed by it to be competent to give such advice or information, and (f) in the case of the Depositary and its agents, incur no liability by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or this GDR (including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable). The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise. The Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any Custodian that is not a branch or affiliate of THE BANK OF NEW YORK MELLON The Depositary and its agents may rely and shall be protected in acting upon any notice, request, direction or other document or communication believed by them to be genuine and to have been signed or presented by the proper party or parties. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary shall be under no obligation to inform Holders or any other holders of an interest in a GDS about the requirements of Kazakhstan law, rules or regulations or any changes therein or thereto. The Depositary and its agents may own and deal in any class of securities of the Bank and its affiliates and in GDS. Notwithstanding anything to the contrary set forth in the Deposit Agreement or a GDR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any GDR or GDRs or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. None of the Depositary, the Custodian or the Bank shall be liable for the failure by any Holder or beneficial owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holders or beneficial owners income tax liability. The Depositary and the Bank shall not incur any liability for any tax consequences that may be incurred by Holders and/or any persons holding GDRs and/or GDSs or beneficial interests in the Master GDR on account of their ownership of the GDRs or GDSs. The Depositary shall not incur any liability for the content of any information submitted to it by or on behalf of the Bank for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities, for the credit worthiness of any third party, for allowing any rights to lapse upon the terms of this Deposit Agreement or for the failure or timeliness of any notice from the Bank. The Bank has agreed to indemnify the Depositary and its agents under certain circumstances. Neither the Depositary nor any of its agents shall be liable to Holders or beneficial owners of interests in GDSs (including those evidenced by the Master GDR) or any other persons or entities for (i) any act or omission to act on the part of the Bank, Samruk-Kazyna or any of their respective agents (including, without limitation, their officers, directors, representatives and

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affiliates) or (ii) for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought. The Depositary shall not be obliged to distribute GDSs representing such Shares, Shares, other securities or other property deposited under the terms of the GDSs or make any offer of any such rights or sell any securities corresponding to any such rights with respect to which (as notified to the Depositary by the Bank) 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 order for the Depositary to receive from the Bank Shares or other securities to be deposited under the terms of the GDSs, or in order for Shares, other securities or other property to be distributed or subscribed under the terms of the GDSs, or to offer any rights or sell any securities represented by such rights relevant to any Deposited Securities, and such authorisation, consent, registration or permit or such report has not been obtained or filed, as the case may be, and the Depositary shall have no duties to obtain any such authorisation, consent, registration or permit, or to file any such report. Notwithstanding any other terms of the Deposit Agreement or the terms of the GDRs or GDSs: (a) In acting, hereunder the Depositary shall have only those duties, obligations and responsibilities expressly specified in the Deposit Agreement and the terms of the GDSs and, other than holding the Deposited Property for the benefit of Holders as bare trustee, does not assume any relationship of trust for or with the Holders or owners of GDSs or any other person. Neither the Depositary, the Custodian, the Bank, 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 GDSs if, by reason of any provision of any present or future law or regulation of any relevant jurisdiction 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, 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 the terms of the GDSs provide shall or may be done or performed; nor shall any of them incur any liability to any Holder or owner of GDRs or GDSs or any other person with an interest in any GDRs or GDSs by reason of any exercise of, or failure to exercise, any voting rights attached to the Deposited Securities or any of them or any other discretion or power provided for in this 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). Neither the Depositary nor any of its agents 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 GDSs or any other person, by reason of having accepted as valid or not having rejected any certificate for Shares or GDSs 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 the terms of the GDSs.

(b)

(c)

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(d)

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 Securities (including, without prejudice to the generality of the foregoing, the conversion of any part of the Deposited Securities or cash from one currency to another), may at any time hold or be interested in GDSs 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 Securities from one currency to another and on any sales of property) without accounting to Holders or any other person for any profit arising therefrom. The Depositary shall endeavour to effect any such sale as is referred to or contemplated in the terms of the GDSs or any such conversion as is referred to in the terms of the GDSs in accordance with the Depositarys 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. 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 the terms of the GDSs. The Depositary shall have no responsibility whatsoever to the Bank, any Holders, or any owner of GDSs or any other person as regards any deficiency which might arise because the Depositary is subject to any tax in respect of the Deposited Securities or any part thereof or any income therefrom or any proceeds thereof. 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 the Deposit Agreement or the terms applicable to the GDSs, be obliged to have regard to the consequence thereof for the Holders or the owners of GDSs or any other person. 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. 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 may reasonably object, 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 terms of the GDSs, including power to sub-delegate, and subject to such regulations as the Depositary may in the interests of the Holders think fit, provided that no objection from the Bank to any such delegation as aforesaid may be made to a person whose financial statements are consolidated with those of the Depositarys ultimate holding company. 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. 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 the proceedings or be in any way

(e)

(f)

(g)

(h)

(i)

(j)

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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 Banks 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 provision 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. (k) 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. Notwithstanding anything to the contrary contained herein or in the terms of the GDSs, 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. No provision of the Deposit Agreement or the terms of the GDSs 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 right or powers. Without prejudice to the previous sentence, the Depositary shall to the extent reasonably practicable notify the Bank of any instance known to the Depositary where the Bank should prefund the Depositary or provide adequate indemnity and/or security to the Depositary in connection with the Deposit Agreement or the terms of the GDSs. No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement or the terms of the GDSs.

(l)

(m)

(n) 15.

Resignation and Removal of Depositary; the Custodian The Depositary may resign as Depositary by written notice of its election so to do delivered to the Bank, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Bank by no less than 90 days prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may appoint substitute or additional Custodians and the term Custodian refers to each Custodian or all Custodians as the context requires. So long as a Custodian shall be the Bank or an affiliate thereof, the Bank agrees to take any and all actions necessary to ensure that the Custodian (i) complies with the provisions of any custody agreement entered into between the Custodian and THE BANK OF NEW YORK MELLON, (ii) follows any and all instructions provided to the

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Custodian by the Depositary consistent herewith and/or with such custody agreement, and (iii) complies with the provisions of the Deposit Agreement applicable thereto. 16. Amendment The GDRs and the Deposit Agreement may be amended by the Bank and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise materially prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to the Holders. Every Holder of a GDR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such GDR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Holder of any GDR to surrender such GDR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body or regulatory body or authority should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of GDR to ensure compliance therewith, the Bank and the Depositary may amend or supplement the Deposit Agreement and the GDR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance. Notice of any amendment to the Deposit Agreement or form of GDRs shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders to retrieve or receive the text of such amendment. 17. Termination Subject to paragraph (22), the Deposit Agreement may not be terminated by the Bank prior to the Minority Protection Expiry Date. The Depositary may, and shall at the written direction of the Bank, terminate the Deposit Agreement and this GDR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder within 45 days of the date of such resignation, or (ii) been removed as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder on the 90th day after the Banks notice of removal was first provided to the Depositary. After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this GDR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the expiration of six months from the date so fixed for termination, the Depositary shall sell the Deposited Securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of GDRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this GDR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Bank shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents.

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18.

Appointment Each Holder and each person holding an interest in GDSs, upon acceptance of any GDSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be bound by the terms of the Deposit Agreement and the applicable GDR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable GDR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable GDR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

19.

Deed Poll To the extent the law, rules and/or regulations governing the Deposit Agreement and/or the GDRs issued hereunder would result in (i) Holders not being deemed a party to the Deposit Agreement, (ii) Holders, owners of GDRs and owners of beneficial interests in the Master GDRs or persons holding interests in GDSs not being bound by the provisions of the Deposit Agreement or the GDRs, the Bank agrees that the Deed Poll (a form of which is attached as Exhibit E to the Deposit Agreement) executed by the Bank in favour of such Holders, owners and persons provides that, if the Bank fails to perform the obligations imposed on it by certain specified provisions of the Deposit Agreement, any Holder, owner or person 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 GDSs of which he is the Holder relate.

20.

Registration of Shares; Kazakh Share Register The Bank agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue the appointment of a Kazakh Share Registrar, in full force and effect for so long as any GDSs remain outstanding under the Deposit Agreement or the Deposit Agreement remains in force. The Bank agrees that it shall: (i) take such action as is reasonably necessary to ensure the accuracy and completeness of all information set forth in the Share Register; (ii) provide or use its reasonable efforts to cause the Kazakh Share Registrar to provide to the Depositary, the Custodian and their respective agents, Kazakh Depository unrestricted access to the Share Register during ordinary business hours in Almaty, the Republic of Kazakhstan, in such manner and upon such terms and conditions as the Depositary, in its reasonable discretion, may deem appropriate, to permit the Depositary, the Custodian and their respective agents to regularly reconcile the number of Deposited Securities registered in the name of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the terms of the Deposit Agreement and, in connection therewith, to provide the Depositary, the Custodian and their respective agents, upon request, with a duplicate extract from the Share Register duly certified by the Kazakh Share Registrar (or some other evidence of verification which the Depositary, in its reasonable discretion, deems sufficient); (iii) use its reasonable efforts to cause the Kazakh Depository and the Kazakh Share Registrar promptly (and, in any event, within three (3) Business Days in Almaty, the Republic of Kazakhstan, of the Kazakh Depository and the Kazakh Share Registrars receipt of such documentation as may be required by applicable law and regulation and the reasonable and customary internal regulations of the Kazakh Depository and the Kazakh Share Registrar, or as soon as practicable thereafter) to effect the re-registration of ownership of Shares in the Share Register and the book entry system of the Kazakh Depository in connection with any deposit or withdrawal of Shares or other Deposited Securities under the Deposit Agreement; (iv) permit and use its reasonable efforts to cause the Kazakh Depository and the Kazakh

435

Share Registrar to permit each of the Depositary and the Custodian to register any Shares held hereunder in the name of the Depositary, the Custodian or their respective nominees (who may be non-residents of the Republic of Kazakhstan); and (v) use its reasonable efforts to cause the Kazakh Depository and the Kazakh Share Registrar promptly to notify the Depositary in writing at any time that the Kazakh Share Registrar (A) eliminates the name of a shareholder of the Bank from the book entry system of the Kazakh Depository or the Share Register or otherwise alters a shareholders interest in the Shares and such shareholder alleges to the Bank or the Kazakh Depository or the Kazakh Share Registrar or publicly that such elimination or alternation is unlawful; (B) no longer will be able materially to comply with, or has engaged in conduct that indicates it will not materially comply with, the provisions of the Deposit Agreement relating to it; (C) refuses to re register shares in the name of a particular purchaser and such purchaser (or its respective seller) alleges that such non-registration or refusal is unlawful; (D) holds Shares of the Bank for its own account; or (E) has materially breached the provisions of the Deposit Agreement relating to it and has failed to cure such breach within a reasonable time. In connection with the Deposit Agreement, the Bank agrees that it shall be solely liable for any act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar (other than such act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar arising in connection with any negligence, bad faith, fraud or wilful default of the Depositary, or the Depositarys directors, employees, agents ((other than the Custodian)) or affiliates) and that the Bank shall be solely liable for the unavailability of Deposited Securities or for the failure of the Depositary to make any distribution of cash or other distributions with respect thereto as a result of (i) any act or failure to act of the Bank or its agents, the Kazakh Depository, the Kazakh Share Registrar (other than such act or failure to act on the part of the Kazakh Depository or the Kazakh Share Registrar arising in connection with any negligence, bad faith, fraud or wilful default of the Depositary or its directors, employees, agents ((other than the Custodian)) or affiliates), or their respective directors, employees, agents (other than the Custodian) or affiliates, (ii) any provision of any present or future Charter or any other instrument of the Bank governing the Deposited Securities, or (iii) any provision of any securities issued or distributed by the Bank, or any offering or distribution thereof. The Bank and the Depositary agree that, for the purposes of the rights and obligations under the Deposit Agreement of the parties thereto, the records of the Depositary shall be controlling for all purposes with respect to the number of Shares or other Deposited Securities which should be registered in the name of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the terms of the Deposit Agreement; provided, however, that the Depositary agrees that it shall, and shall cause the Custodian to , at any time and from time to time take any and all action necessary to ensure the accuracy and completeness of all information set forth in the records of the Depositary, the Custodian or their respective nominees, as applicable, pursuant to the Deposit Agreement with respect to Shares or other Deposited Securities registered in the name of any of them. The Depositary agrees that it will instruct the Custodian to maintain custody of all duplicate share extracts (or other evidence of verification) provided to the Depositary, the Custodian or their respective agents. In the event of any material discrepancy between the records of the Depositary or the Custodian and the Share Register, then, if the Depositary has knowledge of such discrepancy, the Depositary shall notify the Bank promptly. In event of discrepancy between the records of the Depositary or the Custodian and the Kazakh Depository or the Share Register, as the case may be, the Bank agrees that (whether or not it has received any notification from the Depositary) it will (i) use its reasonable efforts to cause the Kazakh Depository or Kazakh Share Registrar, as the case may be, to reconcile its records to the records of the Depositary and/or the Custodian (as directed by the Depositary) and to make such corrections or revisions in the book entry system of the Kazakh Depository and Share Register as may be necessary in connection therewith, and (ii) to the extent the Bank is unable to so reconcile such records, and the number of Shares reflected in the records of the Kazakh Depository or the Kazakh

436

Share Registrar differs by more than one-half of one percent from the number of Shares reflected in the records of the Depositary or the Custodian, promptly instruct the Depositary to notify the Holders of the existence of such discrepancy. Upon receipt of the Banks instruction to notify the Holders of such discrepancy, the Depositary shall give such notification promptly to the Holders (it being understood that the Depositary at any time may give such notification to the Holders, whether or not it has received instructions from the Bank) and shall promptly cease issuing GDSs until such time as, in the opinion of the Depositary, such records have been appropriately reconciled. 21. Tag-Along Rights (a) The Holders Tag-Along Rights are set out in the Samruk-Kazyna Undertaking (the Samruk-Kazyna Undertaking) executed and delivered by JSC Sovereign Wealth Fund Samruk-Kazyna (Samruk-Kazyna) in favour of inter alia the Holders in connection with the debt restructuring of the Bank. Exercise of Tag-Along Rights To the extent Samruk-Kazyna proposes to dispose of Shares up to and including the Minority Protection Expiry Date thereby entitling any holder of Shares to enforce Tag-Along rights (Tag-Along Rights) as set out in the Samruk-Kazyna Undertaking, the Bank shall provide the Depositary with: (a) a copy of the Tag-Along offer of Samruk-Kazyna specifying the total number of Shares being sold, the Tag-Along sale price per Share (Tag Price) (or in the case of a public offering, the estimated sale price per Share) and all other material terms of the proposed Share disposal (the Tag-Along Offer); (b) a notice to be provided to Holders (the Tag-Along Informational Notice) that (i) instructs Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that in order to request the exercise of any Tag-Along rights they might otherwise possess, such Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR will be required to give a blocking instruction to Euroclear, Clearstream or DTC (as applicable) in relation to the GDSs representing Shares for which such Holders and/or persons wish to request the exercise Tag-Along Rights and provide both the Depositary and the Bank with proof of such blocking along with a properly executed certification in the form set forth in Exhibit C-2 or D-219 thereof and must timely comply with the provisions of the Deposit Agreement related to the withdrawal of Deposited Securities and cancellation of GDSs and the exercise of Tag-Along Rights, (ii) informs Holders and all persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that in order to request the exercise of Tag-Along Rights, such Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR must provide the Bank and Samruk-Kazyna (within 21 calendar days of service by Samruk-Kazyna of the Tag-Along Offer) with a notice (the Tag-Along Participation Request Notice) specifying that such Holder and/or person holding GDRs and/or GDSs or beneficial interests in the Master GDR wish to exercise its Tag-Along Rights and includes such other information as the Bank may reasonably require (including, but not limited to, confirmation of participant accounts, the number of GDSs held by such participants, and disclosure of the beneficial owner of such GDSs etc.), and (iii) provides Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR with the address to which the Tag-Along Participation Request Notice and other information contemplated in (ii) above shall be delivered to the Bank; and (c) an instruction to request Euroclear, Clearstream or DTC to block GDRs and/or GDSs within such systems as requested by Holders and
When Certificates C-2 and D-2 are delivered by Holders in the context of the exercise of the Tag-Along Rights, Holders will not be required to make any certification about the transferee (including any certification pursuant to Clause (ii)(b)(iv) of the Certificates) or compliance by the transferee with any law or regulation.
19

(b)

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to provide a list to the Bank and the Depositary of all settlement system participants holding GDRs and GDSs at the time such blocking instructions take effect and details of the GDRs and GDSs held and (if relevant) blocked by each such participant at such time. Upon receipt of such notices the Depositary shall forward copies of the notices described in (a) and (b) to the Holders. Each Holder wishing to request that Tag-Along Rights are enforced against Samruk-Kazyna in respect of Shares represented by GDSs held by such Holder shall send the Bank within 21 calendar days of receipt of such notices a Tag-Along Participation Notice and shall give a blocking instruction to Euroclear, Clearstream or DTC (as applicable) in relation to GDRs or GDSs held by such Holder. The Bank shall promptly (a) review all Tag-Along Participation Request Notices received on a timely basis, (b) notify the Depositary of all Holders eligible for enforcement of Tag-Along Rights against Samruk-Kazyna, the number of deposited Shares of each such Holder in respect of which such Tag-Along Rights are to be exercised, the DTC/Euroclear/Clearstream accounts of those Holders whose GDSs correspond to Shares subject to the Tag-Along Rights, the identity of the person to whom the relevant deposited Shares are to be transferred pursuant to the exercise of the Tag-Along Rights, and any other details and information required by the Depositary in order to procure the transfer of deposited Shares to such person and otherwise process the transaction. All Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR that deliver a Tag-Along Participation Request Notice to the Depositary shall be deemed to have requested withdrawal of the deposited Shares referred to in such Tag-Along Participation Request Notice and delivery of such Shares to the person identified by the Bank in its notice to the Depositary as the person to whom the relevant Shares are to be transferred pursuant to the exercise of the Tag-Along Rights, subject to receipt by the Depositary of the consideration attributable to the sale of the Shares subject to the Tag-Along Rights (Tag Consideration) in full, and to have instructed the Depositary to cancel such GDSs and deduct any fees, expenses and charges owing under the Deposit Agreement from the Tag Consideration received by the Depositary on account of participation in the Tag-Along Rights. Upon receipt by the Depositary of the Tag Consideration and certification in the form set out in Exhibit C-2 or Exhibit D-2 (as applicable) given by or on behalf of the person who will be the beneficial owner of the deposited Shares following withdrawal, (a) the Tag Consideration shall be converted subject to the same terms as conversion of cash distributions pursuant to paragraph 10(a) above, and the Depositary shall distribute the net proceeds therefrom (less the fees, expenses and charges owing on the cancellation of GDSs and otherwise) to the Holders entitled thereto, (b) the GDSs representing the deposited Shares subject to the Tag-Along Rights shall be cancelled, and (c) the deposited Shares subject to the Tag-Along Rights shall be delivered to the person identified by the Bank as the person to whom the relevant deposited Shares are to be transferred. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR acknowledges and agrees that the ability to transfer GDRs or GDSs will be restricted until completion of the process for the exercise of Tag-Along Rights, and that the Depositary is authorized to take any and all actions as may be appropriate to facilitate such process, including to give such instructions to Euroclear, Clearstream or DTC. (c) The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that at no time is the Depositary acting as, and at no time will the Depositary be, an intermediate owner of GDRs, GDSs and that any act or omission to act on the part of the Depositary in respect of the exercise of Tag-Along Rights will be solely on behalf of Holders and beneficial owners of GDSs and not on behalf of the Depositary or any of its agents.

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22.

Drag-Along Rights (a) If Samruk-Kazyna (whether acting alone or in concert) wishes to transfer a majority of the Shares in the Bank under a bona fide arms length offer to one or more persons (Drag-Along Purchaser), then Samruk-Kazyna shall have the option (subject to certain conditions) to require Holders to transfer all of the Shares corresponding to their GDRs to the Drag-Along Purchaser as set out herein (Drag-Along Rights). Samruk-Kazynas Drag-Along Rights may be enforced against any Holder. Where the consideration for the sale of such Shares is in a form other than cash, Samruk-Kazyna must procure that an amount in cash equivalent to the value determined by an independent expert is undertaken (by a party with a credit rating of BBB or better from Standard & Poors) to be paid to the Holders on completion of such sale or transfer (such undertaking to be in a form satisfactory to the Depositary and to be provided as a condition precedent to the effectiveness of such transfer). The exercise of the Drag-Along Rights shall be subject to: (i) the condition that the Drag-Along Price is equal to or better than the fair market arms length value as determined by an independent expert (being one of Deloitte, PricewaterhouseCoopers, KPMG or Ernst & Young or an international investment bank) appointed by Samruk-Kazyna and whose costs and expenses shall be borne by the Bank; the condition that the each relevant Holder receives no less per Share than the price per Share received by Samruk-Kazyna; and the sale price per Share is payable exclusively in cash or in a form immediately convertible into cash which the independent expert confirms is of at least equal value to the consideration provided to Samruk-Kazyna per Share and such consideration is paid or delivered at completion of such transfer. To the extent the Depositary receives anything other than cash on account of the Drag-Along Rights, pursuant to the Deposit Agreement, the Depositary shall endeavour to sell the consideration received and, if sold, Holders will be entitled to the net proceeds, if any, from the sale thereof.

(ii) (iii)

Samruk-Kazyna may exercise the Drag-Along Rights by giving a written notice (a Drag-Along Notice) to the Depositary specifying the proposed Drag-Along sale price per Share the (Drag-Along Price) at least 45 days prior to completion of such transfer. The Depositary shall as soon as reasonably practicable following receipt of a Drag-Along Notice from Samruk-Kazyna provide such information to the Holders. A Drag-Along Notice shall lapse if Samruk-Kazyna has not completed the sale of Shares to the Drag-Along Purchaser within 90 Business Days of giving the Drag-Along Notice. Samruk-Kazyna may give further Drag-Along Notices following the lapse of any particular Drag-Along Notice. (b) Exercise of Drag-Along Rights To the extent Samruk-Kazyna shall exercise its Drag-Along Rights with respect to the Shares as set out in Clause 22(a) above, the Bank shall provide the Depositary with: (a) a copy of the written notice of exercise of Drag-Along Rights from Samruk-Kazyna (Drag-Along Notice) specifying that all of the Shares corresponding to GDSs are to be sold, the Drag-Along Price and all other material terms of the proposed Share disposal (the Drag-Along Offer); and (b) an instruction to request Euroclear, Clearstream or DTC to block all transfers of GDRs and/or GDSs within such systems and to provide a list to the Bank, Samruk-Kazyna and the Depositary of all settlement system participants holding GDRs and GDSs at

439

the time such blocking instructions take effect and details of the GDRs and GDSs held by each such participant at such time. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR shall remain subject to the provisions of this Clause 22, and, subject to compliance by the Bank and Samruk-Kazyna with the provisions of this Clause 22, the deposited Shares subject to the Drag-Along Rights shall be delivered to the person(s) identified by the Bank as the Drag-Along Purchaser(s) to whom the relevant deposited Shares are to be transferred. Upon receipt of such notices the Depositary shall forward copies of the notice described in (a) to the Holders. The Bank shall promptly notify the Depositary of the identity of the person(s) who are the Drag-Along Purchaser(s) to whom the relevant deposited Shares are to be transferred pursuant to the exercise of the Drag-Along Rights, and such other details and information required by the Depositary in order to procure the transfer of the deposited Shares to such person(s) and otherwise process the transfer. All Holders and persons holding GDRs and/or GDSs or beneficial interests in the Master GDR shall, upon receipt by the Depositary of the Drag-Along Notice, be deemed to have requested the withdrawal of the deposited Shares and delivery of such Shares to the person(s) identified by the Bank as the Drag-Along Purchaser(s) to whom the relevant Shares are to be transferred pursuant to the exercise of the Drag-Along Rights, subject to receipt by the Depositary of the consideration attributable to the sale of the Shares subject to the Drag-Along Rights (Drag Consideration) in full, and to have instructed the Depositary to cancel such GDSs and deduct any fees, expenses and charges owing under the Deposit Agreement from the Drag Consideration received by the Depositary on account of exercise of the Drag-Along Rights. Upon receipt by the Depositary of: (a) the Drag Consideration in full in respect of all dragged Shares, (b) certification in the form set out in Exhibit C-2 or Exhibit D-2 (as applicable) from each Drag-Along Purchaser, and (c) confirmation from the Bank that each of the conditions for the exercise of the Drag-Along Rights as set out in Clause 22(a) above have been fully satisfied, the Drag-Along Notice has not lapsed and the sale of the Shares held by Samruk-Kazyna to the person(s) identified by the Bank as the Drag-Along Purchaser(s) has been completed, then (i) the Drag Consideration shall be converted subject to the same terms as conversion of cash distributions pursuant to paragraph 10(a) above, and the Depositary shall distribute the net proceeds therefrom (less the fees, expenses and charges owing on the cancellation of GDSs and otherwise) pro rata to the Holders, (ii) the GDSs representing the deposited Shares subject to the Drag-Along Rights shall be cancelled, and (iii) the deposited Shares subject to the Drag-Along Rights shall be delivered to the person(s) identified by the Bank as the Drag-Along Purchaser(s). Following distribution of the Drag-Along Consideration to the Holders (less fees, expenses and charges owing on the cancellation of GDSs and otherwise), cancellation of all GDSs and delivery of the deposited Shares to the person identified by the Bank as the Drag-Along Purchaser(s), the Bank shall be deemed to have terminated the Deposit Agreement in accordance with the provisions of paragraph (17) of each GDR and the Depositary will notify Holders of such termination and follow the provisions of said paragraph (17) with respect thereto. Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR acknowledges and agrees that the ability to transfer GDRs or GDSs will be restricted until completion of the process for the exercise of Drag-Along Rights, and that the Depositary is authorized to take any and all actions as may be appropriate to facilitate such process, including to give such instructions to Euroclear, Clearstream or DTC.

440

Each Holder and person holding GDRs and/or GDSs or beneficial interests in the Master GDR irrevocably appoints the Bank as its true and lawful attorney with full power and authority in its name or otherwise and on its behalf to consider, settle, approve, execute, sign and deliver all agreements, documents, certificates and instruments (whether as a deed or not) which the Bank (acting reasonably) considers necessary or desirable to give effect to the transfers of the Shares pursuant to the exercise of the Drag-Along Rights by Samruk-Kazyna. If a Drag-Along Notice does lapse, the Depositary and the Bank shall use reasonable endeavours to procure that the GDSs are unblocked. (c) The Bank, Holders and by holding any interest in GDSs, beneficial owners of GDSs, each acknowledge and agree that at no time is the Depositary acting as, and at no time will the Depositary be, an intermediate owner of GDRs, GDSs and that any act or omission to act on the part of the Depositary in respect of the exercise of Drag-Along Rights will be solely on behalf of Holders and beneficial owners of GDSs and not on behalf of the Depositary or any of its agents.

23.

Additional Representations and Covenants of Holders and beneficial owners of GDSs By holding a GDR or an interest in the Master GDR, Holders and beneficial owners of GDSs (including any interests therein) acknowledge that the Shares represented hereby are subject to the Tag-Along Rights and Drag-Along Rights contemplated by paragraph (21) and (22) hereof. In addition to any other representations, warranties and covenants set forth in the Deposit Agreement and the GDRs, each Holder and beneficial owner of GDSs shall be deemed to have represented, warranted and covenanted as follows: (a) the person or entity providing voting instructions for use by the Depositary in accordance herewith will be deemed to have represented that (i) neither such person nor any person for whom they are acting is prohibited from voting pursuant to Clause 17.5 of the Banking Law, (ii) neither such person nor any person for whom such person is acting owns 10% or more of the outstanding Shares of the Bank or such person and/or person for whom the Holder is acting owns 10% or more of the outstanding Shares of the Bank and has obtained all relevant approvals required in connection therewith, (iii) that neither such person or the person for whom they are acting is associated with any Former Management of the Bank, and (iv) such person is not Samruk-Kazyna or an affiliate of Samruk-Kazyna; On each issuance of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR shall be deemed to represent (i) as a result of the issuance of GDSs neither such persons holdings nor the holdings for the person for whom such person is acting will exceed 10% of the Banks share capital or if it will exceed 10% that the person and such person for whom the person is acting has obtained all relevant approvals, (ii) neither the person nor any person for whom the person is acting is either Samruk-Kazyna or an affiliate of Samruk-Kazyna, and (iii) neither the person nor any person for whom the person is acting is associated with the Former Management of the Bank; On each transfer of GDSs (and/or interests in the Master GDR), each person receiving GDSs or interests in the Master GDR on such transfer shall be deemed to represent that such person (i) is not Samruk-Kazyna or an affiliate of Samruk-Kazyna, (ii) does not hold, and after giving effect to such transfer will not hold, more than 10% of the Banks share capital (unless such person has obtained all relevant approvals), and (iii) is not associated with the Former Management of the Bank;

(b)

(c)

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(d)

With respect to any cancellation of GDSs, the person or entity receiving deposited Shares on such cancellation will be deemed to have represented that neither such person nor the person for whom it is acting (a) is prohibited from holdings Shares of the Bank pursuant to Clause 17.5 of the Banking Law, or (b) is associated with the Former Management of the Bank; and to promptly disclose in writing to the Bank if at any time it holds 10% or more of the share capital of the Bank.

(e) 24.

Meeting Requests Upon receiving a notice (Collation Request) from one or more Holders where (i) each such Collation Request certifies that in aggregate the Holders sending such Collation Request hold at least 1% of all GDSs in issue, (ii) such Collation Request instructs the Depositary to send to all Holders a notice (Collation Notice) inviting Holders to instruct the Depositary by way of a further notice (Meeting Request Notice) to request a general meeting of the Bank, and (iii) the Collation Request attaches forms of Collation Notice, the Meeting Request Notice and a notice (Requisition Notice) which the Depositary will forward to the Bank upon receipt of Meeting Request Notices from Holders holding GDSs corresponding to the required number of Shares, the Depositary shall distribute a Collation Notice with the form of Meeting Request Notice to each Holder. Upon receipt of Meeting Request Notices from Holders who certify that in the aggregate they hold GDSs corresponding to 5 per cent. or more of the outstanding Shares of the Bank, the Depositary shall forward a Requisition Notice to the Bank on behalf of the instructing Holders.

25.

Governing Law; Consent to Jurisdiction; Arbitration This GDR and the GDSs, and any non-contractual obligations arising out of or in connection with this GDR and the GDSs, will be governed by and construed in all respects in accordance with English law. Any dispute, controversy or cause of action arising out of or in connection with this GDR, including any question regarding its scope, existence, validity or termination, shall be referred to and finally resolved by arbitration in accordance with the Rules of the London Court of International Arbitration (the LCIA). The seat of the arbitration shall be London, England, and the language of the arbitration shall be English. The number of arbitrators shall be three, one of whom shall be nominated by the claimant(s), one by the respondent(s) and the third of whom, who shall act as chairman, shall be nominated by the two party-nominated arbitrators, provided that if the third arbitrator has not been nominated within thirty days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA. Sections 45 and 69 of the Arbitration Act of England of 1996 shall not apply. An arbitral tribunal constituted under this GDR may, unless consolidation would prejudice the rights of any party, consolidate an arbitration hereunder with arbitration under the Deposit Agreement, the other Master GDR and/or the Deed Poll if the arbitration proceedings raise common questions of law or fact. If two or more arbitral tribunals issue consolidation orders, the order issued first shall prevail. In the event that the Depositary is made a party to any litigation, arbitration or other proceeding (whether administrative or judicial) 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, the Bank has agreed in the Deposit Agreement, upon notice from the Depositary, to fully cooperate with the Depositary in connection with such litigation, arbitration or proceeding.

442

SCHEDULE 4INDEX TO FINANCIAL STATEMENTS Unaudited Interim Financial Statements for the six months ended 30 June 2010............... F-2 Report on review of Interim Condensed Consolidated Financial Statements.............................. F-4 Interim Condensed Consolidated Statement of Financial Position.............................................. F-5 Interim Condensed Consolidated Statement of Income............................................................... F-6 Interim Condensed Consolidated Statement of Comprehensive Income..................................... F-7 Interim Condensed Consolidated Statement of Changes in Equity ............................................. F-8 Interim Condensed Consolidated Statement of Cash Flow.......................................................... F-9 Notes to Interim Condensed Consolidated Financial Statement ................................................. F-10 Consolidated Financial Statements for the year ended 31 December 2009 .......................... F-39 Independent Auditors Report...................................................................................................... F-40 Consolidated Statement of Financial Position ............................................................................. F-43 Consolidated Statement of Income .............................................................................................. F-44 Consolidated Statement of Comprehensive Income .................................................................... F-45 Consolidated Statement of Changes in Equity............................................................................. F-46 Consolidated Statement of Changes in Cash Flows..................................................................... F-47 Notes to the Consolidated Financial Statements.......................................................................... F-48 Consolidated Financial Statements for the year ended 31 December 2008 .......................... F-109 Independent Auditors Report...................................................................................................... F-111 Consolidated Balance Sheet......................................................................................................... F-113 Consolidated Statement of Income .............................................................................................. F-114 Consolidated Statement of Changes in Equity............................................................................. F-115 Consolidated Statement of Cash Flows ....................................................................................... F-117 Notes to the Consolidated Financial Statements.......................................................................... F-118 Consolidated Financial Statements for the year ended 31 December 2007 .......................... F-179 Independent Auditors Report...................................................................................................... F-181 Consolidated Balance Sheets ....................................................................................................... F-182 Consolidated Statement of Income .............................................................................................. F-183 Consolidated Statement of Changes in Equity............................................................................. F-184 Consolidated Statements of Cash Flows...................................................................................... F-187 Notes to the Consolidated Financial Statements.......................................................................... F-188

F-1

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F-35

F-36

F-37

F-38

JSCBTABankandsubsidiaries

ConsolidatedFinancialStatements

Yearended31December2009 TogetherwithIndependentAuditorsReport

F-39

Ernst & Young LLP Esentai Tower Al-Farabi Ave.. 7717 Almaty, Kazakhstan
Tel: +7 (727)258 5960 Fax: +7 (727)258 5961 www.ey.com/kazakhstan

TOO R ~ ~ H 3HA Rnn) C T Kasaxc~an. An~aTbl np. Anb-cDapa6n. 7717 3nanne ( ~ E c ~ H Tay3p)) T~A

Ten.: +7 (727)258 5960 O a ~ c :+7 (727)258 5961

INDEPENDENT AUDITORS' REPORT To the shareholders and Board of Directors of JSC BTA Bank We have audited the accompanying consolidated financial statements of JSC BTA Bank (the "Bank") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 3 1 December 2009, and the consolidated income statement, consolidated statements of comprehensive income, changes in equity and of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management's Responsibility for the 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 consolidated 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 financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the 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 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-40

A member firm ot Ernst 8 Ywnq Global LlmBed

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 3 1 December 2009, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 2 in the financial statements which indicates that the Group incurred a net loss amounting to KZT 1,114,534 million during the year ended 3 1 December 2009 and, as of that date, the Group's total liabilities exceeded its total assets by KZT 1,689,820 million. These conditions, along with other matters described in Note 2, including current defaults under debt agreements, indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern.

ficate No. series MOD-2 No. 0000003 issued by the Ministry of Finance of the Republic of Kazakhstan on 15 July 2005
5 May 2010

A member llrm of Ernst 8 Younq Global Lrmlted

F-41

JSC BTA Bank

2009 Consolidated Financial Statements

CONTENTS
INDEPENDENT AUDITORS' REPORT
Consolidated statement of financial position...................................................................................................................................... 1 Consolidated statement of income ....................................................................................................................................................... 2 Consolidated statement of comprehensive income ........................................................................................................................... 3 Consolidated statement of changes in equity...................................................................................................................................... 4 Consolidated statement of cash flows.................................................................................................................................................. 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Principal activities ........................................................................................................................................................................ 6 Going concern.............................................................................................................................................................................. 6 Basis of preparation ..................................................................................................................................................................... 7 Summary of significant accounting policies ......................................................................................................................... 10 Significant accounting judgements and estimates............................................................................................................... 23 Disposal of subsidiaries ........................................................................................................................................................... 25 Cash and cash equivalents ....................................................................................................................................................... 26 Obligatory reserves ................................................................................................................................................................... 26 Trading securities...................................................................................................................................................................... 27 Amounts due from credit institutions ...................................................................................................................................27 Derivative hancial instruments ............................................................................................................................................ 28 Available-for-sale investment securities................................................................................................................................ 28 Loans to customers .................................................................................................................................................................. 29 Bonds of NWF Samruk-Kazyna ............................................................................................................................................ 32 Investments in associates ........................................................................................................................................................ 32 Goodwill.....................................................................................................................................................................................33 Other impairment and provisions.......................................................................................................................................... 34 Taxation ...................................................................................................................................................................................... 35 Amounts due to the Government of RK and central banks ...................................................................................... 37 Amounts due to credit institutions ........................................................................................................................................ 37 Amounts due to customers ..................................................................................................................................................... 37 Debt securities issued ............................................................................................................................................................... 39 Equity ..........................................................................................................................................................................................40 Commitments and contingencies...........................................................................................................................................41 Fees and commissions .............................................................................................................................................................44 Net trading loss .........................................................................................................................................................................44 Other impairment charge .................................................................................................................................................... 44 Salaries and other administrative and operating expenses ................................................................................................. 45 Earnings per share .................................................................................................................................................................... 45 Risk management policies ....................................................................................................................................................... 45 Fair values of frnancial instruments....................................................................................................................................... 55 Segment analysis........................................................................................................................................................................ 57 Related party transactions ....................................................................................................................................................... 60 Capital adequacy........................................................................................................................................................................ 65 Subsequent events .................................................................................................................................................................... 65

F-42

JSCBTA Bank

2009 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2009

(Mi/bons ofKaxakhstani Tenge)
Note
Assets Cash and cash equivalents Obligatory reserves Trading securities Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customers Bonds of X\W Samruk-Kazyna Investments in associates Property and equipment Goodwill Current income fax asset Deferred tax assets Other assets Total assets Liabilities Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Derivative financial liabilities Debt securities issued Provisions Other liabilities Total liabilities Equity deficit Issued capital: common shares Additional paid-in capital Treasury shares Available-for-sale investment securities revaluation reserve Foreign currency translation reserve Accumulated deficit Equity attributable to: Shareholders of the parent Non-controlling interest Total equity deficit Total liabilities a n d equity

2009

2008

Signed and authorized for release on behalf of the Management Board of the Bank Anvar Saidenov Chairman of the Board

Alma Maxutova

Chief Accountant

5 May 2010

The a~mpanying notes on pages 6 to 66 are an integra/part ofthese bvnsobhted~nancia/state~enfs.

F-43

JSC BTA Bank

2009 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF INCOME For the year ended 31 December 2009

(Millions of Kazakhstani Tenge)
Note
Interest income Loans Bonds of NWF Samruk-Kazyna Investment securities, held for sale Deposits in other banks Trading securities Interest expense Amounts due to the Government of RK and central banks Deposits and loans from credit institutions Due to customers Debt securities issued Net interest income before impairment Impairment charge Net interest income Fee and commission income Fee and commission expense Fees and commissions Net trading loss Gains less losses from foreign currencies: - dealing - translation differences Income from insurance operations Share of income/ (loss) of associates Loss on disposal of subsidiaries Other impairment charge Inventory write-off Other income Non interest loss Salaries and other employee benefits Other administrative and operating expenses Depreciation and amortisation Taxes other than income tax Other provisions Obligatory insurance of individuals deposits Other expenses Non interest income/ (expense) Loss before income tax expense Income tax (expense)/ benefit Net loss after income tax expenses Attributable to: Equity holders of the parent Non-controlling interest Net loss Basic and diluted loss per share (in Kazakhstani Tenge) 29 18 10,13 25 25 25 26

2009
189,523 28,551 2,490 5,756 226,320 11,405 237,725 (22,195) (48,047) (45,810) (141,611) (257,663) (19,938) (754,254) (774,192) 21,382 (1,732) 19,650 (2,965) 3,052 (326,398) 2,688 4,690 (3,075) (38,876) (4,473) 4,165 (361,192) (22,226) (24,388) (4,886) (3,836) 62,451 (2,051) (3,238) 1,826 (1,113,908) (626) (1,114,534) (1,086,625) (27,909) (1,114,534) (33,193)

2008
366,037 2,766 17,833 386,636 9,831 396,467 (82) (56,663) (55,748) (95,888) (208,381) 188,086 (1,094,300) (906,214) 30,334 (1,179) 29,155 (29,769) 1,665 (10,870) 2,100 (15,448) (11,252) (69,855) (2,396) 5,792 (130,033) (26,597) (27,414) (4,435) (4,163) (113,130) (2,102) (3,184) (181,025) (1,188,117) 67 (1,188,050) (1,187,584) (466) (1,188,050) (143,526)

3 6 27

28 28 17

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements.
2

F-44

JSC BTA Bank

2009 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2009
(Millions of Kazakhstani Tenge)
2009
Net loss for the reporting period Other comprehensive income: Fair value change of available-for-sale investment securities Release of available-for-sale investment securities revaluation reserve on disposal of previously revalued assets Impairment of available-for-sale investment securities Share of changes recognized directly in equity of an associate Foreign exchange revaluation Other comprehensive income for the reporting period, net of tax Total comprehensive income for the reporting period Attributable to: - Equity holders of the parent - Non-controlling interest (1,114,534) (6,568) 2,192 2,764 372 580 (660) (1,115,194) (1,087,365) (27,829) (1,115,194)

2008
(1,188,050) (46,887) 3,930 42,610 (627) (1,190) (2,164) (1,190,214) (1,189,553) (661) (1,190,214)

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements.
3

F-45

JSC BTA Bank

2009 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2009
(Millions of Kazakhstani Tenge)
Equity attributable to equity holders of the Parent Available-forForeign sale securities currency Treasury revaluation translation Accumulated stock reserve reserve loss
(555) (5,508) 4,495 (1,568) (195) (917) (1,112) 104 (1,052) (948) 129,938 (1,187,584) (1,057,646)

Issued capitalcommon shares

1 January 2008 Total comprehensive loss Issue of common shares Purchase of treasury shares Sale of treasury shares Non-controlling interest arising on acquisition Acquisition of Non-controlling interest 31 December 2008 303,427 29 303,456

Total
432,719 (1,189,553) 29 (5,508) 4,495 (757,818)

Noncontrolling interest
19,312 (661) 15 (3,627) 15,039

Total equity
452,031 (1,190,214) 29 (5,508) 4,495 15 (3,627) (742,779)

Equity attributable to equity holders of the Parent Available-forIssued Foreign sale securities capitalcurrency Treasury revaluation common Additional translation Accumulated stock reserve shares paid-in capital reserve loss
1 January 2009 Total comprehensive loss Issue of common shares (Note 23) Additional paid-in capital (Note 14, 22) Purchase of treasury shares Issue of treasury shares Contribution of non-controlling interests to subsidiaries equity Disposal of subsidiary Purchase of non-controlling interest Change of non-controlling interest from redistribution of participation share 31 December 2009 303,456 212,095 515,551 (38,798) (38,798) (1,568) (5,956) 1,141 (6,383) (1,112) (1,240) (2,352) (948) 500 (448) (1,057,646) (1,086,625) (2,144,271)

Total
(757,818) (1,087,365) 212,095 (38,798) (5,956) 1,141 (1,676,701)

Noncontrolling interest
15,039 (27,829) 619 (1,191) (292) 535 (13,119)

Total equity
(742,779) (1,115,194) 212,095 (38,798) (5,956) 1,141 619 (1,191) (292) 535 (1,689,820)

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements.
4

F-46

JSC BTA Bank

2009 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CHANGES IN CASH FLOWS For the year ended 31 December 2009
(Millions of Kazakhstani Tenge)
Note
Cash flows from operating activities: Interest received Interest paid (Loss)/ income received from foreign currencies dealing (Loss)/ income received from transactions with securities Fee and commission received Fee and commission paid Cash paid for insurance operations Cash received from insurance operations Cash paid to employees Cash paid for obligatory deposits insurance Operating expenses paid Nat (decrease)/ increase in cash from operating activities before changes in operating assets and liabilities Net increase/decrease in cash from operating assets and liabilities Net decrease in obligatory reserves Net decrease / (increase) in trading securities Net decrease in due from credit institutions Net (increase)/ decrease in loans to customers Net increase in other assets, including prepaid taxes Net increase in due to the Government and central banks Net increase/ (decrease) in derivative financial instruments Net (decrease) / increase in due to credit institutions Net (decrease)/ increase in due to customers Income tax paid Net (decrease)/ increase in other liabilities Net cash received from operating activities Cash flows from investing activities Purchase of available-for-sale investment securities Disposal of available-for-sale investment securities Purchase of bonds of NWF Samruk-Kazyna Acquisition of non-controlling interest Investment in associates Cash of disposed subsidiaries Acquisition of subsidiaries, less cash received Dividends received from associates Purchase of property and equipment Proceeds from disposal of property and equipment Net cash used in investing activities Cash flows from financing activities Net proceeds from from debt securities issued Redemption of debt securities Proceeds from issue of common shares Contribution to subsidiaries by non-controlling interest Purchase of treasury shares Proceeds from sale of treasury shares Net cash received from financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Non-cash transactions: Reclassification of available-for-sale investment securities to investments in associates Deconsolidation of subsidiary

2009
152,908 (182,906) (10,819) (750) 15,655 (1,732) (4,947) 8,574 (20,095) (2,051) (41,046) (87,209) 66,477 1,119 15,490 53,333 (688) 404,529 383 (114,238) (321,896) (1,049) (7,535) 12,831 (17,943) 9,505 (645,000) (292) (3,269) (1,996) (4,531) 2,359 (661,167) 647,075 (223,127) 212,095 619 (5,956) 1,141 631,847 6,811 (9,678) 87,893 78,215

2008
299,195 (213,316) 1,665 129 29,257 (1,174) (5,108) 9,859 (24,910) (2,102) (30,045) 63,450 125,369 (38,519) 10,018 (326,165) (16,917) 5,694 (2,961) 25,133 197,629 (10,370) 4,750 37,111 (58,061) 26,905 (8,970) (33,690) (15,170) 26,625 658 (5,251) 1,102 (65,852) 118,828 (96,657) 29 (5,508) 4,495 21,187 (4,276) (11,830) 99,723 87,893

2,546 (2,112)

6,785 (13,288)

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements.
5

F-47

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 1. Principalactivities

JSC BTA Bank and its subsidiaries (together the Group) provide retail and corporate banking services, insurance services, leasing and other financial services in Kazakhstan, Russian Federation, Belorussia, Georgia and Armenia. The parent company of the Group is BTA Bank (the Bank), a joint stock company. The Bank is incorporated and domiciled in the Republic of Kazakhstan. Note 3 lists the Banks subsidiaries and associates. The address of the Banks registered office is: 97 Zholdasbekov Street, Samal-2, Almaty, 050051, Republic of Kazakhstan. The Bank accepts deposits from the public and extends credit, transfers payments within Kazakhstan and abroad, exchanges currencies and provides other banking services to its commercial and retail customers. In addition, the Group is authorized to accept pension fund deposits. The Bank has a primary listing in the Kazakhstani Stock Exchange (KASE). Certain of the Groups debt securities are listed on the Luxemburg Stock Exchange and London Stock Exchange with a secondary listing on the KASE. Its head office is located in Almaty, Kazakhstan. As of 31 December 2009 the Bank had 22 regional branches and 230 cash settlement units (as at 31 December 2008, the Bank had 22 regional branches and 279 cash settlement units), located throughout Kazakhstan and representative offices in Shanghai, China; Moscow, Russia; Kiev, Ukraine; Dubai, United Arab Emirates; London, Great Britain. National Welfare Fund Samruk-Kazyna is the ultimate parent (the Parent or the Controlling shareholder) of the Group. Below is the list of major shareholders as at As at 31 December: Shareholders: Common shares: NWF Samruk-Kazyna JSC KT Asia Investment Group B.V. Drey Associates Limited Strident Energy Limited InvestCapital Company LLP SMKK LLP Yassy Invest LLP Agroinvest LLP P-CreditPrive SA Makta Aral Company LLP Other less than 5%

2009 %
75.10 2.40 2.40 2.38 0.70

2008 %
0 9.66 9.65 9.56 8.14 7.77 7.19 7.15 6.74 6.67 27.47 100.00

1.79 1.78 1.68

11.77 100.00

As described in more detail in Note 2, in accordance with Law of the Republic of Kazakhstan on Bank and banking activities in February 2009 Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations (the FMSA) made an offer to the Government of the Republic of Kazakhstan to purchase a majority interest in BTA Bank JSC. The purchase was carried out through an additional emission. As part of this emission, the Government represented by the Controlling shareholder purchased 25,246,343 shares at the price of KZT 8,401 per share that resulted in KZT 212,095 million invested to the Banks equity and the share of the controlling shareholder in the Banks equity amounted to 75.10%. As of 31 December 2009 members of the Board of Directors and Management Board owned 37 ordinary shares or 0.0001% of issued capital (31 December 2008 111 shares or 0.0013 %). No dividends to common shareholders were paid during 2009 and 2008.

2. Goingconcern
During the fourth quarter of 2008 there was a significant deterioration in the consolidated financial position of BTA Bank and its subsidiaries principally resulting from loss events related to loan portfolio. This led to a breach by the Bank and the Group of certain prudential requirements including those related to capital adequacy set by the Financial Markets Supervision Agency (the FMSA). In addition, in February 2009 Kazakh Tenge has devaed against US dollar by 23%. This also has negatively affected the Bank and its customers, resulting in further deterioration of the Banks assets. As a result of these loss events the Groups total liabilities as at 31 December 2009 exceeded its total assets by KZT 1,689,820 million (31 December 2008: KZT 742,779 million) and the Group has reported a net loss amounting to KZT 1,114,534 million for the year then ended. This led the Bank to non-compliance of certain ratios, including capital adequacy ratio as calculated in accordance with Basel Capital Accord 1988 requirements. As at 31 December 2009 the amounts drawn by the Group under bond programs and loan facilities amounted to KZT 2,504,986 million (31 December 2008: KZT 1,891,092 million). In accordance with the contractual terms of these bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. 6

F-48

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 2. Goingconcern(continued)

As at 31 December 2009 and 2008 the Bank was in breach of capital adequacy and lending exposure covenants on syndicated loans, bond programs and certain other facilities. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and cross-defaults under the terms of the respective agreements. In April 2009 the Bank suspended its payments on principal and in July on interest payments. The Group, with the support of the Controlling shareholder is in the process of restructuring its debts. After the debt restructuring, the controlling shareholder has committed to provide to the Bank sufficient funds to enable the Bank to both repay interest and principal in accordance with restructured maturities and to continue the Banks operations. Starting from February 2009, the controlling shareholder and the management of the Bank have been executing several initiatives aimed at improving liquidity and enabling the Group to continue its operations including, but not limited, to the following: () In March 2009, the controlling shareholder purchased the Banks bonds totaling KZT 645 billion; (b) In 2009, significant funds were placed on current accounts with the Group by entities owned by the controlling shareholder; (c) the Bank is an active participant of governmental programs. Under Governmental anti-crisis programs the Group received KZT 40 billion to refinance mortgage loans and KZT 22 billion to finance medium and small size entities. Furthermore the Bank is a key financial institution for realization of stabilization and support of a real sector of economy. (d) On 21 September 2009 the Bank signed a Memorandum of Understanding with the Creditors Steering Committee on debt restructuring. (e) On 16 October 2009 the ruling of the specialized financial court of Almaty city concerning the restructuring of the Bank came into the legal force. In accordance with the law of the Republic of Kazakhstan On banks and bank activities the decision on Bank restructuring was recognized reasonable and competent in meeting all legislation requirements. The Bank was prescribed to present to and approve with Creditors the restructuring plan which would be considered satisfactory for all creditors on restructuring of the Banks debt. The aim of restructuring was also to satisfy FMSA regulative requirements on capital adequacy on the moment of restructuring and fair offset of debt to creditors of the Bank. (f) On 7 December 2009 the Bank signed with its creditors a commercial term sheet on debt restructuring (Term sheet). According to the Term sheet the Groups external debt amounting to US Dollar 11.6 billion will be settled by cash of US Dollar 1 billion, new senior debt of US Dollar 3,067 million, new subordinated debt of US Dollar 797 million and revolving committed trade finance facility of US Dollar 700 million as well as recovery notes, which provide the holders with 50% of the qualified bad assets, which the Bank recovers in the future. As a result of the restructuring it is expected that the Groups regulatory capital will be increased to comply with FMSA requirements. (g) In December 2009 restructuring proceedings that have been commenced in respect of the Bank before the Specialised Financial Court in Almaty have been recognized in Great Britain as a main foreign proceeding. This recognition was granted by order of the High Court of Justice of England and Wales on 18 December 2009. Because of the negative events described above there is a material uncertainty which may cast significant doubt about the Bank's ability to continue as a going concern. Therefore, the Bank may be unable to realize its assets and discharge its liabilities in the normal course of business. These consolidated financial statements of the Group have been prepared on a going concern basis that contemplates the realization of restructuring of its long-term debt and continued adequate support from the controlling shareholder of the Bank. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary if the restructuring of debt is unsuccessful and adequate additional resources are not available and/or the Bank is unable to continue as a going concern.

3. Basisofpreparation
Statementofcompliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

F-49

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 3. Basisofpreparation(continued)

General

These financial statements are presented in millions of Kazakh Tenge (KZT or Tenge), except per share amounts and unless otherwise indicated. The KZT is utilized as the shareholders, the managers and the regulators measure the Groups performance in KZT. In addition, the KZT, being the national currency of the Republic of Kazakhstan, is the currency that reflects the economic substance of the underlying events and circumstances relevant to the Group. Significant foreign currency positions are maintained as they are necessary to meet customers requirements, manage foreign currency risks and achieve a proper assets and liabilities structure of the Group. Transactions in other currencies are treated as transactions in foreign currencies. The consolidated financial statements are prepared under the historical cost convention modified for the measurement at fair value of available-for-sale investment securities, trading securities and derivative contracts as required by IAS 39 Financial Instruments: Recognition and Measurement.
Consolidatedsubsidiaries

The consolidated financial statements include the following subsidiaries:

Holding, % 31 December 2008 2009
100.00% 86.05% 100.00% 100.00% 98.17% 100.00% 100.00% 99.54% 86.11% 100.00% 70.51% 100.00% 99.29% 100.00% 95.20% 100.00% 100.00%

Subsidiary
JSC Subsidiary of JSC BTA Bank - BTA Securities JSC Subsidiary of JSC BTA Bank Accumulative Pension Fund BTA Kazakhstan JSC BTA Ipoteka Subsidiary Mortgage company of JSC BTA JSC Subsidiary Life Insurance company of BTA - BTA Zhizn JSC Subsidiary insurance company of BTA Bank JSC BTA Zabota TuranAlem Finance B.V. LL Subsidiary of JSC BTA Bank TuranAlem Finance JSC Subsidiary of JSC BTA Insurance Company London-Almaty BTA Finance Luxembourg S.A. JSC Subsidiary company of BTA - BTA Insurance JSC Subsidiary of JSC BTA TemirBank TemirCapital B.V. CJSC BTA Bank BTA Bank CJSC First Kazakh Securitization Company Second Kazakh Securitization Company

Country
Kazakhstan Kazakhstan Kazakhstan Kazakhstan

Date of incorporation
17.10.97 11.12.97 20.11.00 22.07.99 10.09.96 22.05.01 22.06.04 20.11.97 05.01.06 08.09.98 26.03.92 29.05.01 02.12.96 25.04.02 08.12.05 25.09.07

Industry
Securities trading and asset management Pension Fund Consumer mortgage lending Life and annuity insurance Medical insurance Capital markets Capital markets Property and liability insurance Capital markets Property and liability insurance Bank activities Capital markets Bank activities Bank activities Securitization of financial assets Securitization of financial assets

Date of acquisition
13.12.97 16.09.98 20.11.00 30.03.01 04.04.01 22.05.01 28.09.04 5.08.04 06.03.06 21.12.06 29.12.06 29.12.06 19.11.07 30.10.08

98.17% Kazakhstan 100.00% Netherlands 100.00% 99.54% 86.11% Russia Kazakhstan Luxemburg

100.00% Kazakhstan 69.85% Kazakhstan 100.00% Netherlands 71.00% Kyrgyzstan 99.29% Belorussia Netherlands Netherlands

In December 2008, JSC Accumulative Pension Fund BTA Kazakhstan, the Banks subsidiary, authorized to issue 5,000,000 common shares. As at 31 December 2008, 3,841,585 common shares were issued and paid by the Bank. As a result the Groups share in JSC Accumulative Pension Fund BTA Kazakhstan increased to 95.20%. Gain from increase of Groups share amounted to KZT 843 million. In February and March 2009 JSC Accumulative Pension Fund BTA Kazakhstan placed the remaining 1,158,415 common shares of which 553,185 were purchased by BTA Bank. As a result BTA Banks share in Pension Fund BTA Kazakhstan decreased to 86.05%. On 28 December 2009 on the basis of the decision of Bishkek regional court, Kyrgyz Republic, the court marshal levied execution upon shares of BTA Bank CJSC owned by the Bank, and therefore, Banks management decided to deconsolidate BTA Bank CJSC as at the end of 2009. The loss from derecognition of BTA Bank CJSC amounted to KZT 3,075 million. Refer to Note 24. In connection with completion of securitization transactions, special purpose entity DPR Finance Company was liquidated as at the end of 2009.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 3. Basisofpreparation(continued)

Consolidatedsubsidiaries(continued)

In October 2008, the Bank finalized the acquisition of additional 50.3% equity interest in BTA Bank CJSC (Belorussia) (former Astanaeximbank CJSC) for KZT 3,501 million. As a result of the acquisition the Banks interest in BTA Bank CJSC (Belorussia) increased to 99.29%, which provided the Bank with effective control and enabled the Bank to treat BTA Bank CJSC (Belorussia) as a subsidiary starting from November 2008. BTA Bank CJSC (Belorussia) was incorporated as a closed joint stock company and operates in Belorussia. Refer to Note 6 for the fair value of the identifiable assets and liabilities acquired and goodwill arising at the date of acquisition. Before the Group took over the effective control over the operations of CJSC BTA Bank (Belorussia), it was accounted as an associate under equity method. In 2008 the Group increased its share in TemirBank JSC from 64.32% to 69.85%. In 2009 the Group acquired additional 0.66% share in TemirBank JSC for KZT 292 million. Although the Group did not own any shares in First Kazakh Securitisation Company and Second Kazakh Securitisation Company as at 31 December 2009 and 2008 and for the years then ended, they are treated, in accordance with SIC-12 Consolidation Special Purpose Entities, as subsidiaries, because at those dates the Group controlled and benefited directly from operations of these entities. Associates accounted for under equity method The following associates are accounted for under the equity method and included into other assets:

2009 Associates
BTA Bank OJSC BTA Bank JSC (former Silk Road Bank JSC) BTA Bank CJSC (Armenia) JSCB BTA Kazan OJSC BTA ORIX Leasing JSC Temir Leasing JSC Oranta NJSIC OJSC Sekerbank BTA Bank LLC

Holding, %
49.99%

Country
Ukraine

Share in net income/ Activities (loss)

Bank Bank Bank Bank Leasing Leasing Insurance Bank Bank (126) (124) (19) 57 (124) 20 5,006

Total assets
58,270 12,992 3,307 54,592 4,193 3,222 22,219 909,678 223,129

Total liabilities
30,938 9,652 1,306 43,764 2,345 1,300 7,830 788,890 163,306

Equity
27,332 3,340 2,001 10,828 1,848 1,922 14,389 120,788 59,823

49.00% Georgia 48.93% Armenia 47.32% Russia 45.00% Kazakhstan 45.80% Kazakhstan 30.39% Ukraine 33.98% Turkey 22.26% Russia

In December 2008 the Bank purchased additional 40.038% share in BTA Bank OJSC (Ukraine) for KZT 27,301 million. As a result the Banks interest in BTA Bank OJSC (Ukraine) increased to 49.99%, which provided the Bank with significant influence on operations of BTA Bank OJSC (Ukraine) and enabled the Bank to treat BTA Bank OJSC (Ukraine) as an associated bank. In December 2009 the Bank purchased additional 16.38% share in Oranta NJSIC OJSC for KZT 2,516 million, as a result the Groups equity interest in Oranta increased to 30.39% from 14.01% as at 31 December 2009, which provided the Bank with significant influence on operations of Oranta and enabled the Bank to account for these investments under the equity method. In July 2008, the Group acquired additional 38.64% of the statutory fund in BTA Bank LLC (Russia), which resulted in increase of the Groups interest to 52.84% and provided the Group with a controlling interest. In November 2008, BTA Bank LLC (Russia) issued additional shares in the amount of RUR 7,200 million (equivalent of KZT 31,968 million). The Bank did not use its preemptive right to purchase these shares. As a result the Banks share in BTA Bank LLC (Russia) decreased to 22.26% resulting in a loss from deemed disposal in the amount of KZT 12,095 million. In November 2008, the Group acquired an additional equity interest in TemirLeasing JSC, as a result the Groups equity interest in TemirLeasing JSC increased to 45.63%.

2008 Associates
BTA Bank LLC (Russia) BTA Bank JSC (Ukraine) BTA Bank JSC (Georgia) BTA Bank CJSC (Armenia) JSCB BTA Kazan OJSC BTA ORIX Leasing JSC Temir Leasing JSC Sekerbank

Holding, %
22.26% 49.99% 49.00% 48.93% 47.32% 45.00% 45.63% 33.98%

Country
Russia Ukraine Georgia Armenia Russia Kazakhstan Kazakhstan Turkey

Share in net income / Activities loss

Bank Bank Bank Bank Bank Leasing Leasing Bank (18,827) 48 (195) 376 34 41 3,185

Total assets
196,389 35,418 11,542 5,202 37,770 6,047 4,070 653,616

Total liabilities
236,125 11,607 8,530 3,030 28,943 3,922 1,874 578,808

Equity
(39,736) 23,811 3,012 2,172 8,827 2,125 2,196 74,808

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies

Changes in accounting policies In 2009 the Group has implemented the following revised IFRS standards and new Interpretations. The effect of these changes are noted below: Early adoption of amendments to IFRS 3 Business combinations and amendment to IAS 27 Consolidated and Separate financial statements The revised standards were issued in January 2008 and became effective for financial years beginning on or after 1 July 2009. Revised IFRS 3 introduces a number of changes in the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. Revised IAS 27 requires that a change in the ownership interest of a subsidiary is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give raise to a gain or loss. Furthermore, the revised standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes introduced by the revised Standards must be applied prospectively. The Group has elected to early adopt these amendments starting from 1 January 2009. In accordance with these amendments total comprehensive loss is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. As a result, total comprehensive loss of the Groups subsidiaries in the amount of KZT 27,829 million were attributed to non-controlling interests. IFRS 7 Financial Instruments: Disclosures The amendments to IFRS 7 were issued in March 2009, to enhance fair value and liquidity disclosures. With respect to fair value, the amendments require disclosure of a three-level fair value hierarchy, by class, for all financial instruments recognised at fair value and specific disclosures related to the transfers between levels in the hierarchy and detailed disclosures related to level 3 of the fair value hierarchy. In addition, the amendments modify the required liquidity disclosures with respect to derivative transactions and assets used for liquidity management. Comparative information has not been provided as permitted by the transition provisions of the amendment. The fair value measurement disclosures are presented in Note 31, and the liquidity risk disclosures are not significantly impacted by the amendments. IFRS 8 Operating Segments IFRS 8 is effective for financial years beginning on or after 1 January 2009. This standard requires disclosure of information about the Groups operating segments and replaces the requirement to determine primary (business) and secondary (geographical) reporting segments of the Group. Adoption of this Standard did not have any effect on the financial position or performance of the Group. The Group determined that the operating segments were the same as the business segments previously identified under IAS 14 Segment Reporting. Additional disclosures about each of these segments are shown in Note 32, including revised comparative information. IAS 1 Presentation of Financial Statements (Revised) A revised IAS 1 was issued in September 2007, and became effective for annual periods beginning on or after 1 January 2009. This revised Standard separates owner and non-owner changes in equity. The statement of changes in equity will include only details of transactions with owners, with non-owner changes in equity presented as a single line. In addition, the Standard introduces the statement of comprehensive income: it presents all items of recognised income and expense, either in one single statement, or in two linked statements. The revised standard also requires that the income tax effect of each component of comprehensive income be disclosed. In addition, it requires entities to present a comparative statement of financial position as at the beginning of the earliest comparative period when the entity has applied an accounting policy retrospectively, makes a retrospective restatement, or reclassifies items in the financial statements. The Group has elected to present comprehensive income in two separate statements: income statement and statement of comprehensive income. The Group has not provided a restated comparative set of financial position for the earliest comparative period, as it has not adopted any new accounting policies retrospectively, or has made a retrospective restatement, or retrospectively reclassified items in the financial statements. IAS 23 Borrowing Costs(Revised) A revised IAS 23 Borrowing costs was issued in March 2007, and became effective for financial years beginning on or after 1 January 2009. The standard has been revised to require capitalisation of borrowing costs when such costs relate to a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. In accordance with the transitional requirements in the Standard, the Group adopted this as a prospective change. No changes were made for borrowing costs incurred to 1 January 2009 that have been expensed.

10

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Changes in accounting policies (continued) IAS 24 Related party disclosures (Revised) The revised IAS 24, issued in November 2009, simplifies the disclosure requirements for government-related entities and clarifies the definition of a related party. Previously, an entity controlled or significantly influenced by a government was required to disclose information about all transactions with other entities controlled or significantly influenced by the same government. The revised standard requires disclosure about these transactions only if they are individually or collectively significant. The revised IAS 24 is effective for annual periods beginning on or after 1 January 2011, with earlier application permitted. The Group has decided to early adopt the revised IAS 24 from 1 January 2009. Improvements to IFRS In May 2008 International Accounting Standards Board issued its first omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. Amendments included in May 2008 Improvements to IFRS did not have any impact on the accounting policies, financial position or performance of the Group, except for the amendment to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, as described below. IAS 20 has been amended to require that loans received from the government that have a below-market rate of interest be recognized and measured in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The benefit of the government loan is measured at the inception of the loan as the difference between the cash received and the amount at which the loan is initially recognised in the statement of financial position. This benefit is accounted for in accordance with IAS 20. The amendment is applied prospectively to government loans received on or after 1 January 2009. The following new or revised standards and interpretations effective from 2009 did not have any impact on the accounting policies, financial position or performance of the Group: Amendments to IFRS 2 Share-based Payment- Vesting Conditions and Cancellations Amendment to IFRS 2 were issued in January 2008 and became effective for annual periods beginning on or after 1 January 2009. This amendment clarifies the definition of vesting conditions and prescribes the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied. This amendment did not have any impact on the consolidated financial statements of the Group. Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation These amendments were issued in February 2008, and became effective for annual periods beginning on or after 1 January 2009. The amendments require puttable instruments that represent a residual interest in an entity to be classified as equity, provided they satisfy certain conditions. These amendments did not have any impact on the consolidated financial statements of the Group. IFRIC 13 Customer Loyalty Programmes IFRIC Interpretation 13 was issued in June 2007 and became effective for annual periods beginning on or after 1 July 2008. This Interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the award credits and deferred over the period that the award credits are fulfilled. This interpretation did not have any impact on the Group's consolidated financial statements as no such schemes currently exist. IFRIC 15 Agreements for the Construction of Real Estate IFRIC Interpretation 15 was issued in July 2008 and is applicable retrospectively for annual periods beginning on or after 1 January 2009. IFRIC 15 clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognized if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. The interpretation also provides guidance on how to determine whether an agreement is within the scope of IAS 11 Construction Contracts or IAS 18 Revenue and supersedes the current guidance for real estate in the Appendix to IAS 18. This interpretation did not have any impact on the Group's consolidated financial statements.

11

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Changes in accounting policies (continued) IFRIC 16 Hedges of a Net Investment in a Foreign Operation IFRIC Interpretation 16 was issued in July 2008 and is applicable for annual periods beginning on or after 1 October 2008. This Interpretation provides guidance on identifying the foreign currency risks that qualify for hedge accounting in the hedge of net investment, where within the group the hedging instrument can be held and how an entity should determine the amount of foreign currency gain or loss, relating to both the net investment and the hedging instrument, to be recycled on disposal of the net investment. This interpretation did not have any impact on the Group's consolidated financial statements. Amendments to IFRIC 9 Reassessment of Embedded Derivatives The amendments require entities to assess whether to separate an embedded derivative from a host contract in the case where the entity reclassifies a hybrid financial asset out of the fair value through profit or loss category. This assessment is to be made based on circumstances that existed on the later of the date the entity first became a party to the contract and the date of any contract amendments that significantly change the cash flows of the contract. The amendments are applicable for annual periods ending on or after 30 June 2009. The application of the amendment did not have a significant impact on the Groups consolidated financial statements as no reclassifications were made for instruments that contained embedded derivatives. IFRIC 18 Transfers of Assets from Customers IFRIC 18 was issued in January 2009 and became effective for transfers of assets from customers received on or after 1 July 2009 with early application permitted, provided valuations were obtained at the date those transfers occurred. This interpretation should be applied prospectively. IFRIC 18 provides guidance on accounting for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services or to do both. This interpretation did not have any impact on the financial position or performance of the Group as the Group has no transfers of assets from its customers.
Basisofconsolidation

Subsidiaries, which are those entities in which the Group has an interest of more than one half of the voting rights, or otherwise has power to exercise control over their operations, are consolidated. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. All intragroup transactions, balances and unrealised gains on transactions between group companies are eliminated in full; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. Acquisition of subsidiaries Business combinations from 1 January 2009 Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition costs incurred are expensed. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the acquisition date fair value of the acquirers previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit and loss. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with IAS 39 either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured until it is finally settled within equity. Goodwill is initially measured at cost being the excess of the consideration transferred over the Groups net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

12

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Basisofconsolidation(continued)

Business combinations from 1 January 2009 (continued) After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained. Business combinations prior to 31 December 2008 The requirements applied previously, had the following differences in comparison to the above mentioned requirements: Business combinations were accounted for using the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquirees identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. The excess of the consideration transferred over the Groups share in the net identifiable assets acquired and liabilities assumed was recognized as Goodwill. Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration affected goodwill.
Investmentsinassociates

Associates are entities in which the Group generally has between 20% and 50% of the voting rights, or is otherwise able to exercise significant influence, but which it does not control or jointly control. Investments in associates are accounted for under the equity method and are initially recognised at cost, including goodwill. Subsequent changes in the carrying value reflect the post-acquisition changes in the Groups share of net assets of the associate. The Groups share of its associates profits or losses is recognised in statement of income, and its share of movements in reserves is recognised in equity. However, when the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless the Group is obliged to make further payments to, or on behalf of, the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Financialassets

Initial recognition of financial instruments Financial assets in the scope of IAS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets upon initial recognition, and subsequently can reclassify financial assets in certain cases as described below. Date of recognition All regular way purchases and sales of financial assets are recognised on the settlement date i.e. the date that an asset is delivered to or by the Group. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace. Day 1 profit Where the transaction price in a non-active market is different to the fair value from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable markets, the Group immediately recognises the difference between the transaction price and fair value (a Day 1 profit) in the consolidated income statement. In cases where use is made of data which is not observable, the difference between the transaction price and model value is only recognised in the income statement when the inputs become observable, or when the instrument is derecognised. 13

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Financialassets(continued)

Trading securities Trading securities are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on financial assets held for trading are recognised in the consolidated income statement. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the consolidated statement of income when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale financial investments Available-for-sale securities are those non-derivative financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories. They include equity instruments, short-term instruments and other debt instruments. After initial recognition available-for sale financial investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the consolidated statement of income. However, interest calculated using the effective interest method is recognised in the consolidated statement of income. Determination of fair value The fair value for financial instruments traded in active market at the reporting date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models and other relevant valuation models. Offsetting Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial position.
Reclassificationoffinancialassets

If a non-derivative financial asset classified as held for trading is no longer held for the purpose of selling in the near term, it may be reclassified out of the fair value through profit or loss category in one of the following cases: a financial asset that would have met the definition of loans and receivables above may be reclassified to loans and receivables category if the Group has the intention and ability to hold it for the foreseeable future or until maturity; other financial assets may be reclassified to available for sale or held to maturity categories only in rare circumstances.

A financial asset classified as available for sale that would have met the definition of loans and receivables may be reclassified to loans and receivables category if the Group has the intention and ability to hold it for the foreseeable future or until maturity. Financial assets are reclassified at their fair value on the date of reclassification. Any gain or loss already recognized in profit or loss is not reversed. The fair value of the financial asset on the date of reclassification becomes its new cost or amortised cost, as applicable.
Cashandcashequivalents

Cash and cash equivalents consist of cash on hand, amounts due from National Bank of Kazakhstan (the NBK) excluding obligatory reserves, and amounts due from other financial institutions that mature within ninety days of the date of origination and are free from contractual encumbrances.

14

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Obligatoryreserves

Obligatory reserves represent mandatory reserve deposits and cash which are not available to finance the Banks day to day operations and, hence, are not considered as part of cash and cash equivalents for the purpose of the consolidated cash flow statements.
Repurchaseandreverserepurchaseagreementsandsecuritieslending

Sale and repurchase agreements (repos) are treated as secured financing transactions. Securities sold under sale and repurchase agreements are retained in the consolidated statement of financial position and, in case the transferee has the right by contract or custom to sell or repledge them, reclassified as securities pledged under sale and repurchase agreements. The corresponding liability is presented within amounts due to credit institutions or customers. Securities purchased under agreements to resell (reverse repo) are recorded as amounts due from credit institutions or loans to customers as appropriate. The difference between sale and repurchase price is treated as interest and accrued over the life of repo agreements using the effective yield method. Securities lent to counterparties are retained in the consolidated statement of financial position. Securities borrowed are not recorded in the consolidated statement of financial position, unless these are sold to third parties, in which case the purchase and sale are recorded within gains less losses from trading securities in the consolidated statement of income. The obligation to return them is recorded at fair value as a trading liability.
Derivativefinancialinstruments

In the normal course of business, the Group enters into various derivative financial instruments, including futures, forwards, swaps and options in the foreign exchange and capital markets. Such financial instruments are primarily held for trading and are measured at their fair value. Their 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 (unrealised gain) when fair value is positive and as liabilities (unrealised loss) when it is negative. Gains and losses resulting from these instruments are included in the consolidated statement of income as net trading income or gains less losses from foreign currencies dealing, depending on the nature of the instrument. Derivative instruments embedded in other financial instruments are treated as a separate derivative and recorded at fair value if their risks and economic characteristics are not closely related to the host contracts and the host contracts are not carried at fair value through profit or loss. 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. At 31 December 2008 embedded derivatives held by the Group were not material.
Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of specific assets and the arrangement conveys a right to use the asset.
I. FinanceGroupaslessor

The Group presents leased assets as loans equal to the net investment in the lease. Finance income is based on a pattern reflecting a constant periodic rate of return on the net investment outstanding. Initial direct costs are included in the initial measurement of the lease receivables.
II. OperatingGroupaslessee

Leases of assets under which the risks and rewards of ownership are effectively retained with the lessor are classified as operating leases. Lease payments under operating lease are recognized as expenses on a straight-line basis over the lease term and included in administrative and operating expenses.
III. OperatingGroupaslessor

The Group presents assets subject to operating leases in the consolidated statement of financial position according to the nature of the asset. Lease income from operating leases is recognized in the statement of income on a straight-line basis over the lease term as other operating income. The aggregate cost of incentives provided to lessees is recognized as a reduction of rental income over the lease term on a straight-line basis. Initial direct costs incurred specifically to earn revenues from an operating lease are added to the carrying amount of the leased asset.

15

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Taxation

The current income tax charge is calculated in accordance with the regulations of the Republic of Kazakhstan and other tax authorities, and of the jurisdictions in which the Group has offices, branches or subsidiaries. Deferred tax assets and liabilities are calculated in respect of temporary differences using the liability method. Deferred income taxes are provided for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes, except where the deferred income tax arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. A deferred tax asset is recorded only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on laws that have been enacted or substantively enacted at the reporting date. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Kazakhstan also has various operating taxes that are assessed on the Groups activities. These taxes are recorded as taxes other than income tax.
Impairmentoffinancialassets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Allowancesforimpairmentoffinancialassets

Amounts due from credit institutions and loans to customers For amounts due from credit institutions and loans to customers carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. If there is an objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of income. Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the consolidated statement of income. The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The calculation of the present value of the estimated future cash flows of a collateralised financial asset reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable. For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of the Groups internal credit grading system that considers credit risk characteristics such as asset type, industry, geographical location, collateral type, pastdue status and other relevant factors.

16

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Allowancesforimpairmentoffinancialassets(continued)

Amounts due from credit institutions and loans to customers (continued) Future cash flows on a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the years on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. Estimates of changes in future cash flows reflect, and are directionally consistent with, changes in related observable data from year to year (such as changes in unemployment rates, property prices, commodity prices, payment status, or other factors that are indicative of incurred losses in the Group or their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. Available-for-sale financial investments For available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the consolidated income statement is reclassified from other comprehensive income to the consolidated income statement. Impairment losses on equity investments are not reversed through the consolidated income statement; increases in their fair value after impairment are recognised in other comprehensive income. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. Future interest income is based on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded in the consolidated income statement. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the consolidated income statement, the impairment loss is reversed through the consolidated income statement. Renegotiated loans Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and that future payments are likely to occur. The loans continue to be subject to an individual or collective impairment assessment, calculated using the loans original effective interest rate.
Derecognitionoffinancialassetsandliabilities

Financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised 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; 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.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Groups continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Groups continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Groups continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. 17

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Derecognitionoffinancialassetsandliabilities(continued)

Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or 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 derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement of income. Securitisation As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to special purposes entities which issue securities to investors. The transferred assets may qualify for derecognition in full or in part. Interests in the securitised financial assets may be retained by the Group and are primary classified as loans and receivables. Gains or losses on securitisations are based on the carrying amount of the financial assets derecognised and the retained interest, based on their relative fair values at the date of the transfer.
Financialguarantees

In the ordinary course of business, the Group gives financial guarantees, consisting of letters of credit, guarantees and acceptances. Financial guarantees are initially recognised in the financial statements at fair value, in Other liabilities, being the premium received. Subsequent to initial recognition, the Groups liability under each guarantee is measured at the higher of the amortised premium and the best estimate of expenditure required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to financial guarantees is taken to the income statement. The premium received is recognised in the income statement on a straight-line basis over the life of the guarantee.
Propertyandequipment

Property and equipment are carried at cost excluding costs of day-to-day maintenance less accumulated depreciation and any accumulated impairment in value. Such cost includes the cost of replacing part of equipment when that cost is incurred if the recognition criteria are met. The carrying amounts of property and equipment are reviewed at each reporting date to assess whether they are recorded in excess of their recoverable amounts, and 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 other administrative and operating expenses. Depreciation of an asset begins when it is available for use. Depreciation is calculated on a straight-line basis over the following estimated useful lives.

Years
Buildings Furniture and fixtures Computers Office equipment Land Construction in process 40 4-10 4 8

Depreciation on assets under construction is charged only when the assets are available for use and transferred into relevant property and equipment categories. The assets residual values, useful lives and methods are reviewed, and adjusted as appropriate, at each financial year-end. Expenses related to repairs and renewals are recorded in income statement and included in administrative and operating expenses unless they qualify for capitalization. An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on the derecognition of the asset is included in the consolidated statement of income.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Goodwill

Goodwill is initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiary at the date of acquisition. Goodwill on an acquisition of a subsidiary is included in goodwill. Goodwill on an acquisition of an associate is included in investments in associates. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and is not larger than the operating segment as defined in IFRS 8 Operating Segments.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a cash-generating unit (group of cashgenerating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
AmountsduetoGovernmentandcentralbanks,creditinstitutionsandcustomers

Issued financial instruments or their components are classified as liabilities, where the substance of the contractual arrangement results in the Group having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity instruments. Such instruments include amounts due to Government and central banks, credit institutions and to customers and initially recognised at the fair value of the consideration received less directly attributable 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 statements of income over the period of the borrowings using the effective interest method. If the Group purchases its own debt, it is removed from the consolidated statement of financial position and the difference between the carrying amount of the liability and the consideration paid is recognised in the consolidated statement of income.
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.
Retirementandotherbenefitobligations

The Group does not have any pension arrangements separate from the State pension system of Kazakhstan, which requires current withholdings by the employer calculated as a percentage from current gross salary payments; such expense is charged in the period the related salaries are earned and included in salaries and benefits in consolidated statements of income. The Group has contributed social tax to the budget of the Republic of Kazakhstan for its employees. In addition, the Group has no postretirement benefits or significant other compensated benefits requiring accrual.
Equity

Issued capital Ordinary shares with discretionary dividends are classified as equity. External costs directly attributable to the issue of new shares, other than on a business combination, are shown as a deduction from the proceeds in equity. Treasury shares Where the Bank or its subsidiaries purchase the Banks shares, the consideration paid, including any attributable transaction costs, net of income taxes, is deducted from total equity as treasury shares until they are cancelled or reissued. Where such shares are subsequently sold or reissued, any consideration received is included in equity. Treasury shares are stated at weighted average cost. 19

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Equity(continued)

Dividends Dividends are recognised as a liability and deducted from equity at the reporting date only if they are declared before or on the reporting date. Dividends are disclosed when they are proposed before the reporting date or proposed or declared after the reporting date but before the financial statements are authorised for issue.
Contingencies

Contingent liabilities are not recognized in the consolidated financial statements but disclosed unless the possibility of any outflow of economic benefits is remote. A contingent asset is not recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is probable.
Trustactivities

Assets held in trust or in a fiduciary capacity are not treated as assets of the Group and, accordingly, are not included in these consolidated financial statements.
Recognitionofincomeandexpenses

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest and similar income and expense For all financial instruments measured at amortised cost and interest bearing financial instruments classified as available-for-sale investments, interest income or expense is recorded at the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying amount of the financial asset or financial liability is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as interest income or expense. Once the recorded value of a financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount. Fee and commission income The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be divided into the following two categories: Fee income earned from services that are provided over a certain period of time Fees earned for the provision of services over a period of time are accrued over that period. These fees include commission income and asset management, custody and other management and advisory fees. Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognised as an adjustment to the effective interest rate on the loans. Fee income from providing transaction services Fees arising from negotiating or participating in the negotiation of a transaction for a third party such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses are recognised on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognised after fulfilling the corresponding criteria.
Underwritingincome(loss)

Underwriting income (loss) includes net written insurance premiums and commissions earned on ceded insurance reduced by the net change in the unearned premium reserve, claims paid, the provision of insurance losses and loss adjustment expenses, and policy acquisition costs.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Underwritingincome(loss)(continued)

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 prorata 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 liabilities in the consolidated statement of financial position. Losses and loss adjustments are charged to the consolidated statement of income as incurred through the reassessment of the reserve for losses and loss adjustment expenses. Commissions earned on ceded reinsurance contracts are recognised in income as incurred. 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 consolidated statement of financial position within other assets, and are amortized over the period in which the related written premiums are earned.
Reserveforinsurancelossesandlossadjustmentexpenses

The reserve for insurance losses and loss adjustment expenses are included in the consolidated statement of financial position within other liabilities and is based on the estimated amount payable on claims reported prior to the reporting 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) was established 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. The resulting adjustments are reflected in income.
Reinsurance

In the ordinary course of business, the Group cedes insurance. 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 consolidated statement of financial position 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.
Foreigncurrencytranslation

The consolidated financial statements are presented in Kazakh Tenge, which is the Banks functional and presentation currency. Transactions in foreign currencies are initially recorded in the functional currency, converted at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into KZT at the market exchange rate quoted by KASE and reported by the NBK at the reporting date. Gains and losses resulting from the translation of foreign currency transactions are recognised in the consolidated statement of income as gains less losses from foreign currencies - translation differences. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Differences between the contractual exchange rate of a transaction in a foreign currency and the KASE exchange rate on the date of the transaction are included in gains less losses from foreign currencies dealing. The official KASE exchange rates as at 31 December 2009 and 2008 were KZT 148.46 and KZT 120.79 to 1 USD, respectively. As at the reporting date, the assets and liabilities of the entities whose functional currency is different from the presentation currency of the Group are translated into Kazakh Tenge at the rate of exchange ruling at the reporting date and, their statements of income are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken to other comprehensive income. On disposal of a subsidiary or an associate whose functional currency is different from the presentation currency of the Group, the deferred cumulative amount recognised in other comprehensive income relating to that particular entity is recognised in the consolidated income statement. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operations and translated at closing rate.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Segmentreporting

The Groups segmental reporting is based on the following operating segments: Retail banking, Corporate banking, Investment banking, Small and Medium business and Investing activities.
Futurechangesinaccountingpolicies

Standards and interpretations issued but not yet effective Amendment to IAS 39 Financial Instruments: recognition and measurement - Eligible Hedged Items The amendment to IAS 39 was issued in August 2008, and became effective for annual periods beginning on or after 1 July 2009. The amendment addresses the designation of a one-sided risk in a hedged item, and designation of inflation as a hedged risk or portion in particular situations. It clarifies that an entity is permitted to designate a portion of the fair value changes or cash flow variability of a financial instrument as hedged item. Management does not expect the amendment to IAS 39 to affect the Groups consolidated financial statements as the Group has not entered into any such hedges. IFRS 2 Share-based Payment: Group Cash-settled Share-based Payment Transactions The amendment to IFRS 2 was issued in June 2009 and becomes effective for financial years beginning on or after 1 January 2010. The amendment clarifies the scope and the accounting for group cash-settled share-based payment transactions. This amendment also supersedes IFRIC 8 and IFRIC 11. The Group expects that this amendment will have no impact on the Group's consolidated financial statements. IFRIC 17 Distribution of Non-Cash Assets to Owners IFRIC Interpretation 17 was issued on 27 November 2008 and is effective for annual periods beginning on or after 1 July 2009. IFRIC 17 applies to pro rata distributions of non-cash assets except for common control transactions and requires that a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity; an entity should measure the dividend payable at the fair value of the net assets to be distributed; an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. The Interpretation also requires an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation. The Group expects that this interpretation will have no impact on the Group's consolidated financial statements. Improvements to IFRSs In April 2009 the IASB issued the second omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. Most of the amendments are effective for annual periods beginning on or after 1 January 2010. There are separate transitional provisions for each standard. Amendments included in April 2009 Improvements to IFRS will have no impact on the accounting policies, financial position or performance of the Group, except the following amendments resulting in changes to accounting policies, as described below. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations: clarifies that the disclosures required in respect of non-current assets and disposal groups classified as held for sale or discontinued operations are only those set out in IFRS 5. The disclosure requirements of other IFRSs only apply if specifically required for such non-current assets or discontinued operations. The Group expects that this amendment will have no impact on the Group's consolidated financial statements. IFRS 8 Operating Segment Information: clarifies that segment assets and liabilities need only be reported when those assets and liabilities are included in measures that are used by the chief operating decision maker. As the Groups chief operating decision maker does review segment assets and liabilities, the Group will continue to disclose this information. IAS 7 Statement of Cash Flows: Explicitly states that only expenditure that results in recognising an asset can be classified as a cash flow from investing activities. IAS 36 Impairment of Assets: The amendment clarifies that the largest unit permitted for allocating goodwill, acquired in a business combination, is the operating segment as defined in IFRS 8 before aggregation for reporting purposes. The amendment will have no impact on the Group as the annual impairment test is performed before aggregation.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Futurechangesinaccountingpolicies(continued)

Standards and interpretations issued but not yet effective (continued) Amendments to IAS 32 Financial instruments: Presentation: Classification of Rights Issues In October 2009, the IASB issued amendment to IAS 32. Entities shall apply that amendment for annual periods beginning on or after 1 February 2010. Earlier application is permitted. The amendment alters the definition of a financial liability in IAS 32 to classify rights issues and certain options or warrants as equity instruments. This is applicable if the rights are given pro rata to all of the existing owners of the same class of an entitys non-derivative equity instruments, in order to acquire a fixed number of the entitys own equity instruments for a fixed amount in any currency. The Group expects that this amendment will have no impact on the Group's consolidated financial statements. IFRS 9 Financial Instruments (first phase) In November 2009 the IASB issued the first phase of IFRS 9 Financial instruments. This Standard will eventually replace IAS 39 Financial Instrument: Recognition and Measurement. IFRS 9 becomes effective for financial years beginning on or after 1 January 2013. Entities may adopt the first phase for reporting periods ending on or after 31 December 2009. The first phase of IFRS 9 introduces new requirements on classification and measurement of financial assets. In particular, for subsequent measurement all financial assets are to be classified at amortised cost or at fair value through profit or loss with the irrevocable option for equity instruments not held for trading to be measured at fair value through other comprehensive income. The Group now evaluates the impact of the adoption of new Standard and considers the initial application date.

5. Significantaccountingjudgementsandestimates
Judgments

In the process of applying the Groups accounting policies, management has made the following judgments, apart from those involving estimates, which have the most significant effect on the amounts recognized in the consolidated financial statements: Special purpose entities Although the Group did not own any direct shares in the capital of First Kazakh Securitization Company and Second Kazakh Securitization Company for the purposes of these consolidated financial statements, they were treated as subsidiaries, in accordance with SIC-12 Consolidation Special Purpose Entities, since the Group controlled and benefited directly from these entities operations; Key sources of estimation uncertainty The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts. The most significant estimates with regard to these financial statements relate to the allowances for impairment of assets, reserves for insurance claims, income taxes, fair values of securities, and other provisions. These estimates are based on information available as at the date of the financial statements. Actual results, therefore, could differ from these estimates
Estimationuncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Allowance for impairment of loans and receivables The Group regularly reviews its loans and receivables to assess impairment. The Group uses its experienced judgement to estimate the amount of any impairment loss in cases where a borrower is in 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 the observable data indicating that there has been an adverse change in the payment status of borrowers in a group, or 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 its experienced judgement to adjust observable data for a group of loans or receivables to reflect current circumstances.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 5. Significantaccountingjudgementsandestimates(continued)

Estimationuncertainty(continued)

Allowance for impairment of loans and receivables (continued) As described in Note 2, during the fourth quarter of 2008, the quality of the Banks loan portfolio has significantly deteriorated as a result of circumstances and actions taken before the current management of the Bank were appointed by the controlling shareholder. Certain loan documentation, including collateral and associated additional agreements, primarily relating to financing of projects outside Kazakhstan, is no longer available. In addition, many loans were transferred to new borrowers that do not have adequate sources of repayment. Moreover, no collateral was provided by these new borrowers. A number of significant borrowers, primarily registered outside Kazakhstan, have ceased servicing their loans, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. During 2009, the quality of the Banks loan portfolio continued to deteriorate as a result of the following circumstances and actions taken before the current management of the Bank were appointed by the National Welfare Fund Samruk-Kazyna - a controlling shareholder of the Bank: A number of significant borrowers, primarily registered outside Kazakhstan, who during 2008 continued servicing their debt in accordance with terms of loan agreements, have ceased servicing their loans in 2009, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. A number of borrowers, whom the Bank had communications at the beginning of 2009, ceased to communicate with the Bank. Collateral on certain borrowers, which was considered for calculation of allowances as at 31 December 2008, become no longer available in 2009, due to cancellation of encumbrances by borrowers and further resale to third parties or pledge under other loans from other banks. The Bank has concluded that the loss event on those loans occurred during 2009 since: practice of lending through off-shore companies allowed these borrowers to break the link to final borrowers and helped to dishonor the loan and collateral agreements. Whereby, most of the borrowers and pledgers are different legal entities. in the beginning of 2009 certain loans to non-residents were issued to finance start-up projects without proper economic expertise of the borrowers ability to serve the loan. During 2009 the Bank has suspended further financing of investment loans issued earlier, which were assessed as unimpaired as at 31 December 31, 2008. While the Bank continues its efforts related to the recovery of the above loans, the Banks Management considers that loans where a borrower fails to service debt, monitoring of the borrowers has not been possible, there is neither properly registered collateral nor other necessary legal documentation, to be fully impaired and has created an allowance for the full carrying amount of such loans. In addition, the ongoing financial crisis has affected the borrowers ability to service their obligations and the value of collateral. As a result of the above, in 2009 the Bank has recorded impairment loss on loans in the amount of KZT 706,944 million (in 2008: KZT 1,090,127 million). Impairment of goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill at 31 December 2009 was KZT 1.841 million (2008 KZT 37,421 million). More details are provided in Note 16. Taxation Kazakh tax, currency and customs legislation is subject to varying interpretations, and changes, which can occur frequently. Management's interpretation of such legislation as applied to the transactions and activity of the Group may be challenged by the relevant regional and state authorities. As such, significant additional taxes, penalties and interest may be assessed. Fiscal periods remain open to review by the authorities in respect of taxes for five calendar years preceding the year of review. Under certain circumstances reviews may cover longer periods. As at 31 December 2009 management believes that its interpretation of the relevant legislation is appropriate and that the Group's tax, currency and customs positions will be sustained.

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 5. Significantaccountingjudgementsandestimates(continued)

Estimationuncertainty(continued)

Claims liability arising from insurance contracts For insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at the reporting date and for the expected ultimate cost of IBNR claims at the reporting date. It can take a significant period of time before the ultimate claims cost can be established with certainty and for some type of policies, IBNR claims form the majority of the balance sheet claims provision. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using past claim settlement trends to predict future claims settlement trends. At each reporting date, prior year claim estimates are reassessed for adequacy and changes made are made to the provision. General insurance claims provisions are not discounted for the time value of money.

6. Disposalofsubsidiaries
On 28 December 2009 on the basis of the decision of Bishkek regional court, Kyrgyz Republic, the shares of BTA Bank CJSC owned by the Bank were siezed, and therefore, the Banks management decided to deconsolidate BTA Bank CJSC as at the end of 2009. The loss from derecognition of BTA Bank CJSC amounted to KZT 3,075 million. Below is the carrying value of assets, liabilities and goodwill as at the derecognition date:

Carrying value BTA Bank CJSC Kyrgyzstan 28 December 2009

Cash and cash equivalents Due from credit institutions Obligatory reserves Investment securities Loans to customers Property and equipment Other assets Total assets Due to the government Due to credit organisations Due to customers Other liabilities Total liabilities Net assets value Non-controlling interests Groups share in fair value of net assets Goodwill Loss from disposal Total cash received Cash of disposed organization Total cash outflow 1,996 945 854 1,145 6,671 1,434 593 13,638 248 7,560 1,443 279 9,530 4,108 (1,191) 2,917 158 (3,075) (1,996) (1,996)

25

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 7. Cashandcashequivalents

Cash and cash equivalents comprise:

2009
Cash on hand Current accounts with other financial institutions Current accounts with central banks Time deposits with other financial institutions with contractual maturity of 90 days or less Reverse repurchase agreements with contractual maturity of 90 days or less Time loans with contractual maturity of less than 90 days from the date of origination Cash and cash equivalents, gross Less Allowance for impairment Cash and cash equivalents 41,492 22,955 7,462 1,231 3,706 1,369 78,215 78,215

2008
5,248 34,931 195 27,200 20,109 238 87,921 (28) 87,893

The Group has entered into reverse repurchase agreements with Kazakhstani banks. The subject of these agreements was mainly corporate securities issued by Kazakhstani companies. Fair value of the collateral as at 31 December 2009 was KZT 3,573 million (31 December 2008 KZT 29,406 million). As at 31 December 2009 balances with ten banks accounted for 15.63% of total cash and cash equivalents (as at 31 December 2008 balances with ten banks accounted for 72.81% of total cash and cash equivalents).

8. Obligatoryreserves
Obligatory reserves comprise:

2009
Due from the NBK and national central banks Cash on hand allocated to obligatory reserves Obligatory reserves 145 145

2008
27,601 36,453 64,054

Under Kazakh legislation, the Group is required to maintain certain obligatory reserves, which are computed as a percentage of certain liabilities of the Group. Historically, such reserves must be held in either non-interest bearing deposits with the NBK or in physical cash computed based on average balances of the aggregate of non-interest bearing deposits with the NBK and physical cash in national and hard currencies during the period. The use of such funds is, therefore, subject to certain restrictions. In 2008 in accordance with the financial markets stability program, the NBK decreased obligatory reserve requirements from 6% to 2% for domestic liabilities, and from 8% to 3% for external debt. Furthermore, since 3 March 2009, minimum reserve requirement for the second tier banks were decreased from 2% to 1.5% for domestic liabilities, and from 3% to 2.5% for other liabilities. By the resolution of the NBK Board dated 30 November 2009 amendments were introduced into the resolution of the NBK dated 23 June 2008 On setting the obligatory reserve ratio for the second tier banks for which a debt restructuring is in process. According to these amendments the obligatory reserve ratio for the Bank is set at zero percent for both internal and external liabilities. The zero ratio is valid until restructuring process is finalized.

26

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 9. Tradingsecurities

Trading securities comprise:

2009
Debt securities: Corporate bonds Treasury bills of the Ministry of Finance of the Republic of Kazakhstan Sovereign bonds of OECD countries Bonds of Kazakhstan financial institutions Bonds of Kazakhstan non-financial institutions Bonds of international financial organizations Treasury bills of the Ministry of Finance of Russian Federation Notes of the NBK Equity securities Trading securities Subject to repurchase agreements 39,359 20,642 8,679 5,278 4,921 97 3 78,979 36,805 115,784 4,420

2008
59,979 25,019 3,793 2,887 4,841 80 2 9,918 106,519 21,631 128,150 74,590

Counterparties of the Group under repurchase agreements do not have the right to sell or re-pledge securities pledged under these agreements.

10. Amountsduefromcreditinstitutions
As at 31 December, amounts due from credit institutions comprise:

2009
Loans Deposits Amounts due from credit institutions, gross Less Allowance for impairment Amounts due from credit institutions 65,249 18,652 83,901 (52,457) 31,444

2008
70,224 19,389 89,613 (4,439) 85,174

As at 31 December 2009 amounts due from ten largest credit institutions comprised 30.59% of total amounts due from credit institutions (at 31 December 2008 amounts due from ten largest credit institutions comprised 80.17% ). The movements in allowance for impairment of amounts due from credit institutions were as follows:

2009
1 January Impairment charge Write-offs Recovery Revaluation 31 December 4,439 47,310 (336) 1,044 52,457

2008
123 4,173 313 (170) 4,439

27

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 11. Derivativefinancialinstruments

The Group enters into derivative financial instruments for trading purposes. The table below shows the fair values of derivative financial instruments, recorded as assets and liabilities, together with their notional amounts. The notional amount, recorded gross, is the amount of a derivatives underlying asset and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding as at the year end and are indicative of neither the market risk nor the credit risk.

Notional principal
Currency swaps Forwards and futures Interest rate swaps Options Total derivative assets/liabilities Swaps 1,429 1,456 255,463 109,369

2009 Fair value Assets Liabilities

11,797 14,183 25,980 (1) (33) (3,940) (3,974)

Notional principal
136,115 27,799 462,318 127,968

2008 Fair value Assets Liabilities

562 799 20,289 21,650 (472) (1,420) (16,897) (18,789)

Swaps are contractual agreements between two parties to exchange movements in interest and foreign currency rates. Forwards and futures Forwards and futures contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. Forwards are customised contracts transacted in the over-the-counter market. Futures contracts are transacted in standardised amounts on regulated exchanges and are subject to daily cash margin requirements. Options Options are contractual agreements that convey the right, but not the obligation, for the purchaser either to buy or sell a specific amount of a financial instrument at a fixed price, either at a fixed future date or at any time within a specified period. As at 31 December 2009 and 2008 the Bank had certain loans that are foreign currencies linked debt instruments with a floor feature, i.e. where interest and principal payments are linked to foreign currencies, in such a way, that the Bank has an option to demand higher payments if the foreign currency specified in the contract will appreciate above a certain floor (floor is generally set at the level of spot rates prevailing on the loans issue date). At the same time, if the foreign currency rates will fall below the floor, interest and principal payments will remain at original level. The Bank believes that the above feature comprises an embedded foreign currency option is embedded derivative that should be separated from the host contract and recorded as a separate financial instrument measured at fair value through profit or loss in the financial statements.

12. Availableforsaleinvestmentsecurities
Available-for-sale investment securities as at 31 December comprise:

2009
Corporate bonds Treasury bills of the Ministry of Finance of the Republic of Kazakhstan Notes of the NBK Bonds of Kazakhstan financial institutions Treasury bills of the Ministry of Finance of the Republic of Belorussia Treasury bills of the Ministry of Finance of Kyrgyzstan Equity securities Mutual fund shares Available-for-sale investment securities 10,441 6,215 940 897 18,493 526 19,019

2008
15,142 2,129 218 312 912 409 19,122 1,328 32 20,482

During 2008 the Bank transferred certain available-for-sale investment securities with a carrying amount of KZT 35,402 million under trust management to a company registered in an offshore jurisdiction. Subsequent to 31 December 2008, the Bank received a statement from this company, which indicated that these securities were disposed of in January 2009. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and FMSA. Management of the Bank believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities have been fully written-off as at 31 December 2008. During 2009 the Group has recognized an impairment loss on equity securities in the amount of KZT 2,764 million (2008 42,610). 28

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers

Loans to customers comprise:

2009
Corporate lending Small and medium business lending Individuals lending Gross loans to customers Less Allowance for impairment Loans to customers Gross loans have been extended to the following types of customers: 2,476,199 216,445 471,537 3,164,181 (2,123,408) 1,040,773

2008
2,071,991 256,833 505,517 2,834,341 (1,217,278) 1,617,063

2009
Private companies Individuals State companies Other Loans to customers, gross Allowance for impairment of loans to customers A reconciliation of the allowance for impairment of loans to customers by class is as follows: 2,684,843 471,537 7,574 227 3,164,181

2008
2,321,272 505,517 7,353 199 2,834,341

Corporate lending 2009

At 1 January 2009 Charge for the year Amounts written off Recoveries Revaluation Amount arising from disposal of subsidiaries At 31 December 2009 Individual impairment Collective impairment Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance
1,174,310 592,588 (37,512) 3 255,056 (235) 1,984,210 1,974,495 9,715 1,984,210

Small and medium business lending 2009

21,162 55,846 (14,615) 180 489 (260) 62,802 35,917 26,885 62,802

Individuals lending 2009

21,806 58,510 (12,094) 3,250 4,961 (37) 76,396 51,173 25,223 76,396

Total 2009
1,217,278 706,944 (64,221) 3,433 260,506 (532) 2,123,408 2,061,585 61,823 2,123,408

2,274,681

52,845

107,205

2,434,731

Corporate lending 2008

At 1 January 2008 Charge for the year Amounts written off Recoveries Revaluation Amounts arising on business combination At 31 December 2008 Individual impairment Collective impairment Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance
111,502 1,067,075 (1,705) 308 (868) (2,002) 1,174,310 1,141,870 32,440 1,174,310

Small and medium business lending 2008

23,231 (824) (2,818) 1,606 (33) 21,162 9,094 12,068 21,162

Individuals lending 2008

2,310 23,876 (6,006) 2,485 (249) (610) 21,806 15,031 6,775 21,806

Total 2008
137,043 1,090,127 (10,529) 4,399 (1,150) (2,612) 1,217,278 1,165,995 51,283 1,217,278

1,355,897

15,637

25,846

1,397,380

29

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers(continued)

Individually impaired loans As described in Note 5, during the fourth quarter of 2008 and at the beginning of 2009, the quality of the Banks loan portfolio has significantly deteriorated as a result of circumstances and actions taken before the current management of the Bank were appointed by the controlling shareholder. Certain loan documentation, including collateral and associated additional agreements, primarily relating to financing of projects outside Kazakhstan, is no longer available. In addition, many loans were transferred to new borrowers that do not have adequate sources of repayment. Moreover, no collateral was provided by these new borrowers. Consequently all transferred loans are unsecured. A number of significant borrowers, primarily registered outside Kazakhstan, have ceased servicing their loans, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. During 2009, the quality of the Banks loan portfolio continued to deteriorate as a result of the following circumstances and actions taken before the current management of the Bank were appointed by the National Welfare Fund Samruk-Kazyna - a controlling shareholder of the Bank: A number of significant borrowers, primarily registered outside Kazakhstan, who during 2008 continued servicing their debt in accordance with terms of loan agreements, have ceased servicing their loans in 2009, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. A number of borrowers, whom the Bank had communications at the beginning of 2009, ceased to communicate with the Bank. Collateral on certain borrowers, which was considered for calculation of allowances as at 31 December 2008, became no longer available in 2009, due to cancellation of encumbrances by borrowers and further resale to third parties or pledge under other loans from other banks. The Bank has concluded that the loss event on those loans occurred during 2009 since: practice of lending through off-shore companies allowed these borrowers to break the link to final borrowers and helped to dishonor the loan and collateral agreements. Whereby, most of the borrowers and pledgers are different legal entities. in the beginning of 2009 certain loans to non-residents were issued to finance start-up projects without proper economic expertise of the borrowers ability to serve the loan. in 2009 the Bank has suspended further financing of investment loans issued earlier, which were assessed as unimpaired as at 31 December 2008. While the Bank continues its efforts related to the recovery of the above loans, the Banks Management considers that loans where a borrower fails to service debt, monitoring of the borrowers has not been possible, there is neither properly registered collateral nor other necessary legal documentation, to be fully impaired and has created an allowance for the full carrying amount of such loans. In addition, the ongoing financial crisis and devaluation of tenge by 25% have affected the borrowers ability to service their obligations and the value of collateral. As a result of the above, in 2009 the Bank has recorded impairment loss on loans in the amount KZT 706,944 million. Interest income accrued on loans, for which individual impairment allowances have been recognized, as at 31 December 2009, comprised KZT 468,795 million (at at 31 December 2008: KZT 141,743 million). The fair value of collateral that the Group holds relating to loans individually determined to be impaired at 31 December 2009 comprised KZT 493,947 million (at 31 December 2008: KZT 583,015 million). In accordance with the NBK requirements, loans may only be written off with the approval of the Board of Directors and, in certain cases, with the respective decision of the Court. Collateral and other credit enhancements The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters. The main types of collateral obtained are as follows: For commercial lending, charges over real estate properties, inventory and trade receivables; For retail lending, mortgages over residential properties, charges over transport, cash and cash equivalents and guarantees of third parties.

The Group also obtains guarantees from parent companies for loans to their subsidiaries and civil liability insurance agreements. 30

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers(continued)

Collateral and other credit enhancements (continued) Management requests additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the allowance for loan impairment. During the year, the Group took possession of collateral with an estimated value of KZT 3,348 million, which the Group is in the process of selling (at 31 December 2008 KZT 11,207 million). It is the Groups policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to reduce or repay the outstanding claim. In general, the Group does not occupy repossessed properties for business use. Of the total aggregate amount of gross past due but not impaired loans to customers, the fair value of collateral that the Group held as at 31 December 2009 was KZT 55,345 million (at 31 December 2008 KZT 83,629 million). Derecognition of a loan portfolio The Group has been periodically selling part of its mortgage loan portfolio to Kazakhstan Mortgage Company (KMC), with full recourse to the Group for any default loan. The Group has determined that, as a result of these transactions, substantially all the risks and rewards of the portfolio have not been transferred to KMC. Therefore, the Group continues to recognise these loans as an asset on its consolidated statement of financial position with the corresponding liability recorded in loans from financial institutions for the same amount. As at 31 December 2009 these loans amounted to KZT 6,994 million (2008: KZT 9,082 million). As at 31 December 2009 loans to customers include loans of KZT 52,427 million, which are pledged as collateral for the mortgage-backed bonds (at 31 December 2008 KZT 64,917 million). Concentration of loans to customers As at 31 December 2009 the Group had a concentration of loans represented by KZT 478,875 million due from the ten largest borrowers that comprised 15% of the total gross loan portfolio (2008 KZT 409,465 million, 14%). Allowances amounting to KZT 437,103 million were recognised against these loans as at 31 December 2009 (at 31 December 2008 KZT 315,565 million). As at 31 December 2009 the Group had in the amount of KZT 508,966 million (at 31 December 2008 KZT 494,799 million), with interest and principal repayable at maturity. Allowances amounting to KZT 391,732 million were recognised against these loans as at 31 December 2009 (at 31 December 2008 KZT 236,111 million). Loans are made to the following sectors:

2009
Real estate investments Housing construction Individuals Oil & Gas Wholesale trade Construction of roads and industrial buildings Agriculture Energy Chemical industry Retail trade Food industry Transport Mining Telecommunication Metallurgical industry Hospitality Textile and leather industry Production of machinery and equipment Financial services Production of rubber and plastic articles Publishing Research & development Other 536,224 492,138 471,537 382,103 359,531 274,311 153,401 68,895 64,452 49,552 41,037 39,453 38,991 33,940 28,534 16,102 12,514 9,136 8,896 992 645 584 81,213 3,164,181

%
16.9% 15.6% 14.9% 12.1% 11.4% 8.7% 4.8% 2.2% 2.0% 1.6% 1.3% 1.2% 1.2% 1.1% 0.9% 0.5% 0.4% 0.3% 0.3% 0.0% 0.0% 0.0% 2.6% 100.0%

2008
435,188 415,536 505,517 314,970 298,573 206,066 142,819 84,266 62,783 62,116 40,152 51,087 35,580 25,244 25,374 13,903 11,241 12,259 12,968 894 1,059 818 75,928 2,834,341

%
15.4% 14.7% 17.8% 11.1% 10.5% 7.3% 5.0% 3.0% 2.2% 2.2% 1.4% 1.8% 1.3% 0.9% 0.9% 0.5% 0.4% 0.4% 0.5% 0.0% 0.0% 0.0% 2.7% 100.0%

31

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers(continued)

Concentration of loans to customers (continued) Loans to individuals are presented as follows:

2009
Consumer loans Mortgage loans 241,759 229,778 471,537

2008
271,387 234,130 505,517

Finance lease receivable Below is the analysis of finance lease receivables as at 31 December 2009:

2009
Finance lease receivables Unearned finance income on finance lease of future periods Net investment in finance leases

Later than one Not later than one year and not later year than five years
1,986 (94) 1,892 17,871 (4,506) 13,365

Later than five years

13,123 (2,741) 10,382

Total
32,980 (7,341) 25,639

2008
Finance lease receivables Unearned finance income on finance lease of future periods Net investment in finance leases

Later than one year Not later than one and not later than year Later than five years five years
4,278 (125) 4,153 15,531 (4,667) 10,864 2,887 (757) 2,130

Total
22,696 (5,549) 17,147

14. BondsofNWFSamrukKazyna
The balance of bonds of Samruk-Kazyna as at 31 December 2009 represents 645,000 thousands non-trading debt securities of the Parent, purchased by the Bank during 2009 at their nominal value of KZT 645,000 million. These debt securities were initially recorded at their fair value of KZT 496,595 million. The difference between the nominal value of these debt securities and their fair value in the amount of KZT 148,405 million was recorded as additional paid-in capital in the Group's consolidated statement of changes in equity. As at 31 December 2009 426,251 thousands of these debt securities were pledged under repurchase agreements with the NBK for the one month term with the renewal right. The fair value of these debt securities as at 31 December 2009 amounted to KZT 359,058 million. NBK has the right to sell or re-pledge these securities, during the agreement period.

15. Investmentsinassociates
Movement in investments in associates was: Balance, beginning of the period Purchase cost Disposal cost Impairment charge Transfer to/ from investments in associates Share in net income/(loss) of associates Dividends received Share of reserve for revaluation of securities of associates Investments in associates, end of the year

2009
72,371 5,785 (676) 2,546 4,690 372 85,088

2008
67,767 34,298 (608) (19,138) 6,785 (15,448) (658) (627) 72,371

In March 2009 the Group acquired 33,978,708 shares in its associate Shekerbank to the amount of KZT 3,269 million by purchasing additional issued shares to maintain the equity interest of 33,98%. As at 31 December 2008 investment in Oranta NJSIC OJSC (Ukraine) in the amount of KZT 881 million was included into available-for-sale investment securities. In December 2009 as the result of an additional issue of common shares of Oranta NJSIC OJSC the Bank invested KZT 1,665 million to maintain the equity interest of 14.01% and acquired an additional share of 16.38% in the equity of Oranta NJSIC OJSC for KZT 2,516 million. As the result, the Groups share in the equity of Oranta

32

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 15. Investmentsinassociates(continued)

NJSIC OJSC increased from 14.01% to 30.39% as at 31 December 2009, which provided the Bank with significant influence over the activity of Oranta NJSIC OJSC and enabled the Bank to record the investment by using the equity method. In October 2008 the Bank finalized the acquisition of an additional 50.3% equity interest in BTA Bank CJSC (Belorussia) (former Astanaeximbank CJSC) for KZT 3,501 million. As a result of the acquisition the Banks interest in BTA Bank CJSC (Belorussia) increased to 99.29%, which provided the Bank with effective control and enabled the Bank to treat BTA Bank CJSC (Belorussia) as a subsidiary starting from November 2008. On 7 November 2008 BTA Bank LLC (Russia) issued additional shares in the amount of RUR 7,200 million (equivalent of KZT 31,968 million). The Bank did not use its preemptive right to purchase these shares. As a result the Banks share in BTA Bank LLC (Russia) decreased from 52.84% to 22.26%. As a result, the Bank has lost effective control over BTA Bank LLC (Russia), but retained significant influence. This allowed the Bank to consider BTA Bank LLC (Russia) as an associate. The carrying amount of investment at the date BTA Bank LLC (Russia) became an associate was KZT 18,938 million, before any share in loss. The following table illustrates summarised financial information as at 31 December of the associates:

Aggregated assets and liabilities of associates

Total assets Total liabilities Net assets

2009
1,291,602 (1,049,331) 242,271

2008
950,054 (872,839) 77,215

Aggregated profit of associates

Net profit/(loss)

2009
9,982

2008
(103,923)

Investments in associates at 31 December 2009 include goodwill of KZT 24,096 million (excess of the cost of the investment over the Groups share in the net fair value of identifiable assets and liabilities of the associate (2008 KZT 23,944 million)). For general information, refer to Note 3.

16. Goodwill
The movements in goodwill were as follows:

2009
Cost January 1 Additions Acquisition through business combinations Foreign currency revaluation Disposal 31 December Accumulated impairment 1 January Impairment charge 31 December Net book value: Impairment testing of goodwill 45,528 14 (158) 45,384 (8,107) (35,436) (43,543) 1,841

2008
37,557 6,173 12,567 (1,891) (8,878) 45,528 (8,107) (8,107) 37,421

The impairment is largely the result of uncertainties in the Kazakhstan economy, especially in the retail and mortgage sectors and deterioration of the subsidiaries financial position. The Group performed an impairment test of goodwill as at 31 December 2009 and recognized an impairment loss of KZT 35,436 million on goodwill from acquisition of Temirbank JSC. Goodwill acquired through business combinations with indefinite lives have been allocated to two individual cash-generating units, which are also reportable segments, for impairment testing as follows: - Corporate Banking; and - Retail Banking. The carrying amount of goodwill allocated to each of the cash-generating units is as follows:

31 December 2009
Corporate Banking Retail Banking 1,031 810 1,841 33

31 December 2008
12,771 24,650 37,421

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 16. Goodwill(continued)

Key assumptions used in value in use calculations The recoverable amount of each cash generating unit has been determined based on a value in use calculation, using cash flow projections based on financial budgets approved by senior management covering a five-year period. The following rates are used by the Group:

Temirbank Corporate Banking 2009, % 2008, %

Discount rate Projected growth rate 13.96 5.00 12.66 2.00

Retail Banking 2009, %

13.96 5.00

2008, %
12.66 2.00

The calculation of value in use for both Corporate and Retail Banking units is most sensitive to the following assumptions: - Interest margins; - Discount rates; - Market share during the budget period; - Current local Gross Domestic Product (GDP); and - Local inflation rates. Interest margins Interest margins are based on effective interest rates charged during 2009. These are increased over the budget period for anticipated inflation rates. Discount rates Discount rates reflect managements estimate of return of capital employed (ROCE) required in each business. This is the benchmark used by management to assess operating performance and to evaluate future investment proposals. Discount rates are used to calculate present value of future cash flows expected to receive from cash generating units. Discount rates are calculated by using the Weighted Average Cost of Capital (WACC). Market share assumptions These assumptions are important because, as well as using industry data for growth rates, management assess how the units relative position to its competitors might change over the budget period. Management expects the Groups share of the Retail Banking and Corporate Banking markets, including customer deposits, to be stable over the budget period. Projected growth rates, GDP and local inflation rates Assumptions are based on published industry research. Sensitivity to changes in assumptions Management believes that reasonable possible changes in key assumptions used to determine the recoverable amount of segments will not result in an additional impairment of goodwill.

17. Otherimpairmentandprovisions
The movements in allowances for other losses and provisions were as follows: As at 31 December 2007 Impairment charge Write-offs Recoveries Revaluation As at 31 December 2008 Impairment charge Write-offs Recoveries Revaluation As at 31 December 2009

Other assets
360 1,435 (476) 74 (6) 1,387 8,145 (1,055) 13 (12) 8,478

Guarantees and letters of credit

10,577 95,397 (1,081) 104,893 (70,596) (3) 24,833 59,127

Total
10,937 96,832 (476) 74 (1,087) 106,280 (62,451) (1,058) 13 24,821 67,605

Allowances for impairment of assets are deducted from the related assets. Other provisions comprise allowances for letters of credit and guarantees. 34

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 18. Taxation

The corporate income tax expense comprises:

2009
Current tax charge Deferred tax charge- origination and reversal of temporary differences Income tax (benefit) / expense 847 (221) 626

2008
4,297 (4,364) (67)

The Bank and its subsidiaries, other than TuranAlem Finance B.V. (TAF BV), Temir Capital B.V (TK BV), TuranAlem Finance (TAF), BTA Bank (Belorussia), BTA Luxembourg, First Kazakh Securitization Company and Second Kazakh Securitization Company are subject to taxation in the Republic of Kazakhstan. TAF BV, TK BV, First Kazakh Securitization Company and Second Kazakh Securitization Company are subject to taxation in the Netherlands. TAF is subject to income tax in the Russian Federation. BTA Luxembourg is subject to income tax in Luxembourg. BTA Bank (Belorussia) is subject to income tax in Belorussia. The tax rate for the Bank and its subsidiaries, other than the insurance company, on income differing from taxable income from state and other qualified securities amounted to 20% in 2009 and 30% in 2008. In accordance with changes to tax legislation in 2009, as at 31 December 2009 the corporate income tax rate of 20.0% has decreased to 17.5% and 15.0% in 2013 and 2014 years, respectively. Tax legislation effective as at 31 December 2008 stipulated a decrease in tax rate to 17.5% in 2010 and to 15.0% in 2011. As at 31 December 2009 and 2008 the Group had current income tax assets in the amount of 5,708 million and 5,505 million tenge, respectively. A reconciliation between income tax expense in the accompanying consolidated financial statements and income before taxes multiplied by the statutory tax rate for the years ended 31 December is as follows:

2009
Accounting profit before income tax Statutory rate of corporate income tax Theoretical income tax benefit at the statutory rate Non-deductible impairment charge Non-deductible interest expenses Non-deductible losses from disposal of subsidiaries Non-deductible business expenses Impairment loss on goodwill Write-down of inventories Non-deductible loss/ (non taxable income) on state securities and securities officially listed at KASE (Non taxable income)/ non-deductible loss from associates Income of subsidiaries taxed at different rates Differences arising from changes in tax rates Change in unrecognised deferred tax assets Other permanent differences Income tax expense/(benefit)

2008
(1,188,117) 30% (356,435) 23,411 3,376 1,110 2,432 719 (496) 4,634 (2,347) 131,997 192,315 (783) (67)

(1,113,908) 20% (222,782) 16,020 24,472 615 573 7,087 895 1,365 (938) (17) (16,920) 185,851 4,405 626

35

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 18. Taxation(continued)

Deferred tax assets and liabilities, and their movement for respective years comprised the following at December 31:

Origination and reversal of temporary differences in statement 2007 of income

Tax effect of deductible temporary differences: Allowances for loan impairment Tax losses carry forward Fair value measurement of securities Interest written-off Property and equipment Other Gross deferred tax assets Unrecognised deferred tax assets Deferred tax asset Tax effect of taxable temporary differences: Allowances for impairment Fair value measurement of securities Property and equipment Other Deferred tax liability Deferred tax asset

Origination and reversal of temporary differences in equity

Origination and reversal of temporary differences in statement 2008 of income

Origination and reversal of temporary differences in equity

2009

4,906 1,644 1,015 7,565 7,565

189,653 4,783 1,684 56 417 196,593 (192,315) 4,278

11 11 11

194,559 6,438 1,684 56 1,432 204,169 (192,315) 11,854

(184,272) 351,206 (4,896) 29,682 (56) 803 192,467 (185,851) 6,616

10,287 351,206 1,542 31,366 2,235 396,636 (378,166) 18,470

(1,647) (4,529) (702) (4) (6,882) 683

1,647 (2,263) 702 86 4,364

(12) (12) (1)

(6,804) (4) (6,808) 5,046

(7,691) 2,190 (517) (377) (6,395) 221

(7,691) (4,614) (517) (381) (13,203) 5,267

Kazakhstan currently has a single Tax Code that regulates main taxation matters. The main taxes include value added tax, income tax, social taxes, and others. Often, different opinions regarding legal interpretation exist both among and within government authorities; thus creating uncertainties and areas of conflict. These facts create tax risks in Kazakhstan substantially more significant than typically found in countries with more developed tax systems. Management believes that the Group is in substantial compliance with the tax laws affecting its operations; however, the risk remains that relevant authorities could take different positions with regard to interpretive issues. The deferred tax asset as at 31 December 2009 was mainly comprised of losses carried forward as a result of allowance for bad debts. In accordance with IAS 12 a deferred tax asset was recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available in future against which the deductible temporary difference can be utilized. As at 31 December 2009 deferred tax asset in the amount of KZT 378,166 million was not recognized as due to restructuring the Group was not able to reliably assess whether it will be able to generate future taxable income against which these temporary differences could be utilized.

36

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 19. AmountsduetotheGovernmentofRKandcentralbanks

Amounts due to the Government and central banks consist of the following:

2009
Loans from the NBK Amounts due to the Government: Interest bearing KZT denominated Interest bearing USD denominated Interest bearing EUR denominated Interest bearing KGS denominated Loans from the National Bank of Kyrgyzstan Amounts due to the Government of RK and central banks 405,487 1,002 20 86 406,595

2008
28 1,292 193 136 55 14 1,718

Loans from the NBK represent repurchase agreements under the pledge of debt securities of the Parent. As at 31 December 2009 the fair value of these debt securities was KZT 359,058 million.

20. Amountsduetocreditinstitutions
Amounts due to credit institutions com:

2009
Loans from OECD based banks and financial institutions Loans from Kazakh banks and financial institutions Syndicated bank loans Loans from other banks and financial institutions Pass-through loans Interest-bearing placements from Kazakh banks Loro accounts Interest-bearing placements from non OECD banks Amounts due to credit institutions Subject to repurchase agreements 442,778 190,438 163,053 19,293 18,429 833,991 1,600 772 21 2,393 836,384 4,430

2008
451,737 126,434 156,617 24,201 17,278 776,267 21,112 2,503 3,484 27,099 803,366 65,472

As at 31 December 2009 the fair value of the securities pledged under the repurchase agreements amounted to KZT 4,420 million (at 31 December 2008 KZT 74,590 million). Refer to Note 9. Financial covenants In accordance with the contractual terms of loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. As at 31 December 2009 and 2008 the Bank was in breach of capital adequacy, lending exposure and cross default covenants on these loan facilities. As at 31 December 2009 and the date of authorization of these consolidated financial statements the Bank was in the process of restructuring these debts.

21. Amountsduetocustomers
The amounts due to customers included balances in customer current accounts, time deposits, and certain other liabilities, and include the following:

2009
Time deposits Current accounts Guarantee and restricted deposits Amounts due to customers 373,802 270,221 11,940 655,963

2008
684,330 179,658 22,064 886,052

Guarantee and restricted deposits represent customers collateral under letters of credit and guarantees issued by the Bank on behalf of clients.

37

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 21. Amountsduetocustomers(continued)

At 31 December 2009, the Banks ten largest customers accounted for approximately 56.61% of the total amounts due to customers (2008 34.80%). The amounts due to customers included balances in customer current accounts and term deposits, and were analysed as follows:

2009
Time deposits: Commercial entities Individuals Governmental entities Non-commercial entities Current accounts: Commercial entities Individuals Governmental entities Non-commercial entities Guarantees and other restricted deposits: Commercial entities Individuals Governmental entities Non-commercial entities Amounts due to customers 32,016 151,318 184,448 6,020 66,057 29,314 173,132 1,718 8,557 3,345 37 1 655,963

2008
201,240 262,644 218,209 2,237 124,350 33,864 20,371 1,073 10,762 10,837 463 2 886,052

Included in time deposits are deposits of individuals in the amount of KZT 151,318 million (2008 KZT 262,644 million). In accordance with the Civil Code of the Republic of Kazakhstan, the Group is obliged to repay such deposits upon demand of a depositor. In case a term deposit is repaid upon demand of the depositor prior to maturity, interest is not paid or paid at considerably lower interest rate depending on the terms specified in the agreement. An analysis of customer accounts by sector follows:

2009
Individuals Oil and gas production Amounts due to Samruk Kazyna Construction Non-credit financial organizations Wholesale trading State administration bodies Research and development Transportation Wholesale trading Chemical processing Agriculture Machinery and equipment production Education Energy Textile and leather industry Mining Food industry Metallurgy Entertainment Communication Hotel and hospitality Other 183,977 183,478 160,454 25,405 19,635 18,668 13,035 5,772 3,328 3,320 2,845 2,484 1,975 1,945 1,454 1,065 849 759 749 517 411 155 23,683 655,963

%
28.00% 28.00% 24.50% 3.90% 3.00% 2.80% 2.00% 0.90% 0.50% 0.50% 0.40% 0.40% 0.30% 0.30% 0.20% 0.20% 0.10% 0.10% 0.10% 0.10% 0.10% 0.00% 3.60% 100.0%

2008
307,345 233,290 49,060 19,226 81,303 28,501 11,594 33,113 4,265 1,480 3,887 5,873 7,014 30,788 1,607 1,912 1,091 11,475 1,241 5,425 353 46,209 886,052

%
34.70% 26.30% 5.50% 2.20% 9.20% 3.20% 1.30% 3.70% 0.50% 0.20% 0.40% 0.70% 0.80% 3.50% 0.20% 0.20% 0.10% 1.30% 0.10% 0.60% 0.00% 5.30% 100.0%

38

F-80

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 22. Debtsecuritiesissued

As at 31 December debt securities issued consisted of the following:

2009
KZT bonds with fixed rate USD bonds with fixed rate USD and KZT subordinated bonds with fixed rate EUR bonds with fixed rate JPY bonds with floating rate USD perpetual financial instruments with fixed rate USD bonds with floating rate KZT bonds with floating rate GBP bonds with fixed rate JPY bonds with fixed rate CHF bonds with floating rate KZT subordinated bonds with floating rate RUR bonds with fixed rate PLZ bonds with floating rate PLZ bonds with fixed rate RUR deposit certificate USD treasury bonds held by Group KZT treasury bonds held by Group USD and KZT treasury subordinated bonds held by Group Plus unamortized premium Less unamortized cost of issuance Less unamortized discount Debt securities issued 578,684 501,749 165,334 120,618 70,938 68,699 53,048 49,956 41,422 32,748 29,654 22,762 15,268 11,558 14 1,762,452 (3,615) (4,297) (64,053) 1,690,487 124 (663) (21,346) 1,668,602

2008
28,358 411,068 174,271 85,844 57,598 54,623 165,251 39,555 34,926 26,609 23,147 21,756 12,555 8,162 19 1,143,742 (1,359) (3,061) (22,365) 1,116,957 622 (699) (29,154) 1,087,726

On 23 January 2009 the Bank has repaid, at maturity, its notes for the total amount of USD 250,000 thousand, issued under the Banks Global Medium Term Notes Program. In March 2009 TemirCapital B.V., the Banks subsidiary, repaid its notes at maturity in the amount of USD 150,000 thousand. In March 2009 the Group issued debt securities at the nominal value of KZT 645,000 million at a below market interest rate, purchased by the Parent. Fair value at the initial recognition date of these securities amounted to KZT 535,393 million. The difference between the nominal value and the fair value at the initial recognition date of KZT 109,607 million was recognized within Additional paid-in-capital as transaction with the Shareholder of the Group. In June 2009 DPR Finance Company, the Banks subsidiary, repaid its notes for the total amount of USD 750,000 thousand. During 2009 the Group purchased its own bonds with the carrying value of KZT 44,998 million for KZT 34,602 million. The gain on repurchase of own bonds in the amount of KZT 10,396 million was recognized in the consolidated income statement. As at 31 September 2009 and 31 December 2008 subordinated notes are unsecured obligations of the Group and are subordinated in right of payment to all present and future senior indebtedness and certain other obligations of the Group. In accordance with the terms of the debt securities issued, the Bank is required to maintain certain financial ratios particularly with regard to its liquidity, capital adequacy, and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major rating agencies. As at 31 December 2009 and 31 December 2008, the Bank was in breach of capital adequacy, lending exposure and cross-default covenants on debt securities issued. As at 31 December 2009 and the date of authorization of these consolidated financial statements the Bank was in the process of restructuring these debts.

39

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 23. Equity

As at 31 December 2009 and 2008 share capital comprises:

Common shares Number of authorized shares

31 December 2007 Increase in issued capital 31 December 2008 Increase in issued capital 31 December 2009 8,370,158 467 8,370,625 29,915,425 38,286,050

Number of shares issued

8,370,158 467 8,370,625 25,246,343 33,616,968

Placement value (KZT million)

303,427 29 303,456 212,095 515,551

Non-redeemable CPS Number of authorized shares

100,000
100,000

Number of shares issued

Placement value (KZT million)

100,000

Issued capital is recorded net of transaction costs and net of adjustments made during 1997 to adjust the opening balances of the Bank following the combination of Turan Bank and Alem Bank. As at 31 December 2009 the Group held 1,517,088 shares of the Bank as treasury shares (2008 30,586). At an Extraordinary General Meeting of the Bank held on 22 February 2007, the Banks shareholders approved the eleventh issue of its common shares and the subsequent increase of the Bank's share capital by the KZT equivalent of USD 1.5 billion, which was registered on 19 March 2007 by FMSA. As a result, in 2007 the Bank increased the number of authorised shares by 3,007,575 common shares. During 2008 the Bank issued 467 common shares at placement value of KZT 62,178 per share totalling KZT 29 million, which were fully issued and paid in 2008. At an Extraordinary General Meeting of the Bank held on 14 May 2008, the Banks shareholders approved the issue of 100,000 convertible cumulative preferred shares (CPS), which was registered on 9 June 2008 by the FMSA. As at 31 December 2009 and 2008 no CPS were issued. In February 2009 according to the decision of the Government the number of authorized shares was increased by 29,915,425 shares. As at 31 December 2009 the Government represented by National Welfare Fund Samruk-Kazyna JSC purchased 25,246,343 shares at KZT 8,401 per share to the total amount of KZT 212,095 million. Dividends on CPS The dividends on convertible preferred shares authorised in 2008 were established at the rate of 11.00% per annum of placement value of shares. No convertible preferred shares were outstanding as at 31 December 2009 and 2008. Accordingly, no dividends on CPS were accrued or paid. Unrealised gains (losses) on investment securities available-for-sale This reserve records fair value changes on available-for-sale investments. Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. Movements in treasury stock were presented as follows: 31 December 2007 Number of purchased treasury shares Number of sold treasury share 31 December 2008 Number of purchased treasury shares Number of sold treasury share 31 December 2009 7,522 215,937 (192,873) 30,586 1,579,740 (93,238) 1,517,088

40

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 24. Commitmentsandcontingencies

Politicalandeconomicenvironment

Kazakhstan continues economic reforms and development of its legal, tax and regulatory frameworks as required by a market economy. The future stability of the Kazakhstani economy is largely dependent upon these reforms and developments and the effectiveness of economic, financial and monetary measures undertaken by the government. The Kazakhstani economy is vulnerable to market downturns and economic slowdowns elsewhere in the world. The ongoing global financial crisis has resulted in capital markets instability, significant deterioration of liquidity in the banking sector, and tighter credit conditions. While the Kazakhstani Government has introduced a range of stabilization measures aimed at providing liquidity and supporting refinancing of foreign debt for Kazakhstani banks and companies, there continues to be uncertainty regarding the access to capital and cost of capital for the Group and its counterparties, which could affect the Groups financial position, results of operations and business prospects. Also, the borrowers may have been affected by the deterioration in liquidity, which could in turn impact their ability to repay the amounts due to the Group. Due to the fall in prices in global and Kazakhstani securities markets, the Group may face a significant decrease in the fair value of securities pledged as collateral against loans extended by the Group. To the extent that information is available, the Group has reflected revised estimates of expected future cash flows in its impairment assessment. While management believes it is taking appropriate measures to support the sustainability of the Groups business in the current circumstances, unexpected further deterioration in the areas described above could negatively affect the Groups results and financial position in a manner not currently determinable. Also refer to Note 2.
Legalactionsandclaims

The Group is subject to various legal proceedings related to business operations. The Group does not believe that pending or threatened claims of these types, individually or in aggregate, are likely to have any material adverse effect on the Groups financial position or results of operations. The Group assesses the likelihood of material liabilities arising from individual circumstances and makes provision in its financial statements only where it is probable that events giving rise to the liability will occur and the amount of the liability can be reasonably estimated. No provision has been made in these financial statements for any of the contingent liabilities mentioned above Also refer to Note 35. BTA Bank (Kyrgyzstan) The Bank is in the process of a legal dispute with CJSC Investment Holding Company (IHC), a Kyrgyzstan registered entity. The total amount of this dispute is GBP 30,418,144 equivalent to KZT 7,400 million. In June 2009, Central Asia Investment Company (CAIC), a Kyrgyzstan registered entity and a 100% subsidiary of IHC, obtained a loan from its parent, IHC, of GBP 8,670,000 with an intended use to purchase Kyrgyzstan state securities. CAIC, in violation of the intended purpose of the loan from its parent, used these funds to purchase bonds of TuranAlem Finance B.V. (TAF B.V.), the Banks subsidiary, at significant discount on the market. The nominal value of purchased bonds was GBP 28,395,000 and accrued interest was GBP 2,023,144. CAIC defaulted on its loan payable to IHC. As a result, IHC filed a lawsuit against BTA Bank, BTA Bank Kyrgyzstan and TAF B.V. claiming a repayment of the full nominal value and interest accrued on bonds of TAF B.V. In accordance with the decision of Bishkeks district court, Bishkeks municipal Court of appeals and the Supreme Court of Kyrgyzstan dated 11 September 2009 the Bank is obliged to pay the full amount and IHC started to collect the funds from the Bank, a guarantor on bonds of TAF B.V., including the Banks shares in BTA Bank Kyrgyzstan and amounts due to the Bank by BTA Bank Kyrgyzstan. This decision was made even though in September 2009 the Bank was in process of negotiating the restructuring of its debts. In December 2009, an officer of the court foreclosed on shares held by the Bank in BTA Bank Kyrgyzstan, which resulted in loss of control over BTA Bank CJSC (Kyrgyzstan). Therefore, the management of the Bank decided to deconsolidate BTA Bank CJSC (Kyrgyzstan) as at 31 December 2009. The management of the Bank believes that the decision of Kyrgyzstan courts was not in compliance with international laws and legislation between the Republic of Kazakhstan and Kyrgyzstan. Moreover, the foreclosure was executed with violations of the Law of Kyrgyzstan. On 5 November 2009 the Bank with support of its controlling shareholder has filed a claim with the Kyrgyzstan government for compensation of GBP 30,418,144 and USD 38,891,000 for damages incurred as a result of illegal acts of Kyrgyz legal and government entities.

41

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 24. Commitmentsandcontingencies(continued)

Taxcontingencies

Various types of legislation and regulations are not always clearly written and their interpretation is subject to the opinions of the local tax inspectors and the Ministry of Finance of the Republic of Kazakhstan. Instances of inconsistent opinions between local, regional and national tax authorities are not unusual. The current regime of penalties and interest related to reported and discovered violations of Kazakhstan laws, decrees and related regulations is severe. Penalties include confiscation of the amounts at issue (for currency law violations), as well as fines of generally 50% of the taxes unpaid. The Group believes that it has paid or accrued all taxes that are applicable. Where legislation concerning the provision of taxes is unclear, the Group has accrued tax liabilities based on managements best estimate. The Groups policy is to recognize provisions in the accounting period in which a loss is deemed probable and the amount is reasonably determinable. Because of the uncertainties associated with the Kazakhstan tax system, the ultimate amount of taxes, penalties and interest, if any, as a result of past transactions, may be in excess of the amount expensed to date and accrued at 31 December 2009. Although such amounts are possible and may be material, it is the opinion of the Groups management that these amounts are either not probable, not reasonably determinable, or both. As at 31 December the Groups commitments and contingencies comprised the following:

2009
Undrawn loan commitments Commercial letters of credit Guarantees Operating lease commitments Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years Less: cash collateral (Note 21) Less: provisions (Note 17) Commitments and contingencies 431,767 42,652 77,239 551,658 1,348 1,661 2,747 5,756 (11,940) (59,127) 486,347

2008
363,490 139,524 175,196 678,210 1,199 3,065 5,881 10,145 (22,064) (104,893) 561,398

The loan commitment agreements stipulate the right of the Bank to unilaterally withdraw from the agreement should any conditions unfavourable to the Bank arise, including change of the refinance rate, inflation, exchange rates and others. The Group requires collateral to support credit-related financial instruments when it is deemed necessary. Collateral held varies, but may include deposits held in the Bank, governments and international prime financial organisations securities, and other assets.
Trustactivities

The Group provides custody services for third parties which involve the Group making allocation and purchase and sales decisions in relation to securities. Those securities that are held in a fiduciary capacity are not included in these consolidated financial statements. As at 31 December 2009 such securities held in this capacity were KZT 242,835 million (2008 KZT 294,852 million). In addition, the Group manages certain pension funds through its specialised subsidiary. Below presented are statements of net assets available for pension benefits as well as changes in net assets available for pension benefits at 31 December of the pension fund under management.

42

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 24. Commitmentsandcontingencies(continued)

Trustactivities(continued)

Statement of Net Assets Available for Pension Benefits As at 31 December net assets available for pension benefits comprise:

2009
Assets Cash and cash equivalents Amounts due from credit institutions: - Time deposits with maturity over 90 days or past due - Reverse repurchase agreements Available-for-sale investment securities: - Sovereign bonds of the Republic of Kazakhstan - Corporate bonds - Corporate shares Investment securities, held to maturity: - Agency bonds - Government bonds of the Republic of Kazakhstan - Corporate bonds Accrued investment income Other receivables Total assets Liabilities Commissions payable to pension funds Other liabilities Net assets available for pension benefits Statement of Changes in Net Assets Available for Pension Benefits During the year ended 31 December changes in net assets available for pension benefits comprise: 1,535 799 48,332 41,226 396 51,078 62,804 1,684 207,854 (114) (6) 207,734

2008
2,228 6,107 612 17,388 54,381 29,783 460 66,887 1,996 181 180,023 (83) (8) 179,932

2009
Net income Additions: - Obligatory contributions - Voluntary contributions - Transfers between funds, net - Penalties for delay Benefits paid to participants - Retirement - Death or disability - Expatriation - Withholding taxes - Insurance policy Net change in assets available for pension benefits Net assets available for pension benefits, beginning Net assets available for pension benefits, ending 8,767 35,708 1 (11,788) 189 24,110 (2,857) (822) (824) (248) (324) (5,075) 27,802 179,932 207,734

2008
11,784 30,715 2 14,945 213 45,875 (1,712) (603) (638) (185) (12) (3,150) 54,509 125,423 179,932

43

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 25. Feesandcommissions

Net fee and commission income for the years ended 31 December was made from the following sources:

2009
Letters of credit and guarantees issued Settlement and cash operations Transfer operations Foreign currency trading Asset management fees Brokerage services Other Fee and commission income Letter of credit and guarantees issued Transfer operations Brokerage services Foreign currency trading Custodian services Other Fee and commission expense Net fee and commission income 5,066 5,883 5,381 1,210 2,788 235 819 21,382 (540) (584) (235) (70) (45) (258) (1,732) 19,650

2008
9,893 7,633 5,193 2,898 3,161 479 1,077 30,334 (542) (211) (52) (49) (325) (1,179) 29,155

26. Nettradingloss
Net trading loss for the years ended 31 December comprised the following:

2009
Securities : Trading securities Available-for-sale investment securities Income from purchase of own debt securities issued Interest rate instruments (16,825) (2,192) 10,396 5,656 (2,965)

2008
(13,649) (3,930) 11,198 (23,388) (29,769)

Securities income includes the effect of buying and selling, and changes in the fair value of trading securities and effect of buying and selling of available-for-sale investment securities. The results of trading and changes in fair value of interest rate swaps are recorded under income from interest rate instruments.

27. Otherimpairmentcharge
Other impairment charge for 2009 and 2008 comprised the following:

2009
Impairment charge on goodwill (Note 16) Impairment charge on available-for-sale investment securities (Note 12) Impairment charge on investments in associates (35,436) (2,764) (676) (38,876)

2008
(8,107) (42,610) (19,138) (69,855)

44

F-86

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Salariesandotheradministrativeandoperatingexpenses

Salaries and other employee benefits and administrative and other operating expenses comprise:

2009
Salaries and bonuses Social security costs Other payments Salaries and other employee benefits Legal services and consultancy Occupancy and rent Repair and maintenance of property and equipment Security Communications Penalties Plastic cards Agency services Encashment Marketing and advertising Transportation expenses Business travel and related expenses Data processing Office supplies Postal charges State duties and customs Representation Insurance Trainings Participation in forums, seminars and conferences Loss on disposals of property and equipment Other Administrative and other operating expenses (19,541) (2,043) (642) (22,226) (6,276) (5,655) (1,682) (1,366) (1,363) (1,317) (1,000) (961) (951) (936) (509) (433) (413) (254) (169) (112) (55) (29) (17) (11) (3) (876) (24,388)

2008
(23,722) (2,010) (865) (26,597) (1,499) (7,056) (2,548) (1,572) (1,639) (427) (767) (1,047) (909) (3,984) (2,077) (1,041) (346) (445) (191) (294) (99) (59) (100) (43) (12) (1,259) (27,414)

29. Earningspershare
Basic earnings per share is calculated by dividing the net income for the year attributable to common shareholders by the weighted average number of shares outstanding during the year. The Bank did not declare or pay any dividends to common shareholders during 2009 and 2008. The following reflects the income and share data used in the basic and diluted earnings per share computations for the years ended 31 December:

2009

2008

Net loss attributable to common shareholders for basic earnings per share Weighted average number of common shares for basic and diluted earnings per share Basic and diluted loss per share (in Kazakhstani Tenge)

(1,086,625) 32,736,858 (33,193)

(1,187,584) 8,274,330 (143,526)

30. Riskmanagementpolicies
Introduction

The Group as a combination of financial organizations is exposed to certain types of risks. Risk management structure is arranged for prompt identification and assessment of risks associated with one or another line of activity. Management understands the high importance of risk management process as an integral part of day-to-day activities of the Group. Of particular priority is liquidity risk, credit risk, market risk, the latter being subdivided into trading and non-trading risks and operating risks that could affect the equity and income of the Group. Risk management structure The Board of Directors The risk management process is directly subordinated to and accountable to the Board of Directors. The Board of Directors is responsible for the overall risk management approach and for approving the risk management policies and adoption strategic decisions on risk management. 45

F- 87

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30. Riskmanagementpolicies(continued)

Introduction(continued)

Risk Committee The Risk Committee oversees the Groups activities on risk management, adopts managerial decisions as related to approval of normative documents and defining lines of activity of subdivisions. Risk Management Unit Risk management units are responsible for identification, assessment and monitoring of risks. Daily activities of these units are governed by internal regulations. Within the Group certain units responsible for management of credit, operating, liquidity and market risks are defined. These units are accountable to Risk Committee and Management Board. Risk monitoring Risk Monitoring Units control over compliance with risk principles, policies and limits, across the Group. Each business group has a decentralised unit which is responsible for the independent control of risks, including monitoring the risk of exposures against limits and the assessment of risks of new products and structured transactions. This unit also ensures the complete capture of the risks in risk measurement and reporting systems. Internal audit function Internal audit is the most important component of internal control, including risk control. Internal audit function regularly examines adequacy of the internal procedures of the Group. The results are submitted to the Board of Directors, the latter adopts relevant decisions to eliminate shortages. Risk measurement and reporting systems The Groups risks are measured using a method which reflects both the expected loss likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual loss based on statistical models. The models make use of probabilities derived from historical experience, adjusted to reflect the economic environment. The Group also runs worst case scenarios that would arise in the event that extreme events which are unlikely to occur do, in fact, occur. Monitoring and controlling risks is primarily performed based on limits established by the Group. These limits reflect the business strategy and market environment of the Group as well as the level of risk that the Group is willing to accept, with additional emphasis on selected industries. In addition the Group monitors and measures the overall risk bearing capacity in relation to the aggregate risk exposure across all risks types and activities. Information compiled from all the businesses is examined and processed in order to analyse, control and identify early risks. This information is presented and explained to the Management Board, the Risk Committee, and the head of each business division. The report includes aggregate credit exposure, credit metric forecasts, hold limit exceptions, liquidity ratios and risk profile changes. On a monthly basis detailed reporting of industry, customer and geographic risks takes place. Senior management assesses the appropriateness of the allowance for credit losses on a quarterly basis. The Board of Directors receives a comprehensive risk report once a quarter which is designed to provide all the necessary information to assess and conclude on the risks of the Group. For all levels throughout the Group, specifically tailored risk reports are prepared and distributed in order to ensure that all business divisions have access to extensive, necessary and up-to-date information. A daily briefing is given to the Management Board and all other relevant employees of the Group on the utilisation of market limits, proprietary investments and liquidity, plus any other risk developments. Risk mitigation As part of its overall risk management, the Group uses derivatives and other instruments to manage exposures resulting from changes in interest rates, foreign currencies and exposures arising from forecast transactions. The Group actively uses collateral to reduce its credit risks (see below for more detail). Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Groups performance to developments affecting a particular industry or geographical location. In order to avoid excessive concentrations of risks, the Groups policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. 46

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BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Creditrisk

Credit risk is the risk that the Group will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations. The Bank manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for geographical and industry concentrations, and by monitoring exposures in relation to such limits. The Group has Credit committees, which are responsible for credit risk management and which set individual limits on borrowers and recommend limits on loan portfolio for further approval by the Management Board. The regional credit committee is responsible for credit risk function over issuance of the loans to Russian Federation and other CIS countries. Financing of borrowers is done by thorough procedures of primary selection of borrowers, preliminary structuring of transaction, project assessment, borrowers financial statement analysis and monitoring and control of risks. Decision on financing of borrowers is made by the respective Credit committee depending on the borrowers limit. The Group has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions based on the requirements of Kazakhstani regulation. Counterparty limits are established by the use of a credit risk classification system, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. The credit quality review process allows the Group to assess the potential loss as a result of the risks to which it is exposed and take corrective action. During 2008, the regional credit committee was chaired by the former Chairman of the Board of Directors. This created a conflict of interest, as the regional credit committee reports to the Managing Board, which in its turn reports to the Board of Directors. Therefore, the control from Managing Board was not effective and potentially contributed to the issuance of loans to off-shore companies, which became uncollectible in 2008 and for which the Bank has created an allowance as at 31 December 2008 (Refer to Note 13). In 2009 the Bank dismissed the credit committees in Russia, Armenia, Belorussia, Georgia and Ukraine and established a new regional credit committee, which reports to the Management Board of the Bank. The new members of the regional credit committee include one Deputy Chairman of the Management Board, managing directors and directors of departments of the Bank. Derivative financial instruments Credit risk arising from derivative financial instruments is, at any time, limited to those with positive fair values, as recorded in the consolidated statement of financial position. Credit-related commitments risks The Bank makes available to its customers guarantees and letters of credit, which may require that the Bank make payments on their behalf. Such payments are collected from customers based on the terms of the contracts. They expose the Bank to similar risks to loans and these are mitigated by the same control processes and policies. The table below shows the maximum exposure to credit risk for the components of the statement of financial position, including derivatives. The maximum exposure is shown gross, before the effect of mitigation through the use of master netting and collateral agreements.

Note
Cash and cash equivalents (excluding cash on hand) Obligatory reserves (excluding cash on hand) Trading securities (excluding equity securities) Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities (excluding equity securities) Loans to customers Bonds of NWF Samruk-Kazyna Other assets Financial commitments and contingencies Total credit risk exposure 7 8 9 10 11 12 13 14 24

Gross maximum exposure 2009

36,723 145 78,979 31,444 25,980 18,493 1,040,773 512,246 27,057 1,771,840 492,531 2,264,371

Gross maximum exposure 2008

82,645 27,601 106,519 85,174 21,650 19,122 1,617,063 23,000 1,982,774 573,317 2,556,091

Where financial instruments are recorded at fair value, the amounts shown above represent the current credit risk exposure but not the maximum risk exposure that could arise in the future as a result of changes in values. For more detail on the maximum exposure to credit risk for each class of financial instrument, references shall be made to the specific notes. The effect of collateral and other risk mitigation techniques is shown in Note 13. 47

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30. Riskmanagementpolicies(continued)

Credit quality per class of financial assets The credit quality of financial assets is managed by the Group internal credit ratings. The table below shows the credit quality by class of asset for loan-related statement of financial position lines, based on the Groups credit rating system.

Note
Loans to customers Corporate lending Small and medium business lending Individuals lending Total 13

Neither past due nor impaired

189,842 158,139 350,116 698,097

2009 Past due or individually impaired

2,286,357 58,306 121,421 2,466,084

Total
2,476,199 216,445 471,537 3,164,181

Note
Loans to customers Corporate lending Small and medium business lending Individuals lending Total 13

Neither past due nor impaired

702,587 234,748 468,695 1,406,030

2008 Past due or individually impaired

1,369,404 22,085 36,822 1,428,311

Total
2,071,991 256,833 505,517 2,834,341

Past due loans to customers include those that are only past due by a few days. An analysis of past due but not impaired loans, by age, is provided below. It is the Groups policy to maintain accurate and consistent risk ratings across the credit portfolio. This facilitates focused management of the applicable risks and the comparison of credit exposures across all lines of business, geographic regions and products. The rating system is supported by a variety of financial analytics, combined with processed market information to provide the main inputs for the measurement of counterparty risk. All internal risk ratings are tailored to the various categories and are derived in accordance with the Groups rating policy. The attributable risk ratings are assessed and updated regularly. Aging analysis of past due but not impaired loans per class of financial assets

Loans to customers Corporate lending Small and medium business lending Individuals lending Total

Less than 30 days 2009

11,676 5,461 14,217 31,354

2008
13,507 6,448 10,976 30,931

Of the total aggregate amount of gross past due but not impaired loans to customers, the fair value of collateral that the Group held as at 31 December 2009 was KZT 55,345 million (2008 - KZT 83,629 million). See Collateral and other credit enhancements in Note 13 for the details of types of collateral held. See Note 13 for more detailed information with respect to the allowance for impairment of loans to customers. Carrying amount per class of financial assets whose terms have been renegotiated The table below shows the carrying amount for renegotiated financial assets, by class:

2009
Loans to customers Corporate lending Small and medium business lending Individuals lending Amounts due from credit institutions Trade securities Total 479,744 20,807 20,266 520,817 15 671 521,503

2008
234,372 5,202 1,982 241,556 1,922 243,478

48

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30. Riskmanagementpolicies(continued)

Impairment assessment The main considerations for the loan impairment assessment include whether any payments of principal or interest are overdue by more than 30 days or there are any known difficulties in the cash flows of counterparties, credit rating downgrades, or infringement of the original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed allowances and collectively assessed allowances. Individually assessed allowances The Group determines the allowances appropriate for each individually significant loan on an individual basis. Items considered when determining allowance amounts include the sustainability of the counterpartys business plan, its ability to improve performance once a financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the availability of other financial support and the realisable value of collateral, and the timing of the expected cash flows. The impairment losses are evaluated at each reporting date, unless unforeseen circumstances require more careful attention. Note 5 and 13 explain in detail the effects of such circumstances. Collectively assessed allowances Allowances are assessed collectively for losses on loans to customers that are not individually significant (including credit cards, residential mortgages and unsecured consumer lending) and for individually significant loans where there is not yet objective evidence of individual impairment. Allowances are evaluated on each reporting date with each portfolio receiving a separate review. The collective assessment takes account of impairment that is likely to be present in the portfolio even though there is no objective evidence of the impairment in an individual assessment. Impairment losses are estimated by taking into consideration the following information: historical losses on the portfolio, current economic conditions, the appropriate delay between the time a loss is likely to have been incurred and the time it will be identified as requiring an individually assessed impairment allowance, and expected receipts and recoveries once impaired. Local management is responsible for deciding the length of this period which can extend for as long as one year. The impairment allowance is then reviewed by credit management to ensure alignment with the Groups overall policy. Financial guarantees and letters of credit are assessed and provision made in a similar manner as for loans. The geographical concentration of Groups monetary assets and liabilities is set out below:

2009 Kazakhstan
Assets: Cash and cash equivalents Obligatory reserves Trading securities Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customers Samruk-Kazyna bonds Other assets (monetary) Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Debt securities issued Derivative financial liabilities Provisions Other liabilities Net position Net position of instruments not recognised in the statement of financial position 61,071 55,740 7,758 14,182 18,195 828,816 512,246 25,631 1,523,639

OECD
13,080 23,183 1,672 11,798 11 104,255 452 154,451

CIS and other non OECD countries

4,064 145 56 22,014 287 107,702 974 135,242

Total
78,215 145 78,979 31,444 25,980 18,493 1,040,773 512,246 27,057 1,813,332

406,595 192,090 641,333 728,565 6,894 27,646 2,003,123 (479,484) 357,877 49

588,429 5,934 924,590 3,940 10,233 134 1,533,260 (1,378,809) 66,354

55,865 8,696 15,447 34 42,000 54 122,096 13,146 133,183

406,595 836,384 655,963 1,668,602 3,974 59,127 27,834 3,658,479 (1,845,147) 557,414

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30. Riskmanagementpolicies(continued)

2008 Kazakhstan
Assets: Cash and cash equivalents Obligatory reserves Trading securities Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customers Other assets (monetary) Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Debt securities issued Derivative financial liabilities Provisions Other liabilities Net position Net position of instruments not recognised in the statement of financial position
Liquidityriskandfundingmanagement

OECD
41,949 12,433 20,937 253,163 1,093 329,575

CIS and other non OECD countries

19,455 1,101 61,897 268 4,293 448,801 3,113 538,928

Total
87,893 64,054 106,519 85,174 21,650 19,122 1,617,063 23,000 2,024,475

26,489 62,953 94,086 23,277 445 14,829 915,099 18,794 1,155,972

1,472 152,328 859,216 216,850 2,375 2,347 22,784 1,257,372 (101,400)

588,622 15,512 858,302 16,391 28,491 1,163 1,508,481 (1,178,906)

246 62,416 11,324 12,574 23 74,055 10,489 171,127 367,801

1,718 803,366 886,052 1,087,726 18,789 104,893 34,436 2,936,980 (912,505)

388,567

87,103

212,685

688,355

Liquidity risk is the risk that the Group will be unable to meet its obligations when due. Liquidity risk management is one of the main functions in the Groups risk management process. When managing the liquidity risk the Group follows two main directions: 1. 2. conformity with the liquidity norms established by the regulatory bodies; and liquidity management by means of the financial pool method and fund conversion method.

Under the financial pool method the Groups monetary assets are considered as one pool, which are split to the primary and the secondary sources for liquidity purposes. The primary source consists of cash and balances on correspondent accounts, and the secondary source consists of highly liquid assets, which have high turnover and readily available for sale. The primary and the secondary sources are considered as not profit bearing and profit bearing, respectively. Fund conversion method is the distribution of all financing sources depending on the accounts turnover and reserve requirement for financing of the related assets. The management of the Asset and Liability Management Committee (ALMC) analyzes the operational data on a weekly basis and makes decisions concerning liquidity management. Frequency of the ALMC meetings may vary depending on the situation. ALMC considers the following issues: GAP analysis of the assets and liabilities broken down by maturity and currencies, duration of assets and liabilities and analysis of future cash flows. All business functions and risk management departments are involved in the process of the Groups liquidity management to provide the information support. The Management regularly monitors high-liquid assets that may be disposed at any time. The Bank builds portfolio consisting of high-liquid assets, predominantly debt financial instruments issued by the states with high credit ratings. On 30 November 2009 the Management Board of the National Bank of Kazakhstan introduced amendments providing for decrease in minimal allowance requirements rates for the Bank to 0%, both for domestic and external liabilities. This rate will be effective until the end of restructuring process. As at 31 December 2009, the amount drawn by the Group under bond programs and loan facilities amounted to KZT 2,504,986 million. In accordance with the contractual terms of certain bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. 50

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Liquidityriskandfundingmanagement(continued)

In April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, this resulted in that syndicated loans, Eurobonds and other certain liabilities became callable by the lenders. Due to the Banks inability to early repay all its debt as called by creditors, the bank decided to suspend all payments of principal on external liabilities, starting from 20 April 2009. Also, starting from 22 July 2009 the Bank has suspended payment of interest on external liabilities. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder and the management considers that the restructuring of the above facilities will be completed in 2010. Analysis of financial liabilities by remaining contractual maturities The table below summarises the maturity profile of the Groups financial liabilities at 31 December 2009 based on undiscounted repayment obligations. Financial liabilities as at 31 December 2009 Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial instruments Amounts due to customers Debt securities issued Provisions Other liabilities Total undiscounted financial liabilities

Within one year

407,453 756,422 3,974 505,800 1,611,473 31,740 32,442 3,349,304

More than one year

1,086 104,209 251,119 355,500 27,387 330 739,631

Total
408,539 860,631 3,974 756,919 1,966,973 59,127 32,772 4,088,935

The table below summarises the maturity profile of the Groups financial liabilities at 31 December 2008 based on undiscounted repayment obligations. Financial liabilities as at 31 December 2008 Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial instruments Amounts due to customers Debt securities issued Provisions Other liabilities Total undiscounted financial liabilities

Within one year

217 698,139 16,689 680,055 769,514 54,294 34,957 2,253,865

More than one year

1,902 127,258 2,100 300,393 637,713 50,599 1,306 1,121,271

Total
2,119 825,397 18,789 980,448 1,407,227 104,893 36,263 3,375,136

As discussed in Note 2, there has been a significant deterioration in the Group's financial position principally resulting from the loss events related with the loan portfolio described in Note 5. This has lead to a breach, by the Bank and the Group, of certain prudential requirements including those related to capital adequacy set by the FMSA. As a result of these loss events the Groups total liabilities as at 31 December 2009 exceeded its total assets by KZT 1,689,820 million (2008: KZT 742,779 million ) and the Group has reported a net loss amounting to KZT 1,114,534 million for the year then ended (2008: KZT 1,188,050 million). The table below shows the contractual expiry by maturity of the Groups financial commitments and contingencies.

2009 2008

On demand
37,723 14,694

Less than month

7,683 21,095

1 to 3 months
31,144 39,854

3 to 12 months
129,051 192,546

1 to 3 years
142,325 249,788

Over 3 years
203,732 160,233

Total
551,658 678,210

In accordance with terms of debt securities issued the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy, and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major rating agencies. Losses on loans, derivative financial instruments and securities, existed in 2008 and identified in 2009 by the current management resulted in the following breaches. As at 31 December 2009, the Bank was in breach of capital adequacy, lending exposure and cross-default covenants on certain debt securities issued. Due to breach of covenants described above, amounts due to credit institutions and debt securities issued of KZT 1,153,008 million have become current. As discussed in Note 2, the Bank is in the process of restructuring these debts.

51

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Liquidityriskandfundingmanagement(continued)

The table below summarises an analysis of assets and liabilities according to when they are expected to be recovered or settled:

2009
Assets: Cash and cash equivalents Obligatory reserves Trading securities Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customers Samruk-Kazyna bonds Other assets Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial liabilities Amounts due to customers Debt securities issued Provisions Other liabilities Net position Accumulated gap

Within one year

78,215 145 115,784 22,865 3,698 4,708 300,336 7,477 25,686 558,914 405,662 753,540 3,974 481,526 1,371,761 31,740 27,702 3,075,905 (2,516,991) (2,516,991)

More than one year

8,579 22,282 14,311 740,437 504,769 1,371 1,291,749 933 82,844 174,437 296,841 27,387 132 582,574 709,175 (1,807,816)

Total
78,215 145 115,784 31,444 25,980 19,019 1,040,773 512,246 27,057 1,850,663 406,595 836,384 3,974 655,963 1,668,602 59,127 27,834 3,658,479 (1,807,816)

2008
Assets: Cash and cash equivalents Obligatory reserves Trading securities Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customers Other assets Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial liabilities Amounts due to customers Debt securities issued Provisions Other liabilities Net position Accumulated gap
Marketrisk

Within one year

87,893 24,173 128,150 71,925 655 3,810 851,289 15,994 1,183,889 125 708,182 16,689 536,302 722,510 54,294 33,930 2,072,032 (888,143) (888,143)

More than one year

39,881 13,249 20,995 16,672 765,774 7,006 863,577 1,593 95,184 2,100 349,750 365,216 50,599 506 864,948 (1,371) (889,514)

Total
87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 23,000 2,047,466 1,718 803,366 18,789 886,052 1,087,726 104,893 34,436 2,936,980 (889,514)

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchanges, and equity prices. The market risk for the trading and non-trading portfolio is managed and monitored based on sensitivity analysis. Except for the concentrations within foreign currency, the Group has no significant concentration of market risk. 52

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Marketrisk(continued)

Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The following table demonstrates the sensitivity of Groups income statement to a reasonable possible change in interest rates, with all other variables held constant, of the Groups income statement. The sensitivity of the income statement is the effect of the assumed changes in interest rates on the net interest income for one year, based on the floating rate financial assets and financial liabilities held at 31 December 2009. The sensitivity of equity is calculated by revaluing fixed rate available-for-sale financial assets at 31 December 2009 for the effects of the assumed changes in interest rates based on the assumption that there are parallel shifts in the yield curve.

Currency
LIBOR: USD KZT EUR CHF JPY

Change in basis points Sensitivity of net interest 2009 income 2009

-25/100 -25/100 -25/100 -25/100 -25/100 555/(2,219) 284/(1,138) (22)/91 72/(288) 411/(1,643)

Sensitivity of equity 2009

12/(50) 87/(349)

Currency
LIBOR: USD KZT EUR CHF JPY

Change in basis points Sensitivity of net interest 2008 income 2008

-59/59 -59/59 -59/59 -59/59 -59/59 2,372/(2,372) 1,699/(1,699) 1,080/(1,080) 177/(177) 804/(804)

Sensitivity of equity 2008

711/(711) 217/(217)

As at 31 December the effective average interest rates by currencies for interest generating/ bearing monetary financial instruments were as follow:

2009 KZT
Trading securities Amounts due from credit institutions Available-for-sale investment securities Loans to customers Bonds of NWF Samruk-Kazyna Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Debt securities issued 11.3% 8.6% 14.9% 15.6% 7.3% 7.8% 9.3% 8.2% 11.6%

Foreign currency
12.5% 5.0% 11.9% 17.5% 5.6% 6.0% 9.1% 7.8%

2008 KZT
9.0% 9.7% 12.3% 20.3% 4.1% 7.9% 10.1% 11.6%

Foreign currency
7.3% 7.9% 4.5% 13.2% 3.5% 6.2% 7.4% 8.0%

53

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Marketrisk(continued)

Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Risk Committee has set limits on positions by currency based on the FMSA regulations. Positions are monitored on a daily basis. The tables below indicate the currencies to which the Group had significant exposure at 31 December 2009 on its monetary assets and liabilities and its forecast cash flows. The analysis calculates the effect of a reasonably possible movement of the currency rate against the Tenge, with all other variables held constant on the income statement. A negative amount in the table reflects a potential net reduction in income statement, while a positive amount reflects a net potential increase.

Currency
USD EUR RUR CHF JPY KGS PLZ GBP Equity price risk

Change in currency rate in % 2009

-16.6/16.6 -21.4/21.4 -22.6/22.6 -21.8/21.8 -22.7/22.7 -27.2/27.2 -23.7/23.7

Effect on profit before tax 2009

113,338/(113,338) 57,631/(57,631) 8,089/(8,089) 6,145/(6,145) 56,962/(56,962) 2,962/(2,962) 12,199/(12,199)

Change in currency rate in % 2008

-15.4/15.4 -15.2/15.2 -8.3/8.3 -16.4/16.4 -22.4/22.4 -15.0/15.0 -23.1/23.1 -23.2/23.2

Effect on profit before tax 2008

61,315/(61,315) 22,811/(22,811) 1,043/(1,043) 3,624/(3,624) 47,122/(47,122) (517)/517 (2)/2 10,892/(10,892)

Equity price risk is the risk that the fair values of equities decrease as the result of changes in the levels of equity indices and the value of individual shares. The equity price risk exposure arises from the Banks investment and trading portfolios. The effect on profit and equity (as a result of a change in the fair value of trading securities or loss and equity instruments held as available-for-sale at 31 December) due to a reasonably possible change in equity indices using Capital Asset Pricing Model, with all other variables held constant, is as follows:

Market index
KASE RTS PFTS (Ukraine) MSCI World Index FTSE MICEX NYSE

Increase in indices 2009, %

46.21% 23.19% 23.29% 47.21% 60.63%

Effect on profit before tax and equity 2009

899 5.792 1.071 28 284

Effect on capital 2009

74 4

Increase in indices 2008, %

66.49 72.77 73.85 39.61 59.35

Effect on profit before tax and equity 2008

763 1 3.422 3

Effect on capital 2008

10 26 69

Market index
KASE RTS PFTS (Ukraine) MSCI World Index FTSE MICEX NYSE

Decrease in indices 2009, %

-46.21% -23.19% -23.29% -47.21% -60.63%

Effect on profit before tax and equity 2009

(589) (4,791) (1,273) (28) (269)

Effect on capital 2009

(38) (4)

Decrease in indices 2008, %

-66.49 -72.77 -73.85 -39.61 -59.35

Effect on profit before tax and equity 2008

1,024 (5,827) 601 (3,151) 4

Effect on capital 2008

16 27 86

54

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 30.Riskmanagementpolicies(continued)

Operationalrisk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to perform, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss. The Group cannot expect to eliminate all operational risks, but through a control framework and by monitoring and responding to potential risks, the Group is able to manage the risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, including the use of internal audit.

31. Fairvaluesoffinancialinstruments
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2: techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

Set out below is a comparison by class of the fair values of the Groups financial instruments that are carried in the financial statements by level of the fair value hierarchy. The table does not include the fair values of non-financial assets and nonfinancial liabilities.

Financial assets

Level 1
106,158 18,578

2009 Level 2
9,626 25,980 441 3,974

Level 3

Level 1
128,150 20,482

2008 Level 2
21,650 18,789

Level 3

Trading securities Derivative financial assets Available-for-sale investment securities Derivative financial liabilities Financial instruments recorded at fair value

Financial liabilities

The following is a description of the determination of fair value for financial instruments which are recorded at fair value using valuation techniques. These incorporate the Groups estimate of assumptions that a market participant would make when valuing the instruments. Derivatives Derivatives valued using a valuation technique with market observable inputs are mainly interest rate swaps, currency swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Trading securities and available-for-sale investment securities Trading securities and available-for-sale investment securities valued using a valuation technique or pricing models primarily consist of unquoted equity and debt securities. These securities are valued using models which sometimes only incorporate data observable in the market and at other times use both observable and non-observable data. The non-observable inputs to the models include assumptions regarding the future financial performance of the investee, its risk profile, and economic assumptions regarding the industry and geographical jurisdiction in which the investee operates. The following describes the methodologies and assumptions used to determine fair values for those financial instruments which are not recorded at fair value in these consolidated financial statements. Assets for which fair value approximates carrying value For financial assets and financial liabilities that are liquid or having a short term maturity (less than three months) it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits, saving accounts without term maturity and variable rate financial instruments.

55

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Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 31. Fairvaluesoffinancialinstruments(continued)

Fixed rate financial instruments The fair values of fixed rate financial assets and liabilities carried at amortised cost are estimated by comparing market interest rates when they were first recognised with current market rates offered for similar financial instruments. The estimated fair value of fixed interest bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk and maturity. For quoted debt issued the fair values are calculated based on quoted market prices. For those notes issued where quoted market prices are not available, a discounted cash flow model is used based on a current interest rate yield curve appropriate for the remaining term to maturity. Transfers between level 1 and 2 The following table shows transfers between level 1 and level 2 of the fair value hierarchy for financial assets and liabilities which are recorded at fair value during the year ended 31 December 2009:

Trading securities Available-for-sale investment securities Fair value of financial assets and liabilities not carried at fair value

Financial assets

Transfer from level 1 to level 2

9,626 441

Set out below is a comparison by class of the carrying amounts and fair values of the Groups financial instruments that are not carried at fair value in the consolidated financial statements. The table does not include the fair values of non-financial assets and non-financial liabilities.

Financial assets

Carrying value 2009

78,215 145 31,444 1,040,773 512,246 27,057 406,595 836,384 655,963 1,668,602 59,127 27,834

Fair value 2009

78,215 145 36,829 1,040,773 546,087 27,057 406,595 272,209 682,744 549,187 59,127 27,834

Unrecognised gain/(loss) 2009

5,385 33,841 564,175 (26,781) 1,119,415 1,696,035

Cash and cash equivalents Obligatory reserves Amounts due from credit institutions Loans to customers Bonds of NWF Samruk-Kazyna Other assets

Financial liabilities

Amounts due to the Government of RK and central banks Amount due to credit institutions Amounts due to customers Debt securities issued Provisions Other liabilities Total unrecognised change in unrealised fair value

Financial assets Carrying value 2008

87,893 64,054 85,174 1,617,063 23,000 1,718 803,366 866,052 1,087,726 104.893 34.436

Fair value 2008

87,893 64,054 92,366 1,617,063 23,000 1,718 794,637 884,940 727,839 104.893 34.436

Unrecognised gain/(loss) 2008

7,192 8,729 (18,888) 359,887 356,920

Cash and cash equivalents Obligatory reserves Amounts due from credit institutions Loans to customers Other assets

Financial liabilities

Amounts due to the Government of RK and NBK Amount due to credit institutions Amounts due to customers Debt securities issued Provisions Other liabilities Total unrecognised change in unrealised fair value

56

F-98

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 32. Segmentanalysis

For management purposes, the Group is organised into four operating 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 and cash and foreign currency related services. Corporate banking representing other than small and medium size legal entities direct debit facilities, current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and trade finance products. Small and medium business representing individual entrepreneurs and small enterprises current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and trade finance products. Investment activity - representing financial assets and liabilities used for trading or investment purposes, financing, and merger and acquisitions transaction support. No operating segments have been aggregated to form the above reportable operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Income taxes are managed on a group basis and are not allocated to operating segments. Revenue of the investment activities segment includes revenue from transactions with a single external customer in the amount of KZT 28,551 million or 11% of the Groups total revenue in 2009. No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Groups total revenue in 2008.

57

F-99

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 32. Segmentanalysis(continued)

Segment information for the main reportable operating segments of the Group for the years ended 31 December 2009 and 2008 is set out below:

2009
External interest income Internal interest income External interest expense Internal interest expense Net interest income before impairment Impairment charge Net interest (loss)/income after impairment Net commission and non-interest income Depreciation and amortizations Non-interest expenses Other provisions Share in net income of associate organizations Impairment loss of available-for-sale investment securities Loss on disposal of subsidiary Impairment of investments in associates Impairment loss on goodwill Inventory write-off Loss before income tax expense Income tax expense Net loss after income tax Total assets Total liabilities Other segment information Investments in associate Capital expenditure

Corporate banking
76,627 86,357 (11,472) (104,763) 46,749 (639,898) (593,149) (240,624) (561) (18,676) 63,400 (11,627) (4,473) (805,710) (805,710) 717,017 470,574 74

Small and medium business

31,699 4,275 (5,867) (11,561) 18,546 (55,846) (37,300) 18,829 (422) (8,779) 83 (27,589) (27,589) 176,367 121,456 120

Retail banking
58,227 17,406 (28,925) (25,751) 20,957 (58,510) (37,553) 17,458 (1,583) (20,251) (807) (23,809) (66,545) (66,545) 406,188 272,448 1,367

Investing activity
71,032 53,261 (210,932) (19,224) (105,863) (105,863) (82,971) (2,056) (7,097) 59 4,690 (2,764) (3,075) (676) (199,753) (199,753) 1,962,827 3,979,476 85,088 60

Unallocated amounts
140 (467) (327) (327) (13,004) (264) (432) (284) (14,311) (626) (14,937) 30,502 254

Elimination
(161,299) 161,299 504 (504) (1,324,242) (1,185,729)

Total
237,725 (257,663) (19,938) (754,254) (774,192) (299,808) (4,886) (55,739) 62,451 4,690 (2,764) (3,075) (676) (35,436) (4,473) (1,113,908) (626) (1,114,534) 1,968,659 3,658,479 85,088 1,621

58

F-100

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 32. Segmentanalysis(continued)

2008
External interest income Internal interest income External interest expense Internal interest expense Net interest income before impairment Impairment charge Net interest (loss)/income after impairment Net commission and non-interest income Depreciation and amortizations Non-interest expenses Other provisions Share in net loss of associate organizations Impairment loss of available-for-sale investment securities Loss on disposal of subsidiary Impairment of investments in associates Impairment loss on goodwill Inventory write-off Loss before income tax expense Income tax benefit Net loss after income tax Total assets Total liabilities Other segment information Investments in associate Capital expenditure

Corporate banking
236,914 52,093 (20,811) (200,542) 67,654 (1,003,422) (935,768) 26,042 (487) (26,637) (96,429) (2,396) (1,035,675) (1,035,675) 1,063,977 701,257 746

Small and medium business

39,874 9,649 (4,792) (23,846) 20,885 (42,364) (21,479) 10,830 (432) (12,095) (143) (23,319) (23,319) 213,297 152,140 1,158

Retail banking
78,033 36,964 (36,524) (44,474) 33,999 (48,071) (14,072) 4,680 (1,212) (20,816) (149) (31,569) (31,569) 437,161 372,745 2,571

Investing activity
41,682 244,688 (146,143) (74,532) 65,695 (443) 65,252 (38,415) (106) (7,303) (16,331) (15,448) (42,610) (11,252) (19,138) (8,107) (93,458) (93,458) 1,391,441 2,758,664 72,371 275

Unallocated amounts
(36) (111) (147) (147) 2,834 (2,198) (4,507) (78) (4,096) 67 (4,029) 312,200 26,250

Elimination
(343,394) 343,394 (7,898) 7,898 (1,223,875) (1,074,076)

Total
396,467 (208,381) 188,086 (1,094,300) (906,214) (1,927) (4,435) (63,460) (113,130) (15,448) (42,610) (11,252) (19,138) (8,107) (2,396) (1,188,117) 67 (1,188,050) 2,194,201 2,936,980 72,371 4,750

59

F-101

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 32. Segmentanalysis(continued)

Geographical segments Segment information for the main geographical segments of the Group for the years ended 31 December 2009 and 2008 is set out below:

Kazakhstan
Non-current assets Revenue

OECD
50,876 85,079

Non OECD
357 39,981 2,236 135,732

Total
22,721 259,107 64,011 426,801

2009

22,364 168,250 61,775 205,990

2008

Non-current assets Revenue

Non-current assets represent proprety and equipment, intangible assets and repossessed collateral.

33. Relatedpartytransactions
In accordance with IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. Related parties, except those, who are subject to the restriction of the legislation, may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

60

F-102

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 33. Relatedpartytransactions(continued)

As at 31 December 2009 and 2008 the Group had the following transactions with related parties

31 December 2009 Entities under common control

15,575 (11,099) 4,476 4,476 1,623 8%-16% 2010-2011

31 December 2008 Key management Other related personnel parties Shareholders

1,295 153 (863) 585 585 51 12% 2016 7 7 (11) 3 3 1

Shareholders
Loans outstanding at 1 January, gross Loans issued during the period Loan repayments during the period Loans outstanding at 31 December, gross Less: allowance for impairment at 31 December Loans outstanding at 31 December, net Interest income on loans Interest rates Maturities Amounts due from credit institutions (deposits) Deposits at 1 January Deposits placed during the period Deposits withdrawn during the period Deposits at 31 December Interest income on amounts due from credit institutions Interest rates Maturities

Associates

Associates

Key management Other related personnel parties

8,210 1,439 (8,354) 1,295 1,295 553 12%-19% 2010-2016 1,352 2 (1,347) 7 7 2 15%-19% 2010-2014

6,359 11,430 (14,556) 3,233 700 10%-18% 2010-2014

5,096 24,842 (23,579) 6,359 1,319 12%-14% 2009

5,582 (5,582) 1,721 11%-14% 2008

61

F-103

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 33. Relatedpartytransactions(continued)

Shareholders
Amounts due from credit institutions (loans) Loans at 1 January Loans placed during the period Loans withdrawn during the period Loans at 31 December, gross Less: allowance for impairment at 31 December Loans at 31 December, net Interest income on amounts due from credit institutions Interest rates Maturities Amounts due to credit institutions Loans at 1 January Loans received during the period Loans repaid during the period Loans at 31 December Interest expenses on amounts due to credit institutions Interest rates Maturities Bonds of Samruk-Kazyna Interest income on bonds of NWF Samruk-Kazyna 512,246 28,551

31 December 2009 Entities under common control Associates

138,445 (96,855) 41,590 (40) 9% 2013-2016 7,329 7,840 (9,171) 5,998 (615) 5,383 370 4%-11% 2011-2013 6,883 73,974 (79,863) 994 (232) 6%-8% 2010-2012

31 December 2008 Key management personnel

Other related parties Shareholders

Associates
9,497 26,394 (28,562) 7,329 (3,683) 3,646 7%-15% 2009-2013 430 494,489 (488,036) 6,883 (189)

Key management personnel

Other related parties

8,398 (8,398) 8%-11% 2008-2013 558 (558) (17) On demand

11% On demand 2009

62

F-104

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 33. Relatedpartytransactions(continued)

31 December 2009 Entities under common control Associates
115,377 (67,168) 48,209 4,598 7%-11% 2013-2026 47,841 (47,841) 695 43,025 (42,932) 788 788 202 1%-18%

31 December 2008 Key management personnel

Shareholders
Trading securities Securities at 1 January Securities purchased during the period Securities sold during the period Securities at 31 December Interest income on financial assets Interest rates Maturities Cash and cash equivalents Deposits at 1 January Deposits received during the period Deposits repaid during the period Deposits at 31 December, gross Less: allowance for impairment at 31 December Deposits at 31 December, net Interest income on deposits up to 90 days Interest rates Maturity

Other related parties Shareholders

Associates
1,619 416 (2,035) 147 9% 2008 1 859,637 (858,943) 695 (28) 667 64

Key management personnel

Other related parties

1,281 (1,281) 9 On demand

On demand

1%-12% On demand 2009

63

F-105

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 33. Relatedpartytransactions(continued)

Shareholders
Amounts due to customers Deposits at 1 January Deposits received during the period Deposits repaid during the period Deposits at 31 December Interest iexpense on amounts due to customers Interest rates Maturities Commitments and guarantees issued Less: allowance for impairment Commitments issued, net Interest rates Maturities Commitments and guarantees received Interest rates Maturities Allowance for impairment Fee and commission income Other income Fee and commission expense Other expense 6 (6)

31 December 2009 Entities under common control Associates

2,617,811 (2,425,466) 192,345 (1,505) 4%-12% 2010-2011 94 94 80 1,165 (1,107) 58 2% 2010-2011 234 69 (10)

31 December 2008 Key management personnel

705 562 (1,242) 25 (2) 3 3

Other related parties Shareholders

287 383 (663) 7 (6) 18 668 (680) 6 On demand

Associates
9,145 (7,741) 1,404 2%-3% 2009-2010 3,105 2% 2009 (11,542) 163 28 (76) (51)

Key management personnel

4,151 48,083 (51,529) 705 (113) 9%-13% 2009-2011 3 3 2009-2010 1 1

Other related parties

4,796 1,379 (5,888) 287 (34) 9%-10% 2009-2011 68

64

F-106

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 33.Relatedpartytransactions(continued)

As at 31 December the Group had the following transactions with related parties: The aggregate remuneration and other benefits paid to members of the Management Board and Board of Directors for 2009 was KZT 460 million (2008 - KZT 624 million). As at 31 December 2009 the Bank had no loans issued to the Group management for investment to mutual investment funds, managed by a subsidiary of the Group (2008 - KZT 807 million), all loans are presented by consumer loans. Included in the table above are the following transactions with related parties outstanding as at 31 December 2009 and 2008: Operations with associates such as: loans - including provisioning matters, due from credit institutions (loans issued and deposits placed) with the Group and guarantees and letters of credit to investees, and mutual investments. Shareholders: loans - including provisioning matters, deposits placed with the Group. Members of Board of Directors: loans - including provisioning matters, deposits attracted with the Group, total remuneration paid during the period.

34. Capitaladequacy
The Group maintains an actively managed capital base to cover risks inherent in the business. The adequacy of the Groups capital is monitored using, among other measures, the ratios established by the Basel Capital Accord 1988 and the ratios established by the FMSA in supervising the Bank. The primary objectives of the Groups capital management are to ensure that the Group complies with externally imposed capital requirements and that the Group maintains strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholders value. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue equity securities. No changes were made in the objectives, policies and processes from the previous years. The Bank was in breach of these capital adequacy and lending exposure covenants on syndicated loans, eurobonds and certain other facilities as at 31 December 2009. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder and the management considers that the restructuring of the above facilities will be completed in 2010.

35. Subsequentevents
Purchase of shares of Accumulated Pension Fund Ular-Umit JSC, Zhetusy Pension Asset Management Company JSC and Atlanta-Police Insurance Company JSC In January 2010 the Bank obtained a 74.99% share in Accumulated pension fund Ular-Umit JSC (Ular-Umit) and 74.99% share in Zhetysu Pension asset management company JSC (Zhetysu) in connection with the discharge of liabilities to the Bank of LLP Astana Stroiservice, LLP Kazakhstan Standart Invest and LLP Logistic Technopark CM. On 25 March 2010 the Bank obtained 3,416 shares of Atlanta-Police Insurance Company JSC (Atlanta-Police). Its share in the Banks equity amounted to 75.28%.

65

F-107

BTA Bank JSC

Notes to the 2009 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 35. Subsequentevents(continued)

The fair value of the identifiable assets and liabilities of Ular-Umit, Zhetysu and Atlanta as at the date of acquisition were:

Ular-Umit
Cash and cash equivalents Amounts due from credit institutions Investment securities Receivables on reverse repo agreements Trading securities Property and equipment Current income tax asset Deferred tax asset Other assets Liabilities Accounts payable Assessed reserves Other liabilities Total identifiable net assets at fair value Non-controling interest measured at fair value Goodwill arising on acquisition Purchase consideration transferred

Zhetysu
53 4,296 15 271 505 136 5,276 (12) (243) (1) (256) 5,020 (1,256) 1,866 5,650

Atlanta-Police
33 806 207 58 107 485 1,696 (726) (726) 970 (240) (450) 280

Assets

79 208 6,392 1,415 584 477 9,155 (1,471) (343) (1,814) 7,341 (1,836) 2,062 7,567

In February 2010, the Bank appealed to the US bankruptcy court under jurisdiction of New York state in order to recognise the Banks restructuring process as legitimate inside the US. This appeal was made in accordance with US legislation regulating bankruptcy issues. It was made after the positive Order of High court of Justice of England and Wales, made on 18 December 2009, on recognising the process of restructuring the Banks financial debt as legitimate in the territory of England and Wales, and aimed at obtaining international recognition of legitimacy of the Banks restructuring process by countries that ratified the 1997 UNCITRAL Model Law on Cross-Border Insolvency. On 18 April 2010 the Bank has signed with its creditors a final Term sheet. In accordance with Term sheet, the Groups external debt amounting to USD 12.2 billion will be settled by cash of USD 1 billion, new senior debt of USD 2,877 million, new subordinated debt of USD 800 million and revolving committed trade finance facility of USD 700 million as well as recovery notes, which provide the holders with 50% of the qualified bad assets, which the Bank recovers in the future. As a result of the restructuring it is expected that the Groups regulatory capital will be increased to comply with FMSA requirements.

66

F-108

JSCBTABankandsubsidiaries

ConsolidatedFinancialStatements

Yearended31December2008together withIndependentAuditorsReport

F-109

JSC BTA Bank

2008 Consolidated Financial Statements

CONTENTS
INDEPENDENT AUDITORS REPORT Consolidated balance sheet...............................................................................................................................................................1 Consolidated statement of income ..................................................................................................................................................2 Consolidated statement of changes in equity ................................................................................................................................3 Consolidated statement of cash flows.............................................................................................................................................5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. Principal activities .................................................................................................................................................................. 6 Going concern........................................................................................................................................................................ 6 Basis of preparation............................................................................................................................................................... 7 Summary of significant accounting policies ..................................................................................................................... 11 Significant accounting judgements and estimates............................................................................................................ 24 Business combination.......................................................................................................................................................... 26 Cash and cash equivalents .................................................................................................................................................. 27 Obligatory reserves.............................................................................................................................................................. 27 Financial assets at fair value through profit or loss......................................................................................................... 27 Amounts due from credit institutions............................................................................................................................... 28 Derivative financial instruments ........................................................................................................................................ 28 Available-for-sale investment securities............................................................................................................................ 29 Loans to customers ............................................................................................................................................................. 30 Investments in associates.................................................................................................................................................... 33 Goodwill ............................................................................................................................................................................... 33 Other impairment and provisions ..................................................................................................................................... 35 Taxation ................................................................................................................................................................................ 35 Amounts due to the government and central banks....................................................................................................... 37 Amounts due to credit institutions.................................................................................................................................... 37 Amounts due to customers ................................................................................................................................................ 38 Debt securities issued.......................................................................................................................................................... 39 Equity .................................................................................................................................................................................... 40 Commitments and contingencies ...................................................................................................................................... 40 Fees and commissions......................................................................................................................................................... 43 Net trading (loss) / income ................................................................................................................................................ 43 Salaries and other administrative and operating expenses.............................................................................................. 44 Earnings per share ............................................................................................................................................................... 44 Risk management policies................................................................................................................................................... 45 Fair values of financial instruments................................................................................................................................... 57 Segment analysis .................................................................................................................................................................. 58 Related party transactions................................................................................................................................................... 61 Capital adequacy................................................................................................................................................................... 65 Subsequent events ............................................................................................................................................................... 66

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2008 Consolidated Financial Statements

CONSOLIDATED BALANCE SHEET AS AT 3l DECEMBER tenge) (ALi/liont Karykhxani of

Notes Assets Cash and cash equivalents Obligatory reselves Financial assetsat fair value thtough profit or loss Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities Loans to customefs Investments in associates Properqr and equipment Goodwill Current income tax assets Deferred income tax assets Other assets Total assets Liabilities Amounts due to the Govemment and central banks Amounts due to credit insdrutions Amounts due to customers D erivative ftnancial liabilitie s Debt securities issued Provisions Other liabilities Total liabilities Equity Issued capital: common shares Treasury shates Available-for-sale investment securities revaluatron feserve Foreign currency translation reser\re (Accumulated deficit) f retained eamings Equity attributable to shareholders of the parent Minority interest Total equity Total liabilities and equity

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2008 87,893 64,054 128,150 85,774 21,650 20,482 7,677,063 72,377 73,704 37,427 5,505 5,046 35,688
2,794,207

2007
99,723 168,242 112,175 1.07,589 31,397 26,422 2,379,81.0 67,767 13,433 37,557 110 683 1.9,709 3,064,677

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F-113

JSC BTA Bank

2008 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED 31 DECEMBER

(Millions of Kazakhstani Tenge)
Notes
Interest income Loans Securities Deposits with other banks Interest expense Debt securities issued Deposits from customers Deposits and loans from credit institutions Net interest income before impairment Impairment charge Net interest income Fee and commission income Fee and commission expense Fees and commissions Net trading (loss)/ income Gains less losses from foreign currencies: - dealing - translation differences Income from insurance operations Expenses from insurance operations Share of (loss)/ income of associates Loss on disposal of subsidiaries Impairment charge for available-for-sale investment securities Impairment charge for goodwill Impairment charge for investments in associates Other income / (loss) Non interest (loss) / income Salaries and other employee benefits Other administrative and operating expenses Depreciation and amortisation Taxes other than income tax Other provisions Obligatory insurance of individuals deposits Non interest expense (Loss) / income before income tax expense Income tax benefit/(expense) Net (loss) / income Attributable to: Equity holders of the parent Minority interest Net (loss) / income Basic and diluted (loss)/ earnings per share (in Kazakhstani Tenge) 27 17 10,13 24 24 24 25

2008
366,037 12,597 17,833 396,467 (95,888) (55,748) (56,745) (208,381) 188,086 (1,094,300) (906,214) 30,334 (1,179) 29,155 (29,769) 1,665 (10,870) 13,585 (11,485) (15,448) (11,252) (42,610) (8,107) (19,138) 212 (133,217) (26,597) (27,414) (4,435) (4,163) (113,130) (2,102) (177,841) (1,188,117) 67 (1,188,050) (1,187,584) (466) (1,188,050) (141,878)

2007
291,724 14,587 17,137 323,448 (85,683) (39,935) (53,661) (179,279) 144,169 (67,810) 76,359 28,489 (1,057) 27,432 2,503 2,512 19,884 12,539 (9,222) 4,234 (249) (62) 32,139 (25,744) (23,400) (2,314) (3,469) (4,705) (1,761) (61,393) 74,537 (9,832) 64,705 61,354 3,351 64,705 8,143

3 3 12 15

26 26 16

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements
2

F-114

JSC BTA Bank

2008 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008
(Millions of Kazakhstani Tenge)
Issued capitalcommon shares
1 January 2007 Fair value change of available-for-sale securities, net of tax Amortization of revaluation loss on available-for-sale securities reclassified to held-to-maturity securities Release of available-for-sale securities revaluation reserve on disposal of previously revalued assets Foreign currency translation Total income / (loss) recognized directly in equity Net income Total income Issue of common shares Purchase of treasury shares Sale of treasury shares Contribution to subsidiaries Minority interest arising on acquisition Acquisition of minority interest 31 December 2007 116,451 186,976 303,427

Availablefor-sale securities Treasury revaluation stock reserve

(2,840) (3,645) 5,930 (555) 335 56 106 (692) (530) (530) (195)

Foreign currency translation reserve

(45) 149 149 149 104

Retained earnings
68,584 61,354 61,354 129,938

Total
182,485 56 106 (692) 149 (381) 61,354 60,973 186,976 (3,645) 5,930 432,719

Minority interest
12,133 48 48 3,351 3,399 8,515 988 (5,723) 19,312

Total equity
194,618 104 106 (692) 149 (333) 64,705 64,372 186,976 (3,645) 5,930 8,515 988 (5,723) 452,031

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements
3

F-115

JSC BTA Bank

2008 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) FOR THE YEAR ENDED 31 DECEMBER 2008
(Millions of Kazakhstani Tenge)
Issued capitalcommon shares
1 January 2008 Fair value change of available-for-sale securities, net of tax Release of available-for-sale securities revaluation reserve on disposal of previously revalued assets Share of changes recognized directly in equity of an associate Foreign currency translation Total loss recognized directly in equity Net loss Total loss Issue of common shares Purchase of treasury shares Sale of treasury shares Minority interest arising on acquisition Acquisition of minority interest 31 December 2008 303,427 29 303,456

Available-forsale Foreign securities currency Treasury revaluation translation Accumustock reserve reserve lated deficit
(555) (5,508) 4,495 (1,568) (195) (261) (29) (627) (917) (917) (1,112) 104 (1,052) (1,052) (1,052) (948) 129,938 (1,187,584) (1,187,584) (1,057,646)

Total
432,719 (261) (29) (627) (1,052) (1,969) (1,187,584) (1,189,553) 29 (5,508) 4,495 (757,818)

Minority interest Total equity

19,312 (58) 1 (138) (195) (466) (661) 15 (3,627) 15,039 452,031 (319) (28) (627) (1,190) (2,164) (1,188,050) (1,190,214) 29 (5,508) 4,495 15 (3,627) (742,779)

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements
4

F-116

JSC BTA Bank

2008 Consolidated Financial Statements

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER

(Millions of Kazakhstani Tenge)
Notes
Cash flows from operating activities: Interest received Interest paid Income received from trading in foreign currencies Fee and commission received Fee and commission paid Cash paid for insurance operations Cash received from insurance operations Cash paid to employees Recovery of loans previously written-off Cash paid for obligatory deposits insurance Operating expenses paid Cash flows provided by operating activities before changes in operating assets and liabilities Net cash increase / decrease from operating assets and liabilities Net decrease / (increase) in obligatory reserves Net (increase) / decrease in financial assets at fair value through profit or loss Net decrease / (increase) in due from credit institutions Net increase in loans to customers Net increase in other assets, including prepaid taxes Net increase in due to the Government and central banks Net increase in derivative financial instruments Net (decrease) / increase in due to credit institutions Net increase in due to customers Income tax paid Net increase in other liabilities Net cash from / (used in) operating activities Cash flows from investing activities Acquisition of available-for-sale investment securities Proceeds from sale of available-for-sale investment securities Acquisition of subsidiaries, net of cash paid Investment in associates Acquisition of minority interest Dividends received from associates Acquisition of property and equipment Proceeds from disposal of property and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from debt securities issued Redemption of debt securities issued Proceeds from issue of common shares Contribution to subsidiaries by minority shareholders Purchase of treasury shares Proceeds from sale of treasury shares Net cash from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at the end of the year Non-cash transactions: Transfer to investments Deconsolidation of subsidiary

2008
299,195 (213,316) 1,665 29,257 (1,174) (5,108) 9,859 (24,910) 4,786 (2,102) (30,045) 68,107 125,369 (38,390) 9,705 (330,564) (16,991) 93,321 (2,961) (62,494) 197,629 (10,370) 4,750 37,111 (58,061) 26,905 11,455 (33,690) (8,970) 658 (5,251) 1,102 (65,852) 118,828 (96,657) 29 (5,508) 4,495 21,187 (4,276) (11,830) 99,723 87,893 6,785 (13,288)

2007
250,757 (164,573) 2,512 28,074 (538) (2,139) 9,333 (19,681) 5,822 (1,761) (28,849) 78,957 (38,751) 109,168 (19,471) (1,083,061) (7,033) 44 226,124 128,468 (11,756) 4,815 (612,496) (57,057) 77,513 (692) (57,537) (19,652) (14,774) 6,615 (65,584) 451,931 (66,997) 186,976 8,515 (3,645) 5,930 582,710 1,453 (93,917) 193,640 99,723 249

10,13,16

The accompanying notes on pages 6 to 66 are an integral part of these consolidated financial statements
5

F-117

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 1. Principalactivities

JSC BTA Bank and its subsidiaries (together the Group) provide retail and corporate banking services, insurance services, leasing and other financial services in Kazakhstan, Kyrgyzstan, Russian Federation and Belorussia. The parent company of the Group is BTA Bank (the Bank), a joint stock company. The Bank is incorporated and domiciled in the Republic of Kazakhstan. Note 3 lists the Banks subsidiaries and associates. The address of the Banks registered office is: 97 Zholdasbekov Street, Samal-2, Almaty, 050051, Republic of Kazakhstan. The Bank accepts deposits from the public and extends credit, transfers payments within Kazakhstan and abroad, exchanges currencies and provides other banking services to its commercial and retail customers. In addition, the Group is authorized to accept pension fund deposits. The Bank has a primary listing in the Kazakhstani Stock Exchange (KASE). Certain of the Groups debt securities are listed on the Luxemburg Stock Exchange and London Stock Exchange with a secondary listing on the KASE. Its head office is located in Almaty, Kazakhstan. At 31 December 2008, the Bank had 22 regional branches and 279 cash settlement units (2007 - 22 regional branches and 289 cash settlement units) located throughout Kazakhstan and representative offices in Shanghai, China; Moscow, Russia; Kiev, Ukraine; Dubai, United Arab Emirates; London, Great Britain. As at 31 December the following shareholders held the outstanding shares: Shareholders: Common shares: KT Asia Investment Group B.V. Drey Associates Limited Strident Energy Limited InvestCapital Company LLP SMKK LLP Yassi Invest LLP Agroinvest LLP CP-CreditPriveSA Makta Aral Company LLP Other less than 5%

2008 %
9.66 9.65 9.56 8.14 7.77 7.19 7.15 6.74 6.67 27.47 100.00

2007 %
9.66 9.65 9.56 8.50 7.53 7.19 7.15 6.74 6.96 27.06 100.00

As described in more detail in Note 2, in accordance with Law of the Republic of Kazakhstan on Bank and banking activities in February 2009 Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations (the FMSA) made an offer to the Government of the Republic of Kazakhstan to purchase a majority interest in BTA Bank JSC. The purchase was carried out through an additional emission. As part of this emission, the Government represented by JSC Sovereign Wealth Fund Samruk-Kazyna(the controlling shareholder) purchased 25,246,343 shares at the price of KZT 8,401 per share that resulted in KZT 212,095 million invested to the Banks equity and the share of the controlling shareholder in the Banks equity amounted to 75.10%. No dividends to common shareholders were paid during 2008 and 2007.

2.

GoingConcern

There has been a significant deterioration in the Group's financial position during 2008, which was identified by the current management of the Bank in 2009, principally resulting from the loss events related with the loan portfolio described in Note 5. This has lead to a breach, by the Bank and the Group, of certain prudential requirements including those related to capital adequacy set by the FMSA. As a result of these loss events the Groups total liabilities as at 31 December 2008 exceeded its total assets by KZT 742,779 million and the Group has reported a net loss amounting to KZT 1,188,050 million for the year then ended. This led the Bank to non-compliance of certain ratios, including capital adequacy ratio as calculated in accordance with Basel Capital Accord 1988 requirements. As at 31 December 2008, the amount drawn by the Group under bond programs and loan facilities amounted to KZT 1,891,092 million. In accordance with the contractual terms of certain bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. The Bank was in breach of these capital adequacy and lending exposure covenants on syndicated loans, bond programs and certain other facilities as at 31 December 2008. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and crossdefaults under the terms of the respective agreements.

F-118

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 2 GoingConcern(continued)

Due to the Banks inability to early repay all its debts as called by creditors, the Bank may not be able to meet all its obligations. Subsequent to 31 December 2008, certain lenders have requested repayment of debts amounting to USD 550 million or equivalent of KZT 83 billion, citing default and/or acceleration clauses. If those lenders continue to exercise and other lenders seek to exercise rights under acceleration and default clauses, the Bank may not be able to meet its obligations. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder, Samruk Kazyna, and the management considers that the restructuring of the above facilities will be completed in 2009. Prior to the debt restructuring, the controlling shareholder, has committed to provide funding to enable the Bank to make all interest payments on debt outstanding and to enable the Bank to continue all banking operations other than payment of principal on external debts amounting to approximately USD 13 billion or equivalent of KZT 1,570 billion. After the debt restructuring, the controlling shareholder has committed to provide to the Bank sufficient funds to enable the Bank to both repay interest and principal in accordance with restructured maturities and to continue the Banks operations for at least a one year period from 8 May 2009. Starting from February 2009, the controlling shareholder and the management of the Bank have been executing several initiatives aimed at improving liquidity and enabling the Group to continue its operations including, but not limited, to the following: (a) In March 2009, the controlling shareholder purchased the Banks bonds totaling KZT 645 billion; (b) In 2009, significant funds were placed on current accounts with the Group by entities owned by the controlling shareholder; (c) the Bank is an active participant of governmental programs. Under Governmental anti-crisis programs the Group received KZT 40 billion to refinance mortgage loans, KZT 22 billion to finance medium and small size entities and KZT 20 billion to complete construction projects. Furthermore the Bank is a key financial institution for realization of stabilization and support of a real sector of economy. (d) The controlling shareholder is looking for a strategic investor in the Banks equity; (e) The Group is negotiating with FMSA a grace period to give the Bank time to restructure its debt and get its banking ratios in line with the requirements of FMSA. Because of the negative events described above there is a material uncertainty which may cast significant doubt about the Bank's ability to continue as a going concern. Therefore, the Bank may be unable to realize its assets and discharge its liabilities in the normal course of business. These consolidated financial statements of the Group have been prepared on a going concern basis that contemplates the realization of restructuring of its long-term debt and continued adequate support from the controlling shareholder of the Bank. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary if the restructuring of debt is unsuccessful and adequate additional resources are not available, the Bank is unable to continue as a going concern.

3.

Basisofpreparation

Statementofcompliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) which comprise standards and interpretations approved by the International Accounting Standards Board, and International Accounting Standards (IAS) and Standing Interpretations Committee interpretations (SIC) approved by the International Accounting Standards Committee that remain in effect.
General

These financial statements are presented in millions of Kazakh Tenge (KZT), except per share amounts and unless otherwise indicated. The KZT is utilized as the shareholders, the managers and the regulators measure the Groups performance in KZT. In addition, the KZT, being the national currency of the Republic of Kazakhstan, is the currency that reflects the economic substance of the underlying events and circumstances relevant to the Group. Significant foreign currency positions are maintained as they are necessary to meet customers requirements, manage foreign currency risks and achieve a proper assets and liabilities structure for the Groups balance sheet. Transactions in other currencies are treated as transactions in foreign currencies.

F-119

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 3. Basisofpreparation(continued)

General(continued)

The consolidated financial statements are prepared under the historical cost convention modified for the measurement at fair value of available-for-sale investment securities, financial assets at fair value through profit or loss and derivative contracts as required by IAS 39 Financial Instruments: Recognition and Measurement.
Reclassifications

The following reclassifications have been made to 2007 balances to conform to the 2008 presentation:

December 31, 2007 Balance sheet:

Provisions Other liabilities
Consolidatedsubsidiaries

As previously reported
33,888

Reclassification
10,577 (10,577)

As reported herein
10,577

Comment

Reclassification of provisions on commitments and contingencies to 23,311 provisions from other liabilities.

The consolidated financial statements include the following subsidiaries:

Subsidiary
JSC Subsidiary of JSC BTA Bank BTA Securities JSC Subsidiary of JSC BTA Bank Accumulative Pension Fund BTA Kazakhstan JSC BTA Ipoteka Subsidiary Mortgage company of JSC BTA Bank JSC Subsidiary Life Insurance company of BTA Bank JSC BTA Zhizn JSC Subsidiary insurance company of BTA Bank JSC BTA Zabota TuranAlem Finance B.V. LLC Subsidiary of BTA Bank JSC TuranAlem Finance JSC Subsidiary of JSC BTA Bank Insurance Company London-Almaty BTA Finance Luxembourg S.A. BTA Insurance JSC Subsidiary company of JSC BTA Bank JSC Subsidiary of JSC BTA Bank TemirBank TemirCapital B.V. BTA Bank CJSC BTA Bank CJSC LLC BTA Finance (subsidiary of BTA Bank JSC) LLC BTA Capital (subsidiary of BTA Bank JSC)

Holding, % December 31 2007 2008

Country

Date of incorporation

Industry
Securities trading and asset management Pension fund Consumer mortgage lending Life and annuity insurance Health insurance Capital markets Capital markets Property and Liability insurance Capital markets Property and Liability insurance

Date of acquisition

100.00% 95.20% 100.00% 100.00% 98.17% 100.00% 100.00% 99.40% 86.11% 100.00% 69.85% 100.00% 71.00% 99.29%

100.00% 76.83% 100.00% 100.00% 98.17% 100.00% 100.00% 99.40% 86.11% 100.00% 64.32% 100.00% 71.00% 100.00% 100.00% 8

Kazakhstan Kazakhstan Kazakhstan Kazakhstan Kazakhstan Netherlands Russia Kazakhstan Luxembourg Kazakhstan Kazakhstan Netherlands Kyrgyzstan Belorussia Russia Russia

17.10.97 11.12.97 20.11.00 22.07.99 10.09.96 22.05.01 22.06.04 20.11.97 05.01.06 08.09.98

13.12.97 16.09.98 20.11.00 30.03.01 04.04.01 22.05.01 28.09.04 05.08.04 06.03.06 21.12.06 29.12.06 29.12.06 19.11.07 30.10.08 27.11.06 27.11.06

26.03.92 Bank activities Operations on capital 29.05.01 markets 02.12.96 Bank activities 25.04.02 Bank activities Operations on capital 27.11.06 markets Operations on capital 27.11.06 markets

F-120

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 3. Basisofpreparation(continued)

Consolidatedsubsidiaries(continued)

Holding,% December 31 Subsidiary

First Kazakh Securitization Company Second Kazakh Securitization Company BTA DPR Finance Company

2008

2007

Country
Netherlands Netherlands Cayman Islands

Date of incorporation

Industry

Date of acquisition
02.09.07

Securitization of 08.12.05 financial assets Securitization of 25.09.07 financial assets Financial services 02.09.07

In October 2008, the Bank finalized the acquisition of additional 50.3% equity interest in BTA Bank CJSC (Belorussia) (former Astanaeximbank CJSC) for KZT 3,501 million. As a result of the acquisition the Banks interest in BTA Bank CJSC (Belorussia) increased to 99.29%, which provided the Bank with effective control and enabled the Bank to treat BTA Bank CJSC (Belorussia) as a subsidiary starting from November 2008. BTA Bank CJSC (Belorussia) was incorporated as a closed joint stock company and operates in Belorussia. Refer to Note 6 for the fair value of the identifiable assets and liabilities acquired and goodwill arising at the date of acquisition. Before the Group took over the effective control over the operations of CJSC BTA Bank (Belorussia), it was accounted as an associate under equity method. In December 2008, JSC Accumulative Pension Fund BTA Kazakhstan, the Banks subsidiary, authorized to issue 5,000,000 common shares. As at 31 December 2008, 3,841,585 common shares were issued and paid by the Bank. As a result the Groups share in JSC Accumulative Pension Fund BTA Kazakhstan has increased to 95.20%. Gain from increase of Groups share amounted to KZT 843 million. In 2007, the Group increased its ownership in its subsidiary JSC TemirBank from 50.80% to 64.32% for KZT 30,205 million. During 2008 the Bank increased its ownership in subsidiary of JSC BTA Bank JSC TemirBank from 64.32% to 69.85%. In November 2007, the Group increased its ownership in CJSC BTA Bank Kyrgyzstan from 46.00% to 71.00% for KZT 925 million, which enabled the Group to take over the effective control over the operations of CJSC BTA Bank and to consider it as a subsidiary as at 31 December 2007. CJSC BTA Bank was incorporated as a closed joint stock company and operates in Kyrgyzstan. Before the Group took over the effective control over the operations of CJSC Ineximbank, it was accounted as an associate under equity method. The Groups share in income of CJSC Ineximbank for 2007 amounted to KZT 151 million. In 2006, the Group established in Russian Federation two 100% owned subsidiaries, BTA Finance and BTA Capital, as limited liability companies (LLC). In October 2007, the Board of Directors made a decision to close LLC BTA Finance (subsidiary of BTA Bank JSC) and LLC BTA Capital (subsidiary of BTA Bank JSC). There were no operations in those subsidiaries starting from the date of incorporation. In 2008, these subsidiaries were liquidated. Although the Group did not own any shares in First Kazakh Securitisation Company, Second Kazakh Securitisation Company and in BTA DPR Finance Company, as at and for the years ended 31 December 2008 and 2007 they were treated, in accordance with SIC-12 Consolidation Special Purpose Entities, as subsidiaries, because at those dates the Group controlled and benefited directly from operations of these entities.

F-121

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge)

3.

Basisofpreparation(continued)

Associates accounted for under equity method The following associates are accounted for under the equity method and included into investments in associates:

2008 Associates
BTA Bank LLC BTA Bank OJSC (Ukraine) BTA Bank JSC (Georgia) BTA Bank CJSC (Armenia) JSCB BTA Kazan OJSC BTA ORIX Leasing JSC Temir Leasing JSC Sekerbank

Holding, %
22.26% 49.99% 49.00% 48.93% 47.32% 45.00% 45.63% 33.98%

Country
Russia Ukraine Georgia Armenia Russia Kazakhstan Kazakhstan Turkey

Share in net income / Activities (loss)

Bank Bank Bank Bank Bank Leasing Leasing Bank (18,827) 48 (195) 376 34 41 3,185

Total assets
196,389 35,418 11,542 5,202 37,770 6,047 4,070 653,616

Total liabilities
236,125 11,607 8,530 3,030 28,943 3,922 1,874 578,808

Equity
(39,736) 23,811 3,012 2,172 8,827 2,125 2,196 74,808

In December 2008, the Bank finalized the acquisition of additional equity interest in BTA Bank OJSC (Ukraine) in the amount of 40.038% for KZT 27,301 million. As a result the Banks interest in BTA Bank OJSC (Ukraine) increased to 49.99%, which provided the Bank with significant influence on operations of BTA Bank OJSC (Ukraine) and enabled the Bank to treat BTA Bank OJSC (Ukraine) as an associated bank. In July 2008, the Group acquired additional 38.64% of the statutory fund in BTA Bank LLC (Russia), which resulted in increase of the Groups interest to 52.84% and provided the Group with a controlling interest. In November 2008, BTA Bank LLC (Russia) issued additional shares in the amount of RUR 7,200 million (equivalent of KZT 31,968 million). The Bank did not use its preemptive right to purchase these shares. As a result the Banks share in BTA Bank LLC (Russia) decreased to 22.26% resulting in a loss from deemed disposal in the amount of KZT 12,095 million. In December 2007, the Bank acquired 25%+ 1 share ownership in Oranta NJSIC OJSC for KZT 11,943 million. In September 2005, shareholders of Oranta NJSIC OJSC made a decision to increase share capital by UAH 79.7 million. In February 2006, the shares were placed between shareholders existing at that date. However, in accordance with legislation of Ukraine the share capital can be increased only after the share issue is registered with regulatory bodies. The registration and consequent increase in share capital took place in March 2008. The Bank did not participate in this share issue since it was not a shareholder when the decision on increase in share capital was made in 2005. Therefore, the increase in share capital of Oranta NJSIC OJSC has been diluted and decreased from 25.00% as at 31 December 2007 to 14.01% as at 31 December 2008. In November 2008, the Group acquired an additional equity interest in TemirLeasing JSC, as a result the Groups equity interest in TemirLeasing JSC increased to 45.63%. In May 2008, BTA Silk Road Bank JSC was renamed as BTA Bank JSC (Georgia). In December 2008, BTA InvestBank CJSC was renamed as BTA Bank CJSC (Armenia).

2007 Associates
BTA Bank CJSC (Belorussia) BTA Bank JSC (Georgia) BTA Bank CJSC (Armenia) JSCB BTA Kazan JSC BTA ORIX Leasing JSC Temir Leasing JSC Sekerbank Oranta NJSIC OJSC

Holding, %

Country

Activities
Bank Bank Bank Bank Leasing Leasing Bank Insurance

Share in net income

50 243 114 308 141 64 3,163

Total assets
10,707 13,330 7,114 43,028 7,390 7,643 626,637 15,526

Total liabilities
9,263 10,679 4,911 36,831 5,323 3,032 537,603 6,630

Equity
1,444 2,651 2,203 6,197 2,067 4,611 89,034 8,896

49.00% Belorussia 49.00% Georgia 48.87% 47.32% 45.00% 43.87% 33.98% 25.00% Armenia Russia Kazakhst an Kazakhst an Turkey Ukraine

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(Millions of Kazakhstani Tenge)

4.

Summaryofsignificantaccountingpolicies

Changesinaccountingpolicies

The Group has adopted the following amended IFRS and new IFRIC Interpretations during the year. The principal effects of these changes are as follows: IFRIC 11 IFRS 2 Group and Treasury Share Transactions IFRIC 11 became effective for annual periods beginning on or after 1 March 2007. It requires arrangements whereby an employee is granted rights to an entitys equity instruments to be accounted for as an equity-settled scheme, even if the entity buys the instruments from another party, or the shareholders provide the equity instruments needed. This Interpretation had no impact on the Group. IFRIC 12 Service Concession Arrangements IFRIC 12 was issued in November 2006 and became effective for annual periods beginning on or after 1 January 2008. This Interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in service concession arrangements. No member of the Group is an operator and hence this Interpretation had no impact on the Group. IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction IFRIC 14 was issued in July 2007 and became effective for annual periods beginning on or after 1 January 2008. This Interpretation provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognized as an asset under IAS 19 Employee Benefits. This Interpretation had no impact on the financial position or performance of the Group. Reclassification of Financial Assets Amendments to IAS 39 Financial instruments: Recognition and measurement and IFRS 7 Financial instruments: Disclosures Amendments to IAS 39 and IFRS 7 were issued on 13 October 2008 and allow reclassification of non-derivative financial assets out of the held for trading category in particular circumstances. The amendments also allow transfer of certain financial assets from the available for sale category to loans and receivables category. The effective date of those amendments is 1 July 2008. Any reclassification made in periods beginning on or after 1 November 2008 shall take effect only from the date when the reclassification is made. Reclassifications are disclosed in Note 12.
NewIFRSsandIFRICinterpretationsnotyeteffective

Standards and interpretations issued but not yet effective Improvements to IFRS In May 2008, the IASB issued amendments to IFRS, which resulted from the IASBs annual improvements project. They comprise amendments that result in accounting changes for presentation, recognition or measurement purposes as well as terminology or editorial amendments related to a variety of individual IFRS standards. Most of the amendments are effective for annual periods beginning on or after 1 January 2009, with earlier application permitted. The Group is currently evaluating the potential impact that the adoption of the amendments will have on its consolidated financial statements. IAS 1 Presentation of Financial Statements (Revised) A revised IAS 1 was issued in September 2007, and becomes effective for annual periods beginning on or after 1 January 2009. This revised Standard separates owner and non-owner changes in equity. The statement of changes in equity will include only details of transactions with owners, with non-owner changes in equity presented as a single line. In addition, the Standard introduces the statement of comprehensive income: it presents all items of recognised income and expense, either in one single statement, or in two linked statements. The Group is still evaluating whether it will have one or two statements.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

NewIFRSsandIFRICinterpretationsnotyeteffective(continued)

Standards and interpretations issued but not yet effective (continued) IAS 23 Borrowing Costs (Revised) A revised IAS 23 Borrowing costs was issued in March 2007, and becomes effective for financial years beginning on or after 1 January 2009. The standard has been revised to require capitalisation of borrowing costs when such costs relate to a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. In accordance with the transitional requirements in the Standard, the Group will adopt this as a prospective change. Accordingly, borrowing costs will be capitalised on qualifying assets with a commencement date after 1 January 2009. No changes will be made for borrowing costs incurred to this date that have been expensed. Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements Puttable Financial Instruments and Obligations Arising on Liquidation These amendments were issued in February 2008, and become effective for annual periods beginning on or after 1 January 2009. The amendments require puttable instruments that represent a residual interest in an entity to be classified as equity, provided they satisfy certain conditions. The Group does not expect that these amendments will have an impact on the Groups financial statements. Amendment to IAS 39 Financial Instruments: recognition and measurement - Eligible Hedged Items. The amendment to IAS 39 was issued in August 2008, and becomes effective for annual periods beginning on or after 1 July 2009. The amendment addresses the designation of a one-sided risk in a hedged item, and designation of inflation as a hedged risk or portion in particular situations. It clarifies that an entity is permitted to designate a portion of the fair value changes or cash flow variability of a financial instrument as hedged item. The Group does not expect the amendment to IAS 39 will affect the Groups financial statements as the Group has not entered into any such hedges. Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate These amendments were issued in May 2008, and become effective for annual periods beginning on or after 1 January 2009. The revision to IAS 27 will have to be applied prospectively. The amendments to IFRS 1 allow an entity to determine the cost of investments in a subsidiary, jointly controlled entity or associate as at the date of transition to IFRS in accordance with IAS 27 or using a deemed cost. The amendment to IAS 27 requires all dividends from a subsidiary, jointly controlled entity or associate to be recognized in the income statement in the separate financial statements. The new requirements affect only the separate financial statements and do not have an impact on the consolidated financial statements. Amendments to IFRS 2 Share-based Payment- Vesting Conditions and Cancellations Amendment to IFRS 2 were issued in January 2008 and become effective for annual periods beginning on or after 1 January 2009. This amendment clarifies the definition of vesting conditions and prescribes the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied. The Group did not enter into such type of transactions, accordingly, these amendments have no impact on the financial statements of the Group. IFRS 3 Business Combinations (revised) and IAS 27 Consolidated and Separate Financial Statements (revised). The revised standards were issued in January 2008 and become effective for financial years beginning on or after 1 July 2009. Revised IFRS 3 introduces a number of changes in the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. Revised IAS 27 requires that a change in the ownership interest of a subsidiary is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give raise to a gain or loss. Furthermore, the revised standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes introduced by the revised Standards must be applied prospectively and will affect only future acquisitions and transactions with minority interests.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

NewIFRSsandIFRICinterpretationsnotyeteffective(continued)

Standards and interpretations issued but not yet effective (continued) IFRS 8 Operating Segments IFRS 8 becomes effective for annual periods beginning on or after 1 January 2009. This Standard requires disclosure of information about the Groups operating segments and replaces the requirement to determine primary (business) and secondary (geographical) reporting segments of the Group. The Group is currently evaluating the potential impact that this standard will have on its consolidated financial statements. IFRIC 13 Customer Loyalty Programmes IFRIC Interpretation 13 was issued in June 2007 and becomes effective for annual periods beginning on or after 1 July 2008. This Interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the award credits and deferred over the period that the award credits are fulfilled. The Group expects that this interpretation will have no impact on the Group's financial statements as no such schemes currently exist. IFRIC 15 Agreements for the Construction of Real Estate IFRIC Interpretation 15 was issued in July 2008 and is applicable retrospectively for annual periods beginning on or after 1 January 2009. IFRIC 15 clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognized if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. The interpretation also provides guidance on how to determine whether an agreement is within the scope of IAS 11 Construction Contracts or IAS 18 Revenue and supersedes the current guidance for real estate in the Appendix to IAS 18. The Group expects that this interpretation will have no impact on the Groups financial statements. IFRIC 16 Hedges of a Net Investment in a Foreign Operation IFRIC Interpretation 16 was issued in July 2008 and is applicable for annual periods beginning on or after 1 October 2008. This Interpretation provides guidance on identifying the foreign currency risks that qualify for hedge accounting in the hedge of net investment, where within the group the hedging instrument can be held and how an entity should determine the amount of foreign currency gain or loss, relating to both the net investment and the hedging instrument, to be recycled on disposal of the net investment. The Group expects that this interpretation will have no impact on the Groups financial statements. IFRIC 17 "Distribution of Non-Cash Assets to Owners" IFRIC Interpretation 17 was issued on 27 November 2008 and is effective for annual periods beginning on or after 1 July 2009. This interpretation applies to pro rata distributions of non-cash assets to owners except for common control transactions and requires that a dividend payable should be recognised when the dividend is appropriately authorised; an entity should measure the dividend payable at the fair value of the net assets to be distributed; an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. The Interpretation also requires an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation. The Group expects that this interpretation will have no impact on the Groups financial statements. IFRIC 18 Transfers of Assets from Customers IFRIC 18 was issued in January 2009 and becomes effective for financial years beginning on or after 1 July 2009 with early application permitted, provided valuations were obtained at the date those transfers occurred. This interpretation should be applied prospectively. IFRIC 18 provides guidance on accounting for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services or to do both. The interpretation clarifies the circumstances in which the definition of an asset is met, the recognition of the asset and its measurement on initial recognition, the identification of the separately identifiable services, the recognition of revenue and the accounting for transfers of cash from customers. The Group expects that this interpretation will have no impact on the Groups consolidated financial statements.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

NewIFRSsandIFRICinterpretationsnotyeteffective(continued)

Standards and interpretations issued but not yet effective (continued) Amendments to IFRS 7 Improving Disclosures about Financial Instruments Amendments to IFRS 7 Improving Disclosures about Financial Instruments were issued in March 2009 and become effective for periods beginning on or after 1 January 2009 with early application permitted. These Amendments introduce a three-level fair value disclosure hierarchy that distinguishes fair value measurements by the significance of the inputs used. In addition, the amendments enhance disclosure requirements on the nature and extent of liquidity risk arising from financial instruments to which an entity is exposed. The Group is currently evaluating the potential impact that this standard will have on its consolidated financial statements.
Basisofconsolidation

Subsidiaries, which are those entities in which the Group has an interest of more than one half of the voting rights, or otherwise has power to exercise control over their operations, are consolidated. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. All intragroup transactions, balances and unrealised gains on transactions between group companies are eliminated in full; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. Acquisition of subsidiaries The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of purchase consideration over the Groups share in the net fair value of the identifiable assets, liabilities and contingent liabilities is recorded as goodwill. If the cost of the acquisition is less than the Groups share in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary acquired the difference is recognised directly in the consolidated statement of income. Minority interest is the interest in subsidiaries not held by the Group. Minority interest at the balance sheet date represents the minority shareholders' share in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary at the acquisition date and the minorities' share in movements in equity since the acquisition date. Minority interest is presented within equity. Losses allocated to minority interest do not exceed the minority interest in the equity of the subsidiary unless there is a binding obligation of the minority to fund the losses. All such losses are allocated to the Group. Increases in ownership interests in subsidiaries The differences between the carrying values of net assets attributable to interests in subsidiaries acquired and the consideration given for such increases are charged or credited to goodwill.
Investmentsinassociates

Associates are entities in which the Group generally has between 20% and 50% of the voting rights, or is otherwise able to exercise significant influence, but which it does not control or jointly control. Investments in associates are accounted for under the equity method and are initially recognised at cost, including goodwill. Subsequent changes in the carrying value reflect the post-acquisition changes in the Groups share of net assets of the associate. The Groups share of its associates profits or losses is recognised in statement of income, and its share of movements in reserves is recognised in equity. However, when the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless the Group is obliged to make further payments to, or on behalf of, the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Financialassets

Initial recognition of financial instruments Financial assets in the scope of IAS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets upon initial recognition. Date of recognition All regular way purchases and sales of financial assets are recognised on the settlement date i.e. the date that an asset is delivered to or by the Group. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace. Day 1 profit Where the transaction price in a non-active market is different to the fair value from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable markets, the Group immediately recognises the difference between the transaction price and fair value (a Day 1 profit) in the consolidated income statement. In cases where use is made of data which is not observable, the difference between the transaction price and model value is only recognised in the income statement when the inputs become observable, or when the instrument is derecognised. Financial assets at fair value through profit or loss Financial assets classified as held for trading are included in the category financial assets at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on financial assets held for trading are recognised in the consolidated income statement. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the consolidated statement of income when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale financial investments Available-for-sale financial investments are those non-derivative financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories. They include equity instruments, short-term instruments and other debt instruments. After initial recognition available-for sale financial investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the consolidated statement of income. However, interest calculated using the effective interest method is recognised in the consolidated statement of income. Determination of fair value The fair value for financial instruments traded in active market at the balance sheet date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models and other relevant valuation models.

15

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Financialassets(continued)

Offsetting Financial assets and liabilities are offset and the net amount is reported in the consolidated balance sheet when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated balance sheet.
Relatedparties

Related parties include the Banks shareholders, key management personnel, close members of the key management personnel, investees and associates.
Cashandcashequivalents

Cash and cash equivalents consist of cash on hand, amounts due from National Bank of Kazakhstan (the NBK) excluding obligatory reserves, and amounts due from other financial institutions that mature within ninety days of the date of origination and are free from contractual encumbrances.
Obligatoryreserves

Obligatory reserves represent mandatory reserve deposits and cash which are not available to finance the Banks day to day operations and, hence, are not considered as part of cash and cash equivalents for the purpose of the consolidated cash flow statements.
Repurchaseandreverserepurchaseagreementsandsecuritieslending

Sale and repurchase agreements (repos) are treated as secured financing transactions. Securities sold under sale and repurchase agreements are retained in the consolidated balance sheet and, in case the transferee has the right by contract or custom to sell or repledge them, reclassified as securities pledged under sale and repurchase agreements. The corresponding liability is presented within amounts due to credit institutions or customers. Securities purchased under agreements to resell (reverse repo) are recorded as amounts due from credit institutions or loans to customers as appropriate. The difference between sale and repurchase price is treated as interest and accrued over the life of repo agreements using the effective yield method. Securities lent to counterparties are retained in the consolidated balance sheet. Securities borrowed are not recorded in the consolidated balance sheet, unless these are sold to third parties, in which case the purchase and sale are recorded within gains less losses from trading securities in the consolidated statement of income. The obligation to return them is recorded at fair value as a trading liability.
Derivativefinancialinstruments

In the normal course of business, the Group enters into various derivative financial instruments, including futures, forwards, swaps and options in the foreign exchange and capital markets. Such financial instruments are primarily held for trading and are measured at their fair value. Their 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 (unrealised gain) when fair value is positive and as liabilities (unrealised loss) when it is negative. Gains and losses resulting from these instruments are included in the consolidated statement of income as net trading income or gains less losses from foreign currencies dealing, depending on the nature of the instrument. Derivative instruments embedded in other financial instruments are treated as a separate derivative and recorded at fair value if their risks and economic characteristics are not closely related to the host contracts and the host contracts are not carried at fair value with unrealised gains and losses reported in income. 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. At 31 December 2008 and 2007 embedded derivatives held by the Group were not material.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4.

Leases

Summaryofsignificantaccountingpolicies(continued)

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of specific assets and the arrangement conveys a right to use the asset.
I. FinanceGroupaslessor

The Group presents leased assets as loans equal to the net investment in the lease. Finance income is based on a pattern reflecting a constant periodic rate of return on the net investment outstanding. Initial direct costs are included in the initial measurement of the lease receivables.
II. OperatingGroupaslessee

Leases of assets under which the risks and rewards of ownership are effectively retained with the lessor are classified as operating leases. Lease payments under operating lease are recognized as expenses on a straight-line basis over the lease term and included in administrative and operating expenses.
III. OperatingGroupaslessor

The Group presents assets subject to operating leases in the balance sheet according to the nature of the asset. Lease income from operating leases is recognized in the statement of income on a straight-line basis over the lease term as other operating income. The aggregate cost of incentives provided to lessees is recognized as a reduction of rental income over the lease term on a straight-line basis. Initial direct costs incurred specifically to earn revenues from an operating lease are added to the carrying amount of the leased asset.
Taxation

The current income tax charge is calculated in accordance with the regulations of the Republic of Kazakhstan and other tax authorities, and of the jurisdictions in which the Group has offices, branches or subsidiaries. Deferred tax assets and liabilities are calculated in respect of temporary differences using the liability method. Deferred income taxes are provided for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes, except where the deferred income tax arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. A deferred tax asset is recorded only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Kazakhstan also has various operating taxes that are assessed on the Groups activities. These taxes are recorded as taxes other than income tax.
Impairmentoffinancialassets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Allowancesforimpairmentoffinancialassets

Amounts due from credit institutions and loans to customers For amounts due from credit institutions and loans to customers carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. If there is an objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of income. Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the consolidated statement of income. The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The calculation of the present value of the estimated future cash flows of a collateralised financial asset reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable. For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of the Groups internal credit grading system that considers credit risk characteristics such as asset type, industry, geographical location, collateral type, past-due status and other relevant factors. Future cash flows on a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the years on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. Estimates of changes in future cash flows reflect, and are directionally consistent with, changes in related observable data from year to year (such as changes in unemployment rates, property prices, commodity prices, payment status, or other factors that are indicative of incurred losses in the Group or their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience. Available-for-sale financial investments For available-for-sale financial investments, the Group assesses at each balance sheet date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the consolidated statements of income is removed from equity and recognised in the statement of income. Impairment losses on equity investments are not reversed through the statement of income; increases in their fair value after impairment are recognised directly in equity. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. Future interest income is based on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded in the consolidated statement of income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of income, the impairment loss is reversed through the consolidated statement of income.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Allowances for impairment of financial assets Renegotiated loans Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending the payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is no longer considered past due. Management continuously reviews renegotiated loans to ensure that all criteria are met and that future payments are likely to occur. The loans continue to be subject to an individual or collective impairment assessment, calculated using the loans original effective interest rate.
Derecognitionoffinancialassetsandliabilities

Financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised 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; 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.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Groups continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Groups continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Groups continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or 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 derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement of income. Securitisation As part of its operational activities, the Group securitises financial assets, generally through the sale of these assets to special purposes entities which issue securities to investors. The transferred assets may qualify for derecognition in full or in part. Reference should be made to the accounting policy on Derecognition of financial assets and liabilities. Interests in the securitised financial assets may be retained by the Group and are primary classified as loans and receivables. Gains or losses on securitisations are based on the carrying amount of the financial assets derecognised and the retained interest, based on their relative fair values at the date of the transfer.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Financialguarantees

In the ordinary course of business, the Group gives financial guarantees, consisting of letters of credit, guarantees and acceptances. Financial guarantees are initially recognised in the financial statements at fair value, in Other liabilities, being the premium received. Subsequent to initial recognition, the Groups liability under each guarantee is measured at the higher of the amortised premium and the best estimate of expenditure required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability relating to financial guarantees is taken to the income statement. The premium received is recognised in the income statement on a straight-line basis over the life of the guarantee.
Propertyandequipment

Property and equipment are carried at cost excluding costs of day-to-day maintenance less accumulated depreciation and any accumulated impairment in value. Such cost includes the cost of replacing part of equipment when that cost is incurred if the recognition criteria are met. The carrying amounts of property and equipment are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and 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 other administrative and operating expenses. Depreciation of an asset begins when it is available for use. Depreciation is calculated on a straight-line basis over the following estimated useful lives:

Years
Buildings Furniture and fixtures Computers Office equipment Land Construction in process 40 4-1 4 8

Depreciation on assets under construction is charged only when the assets are available for use and transferred into relevant property and equipment categories. Expenses related to repairs and renewals are recorded in income statement and included in administrative and operating expenses unless they qualify for capitalization. An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on the derecognition of the asset is included in the consolidated statement of income.
Goodwill

Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiary at the date of acquisition. Goodwill on an acquisition of a subsidiary is included in goodwill. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocated: represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and is not larger than a segment based on either the Group's primary or the Group's secondary reporting format determined in accordance with IAS 14 Segment Reporting.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Goodwill(continued)

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained. When subsidiaries are sold, the difference between the selling price and the net assets plus cumulative translation differences and unamortized goodwill is recognised in the consolidated statement of income.
AmountsduetoGovernmentandcentralbanks,creditinstitutionsandcustomers

Issued financial instruments or their components are classified as liabilities, where the substance of the contractual arrangement results in the Group having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity instruments. Such instruments include amounts due to Government and central banks, credit institutions and to customers and initially recognised at the fair value of the consideration received less directly attributable 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 statements of income over the period of the borrowings using the effective interest method. If the Group purchases its own debt, it is removed from the consolidated balance sheets and the difference between the carrying amount of the liability and the consideration paid is recognised in net interest income.
Debtsecuritiesissued

Debt securities issued represent bonds issued by the Group. They are accounted for according to the same principles used for amounts due to credit institutions and to customers.
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.
Retirementandotherbenefitobligations

The Group does not have any pension arrangements separate from the State pension system of Kazakhstan, which requires current withholdings by the employer calculated as a percentage from current gross salary payments; such expense is charged in the period the related salaries are earned and included in salaries and benefits in consolidated statements of income. The Group has contributed social tax to the budget of the Republic of Kazakhstan for its employees. In addition, the Group has no post-retirement benefits or significant other compensated benefits requiring accrual.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4.

Equity

Summaryofsignificantaccountingpolicies(continued)

Issued capital Ordinary shares with discretionary dividends are classified as equity. External costs directly attributable to the issue of new shares, other than on a business combination, are shown as a deduction from the proceeds in equity. Treasury shares Where the Bank or its subsidiaries purchase the Banks shares, the consideration paid, including any attributable transaction costs, net of income taxes, is deducted from total equity as treasury shares until they are cancelled or reissued. Where such shares are subsequently sold or reissued, any consideration received is included in equity. Treasury shares are stated at weighted average cost. Dividends Dividends are recognised as a liability and deducted from equity at the balance sheet date only if they are declared before or on the balance sheet date. Dividends are disclosed when they are proposed before the balance sheet date or proposed or declared after the balance sheet date but before the financial statements are authorised for issue.
Contingencies

Contingent liabilities are not recognized in the consolidated financial statements but disclosed unless the possibility of any outflow of economic benefits is remote. A contingent asset is not recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is probable.
Trustactivities

Assets held in trust or in a fiduciary capacity are not treated as assets of the Group and, accordingly, are not included in these consolidated financial statements.
Recognitionofincomeandexpenses

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest and similar income and expense For all financial instruments measured at amortised cost and interest bearing financial instruments classified as available-forsale investments, interest income or expense is recorded at the effective interest rate, which is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. The carrying amount of the financial asset or financial liability is adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as interest income or expense. Once the recorded value of a financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognised using the original effective interest rate applied to the new carrying amount. Fee and commission income The Group earns fee and commission income from a diverse range of services it provides to its customers. Fee income can be divided into the following two categories: Fee income earned from services that are provided over a certain period of time Fees earned for the provision of services over a period of time are accrued over that period. These fees include commission income and asset management, custody and other management and advisory fees. Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognised as an adjustment to the effective interest rate on the loans.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Fee income from providing transaction services Fees arising from negotiating or participating in the negotiation of a transaction for a third party such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses are recognised on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognised after fulfilling the corresponding criteria.
Underwritingincome(loss)

Underwriting income (loss) includes net written insurance premiums and commissions earned on ceded insurance reduced by the net change in the unearned premium reserve, claims paid, the provision of insurance losses and loss adjustment expenses, and policy acquisition costs. 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 prorata 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 liabilities in the consolidated balance sheet. Losses and loss adjustments are charged to the consolidated statement of income as incurred through the reassessment of the reserve for losses and loss adjustment expenses. Commissions earned on ceded reinsurance contracts are recognised in income as incurred. 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 consolidated balance sheet within other assets, and are amortized over the period in which the related written premiums are earned.
Reserveforinsurancelossesandlossadjustmentexpenses

The reserve for insurance losses and loss adjustment expenses are included in the consolidated balance sheet within other liabilities 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) was established 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. The resulting adjustments are reflected in income.
Reinsurance

In the ordinary course of business, the Group cedes insurance. 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 consolidated balance sheet 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.
Foreigncurrencytranslation

The consolidated financial statements are presented in Kazakh Tenge, which is the Banks functional and presentation currency. Transactions in foreign currencies are initially recorded in the functional currency, converted at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into KZT at the market exchange rate quoted by KASE and reported by the NBK at the balance sheet date. Gains and losses resulting from the translation of foreign currency transactions are recognised in the consolidated statement of income as gains less losses from foreign currencies - translation differences. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 4. Summaryofsignificantaccountingpolicies(continued)

Foreigncurrencytranslation(continued)

Differences between the contractual exchange rate of a transaction in foreign currency and the market exchange rate on the date of the transaction are included in gains less losses from foreign currencies. The market exchange rates at 31 December 2008 and 2007 were KZT 120.79 and KZT 120.30 to USD 1, respectively. As at the reporting date, the assets and liabilities of the entities whose functional currency is different from the presentation currency of the Group are translated into KZT at the rate of exchange ruling at the balance sheet date and, their statements of income are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a subsidiary or an associate whose functional currency is different from the presentation currency of the Group, the deferred cumulative amount recognised in equity relating to that particular entity is recognised in the consolidated statement of income. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operations and translated at closing rate.
Segmentreporting

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. Segment income, segment expenses and segment performance include transfers between business segments and between geographical segments.

5.

Significantaccountingjudgementsandestimates

Judgements

In the process of applying the Groups accounting policies, management has made the following judgements, apart from those involving estimates, which have the most significant effect on the amounts recognised in the consolidated financial statements. Special purpose entities Although the Group did not own any direct shares in the capital of First Kazakh Securitization Company, Second Kazakh Securitization Company and BTA DPR Company for the purposes of these consolidated financial statements, they were treated as subsidiaries, in accordance with SIC-12 Consolidation Special Purpose Entities, since the Group controlled and benefited directly from these entities operations;
Keysourcesofestimationuncertainty

The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts. The most significant estimates with regard to these financial statements relate to the allowances for impairment of assets, reserves for insurance claims, income taxes, fair values of securities and properties, and other provisions. These estimates are based on information available as at the date of the financial statements. Actual results, therefore, could differ from these estimates.
Estimationuncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Allowance for impairment of loans and receivables The Group regularly reviews its loans and receivables to assess impairment. The Group uses its experienced judgement to estimate the amount of any impairment loss in cases where a borrower is in 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 the observable data indicating that there has been an adverse change in the payment status of borrowers in a group, or 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 its experienced judgement to adjust observable data for a group of loans or receivables to reflect current circumstances.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 5. Significantaccountingjudgementsandestimates(continued)

Estimationuncertainty(continued)

Allowance for impairment of loans and receivable (continued) As described in Note 2, during 2008, the quality of the Banks loan portfolio has significantly deteriorated as a result of circumstances and actions taken before the current management of the Bank were appointed by the controlling shareholder. Certain loan documentation, including collateral and associated additional agreements, primarily relating to financing of projects outside Kazakhstan, is no longer available. In addition, many loans were transferred to new borrowers that do not have adequate sources of repayment. Moreover, no collateral was provided by these new borrowers. Consequently all transferred loans are unsecured. A number of significant borrowers, primarily registered outside Kazakhstan, have ceased servicing their loans, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. While the Bank continues its efforts related to the recovery of the above loans, the Banks Management considers that loans where a borrower fails to service debt, monitoring of the borrowers has not been possible, there is neither properly registered collateral nor other necessary legal documentation, to be fully impaired and has created an allowance for the full carrying amount of such loans. In addition, the ongoing financial crisis has affected the borrowers ability to service their obligations and the value of collateral. As a result of the above, in 2008 the Bank has recorded an impairment charge for losses on loans to customers of KZT 1,090,127 million. Write-off of available-for-sale investment securities During 2008 the Bank placed certain available-for-sale securities with a carrying amount of KZT 35,402 million with a custodian in an offshore jurisdiction. Subsequent to 31 December 2008, the Bank received a statement from its custodian, which indicated that these securities were disposed of in January 2009. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and FMSA. Management of the Bank believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities have been fully written-off as at 31 December 2008. Allowance for counterparty risk off-shore derivatives The Managing Board considers that some of the Bank's derivative financial assets with off-shore counterparties during 2008 have become uncollectible. The counterparties under these agreements did not respond to the Banks inquiries. In addition, the Bank was not able to collect the amounts receivable under such agreements that expired subsequent to 31 December 2008. Therefore, the new Managing Board of the Bank decided to fully provide against these receivables on derivative financial assets with these counterparties as at 31 December 2008 for the aggregate amount of KZT 16,298 million. Impairment of goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill at 31 December 2008 was KZT 37,421 million (2007- KZT 37,557 million). More details are provided in Note 15. Taxation Kazakh tax, currency and customs legislation is subject to varying interpretations, and changes, which can occur frequently. Management's interpretation of such legislation as applied to the transactions and activity of the Group may be challenged by the relevant regional and state authorities. As such, significant additional taxes, penalties and interest may be assessed. Fiscal periods remain open to review by the authorities in respect of taxes for five calendar years preceding the year of review. Under certain circumstances reviews may cover longer periods. As at 31 December 2008 management believes that its interpretation of the relevant legislation is appropriate and that the Group's tax, currency and customs positions will be sustained.

25 F-137

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 5. Significantaccountingjudgementsandestimates(continued)

Estimationuncertainty(continued)

Claims liability arising from insurance contracts For insurance contracts, estimates have to be made both for the expected ultimate cost of claims reported at the balance sheet date and for the expected ultimate cost of IBNR claims at the balance sheet date. It can take a significant period of time before the ultimate claims cost can be established with certainty and for some type of policies, IBNR claims form the majority of the balance sheet claims provision. The primary technique adopted by management in estimating the cost of notified and IBNR claims, is that of using past claim settlement trends to predict future claims settlement trends. At each reporting date, prior year claim estimates are reassessed for adequacy and changes made are made to the provision. General insurance claims provisions are not discounted for the time value of money.

6.

Businesscombination

During 2008 the Group increased its shareholdings from 49.00% to 99.29% of voting shares in BTA Bank CJSC (Belorussia) following the approval from Kazakh regulatory authorities. In July 2008, the share in BTA Bank LLC (Russia) increased from 14.20% to 52.84%. As described in Note 3, in November 2008 BTA Bank LLC (Russia) issued additional shares in the amount of RUR 7,200 million (equivalent of KZT 31,968 million). The Bank did not use its preemptive right to purchase these shares. As a result the Banks share in BTA Bank LLC (Russia) decreased to 22.26% resulting in a loss from deemed disposal in the amount of KZT 12,095 million. The fair value of the identifiable assets and liabilities acquired and goodwill arising as at the date of acquisition of BTA Bank CJSC (Belorussia) was:

Fair value recognized on acquisition BTA Bank CJSC (Belorussia) 30 November 2004 30 October 2008
Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Investment securities Amounts due from credit institutions Loans to customers Property, plant and equipment Current income tax asset Other assets Total assets Amounts due to credit institutions Due to customers Debt securities issued Other liabilities Total liabilities Fair value of net assets Groups share in fair value of net assets Goodwill Cost of acquisition Cash received from acquisition Cash paid Net cash received / (paid) 21 97 39 419 985 260 385 2,206 674 161 1 256 1,092 1,114 546 (220) 326 21 (326) (305) 1,670 343 1,218 270 11,866 390 32 88 15,877 8,000 5,601 85 13,686 2,191 1,103 2,398 3,501 1,670 (3,501) (1,831)

If the combination had taken place at the beginning of 2008, the total net operating loss for 2008 for the Group would have been KZT 1,003 million less at KZT 1,009,273 million and the total loss for the year would have been KZT 204 million less at KZT 1,187,846 million.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 7. Cashandcashequivalents

2008
Cash on hand Current accounts with other financial institutions Current accounts with central banks Time deposits with other financial institutions with contractual maturity of 90 days or less Reverse repurchase agreements with contractual maturity of 90 days or less Time loans with contractual maturity of less than 90 days from the date of origination Cash and cash equivalents, gross Less Allowance for impairment Cash and cash equivalents 5,248 34,931 195 27,200 20,109 238 87,921 (28) 87,893

Cash and cash equivalents comprise:

2007
12,826 29,816 40,602 16,479 99,723 99,723

The Group has entered into reverse repurchase agreements with Kazakhstani banks. The subject of these agreements was mainly corporate securities issued by Kazakhstani companies. Fair value of the collateral as at 31 December 2008 was KZT 29,406 million (2007 KZT 19,198 million). At 31 December 2008 balances with ten banks accounted for 72.81% of total cash and cash equivalents (2007 balances with ten banks accounted for 54.24% of total cash and cash equivalents).

8.

Obligatoryreserves
2008 2007
139,366 28,876 168,242

Obligatory reserves comprise: Due from the NBK Cash on hand allocated to obligatory reserves Obligatory reserves 27,601 36,453 64,054

Under Kazakh legislation, the Group is required to maintain certain obligatory reserves, which are computed as a percentage of certain liabilities of the Group. Such reserves must be held in either non-interest bearing deposits with the NBK or in physical cash computed based on average monthly balances of the aggregate of non-interest bearing deposits with the NBK and physical cash in national and hard currencies during the period of reserves creation. The use of such funds is, therefore subject to certain restrictions. In 2008 in accordance with the financial markets stability program, the NBK decreased obligatory reserve requirements from 6% to 2% for domestic liabilities, and from 8% to 3% for external debt.

9.

Financialassetsatfairvaluethroughprofitorloss
2008 2007
46,241 19,156 3,707 6,694 6,881 76 3 264 83,022 29,100 53 112,175 60,129

Financial assets at fair value through profit or loss comprise: Debt securities: Corporate bonds Treasury bills of the Ministry of Finance of the Republic of Kazakhstan Notes of the NBK Bonds of Kazakhstan non-financial institutions Sovereign bonds of OECD countries Bonds of Kazakhstan financial institutions Bonds of international financial organizations Treasury bills of the Ministry of Finance of Russian Federation Municipal bonds Equity securities Mutual funds shares Financial assets at fair value through profit or loss Subject to repurchase agreements

59,979 25,019 9,918 4,841 3,793 2,887 80 2 106,519 21,631 128,150 65,472

27

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 10. Amountsduefromcreditinstitutions

2008
Loans Deposits Less Allowance for impairment Amounts due from credit institutions 70,224 19,389 89,613 (4,439) 85,174

Amounts due from credit institutions as at 31 December comprise:

2007
88,221 19,491 107,712 (123) 107,589

As at 31 December 2008 amounts due from ten largest credit institutions comprised 80.17% of total amounts due from credit institutions (31 December 2007 ten largest comprised 58.87%). The movements in allowance for impairment of amounts due from credit institutions were as follows:

2008
1 January Impairment charge Write-offs Recovery Revaluation 31 December 123 4,173 313 (170) 4,439

2007
80 396 (355) 2 123

11.

Derivativefinancialinstruments

The Group enters into derivative financial instruments for trading purposes. The table below shows the fair values of derivative financial instruments, recorded as assets and liabilities, together with their notional amounts. The notional amount, recorded gross, is the amount of a derivatives underlying asset and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding as at 31 December and are indicative of neither the market risk nor the credit risk.

Notional principal
Currency swaps Currency forwards and futures Securities forwards Interest rate swaps Options Total derivative assets/liabilities, gross Less - Allowance (Note 16) Total derivative assets/liabilities Swaps 136,115 201,038 19,864 462,318

2008 Fair values Asset Liability

562 6,961 10,136 20,289 37,948 (16,298) 21,650 (472) (1,420) (16,897) (18,789) (18,789)

Notional principal
358,631 204,128 392,888 5,177

2007 Fair value Asset Liability

22,004 6,391 2,739 263 31,397 31,397 (1,501) (247) (3,780) (5,528) (5,528)

Swaps are contractual agreements between two parties to exchange movements in interest and foreign currency rates. Forwards and futures Forwards and futures contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. Forwards are customised contracts transacted in the over-the-counter market. Futures contracts are transacted in standardised amounts on regulated exchanges and are subject to daily cash margin requirements. Options Options are contractual agreements that convey the right, but not the obligation, for the purchaser either to buy or sell a specific amount of a financial instrument at a fixed price, either at a fixed future date or at any time within a specified period.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge)

12.

Availableforsaleinvestmentsecurities
2008 2007

Available-for-sale investment securities as at 31 December comprise: Bonds of international financial organizations Corporate bonds Treasury bills of the Ministry of Finance of the Republic of Kazakhstan Treasury bills of the Ministry of Finance of the Republic of Belarussia Treasury bills of the Ministry of Finance of Kyrgyzstan Bonds of Kazakhstan financial institutions Notes of the NBK Sovereign bonds of OECD countries Notes of the National Bank of Kyrgyzstan Equity securities Mutual fund shares Available-for-sale investment securities, gross Less Write-off Available-for-sale investment securities 35,402 15,142 2,129 912 409 312 218 54,524 8,536 32 63,092 (42,610) 20,482 14,179 410 24 1,165 3,697 1,390 20,865 5,557 26,422 26,422

As discussed in Note 5, during 2008 the Bank placed certain available-for-sale securities with a carrying amount of KZT 35,402 million with a custodian in an offshore jurisdiction. Subsequent to 31 December 2008, the Bank received a statement from its custodian, which indicated that these securities were disposed of in January 2009. No consideration was received by the Bank from this disposal. The Bank initiated an internal investigation with respect to the disposal and passed the information to the Procuracy of the Republic of Kazakhstan and FMSA. Management of the Bank believes that the circumstances above indicate that these securities were not recoverable as at 31 December 2008. Therefore, these securities have been fully written-off as at 31 December 2008. During 2008 the Group has recognized an impairment loss on equity securities in the amount of KZT 7,208 million (2007 nil). In accordance with amendments to IAS 39 and IFRS 7, Reclassification of Financial Assets, the Bank reclassified certain financial assets acquired for the purpose of current liquidity management from held for trading category because the Bank no longer had an intention to sell them in the near term. Reclassification was performed as at 1 July 2008 at fair value at that date. The impact of this reclassification is presented below:

Financial assets held for trading were reclassified into Financial assets available for sale category
Fair value at the date of reclassification Carrying amount of reclassified assets as at 31 December 2008 Write-off of reclassified available-for-sale securities Fair value of reclassified assets as at 31 December 2008 Losses from change in fair value of reclassified assets recognized before reclassification for the year ended 31 December 2008 Interest income recognized after reclassification in income statement for the year ended 31 December 2008 Effective interest rate at the date of reclassification Cash flows expected to be reimbursed at the date of reclassification 35,420 35,402 (35,402) (546) 728 4.06% 41,376

29

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers

2008
Corporate lending Small and medium business lending Individuals lending Gross loans to customers Less Allowance for impairment Loans to customers Gross loans have been extended to the following types of customers: 2,071,991 256,833 505,517 2,834,341 (1,217,278) 1,617,063

Loans to customers comprise:

2007
1,669,648 300,325 546,880 2,516,853 (137,043) 2,379,810

2008
Private companies Individuals State companies Other Loans to customers, gross Allowance for impairment of loans to customers A reconciliation of the allowance for impairment of loans to customers by class is as follows: 2,321,272 505,517 7,353 199 2,834,341

2007
1,963,281 546,880 6,609 83 2,516,853

Small and medium Corporate lending 2008 business lending 2008

At 1 January 2008 Charge for the year Amounts written off Recoveries Revaluation Amount arising from disposal of subsidiaries At 31 December 2008 Individual impairment Collective impairment Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance 111,502 1,067,075 (1,705) 308 (868) (2,002) 1,174,310 1,141,870 32,440 1,174,310 23,231 (824) (2,818) 1,606 (33) 21,162 9,094 12,068 21,162

Individuals lending 2008

2,310 23,876 (6,006) 2,485 (249) (610) 21,806 15,031 6,775 21,806

Total 2008
137,043 1,090,127 (10,529) 4,399 (1,150) (2,612) 1,217,278 1,165,995 51,283 1,217,278

1,355,897

15,637

25,846

1,397,380

Corporate lending 2007

At 1 January 2007 Charge for the year Amounts written off Recoveries Amounts arising from business combination At 31 December 2007 Individual impairment Collective impairment Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance 60,759 51,913 (4,339) 3,068 101 111,502 56,335 55,167 111,502

Small and medium business lending 2007

8,336 13,746 (1,073) 2,108 114 23,231 4,248 18,983 23,231

Individuals lending 2007

1,095 1,755 (1,124) 547 37 2,310 2,310 2,310

Total 2007
70,190 67,414 (6,536) 5,723 252 137,043 60,583 76,460 137,043

264,893

18,868

283,761

F-142

30

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers(continued)

Individually impaired loans As described in Note 5, during 2008, the quality of the Banks loan portfolio has significantly deteriorated. Certain loan documentation, including collateral and associated additional agreements, primarily relating to financing of projects outside Kazakhstan, is no longer available. In addition, many loans were transferred to new borrowers that do not have adequate sources of repayment. Moreover, no collateral was provided by these new borrowers. Consequently all transferred loans are unsecured. A number of significant borrowers, primarily registered outside Kazakhstan, have ceased servicing their loans, have not allowed the Bank to monitor collateral or failed to provide information about their financial performance. While the Bank continues its efforts related to the recovery of the above loans, the Banks Management considers that loans where a borrower fails to service debt, monitoring of the borrowers has not been possible, there is neither properly registered collateral nor other necessary legal documentation, to be fully impaired and has created an allowance for the full carrying amount of such loans. In addition, the ongoing financial crisis has affected the borrowers ability to service their obligations and the value of collateral. As a result of the above, in 2008 the Bank has recorded an impairment charge for losses on loans to customers of KZT 1,090,127 million. Interest income accrued on loans, for which individual impairment allowances have been recognized, as at 31 December 2008, comprised KZT 141,743 million (2007: KZT 20,073 million). The fair value of collateral that the Group holds relating to loans individually determined to be impaired at 31 December 2008 amounts to KZT 583,015 million (2007: KZT 329,678 million). In accordance with the NBK requirements, loans may only be written off with the approval of the Board of Directors and, in certain cases, with the respective decision of the Court. Collateral and other credit enhancements The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters. The main types of collateral obtained are as follows: For commercial lending, charges over real estate properties, inventory and trade receivables; For retail lending, mortgages over residential properties, charges over transport, cash and cash equivalents and guarantees of third parties.

The Group also obtains guarantees from parent companies for loans to their subsidiaries and civil liability insurance agreements. Management requests additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the allowance for loan impairment. During the year, the Group took possession of collateral with an estimated value of KZT 11,207 million which the Group is in the process of selling (2007 KZT 503 million). It is the Groups policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to reduce or repay the outstanding claim. In general, the Group does not occupy repossessed properties for business use. Of the total aggregate amount of gross past due but not impaired loans to customers, the fair value of collateral that the Group held as at 31 December 2008 was KZT 83,629 million (2007- KZT 36,068 million). Derecognition of a loan portfolio The Group has been periodically selling part of its mortgage loan portfolio to Kazakhstan Mortgage Company (KMC), with full recourse to the Group for any default loan. The Group has determined that, as a result of these transactions, substantially all the risks and rewards of the portfolio have not been transferred to KMC. Therefore, the Group continues to recognise these loans as an asset on its consolidated balance sheet with the corresponding liability recorded in loans from financial institutions for the same amount. As at 31 December 2008 these loans amounted to KZT 9,082 million. As at 31 December 2008 loans to customers include loans of KZT 64,917 million, which are pledged as collateral for the mortgage-backed bonds (31 December 2007 KZT 62,724 million).

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 13. Loanstocustomers(continued)

Concentration of loans to customers As at 31 December 2008, the Group had a concentration of loans represented by KZT 409,465 million due from the ten largest borrowers that comprised 14% of the total gross loan portfolio (2007 KZT 274,080 million, 11%). Allowances amounting to KZT 315,565 million were recognised against these loans as at 31 December 2008 (2007 KZT 7,750 million). As at 31 December 2007, mortgage loans issued to individuals in the aggregate amount of KZT 610 million were pledged under the financing received by the Group from OECD based banks. As at 31 December 2008, there were no pledged loans due to repayment of financing received from OECD based banks. As at 31 December 2008, the Group had loans in the amount of KZT 494,799 million (2007 KZT 361,838 million) with interest and principal repayable at maturity. Allowances amounting to KZT 236,111 million were recognised against these loans as at 31 December 2008 (2007 KZT 25,003 million). Loans are made to the following sectors:

2008
Individuals Real estate investments Housing construction Oil & gas Wholesale trade Construction of roads and industrial buildings Agriculture Energy Chemical industry Retail trade Transport Food industry Mining Metallurgical industry Telecommunication Hospitality Financial services Production of machinery and equipment Textile and leather industry Publishing Production of rubber and plastic articles Research & development Other Loans to individuals are presented as follows: 505,517 435,188 415,536 314,970 298,573 206,066 142,819 84,266 62,783 62,116 51,087 40,152 35,580 25,374 25,244 13,903 12,968 12,259 11,241 1,059 894 818 75,928 2,834,341

%
17.8% 15.4% 14.7% 11.1% 10.5% 7.3% 5.0% 3.0% 2.2% 2.2% 1.8% 1.4% 1.3% 0.9% 0.9% 0.5% 0.5% 0.4% 0.4% 0.0% 0.0% 0.0% 2.7% 100.0%

2007
546,880 365,741 316,222 173,948 415,817 154,495 139,615 7,971 47,869 71,836 50,650 48,401 30,325 11,174 24,233 10,689 8,024 16,664 4,134 3,072 731 724 67,638 2,516,853

%
21.7% 14.5% 12.6% 6.9% 16.5% 6.1% 5.6% 0.3% 1.9% 2.9% 2.0% 1.9% 1.2% 0.5% 1.0% 0.4% 0.3% 0.7% 0.2% 0.1% 0.0% 0.0% 2.7% 100.0%

2008
Consumer loans Mortgage loans 271,387 234,130 505,517

2007
292,463 254,417 546,880

Finance lease receivable Net investment in finance leases consisted of the following:

2008
Minimum lease payments receivable Less: Unearned finance income Net investment in finance leases Allowance for uncollectible minimum lease payments receivable Current portion of net investment in finance leases Long-term portion of net investment in finance leases 22,696 (5,549) 17,147 (2) 17,145 4,153 12,994 17,147 32

2007
13,295 (2,619) 10,676 (187) 10,489 3,604 7,072 10,676

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 14. Investmentsinassociates

2008
Balance, beginning of the year Purchase cost Disposal cost Impairment charge Transfer to investments in associates Share in net (loss) / income of associates Dividends received Share of reserve for revaluation of securities of associates Investments in associates, end of the year 67,767 34,298 (608) (19,138) 6,785 (15,448) (658) (627) 72,371

Movement in investments in associates was:

2007
5,996 58,579 (1,042) 4,234 67,767

Included in 31 December 2007 balance were investments in BTA Bank CJSC (Belorussia) in the amount of KZT 574 million and Oranta OJSC in the amount of KZT 11,943 million. Investment in Oranta OJSC were reclassified to available-for-sale investments as the Groups share decreased from 25.00% as at 31 December 2007 to 14.01% as at 31 December 2008. In October 2008 the Bank finalized the acquisition of additional 50.3% equity interest in BTA Bank CJSC (Belorussia) (former Astanaeximbank CJSC) for KZT 3,501 million. As a result of the acquisition the Banks interest in BTA Bank CJSC (Belorussia) increased to 99.29%, which provided the Bank with effective control and enabled the Bank to treat BTA Bank CJSC (Belorussia) as a subsidiary starting from November 2008 (Refer to Note 6). As at 31 December 2007 investments in BTA Bank OJSC (Ukraine) in the amount of KZT 364 million were included in available for sale category. In December 2008 the Bank finalized the acquisition of additional equity interest in BTA Bank OJSC (Ukraine) of 40.038% for KZT 27,301 million which provided the Bank with significant influence and allowed the Bank to treat this entity as its associate. On 7 November 2008 BTA Bank LLC (Russia) issued additional shares in the amount of RUR 7,200 million (equivalent of KZT 31,968 million). The Bank did not use its preemptive right to purchase these shares. As a result the Banks share in BTA Bank LLC (Russia) decreased from 52.84% to 22.26%. As a result, the Bank has lost effective control over BTA Bank LLC (Russia), but retained a significant influence. This allowed the Bank to consider BTA Bank LLC (Russia) as an associate. The carrying amount of investment at the date BTA Bank LLC (Russia) became an associate was KZT 18,938 million, before any share in loss. The following table illustrates summarised financial information as at 31 December of the associates:

Aggregated assets and liabilities of associates

Total assets Total liabilities Net assets

2008
950,054 (872,839) 77,215

2007
731,375 (614,272) 117,103

Aggregated profit of associates

Net profit

2008
(103,923)

2007
11,004

Investments in associates at 31 December 2008 include goodwill of KZT 23,944 million (excess of acquirers interest in the net fair value of acquirees identifiable assets, liabilities and contingent liabilities over cost less allowance for impairment (2007 KZT 33,479 million). For general information, refer to Note 3.

15.

Goodwill
2008 2007
22,849 14,547 161 37,557 37,557

The movements in goodwill were as follows: Cost January 1 Additions Acquisition through business combinations Foreign currency revaluation Disposal 31 December Impairment charge Net book value: 31 December

37,557 6,173 12,567 (1,891) (8,878) 45,528 (8,107) 37,421

33 F-145

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 15. Goodwill(continued)

Impairment testing of goodwill The impairment is largely the result of uncertainties in the Kazakhstan economy, especially in the retail and mortgage sectors. Another key factor in the evaluation of goodwill is the discount rate used to determine the present value of projected cash flows. During 2008, the discount rate required for this calculation has increased substantially, contributing to the reduction in the present value of projected cash flows. Goodwill acquired through business combinations with indefinite lives have been allocated to two individual cashgenerating units, which are also reportable segments, for impairment testing as follows: - Corporate Banking; and - Retail Banking. The carrying amount of goodwill allocated to each of the cash-generating units is as follows:

2008
Corporate Banking Retail Banking 12,771 24,650 37,421

Key assumptions used in value in use calculations The recoverable amount of each cash generating unit has been determined based on a value in use calculation, using cash flow projections based on financial budgets approved by senior management covering a one-year period. The discount rate applied to cash flow projections beyond the one-year period are extrapolated using a projected growth rate. The following rates are used by the Group.

Temirbank Corporate Banking Retail Banking

Discount rate Projected growth rate - Interest margins; - Discount rates; - Market share during the budget period; - Projected growth rates used to extrapolate cash flows beyond the budget period; - Current local Gross Domestic Product (GDP); and - Local inflation rates. Interest margins Interest margins are based on effective interest rates charged during 2008. These are increased over the budget period for anticipated inflation rates. Discount rates Discount rates reflect managements estimate of return of capital employed (ROCE) required in each business. This is the benchmark used by management to assess operating performance and to evaluate future investment proposals. Discount rates are calculated by using the Weighted Average Cost of Capital (WACC). Market share assumptions These assumptions are important because, as well as using industry data for growth rates, management assess how the units relative position to its competitors might change over the budget period. Management expects the Groups share of the Retail Banking and Corporate Banking markets, including customer deposits, to be stable over the budget period. 12.66% 2% 12.66% 2%

The calculation of value in use for both Corporate and Retail Banking units is most sensitive to the following assumptions:

34

F-146

JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 15. Goodwill(continued)

Projected growth rates, GDP and local inflation rates Assumptions are based on published industry research. Sensitivity to changes in assumptions Management believes that reasonable possible changes in key assumptions used to determine the recoverable amount of segments will not result in an additional impairment of goodwill.

16.

Otherimpairmentandprovisions
Derivative financial instruments
16,298 16,298

The movements in allowances for other losses and provisions were as follows:

Other assets
31 December 2006 Impairment charge Write-offs Recoveries Amounts arising on business combination 31 December 2007 Impairment charge Write-offs Recoveries Revaluation 31 December 2008 341 130 (211) 99 1 360 1,435 (476) 74 (6) 1,387

Guarantees and letters of credit

5,997 4,575 5 10,577 95,397 (1,081) 104,893

Total
6,338 4,705 (211) 99 6 10,937 113,130 (476) 74 (1,087) 122,578

Allowances for impairment of assets are deducted from the related assets.

17.

Taxation
2008 2007
11,413 (1,581) 9,832

The corporate income tax expense comprises: Current tax charge Deferred tax charge- origination and reversal of temporary differences Income tax (benefit) / expense 4,297 (4,364) (67)

The Bank and its subsidiaries, other than TuranAlem Finance B.V. (TAF BV), Temir Capital B.V (TK BV), TuranAlem Finance (TAF), BTA Bank (Kyrgyzstan), BTA Bank (Belorussia), BTA Luxembourg, First Kazakh Securitization Company, Second Kazakh Securitization Company and BTA DPR Finance Company are subject to taxation in the Republic of Kazakhstan. TAF BV, TK BV, First Kazakh Securitization Company and Second Kazakh Securitization Company are subject to taxation in the Netherlands. TAF is subject to income tax in the Russian Federation. BTA Luxembourg is subject to income tax in Luxembourg. BTA Bank (Kyrgyzstan) is subject to income tax in Kyrgyzstan. BTA Bank (Belorussia) is subject to income tax in Belorussia. BTA DPR Finance Company is not subject to income tax.

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JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 17. Taxation(continued)

A reconciliation between income tax expense in the accompanying consolidated financial statements and income before taxes multiplied by the statutory tax rate for the years ended 31 December is as follows:
2008
Accounting profit before income tax Statutory tax rate Theoretical income tax (benefit) / expense at the statutory rate Non-deductible impairment charge Non-deductible interest expenses Non-deductible losses from disposal of subsidiaries Non-deductible business expenses Impairment loss on goodwill Write-down of inventories Non taxable income on long-term loans granted for the purchase of property and equipment by legal entities and mortgage loans and financial leasing Non taxable income on state securities and securities at the highest and next to the highest listing categories Non taxable income from associates Income of subsidiaries taxed at different rates Differences arising from changes in tax rates Change in unrecognised deferred tax assets Other permanent differences Income tax (benefit) / expense (1,188,117) 30% (356,435) 23,411 3,376 1,110 2,432 719 (241) (496) 4,634 (2,347) 131,997 192,315 (542) (67)

2007
74,537 30% 22,361 132 422 787 (6,942) (1,915) (1,225) (3,421) (367) 9,832

Deferred tax balances, calculated by applying the statutory tax rates in effect at the respective balance sheet dates to the temporary differences between the tax basis of assets and liabilities and the amounts reported in the financial statements, comprised the following at December 31:
Origination and reversal of Origination temporary and reversal of differences in temporary statement of differences in income equity Origination and reversal of Origination and temporary reversal of differences in temporary statement of differences in income 2007 equity

2006
Tax effect of deductible temporary differences: Allowances for loan impairment Fair value measurement of securities Interest written-off Property and equipment Other Gross deferred tax assets Unrecognised deferred tax assets Deferred tax asset Tax effect of taxable temporary differences: Allowances for impairment Fair value measurement of securities Property and equipment Other Deferred tax liability Deferred tax assets / (liability)

2008

366 417 783 783

4,906 1,057 598 6,561 6,561

221 221 221

4,906 1,644 1,015 7,565 7,565

189,653 4,783 1,684 56 417 196,593 (192,315) 4,278

11 11 11

194,559 6,438 1,684 56 1,432 204,169 (192,315) 11,854

(1,540) (122) (226) (1,888) (1,105)

(107) (4,393) (476) (4) (4,980) 1,581

(14) (14) 207

(1,647) (4,529) (702) (4) (6,882) 683

1,647 (2,263) 702 86 4,364

(12) (12) (1)

(6,804) (4) (6,808) 5,046

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JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge)

17.

Taxation(continued)

Tax loss carry-forward represents losses which arose from changes in the fair market value of certain securities. Losses from such securities are deductible only to the extent that they can be offset against gains from similar securities. In accordance with the tax legislation, such losses can be carried forward and offset against gains from similar securities during a period of 3 years from the year a loss occurs. Kazakhstan currently has a single Tax Code that regulates main taxation matters. The main taxes include value added tax, income tax, social taxes, and others. Implementing regulations are often unclear or nonexistent and few precedents have been established. Often, different opinions regarding legal interpretation exist both among and within government authorities; thus creating uncertainties and areas of conflict. Tax declarations, together with other legal compliance areas (as examples, customs and currency control matters) are subject to review and investigation by a number of authorities, which are enabled by law to impose severe fines, penalties and interest charges. These facts create tax risks in Kazakhstan substantially more significant than typically found in countries with more developed tax systems. Management believes that the Group is in substantial compliance with the tax laws affecting its operations; however, the risk remains that relevant authorities could take different positions with regard to interpretive issues. In accordance with amendments in the Tax Code of the Republic of Kazakhstan adopted in 2008, interest income on mortgage loans issued to individuals for a term of more than three years is subject to tax. Previously such income was tax exempt. Also in accordance with applicable tax legislation, at 31 December 2008, 30% corporate income tax rate applied will be reduced to 20.0%, 17.5%, 15.0% in 2009, 2010 and 2011, respectively.

18.

AmountsduetotheGovernmentandcentralbanks
2008 2007
370 174 212 107 28 22 913

Amounts due to the Government and central banks consist of the following: Amounts due to the Government: Interest bearing KZT denominated Interest bearing USD denominated Interest bearing EUR denominated Interest bearing KGS denominated Loans from the NBK Loans from the National Bank of Kyrgyzstan Amounts due to the Government and central banks

1,292 193 136 55 28 14 1,718

19.

Amountsduetocreditinstitutions
2008 2007
455,384 241,157 51,329 26,609 9,482 783,961 46,021 1,288 4,034 51,343 835,304 60,129

Amounts due to credit institutions comprise: Loans from OECD based banks and financial institutions Syndicated bank loans Loans from Kazakh banks and financial institutions Loans from other banks and financial institutions Pass-through loans Interest-bearing placements from Kazakh banks Loro accounts Interest-bearing placements from non OECD banks Amounts due to credit institutions Subject to repurchase agreements Financial covenants In accordance with the contractual terms of loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. As at 31 December 2008 the Bank was in breach of capital adequacy, lending exposure and cross default covenants on these loan facilities. As a result these loan facilities for the total amount of KZT 492,324 million became due immediately. As discussed in Note 2, the Bank is in the process of restructuring these debts. 451,737 156,617 126,434 24,201 17,278 776,267 21,112 2,503 3,484 27,099 803,366 65,472

F-149

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JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 19. Amountsduetocreditinstitutions(continued)

The Bank was in breach of these capital adequacy, lending exposure covenants on syndicated loans, bond programs and certain other facilities as at 31 December 2008. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and cross-defaults under the terms of the respective agreements. Due to the Banks inability to early repay all its debt as called by creditors in full, the Bank may not be able to meet all its obligations. Subsequent to 31 December 2008, certain lenders have requested repayment of debts amounting to USD 550 million or equivalent of KZT 83 billion, citing default and/or acceleration clauses. If those lenders continue to exercise and other lenders seek to exercise rights under acceleration and default clauses, the Bank may not be able to meet its obligations. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder and the management considers that the restructuring of the above facilities will be completed in 2009.

20.

Amountsduetocustomers

The amounts due to customers included balances in customer current accounts, time deposits, and certain other liabilities, and include the following:

2008
Time deposits Current accounts Guarantee and restricted deposits Amounts due to customers 684,330 179,658 22,064 886,052

2007
463,450 165,685 23,373 652,508

Guarantee and restricted deposits represent customers collateral under letters of credit and guarantees issued by the Bank on behalf of clients. At 31 December 2008, the Banks ten largest customers accounted for approximately 34.80% of the total amounts due to customers (2007 20.45%). The amounts due to customers included balances in customer current accounts and term deposits, and were analysed as follows:

2008
Time deposits: Commercial entities Individuals Governmental entities Non-commercial entities Current accounts: Commercial entities Individuals Governmental entities Non-commercial entities Guarantees and other restricted deposits: Commercial entities Individuals Governmental entities Non-commercial entities Amounts due to customers 201,240 262,644 218,209 2,237 124,350 33,864 20,371 1,073 10,762 10,837 463 2 886,052

2007
130,973 235,620 95,317 1,540 125,400 31,222 7,921 1,142 9,121 13,583 666 3 652,508

Included in time deposits are deposits of individuals in the amount of KZT 262,644 million (2007 KZT 235,620 million). In accordance with the Civil Code of the Republic of Kazakhstan, the Group is obliged to repay such deposits upon demand of a depositor. In case a term deposit is repaid upon demand of the depositor prior to maturity, interest is not paid or paid at considerably lower interest rate depending on the terms specified in the agreement.

F-150

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JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 20. Amountsduetocustomers(continued)

2008
Individuals Oil and gas Wholesale trading Construction Transportation Energy Government investment funds Non-credit financial organizations Research and development Metallurgy Education Machinery and equipment production Communication Retail trade Agriculture Mining Textile and leather industry Chemical processing Entertainment Food industry Hotel and hospitality Other 307,345 233,290 81,303 49,060 33,113 30,788 28,501 19,226 11,594 11,475 7,014 5,873 5,425 4,265 3,887 1,912 1,607 1,480 1,241 1,091 353 46,209 886,052

An analysis of customer accounts by sector follows:

%
34.7% 26.3% 9.2% 5.5% 3.7% 3.5% 3.2% 2.2% 1.3% 1.3% 0.8% 0.7% 0.6% 0.5% 0.4% 0.2% 0.2% 0.2% 0.1% 0.1% 0.0% 5.3% 100.0%

2007
280,425 86,213 52,003 33,623 41,388 3,978 11,071 38,578 6,622 12,024 5,938 6,652 2,429 8,691 6,596 3,688 1,235 5,720 1,207 3,620 454 40,353 652,508

%
43.0% 13.2% 8.0% 5.2% 6.3% 0.6% 1.7% 5.9% 1.0% 1.8% 0.9% 1.0% 0.4% 1.3% 1.0% 0.6% 0.2% 0.9% 0.2% 0.6% 0.1% 6.1% 100.0%

21.

Debtsecuritiesissued
2008 2007
434,793 104,720 169,471 90,108 48,520 54,420 35,187 48,072 66,762 21,886 21,598 21,715 15,023 9,846 604 1,142,725 (5,579) (2,780) (21,506) 1,112,860 983 (4,548) (24,850) 1,084,445

As at 31 December debt securities issued consisted of the following: USD bonds with fixed rate USD and KZT subordinated bonds with fixed rate USD bonds with floating rate EUR bonds with fixed rate JPY bonds with floating rate USD perpetual financial instruments with fixed rate KZT bonds with floating rate GBP bonds with fixed rate KZT bonds with fixed rate JPY bonds with fixed rate CHF bonds with floating rate KZT subordinated bonds with floating rate RUR bonds with fixed rate PLZ bonds with floating rate RUR deposit certificate USD promissory notes with floating rate USD treasury bonds held by Group KZT treasury bonds held by Group USD and KZT treasury subordinated bonds held by Group Plus unamortized premium Less unamortized cost of issuance Less unamortized discount Debt securities issued 411,068 174,271 165,251 85,844 57,598 54,623 39,555 34,926 28,358 26,609 23,147 21,756 12,555 8,162 19 1,143,742 (1,359) (3,061) (22,365) 1,116,957 622 (699) (29,154) 1,087,726

In accordance with terms of debt securities issued the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy, and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major rating agencies. As at 31 December 2008, the Bank was in breach of capital adequacy, lending exposure and cross-default covenants on debt securities issued. As a result, debt securities issued for the total amount of KZT 693,071 million became due immediately. As discussed in Note 2, the Bank in the process of restructuring these debts.

F-151

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JSC BTA Bank

Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 22. Equity

As at 31 December 2008 and 2007 share capital comprises:

Common shares Number of authorized shares

31 December 2006 Increase in issued capital 31 December 2007 Increase in issued capital 31 December 2008 5,363,050 3,007,108 8,370,158 467 8,370,625

Number of shares issued

5,363,050 3,007,108 8,370,158 467 8,370,625

Placement value (KZT million)

116,451 186,976 303,427 29 303,456

Non-redeemable CPS Placement Number of Number of value (KZT authorized shares shares issued million)
100,000 100,000

Issued capital is recorded net of transaction costs and net of adjustments made during 1997 to adjust the opening balances of the Bank following the combination of Turan Bank and Alem Bank. As at 31 December 2008 the Group held 30,586 shares of the Bank as treasury shares (2007 10,146). At an Extraordinary General Meeting of the Bank held on 22 February 2007, the Banks shareholders approved the eleventh issue of its common shares and the subsequent increase of the Bank's share capital by the KZT equivalent of USD 1.5 billion, which was registered on 19 March 2007 by FMSA. As a result, in 2007 the Bank increased the number of authorised shares by 3,007,575 common shares. During 2008 the Bank issued 467 common shares at placement value of KZT 62,178 per share totalling KZT 29 million, which were fully issued and paid in 2008 (2007 - 3,007,108 common shares totalling KZT 186,976 million). At an Extraordinary General Meeting of the Bank held on 14 May 2008, the Banks shareholders approved the issue of 100,000 convertible cumulative preferred shares (CPS), which was registered on 9 June 2008 by the FMSA. As at 31 December 2008 no CPS were issued. Dividends on CPS The dividends on convertible preferred shares authorised in 2008 were established at the rate of 11.00% per annum of placement value. No convertible preferred shares were outstanding as at 31 December 2008 and 2007. Accordingly, no dividends on CPS were accrued or paid. Unrealised gains (losses) on investment securities available-for-sale This reserve records fair value changes on available-for-sale investments. Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

23.

Commitmentsandcontingencies

Politicalandeconomicenvironment

Kazakhstan continues economic reforms and development of its legal, tax and regulatory frameworks as required by a market economy. The future stability of the Kazakhstani economy is largely dependent upon these reforms and developments and the effectiveness of economic, financial and monetary measures undertaken by the government. The Kazakhstani economy is vulnerable to market downturns and economic slowdowns elsewhere in the world. The ongoing global financial crisis has resulted in capital markets instability, significant deterioration of liquidity in the banking sector, and tighter credit conditions within Kazakhstan. While the Kazakhstani Government has introduced a range of stabilization measures aimed at providing liquidity and supporting refinancing of foreign debt for Kazakhstani banks and companies, there continues to be uncertainty regarding the access to capital and cost of capital for the Group and its counterparties, which could affect the Groups financial position, results of operations and business prospects. Also, the borrowers of the Group may have been affected by the deterioration in liquidity, which could in turn impact their ability to repay the amounts due to the Group. Due to the fall in prices in global and Kazakhstani securities markets, the Group may face a significant decrease in the fair value of securities pledged as collateral against loans extended by the Group. To the extent that information is available, the Group has reflected revised estimates of expected future cash flows in its impairment assessment.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 23. Commitmentsandcontingencies(continued)

Politicalandeconomicenvironment(continued)

While management believes it is taking appropriate measures to support the sustainability of the Groups business in the current circumstances, unexpected further deterioration in the areas described above could negatively affect the Groups results and financial position in a manner not currently determinable. Also refer to Note 2.
Legalactionsandclaims

The Group is subject to various legal proceedings related to business operations. The Group does not believe that pending or threatened claims of these types, individually or in aggregate, are likely to have any material adverse effect on the Groups financial position or results of operations. The Group assesses the likelihood of material liabilities arising from individual circumstances and makes provision in its financial statements only where it is probable that events giving rise to the liability will occur and the amount of the liability can be reasonably estimated. No provision has been made in these financial statements for any of the contingent liabilities mentioned above. Also refer to Note 33.
Taxcontingencies

Various types of legislation and regulations are not always clearly written and their interpretation is subject to the opinions of the local tax inspectors and the Ministry of Finance of the Republic of Kazakhstan. Instances of inconsistent opinions between local, regional and national tax authorities are not unusual. The current regime of penalties and interest related to reported and discovered violations of Kazakhstan laws, decrees and related regulations is severe. Penalties include confiscation of the amounts at issue (for currency law violations), as well as fines of generally 50% of the taxes unpaid. The Group believes that it has paid or accrued all taxes that are applicable. Where legislation concerning the provision of taxes is unclear, the Group has accrued tax liabilities based on managements best estimate. The Groups policy is to recognize provisions in the accounting period in which a loss is deemed probable and the amount is reasonably determinable. Because of the uncertainties associated with the Kazakhstan tax system, the ultimate amount of taxes, penalties and interest, if any, as a result of past transactions, may be in excess of the amount expensed to date and accrued at 31 December 2008. Although such amounts are possible and may be material, it is the opinion of the Groups management that these amounts are either not probable, not reasonably determinable, or both.
Financialcommitmentsandcontingencies

As at 31 December the Groups financial commitments and contingencies comprised the following:

2008
Undrawn loan commitments Commercial letters of credit Guarantees Operating lease commitments Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years Less: cash collateral Less: provisions (Note 16) Financial commitments and contingencies 363,490 139,524 175,196 678,210 1,199 3,065 5,881 10,145 (22,064) (104,893) 561,398

2007
334,171 150,644 141,931 626,746 217 1,873 4,792 6,882 (23,373) (10,577) 599,678

The loan commitment agreements stipulate the right of the Bank to unilaterally withdraw from the agreement should any conditions unfavorable to the Bank arise, including change of the refinance rate, inflation, exchange rates and others. The Group requires collateral to support credit-related financial instruments when it is deemed necessary. Collateral may include deposits held in the bank, governments and international prime financial organisations securities, and other assets.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 23. Commitmentsandcontingencies(continued)

Trustactivities

The Group provides custody services for third parties which involve the Group making allocation and purchase and sales decisions in relation to securities. Those securities that are held in a fiduciary capacity are not included in these consolidated financial statements. As at 31 December 2008 such securities held in this capacity were KZT 294,852 million (2007 KZT 282,908 million). In addition, the Group manages certain pension funds through its specialised subsidiary. Below presented are statements of net assets available for pension benefits as well as changes in net assets available for pension benefits at 31 December 2008 and 2007 of the pension fund under management. Statement of Net Assets Available for Pension Benefits As at 31 December net assets available for pension benefits comprise:

2008
Assets Cash and cash equivalents Amounts due from credit institutions: - Time deposits with maturity over 90 days or past due - Reverse repurchase agreements Available-for-sale investment securities: - Sovereign bonds of the Republic of Kazakhstan - Corporate bonds - Corporate shares -Euro notes Investment securities, held to maturity: - Agency bonds - Corporate bonds Accrued investment income Other receivables Total assets Liabilities Commissions payable to pension funds Other liabilities Net assets available for pension benefits Statement of Changes in Net Assets Available for Pension Benefits During the year ended 31 December changes in net assets available for pension benefits comprise: 2,228 6,107 612 17,388 54,381 29,783 460 66,887 1,996 181 180,023 (83) (8) 179,932

2007
484 13,867 2,024 13,489 66,477 14,655 14,422 408 20 125,846 (414) (9) 125,423

2008
Net income Additions: - Obligatory contributions - Voluntary contributions - Transfers between funds, net - Penalties for delay Benefits paid to participants - Retirement - Death or disability - Expatriation - Withholding taxes - Other Net change in assets available for pension benefits Net assets available for pension benefits, beginning Net assets available for pension benefits, ending 11,784 30,715 2 14,945 213 45,875 (1,712) (603) (638) (185) (12) (3,150) 54,509 125,423 179,932

2007
11,282 23,374 1 9,721 316 33,412 (684) (368) (319) (111) (3) (1,485) 43,209 82,214 125,423

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 24. Feesandcommissions

2008
Letters of credit and guarantees issued Settlement and cash operations Transfer operations Asset management fees Foreign currency trading Brokerage services Other Fee and commission income Transfer operations Brokerage services Foreign currency trading Custodian services Other Fee and commission expense Net fee and commission income 9,893 7,633 5,193 3,161 2,898 479 1,077 30,334 (542) (211) (52) (49) (325) (1,179) 29,155

Net fee and commission income for the years ended 31 December was made from the following sources:

2007
9,569 7,925 4,388 2,463 2,639 693 812 28,489 (404) (259) (91) (45) (258) (1,057) 27,432

25.

Nettrading(loss)/income
2008 2007
4,651 (2,148) 2,503

Net trading (loss)/ income for the years ended 31 December comprised the following: Securities Interest rate instruments (6,381) (23,388) (29,769)

Securities income includes the effect of buying and selling, and changes in the fair value of financial assets at fair value through profit or loss and effect of buying and selling of available-for-sale investment securities as well as changes in fair value of forward transactions with securities. The results of trading and changes in fair value of interest rate swaps are recorded under income from interest rate instruments.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 26. Salariesandotheradministrativeandoperatingexpenses

2008
Salaries and bonuses Social security costs Other payments Salaries and other employee benefits Occupancy and rent Marketing and advertising Repair and maintenance of property and equipment Transportation expenses Communications Security Legal services and consultancy Agency services Business travel and related expenses Encashment Plastic cards Office supplies Penalties Data processing State duties and customs Postal charges Trainings Representation Insurance Participation in forums, seminars and conferences Loss on disposals of property and equipment Other Administrative and other operating expenses (23,722) (2,010) (865) (26,597) (7,056) (3,984) (2,548) (2,077) (1,639) (1,572) (1,499) (1,047) (1,041) (909) (767) (445) (427) (346) (294) (191) (100) (99) (59) (43) (12) (1,259) (27,414)

Salaries and other employee benefits and administrative and other operating expenses comprise:

2007
(22,358) (2,436) (950) (25,744) (4,797) (3,193) (1,750) (1,411) (1,522) (1,117) (1,307) (1,035) (1,033) (752) (786) (358) (59) (298) (75) (161) (117) (80) (2,891) (54) (604) (23,400)

27.

Earningspershare

Basic earnings per share is calculated by dividing the net income for the year attributable to common shareholders by the weighted average number of shares outstanding during the year. The Bank did not declare or pay any dividends to common shareholders during 2008 and 2007. The following reflects the income and share data used in the basic and diluted earnings per share computations for the years ended 31 December:

2008
Net (loss) / income attributable to common shareholders for basic earnings per share, being net income less dividends declared on convertible preferred shares Net (loss) / income attributable to common and potential common shareholders for diluted earnings per share Weighted average number of common shares for basic and diluted earnings per share Basic and diluted (loss)/earnings per share (in Kazakhstani Tenge) (1,187,584) (1,187,584) 8,370,461 (141,878)

2007
61,354 61,354 7,534,395 8,143

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies

Introduction

The Group as a combination of financial organizations is exposed to certain types of risks. Risk management structure is arranged for prompt identification and assessment of risks associated with one or another line of activity. Management understands the high importance of risk management process as an integral part of day-to-day activities of the Group. Of particular priority is liquidity risk, credit risk, market risk, the latter being subdivided into trading and non-trading risks and operating risks that could affect the equity and income of the Group. Risk management structure The Board of Directors The risk management process is directly subordinated to and accountable to the Board of Directors. The Board of Directors is responsible for the overall risk management approach and for approving the risk management policies and adoption strategic decisions on risk management. Risk Committee The Risk Committee oversees the Groups activities on risk management, adopts managerial decisions as related to approval of normative documents and defining lines of activity of subdivisions. Risk Management Unit Risk management units are responsible for identification, assessment and monitoring of risks. Daily activities of these units are governed by internal regulations. Within the Group certain units responsible for management of credit, operating, liquidity and market risks are defined. These units are accountable to Risk Committee and Management Board. Risk monitoring Risk Monitoring Units control over compliance with risk principles, policies and limits, across the Group. Each business group has a decentralised unit which is responsible for the independent control of risks, including monitoring the risk of exposures against limits and the assessment of risks of new products and structured transactions. This unit also ensures the complete capture of the risks in risk measurement and reporting systems. Internal audit function Internal audit is the most important component of internal control, including risk control. Internal audit function regularly examines adequacy of the internal procedures of the Group. The results are submitted to the Board of Directors, the latter adopts relevant decisions to eliminate shortages. Risk measurement and reporting systems The Groups risks are measured using a method which reflects both the expected loss likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual loss based on statistical models. The models make use of probabilities derived from historical experience, adjusted to reflect the economic environment. The Group also runs worst case scenarios that would arise in the event that extreme events which are unlikely to occur do, in fact, occur. Monitoring and controlling risks is primarily performed based on limits established by the Group. These limits reflect the business strategy and market environment of the Group as well as the level of risk that the Group is willing to accept, with additional emphasis on selected industries. In addition the Group monitors and measures the overall risk bearing capacity in relation to the aggregate risk exposure across all risks types and activities. Information compiled from all the businesses is examined and processed in order to analyse, control and identify early risks. This information is presented and explained to the Management Board, the Risk Committee, and the head of each business division. The report includes aggregate credit exposure, credit metric forecasts, hold limit exceptions, liquidity ratios and risk profile changes. On a monthly basis detailed reporting of industry, customer and geographic risks takes place. Senior management assesses the appropriateness of the allowance for credit losses on a quarterly basis. The Board of Directors receives a comprehensive risk report once a quarter which is designed to provide all the necessary information to assess and conclude on the risks of the Group. For all levels throughout the Group, specifically tailored risk reports are prepared and distributed in order to ensure that all business divisions have access to extensive, necessary and up-to-date information. A daily briefing is given to the Management Board and all other relevant employees of the Group on the utilisation of market limits, proprietary investments and liquidity, plus any other risk developments. 45

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Introduction(continued)

Risk mitigation As part of its overall risk management, the Group uses derivatives and other instruments to manage exposures resulting from changes in interest rates, foreign currencies and exposures arising from forecast transactions. The Group actively uses collateral to reduce its credit risks (see below for more detail). Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Groups performance to developments affecting a particular industry or geographical location. In order to avoid excessive concentrations of risks, the Groups policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
Creditrisk

Credit risk is the risk that the Group will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations. The Bank manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for geographical and industry concentrations, and by monitoring exposures in relation to such limits. The Group has Credit committees, which are responsible for credit risk management and which set limits on borrowers and on loan portfolio. Regional credit committee is responsible for credit risk function over issuance of the loans to Russian Federation and other CIS countries. Financing of borrowers is done by thorough procedures of primary selection of borrowers, preliminary structuring of transaction, project assessment, borrowers financial statement analysis and monitoring and control of risks. Decision on financing of borrowers is made by the respective Credit committee depending on the borrowers limit. The Group has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions based on the requirements of kazakhstani regulation Counterparty limits are established by the use of a credit risk classification system, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. The credit quality review process allows the Group to assess the potential loss as a result of the risks to which it is exposed and take corrective action. During 2008, regional credit committee was chaired by the former Chairman of the Board of Directors. This created a conflict of interest, as the regional credit committee reports to the Managing Board, which in its turn reports to the Board of Directors. Therefore, the control from Managing Board was not effective and potentially contributed to the issuance of loans to off-shore companies, which became uncollectible in 2008 and for which the Bank has created an allowance as at 31 December 2008. (Refer to Notes 5 and 13). In 2009 the structure of credit committee was improved by the decision of the new management. Derivative financial instruments Credit risk arising from derivative financial instruments is, at any time, limited to those with positive fair values, as recorded in the balance sheet. Credit-related commitments risks The Bank makes available to its customers guarantees and letters of credit, which may require that the Bank make payments on their behalf. Such payments are collected from customers based on the terms of the contracts. They expose the Bank to similar risks to loans and these are mitigated by the same control processes and policies.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Creditrisk(continued)

The table below shows the maximum exposure to credit risk for the components of the balance sheet, including derivatives. The maximum exposure is shown gross, before the effect of mitigation through the use of master netting and collateral agreements.

Note
Cash and cash equivalents (excluding cash on hand) Obligatory reserves (excluding cash on hand) Financial assets at fair value through profit or loss (excluding equity securities) Amounts due from credit institutions Derivative financial assets Available-for-sale investment securities (excluding equity securities) Loans to customers Other assets Financial commitments and contingencies Total credit risk exposure 7 8 9 10 11 12 13 23

Gross maximum exposure 2008

82,645 27,601 106,519 85,174 21,650 19,122 1,617,063 23,000 1,982,774 551,253 2,534,027

Gross maximum exposure 2007

86,897 139,366 83,022 107,589 31,397 20,865 2,379,810 18,854 2,867,800 592,796 3,460,596

Where financial instruments are recorded at fair value, the amounts shown above represent the current credit risk exposure but not the maximum risk exposure that could arise in the future as a result of changes in values. For more detail on the maximum exposure to credit risk for each class of financial instrument, references shall be made to the specific notes. The effect of collateral and other risk mitigation techniques is shown in Note 13. Credit quality per class of financial assets The credit quality of financial assets is managed by the Group internal credit ratings. The table below shows the credit quality by class of asset for loan-related balance sheet lines, based on the Groups credit rating system.

Note
Loans to customers Corporate lending Small and medium business lending Individuals lending Total 13

Neither past due nor impaired

702,587 234,748 468,695 1,406,030

2008 Past due or individually impaired

1,369,404 22,085 36,822 1,428,311

Total
2,071,991 256,833 505,517 2,834,341

Note
Loans to customers Corporate lending Small and medium business lending Individuals lending Total 13

Neither past due nor impaired

1,396,467 278,461 541,511 2,216,439

2007 Past due or individually impaired

273,181 21,864 5,369 300,414

Total
1,669,648 300,325 546,880 2,516,853

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Creditrisk(continued)

Credit quality per class of financial assets (continued) Past due loans to customers include those that are only past due by a few days. An analysis of past due but not impaired loans, by age, is provided below. It is the Groups policy to maintain accurate and consistent risk ratings across the credit portfolio. This facilitates focused management of the applicable risks and the comparison of credit exposures across all lines of business, geographic regions and products. The rating system is supported by a variety of financial analytics, combined with processed market information to provide the main inputs for the measurement of counterparty risk. All internal risk ratings are tailored to the various categories and are derived in accordance with the Groups rating policy. The attributable risk ratings are assessed and updated regularly. Aging analysis of past due but not impaired loans per class of financial assets

Loans to customers Corporate lending Small and medium business lending Individuals lending Total

Less than 30 days 2008

13,507 6,448 10,976 30,931

2007
8,288 2,996 5,369 16,653

Of the total aggregate amount of gross past due but not impaired loans to customers, the fair value of collateral that the Group held as at 31 December 2008 was KZT 83,629 million (2007- KZT 36,068 million). See Collateral and other credit enhancements in Note 13 for the details of types of collateral held. See Note 13 for more detailed information with respect to the allowance for impairment of loans to customers. Carrying amount per class of financial assets whose terms have been renegotiated The table below shows the carrying amount for renegotiated financial assets, by class.

2008
Loans to customers Corporate lending Small and medium business lending Individuals lending Amounts due from credit institutions Total Impairment assessment 234,372 5,202 1,982 241,556 1,922 243,478

2007
60,437 3,340 488 64,265 64,265

The main considerations for the loan impairment assessment include whether any payments of principal or interest are overdue by more than 90 days or there are any known difficulties in the cash flows of counterparties, credit rating downgrades, or infringement of the original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed allowances and collectively assessed allowances. Individually assessed allowances The Group determines the allowances appropriate for each individually significant loan on an individual basis. Items considered when determining allowance amounts include the sustainability of the counterpartys business plan, its ability to improve performance once a financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the availability of other financial support and the realisable value of collateral, and the timing of the expected cash flows. The impairment losses are evaluated at each reporting date, unless unforeseen circumstances require more careful attention. Note 5 and Note 13 explain in detail for effects of such circumstances Collectively assessed allowances Allowances are assessed collectively for losses on loans to customers that are not individually significant (including credit cards, residential mortgages and unsecured consumer lending) and for individually significant loans where there is not yet objective evidence of individual impairment. Allowances are evaluated on each reporting date with each portfolio receiving a separate review.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Credit risk (continued) Collectively assessed allowances (continued) The collective assessment takes account of impairment that is likely to be present in the portfolio even though there is no objective evidence of the impairment in an individual assessment. Impairment losses are estimated by taking into consideration the following information: historical losses on the portfolio, current economic conditions, the appropriate delay between the time a loss is likely to have been incurred and the time it will be identified as requiring an individually assessed impairment allowance, and expected receipts and recoveries once impaired. Local management is responsible for deciding the length of this period which can extend for as long as one year. The impairment allowance is then reviewed by credit management to ensure alignment with the Groups overall policy. Financial guarantees and letters of credit are assessed and provision made in a similar manner as for loans. The geographical concentration of Groups monetary assets and liabilities is set out below:

2008 Kazakhstan
Assets: Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Amounts due from credit institutions Derivative financial assets Available-for-sale securities Loans to customers Other assets (monetary) Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Derivative financial liabilities Debt securities issued Provisions Other liabilities Net balance sheet position Off-balance sheet position 25,510 62,953 115,320 23,277 445 15,272 915,099 18,794 1,176,670

OECD
42,107 12,830 20,937 2 253,163 1,093 330,132

CIS and other non OECD countries

20,276 1,101 61,897 268 5,208 448,801 3,113 540,664

Total
87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 23,000 2,047,466

1,472 152,328 859,216 2,375 216,850 2,347 22,784 1,257,372 (80,702) 388,567

588,622 15,512 16,391 858,302 28,491 1,163 1,508,481 (1,178,349) 87,103

246 62,416 11,324 23 12,574 74,055 10,489 171,127 369,537 212,685

1,718 803,366 886,052 18,789 1,087,726 104,893 34,436 2,936,980 (889,514) 688,355

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Creditrisk(continued)

Collectively assessed allowances (continued)

Kazakhstan
Assets: Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Amounts due from credit institutions Derivative financial assets Available-for-sale securities Loans to customers Other assets Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Derivative financial liabilities Debt securities issued Provisions Other liabilities Net balance sheet position Off-balance sheet position
Liquidityriskandfundingmanagement

2007 CIS and other non OECD countries OECD

42,473 14,186 18,085 3,700 118,048 1,231 197,723 8,690 2,194 74,421 6,921 6,726 760,297 1,605 860,854

Total
99,723 168,242 112,175 107,589 31,397 26,422 2,379,810 18,854 2,944,212

48,560 166,048 97,989 33,168 6,391 15,996 1,501,465 16,018 1,885,635

627 150,953 641,094 395 189,193 2,598 22,539 1,007,399 878,236 379,068

628,449 3,735 880,229 1,772 658 1,514,843 (1,317,120) 59,560

286 55,902 11,414 1,398 15,023 6,207 114 90,344 770,510 195,000

913 835,304 652,508 5,528 1,084,445 10,577 23,311 2,612,586 331,626 633,628

Liquidity risk is the risk that the Group will be unable to meet its obligations when due. Liquidity risk management is one of the main directions in the Groups risk management process. When managing the liquidity risk the Group follows two main directions: 1. 2. conformity with the liquidity norms established by the regulatory bodies; and liquidity management by means of the financial pool method and fund conversion method.

Under the financial pool method the Groups monetary assets are considered as one pool, which are split to the primary and the secondary sources for liquidity purposes. The primary source consists of cash and balances on correspondent accounts, and the secondary source consists of highly liquid assets, which have high turnover and readily available for sale. The primary and the secondary sources are considered as not profit bearing and profit bearing, respectively. Fund conversion method is the distribution of all financing sources depending on the accounts turnover and reserve requirement for financing of the related assets.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Liquidityriskandfundingmanagement(continued)

The management of the Asset and Liability Management Committee (ALMC) analyzes the operational data on a weekly basis and makes decisions concerning liquidity management. Frequency of the ALMC meetings may vary depending on the situation. ALMC considers the following issues: GAP analysis of the assets and liabilities broken down by maturity and currencies, duration of assets and liabilities and analysis of future cash flows. All business functions and risk management departments are involved in the process of the Groups liquidity management to provide the information support. The Management regularly monitors high-liquid assets that may be disposed at any time. The Bank builds portfolio consisting of high-liquid assets, predominantly debt financial instruments issued by the states with high credit ratings. In addition, the Bank keeps obligatory reserves in the National Bank of Kazakhstan in the amount of 3% of certain external borrowings and 2% of the certain domestic borrowings. As discussed in Note 2, as at 31 December 2008, the amount drawn by the Group under bond programs and loan facilities amounted to KZT 1,891,092 million. In accordance with the contractual terms of certain bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. The Bank was in breach of these capital adequacy and lending exposure covenants on syndicated loans, bond programs and certain other facilities as at 31 December 2008. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and cross-defaults under the terms of the respective agreements. Due to the Banks inability to early repay all its debt as called by creditors, the Bank may not be able to meet all its obligations. Subsequent to 31 December 2008, certain lenders have requested repayment of debts amounting to USD 550 million or equivalent of KZT 83 billion citing default and/or acceleration clauses. If those lenders continue to exercise and other lenders seek to exercise rights under acceleration and default clauses, the Bank may not be able to meet its obligations. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder and the management considers that the restructuring of the above facilities will be completed in 2009. Analysis of financial liabilities by remaining contractual maturities The table below summarises the maturity profile of the Groups financial liabilities at 31 December 2008 based on undiscounted repayment obligations. Financial liabilities as at 31 December 2008 Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial instruments Amounts due to customers Debt securities issued Other liabilities Total undiscounted financial liabilities

Within one More than one year year

217 698,139 16,689 680,055 769,514 34,957 2,199,571 1,902 127,258 2,100 300,393 637,713 1,306 1,070,672

Total
2,119 825,397 18,789 980,448 1,407,227 36,263 3,270,243

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

The table below summarises the maturity profile of the Groups financial liabilities at 31 December 2007 based on contractual undiscounted repayment obligations Financial liabilities as at 31 December 2007 Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial instruments Amounts due to customers Debt securities issued Other liabilities Total undiscounted financial liabilities

Within one More than one year year

130 384,784 3,130 489,668 164,010 32,999 1,074,721 884 559,105 2,398 225,075 1,473,570 5,398 2,266,430

Total
1,014 943,889 5,528 714,743 1,637,580 38,397 3,341,151

As discussed in Note 2, there has been a significant deterioration in the Group's financial position principally resulting from the loss events related with the loan portfolio described in Note 5. This has lead to a breach, by the Bank and the Group, of certain prudential requirements including those related to capital adequacy set by the FMSA. As a result of these loss events the Groups total liabilities as at 31 December 2008 exceeded its total assets by KZT 742,779 million and the Group has reported a net loss amounting to KZT 1,188,050 million for the year then ended. As at 31 December 2008, the amount drawn by the Group under bond programs and loan facilities amounted to KZT 1,891,092 million. In accordance with the contractual terms of certain bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. The Bank was in breach of these capital adequacy and lending exposure covenants on syndicated loans, bond programs and certain other facilities as at 31 December 2008. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and cross-defaults under the terms of the respective agreements. Subsequent to 31 December 2008, certain lenders have requested repayment of debts amounting to USD 550 million citing default and/or acceleration clauses. If those lenders continue to exercise and other lenders seek to exercise rights under acceleration and default clauses, the Bank may not be able to meet its obligations. Therefore, the Bank started restructuring process with its creditors. The table below shows the contractual expiry by maturity of the Groups financial commitments and contingencies.

2008 2007

On demand
14,694 17,775

Less than month

21,095 16,478

1 to 3 months
39,854 28,756

3 to 12 months
192,546 146,621

1 to 3 years
249,788 250,623

Over 3 years
160,233 166,493

Total
678,210 626,746

52

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Liquidityriskandfundingmanagement(continued)

In accordance with terms of debt securities issued the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy, and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major rating agencies. Losses on loans, derivative financial instruments and securities, existed in 2008 and identified in 2009 by the current management resulted in the following breaches. As at 31 December 2008, the Bank was in breach of capital adequacy, lending exposure and cross-default covenants on certain debt securities issued. Due to breach of covenants described above, amounts due to credit institutions and debt securities issued of KZT 1,185,395 million have become current. As discussed in Note 2, the Bank is in the process of restructuring these debts. The table below summarises an analysis of assets and liabilities according to when they are expected to be recovered or settled at 31 December 2008.

Withinone year
Assets: Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Amounts due from credit institutions Derivative financial assets Available-for-sale Securities Loans to customers Other assets Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial liabilities Amounts due to customers Debt securities issued Provisions Other liabilities Net position Accumulated gap 87,893 24,173 128,150 71,925 655 3,810 851,289 15,994 1,183,889 125 708,182 16,689 536,302 722,510 54,294 33,930 2,072,032 (888,143) (888,143)

2008 More than one year

39,881 13,249 20,995 16,672 765,774 7,006 863,577 1,593 95,184 2,100 349,750 365,216 50,599 506 864,948 (1,371) (889,514)

Total
87,893 64,054 128,150 85,174 21,650 20,482 1,617,063 23,000 2,047,466 1,718 803,366 18,789 886,052 1,087,726 104,893 34,436 2,936,980 (889,514)

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Liquidityriskandfundingmanagement(continued)

Within one year

Assets: Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Amounts due from credit institutions Derivative financial assets Available-for-sale Securities Loans to customers Other assets Liabilities: Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial liabilities Amounts due to customers Debt securities issued Provisions Other liabilities Net position Accumulated gap
Marketrisk

2007 More than one year

115,976 48,498 31,022 18,211 1,821,248 2,555 2,037,510 818 579,704 3,620 192,705 1,017,533 5,301 1,295 1,800,976 236,534 331,626

Total
99,723 168,242 112,175 107,589 31,397 26,422 2,379,810 18,854 2,944,212 913 835,304 5,528 652,508 1,084,445 10,577 23,311 2,612,586 331,626

99,723 52,266 112,175 59,091 375 8,211 558,562 16,299 906,702 95 255,600 1,908 459,803 66,912 5,276 22,016 811,610 95,092 95,092

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchanges, and equity prices. The market risk for the trading and non-trading portfolio is managed and monitored based on sensitivity analysis. Except for the concentrations within foreign currency, the Group has no significant concentration of market risk. Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The following table demonstrates the sensitivity of Groups income statement to a reasonable possible change in interest rates, with all other variables held constant, of the Groups income statement. The sensitivity of the income statement is the effect of the assumed changes in interest rates on the net interest income for one year, based on the floating rate financial assets and financial liabilities held at 31 December 2008. The sensitivity of equity is calculated by revaluing fixed rate available-for-sale financial assets at 31 December 2008 for the effects of the assumed changes in interest rates based on the assumption that there are parallel shifts in the yield curve.

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Marketrisk(continued)

Interest rate risk (continued)

Currency
LIBOR: USD KZT EUR CHF JPY

Increase in basis points Sensitivity of net interest 2008 income 2008

+59 +59 +59 +59 +59 (2,372) (1,699) (1,080) (177) (804)

Sensitivity of equity 2008

(711) (217)

Currency
LIBOR: USD KZT EUR CHF JPY

Increase in basis points Sensitivity of net interest 2007 income 2007

+46 +46 +46 +46 +46 (1,570) (719) (427) (90) (806)

Sensitivity of equity 2007

(1) (168)

As at 31 December the effective average interest rates by currencies for interest generating/ bearing monetary financial instruments were as follow:

2008 KZT
Financial assets at fair value through profit or loss Amounts due from credit institutions Available-for-sale securities Loans to customers Amounts due to the Government and central banks Amounts due to credit institutions Amounts due to customers Debt securities issued Currency risk 8.1% 9.7% 11.1% 17.8% 4.1% 7.9% 10.1% 11.6%

Foreign currency
5.1% 7.8% 3.1% 12.1% 3.5% 6.2% 7.4% 8.0%

2007 KZT
6.6% 7.6% 11.2% 17.8% 5.8% 8.4% 8.8% 9.8%

Foreign currency
5.9% 10.1% 3.7% 13.0% 4.3% 7.1% 6.3% 9.2%

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Risk Committee has set limits on positions by currency based on the FMSA regulations. Positions are monitored on a daily basis. The tables below indicate the currencies to which the Group had significant exposure at 31 December 2008 on its monetary assets and liabilities and its forecast cash flows. The analysis calculates the effect of a reasonably possible movement of the currency rate against the Tenge, with all other variables held constant on the income statement. A negative amount in the table reflects a potential net reduction in income statement, while a positive amount reflects a net potential increase.

Currency
USD EUR RUR CHF JPY KGS BYR PLZ GBP

Change in currency rate in % 2008

-15.4 -15.2 -8.3 -16.4 -22.4 -15.0 -3.6 -23.2

Effect on profit before tax 2008

(71,743) 6,143 1,081 (218) (1,474) (669) (39) (221)

Change in currency rate in % 2007

-4 -7 -5 -8 -9 -10 -8

Effect on profit before tax 2007

(5,591) 1,044 (1,681) 1,609 831 792 3,476

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Marketrisk(continued)

Equity price risk Equity price risk is the risk that the fair values of equities decrease as the result of changes in the levels of equity indices and the value of individual shares. The equity price risk exposure arises from the Banks investment and trading portfolios. The effect on profit and equity (as a result of a change in the fair value of financial assets at fair value through profit or loss and equity instruments held as available-for-sale at 31 December) due to a reasonably possible change in equity indices using Capital Asset Pricing Model, with all other variables held constant, is as follows: Increase in indices 2008, % 66.49 72.77 73.85 39.61 59.35

Market index
KASE RTS PFTS (Ukraine) MSCI World Index FTSE FTSE World Oil & Gas Index FTSE All Share Mining Index FTSE All Share Support Services Index FTSE All Share Banks Index Toronto SE 300 Composite Index

Effect on profit before tax and equity 2008

773 7,913 481 3,422 3

Increase in indices 2007, %

9.6 27.3 131.1 2.8 14.3 47.5 13.0 22.5 7.0

Effect on profit before tax and equity 2007

534 290 70 1.581 2 19 (1) 2

Market index
KASE RTS PFTS (Ukraine) MSCI World Index FTSE FTSE World Oil & Gas Index FTSE All Share Mining Index FTSE All Share Support Services Index FTSE All Share Banks Index Toronto SE 300 Composite Index

Decrease in indices 2008, %

-66.49 -72.77 -73.85 -39.61 -59.35

Effect on profit before tax and equity 2008

1,024 (5,827) 601 (3,151) 4

Decrease in indices 2007, %

-9.6 -27.3 -131.1 -2.8 -14.3 -47.5 -13.0 -22.5 -7.0

Effect on profit before tax and equity 2007

455 212 (28) 1,513 (1) (11) 3

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 28. Riskmanagementpolicies(continued)

Operationalrisk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to perform, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss. The Group cannot expect to eliminate all operational risks, but through a control framework and by monitoring and responding to potential risks, the Group is able to manage the risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, including the use of internal audit.

29.

Fairvaluesoffinancialinstruments

Set out below is a comparison by class of the carrying amounts and fair values of the Banks financial instruments that are carried in the financial statements. The table does not include the fair values of non-financial assets and non-financial liabilities.

Cash and cash equivalents Obligatory reserves Financial assets at fair value through profit or loss Amounts due from credit institutions Derivative financial assets Loans to customers Available-for-sale investment securities

Financial assets

Carrying value 2008

87,893 64,054 128,150 85,174 21,650 1,617,063 20,482

Fair value2008
87,893 64,054 128,150 85,174 21,650 1,617,063 20,482

Unrecognised gain/(loss) 2008

Carrying value 2007

99,723 168,242 112,175 107,589 31,397 2,379,810 26,422

Fair value 2007

99,723 168,242 112,175 107,589 31,397 2,385,763 26,422

Unrecognised gain/(loss) 2007

5,953

Financial liabilities

Amounts due to the Government and central banks Amounts due to credit institutions Derivative financial liabilities Amounts due to customers Debt securities issued Total unrecognised change in unrealised fair value

1,718 803,366 18,789 886,052 1,087,726

1,718 794,637 18,789 886,052 727,839 8,729 359,887 368,616

913 835,304 5,528 652,508 1,084,445

913 848,660 5,528 652,508 1,016,976

(13,356) 67,469 60,066

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Notes to the 2008 Consolidated Financial Statements (continued)

(Millions of Kazakhstani Tenge) 29. Fairvaluesoffinancialinstruments(continued)

The following describes the methodologies and assumptions used to determine fair values for those financial instruments which are not already recorded at fair value in the financial statements. Assets for which fair value approximates carrying value For financial assets and financial liabilities that are liquid or having a short term maturity (less than three months) it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits and variable rate financial instruments. Fixed rate financial instruments The fair values of fixed rate financial assets and liabilities carried at amortised cost are estimated by comparing market interest rates when they were first recognised with current market rates offered for similar financial instruments. The estimated fair value of fixed interest bearing deposits is based on discounted cash flows using prevailing money-market interest rates for debts with similar credit risk and maturity. For quoted debt issued the fair values are calculated based on quoted market prices. For those notes issued where quoted market prices are not available, a discounted cash flow model is used based on a current interest rate yield curve appropriate for the remaining term to maturity.

30.

Segmentanalysis

The Groups primary format for reporting segment information is business segments and the secondary format is geographical segments. Business segments. The Group is organised on a 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 and cash and foreign currency related services. Corporate banking representing other than small and medium size legal entities direct debit facilities, current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and trade finance products. Small and medium business representing individual entrepreneurs and small enterprises current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and trade finance products. Investment activity - representing financial assets and liabilities used for trading or investment purposes, financing, and merger and acquisitions transaction support.

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Notes to the 2008 Consolidated financial statements

(Millions of Kazakhstani Tenge) 30. Segmentanalysis(continued)

Small and medium business
39,874 9,649 (4,792) (23,846) 20,885 (42,364) (21,479) 10,823 (432) (12,088) (143) (23,319) (23,319) 213,297 152,140

Segment information for the main reportable business segments of the Group for the years ended 31 December 2008 and 2007 is set out below:

2008
External interest income Internal interest income External interest expense Internal interest expense Net interest income before impairment Impairment charge Net interest (loss)/income after impairment Net commission and non-interest income Depreciation and amortizations Non-interest expenses Other provisions Share in net loss of associate organizations Impairment loss of available-for-sale securities Impairment of investments in associates Impairment loss on goodwill Loss before income tax expense Income tax benefit Loss after income tax Total assets Total liabilities

Corporate banking
236,914 52,093 (20,811) (200,542) 67,654 (1,003,422) (935,768) 23,256 (487) (26,247) (96,429) (1,035,675) (1,035,675) 1,063,977 701,257

Retail banking
78,033 36,964 (36,524) (44,474) 33,999 (48,071) (14,072) 4,672 (1,212) (20,808) (149) (31,569) (31,569) 437,161 372,745

Investing activity
41,682 244,688 (146,143) (74,532) 65,695 (443) 65,252 (49,857) (106) (7,113) (16,331) (15,448) (42,610) (19,138) (8,107) (93,458) (93,458) 1,391,441 2,758,664

Unallocated amounts
(36) (111) (147) (147) 245 (2,198) (1,918) (78) (4,096) 67 (4,029) 312,200 26,250

Elimination
(343,394) 343,394 (7,898) 7,898 (1,223,875) (1,074,076)

Total
396,467 (208,381) 188,086 (1,094,300) (906,214) (18,759) (4,435) (60,276) (113,130) (15,448) (42,610) (19,138) (8,107) (1,188,117) 67 (1,188,050) 2,194,201 2,936,980

59

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Notes to the 2008 Consolidated financial statements

(Millions of Kazakhstani Tenge) 30.

2007
External interest income Internal interest income External interest expense Internal interest expense Net interest income before impairment Impairment charge Net interest (loss)/income after impairment Net commission and non-interest income Depreciation and amortization Non-interest expenses Other provisions Income from associate organizations Income before income tax expense Income tax expense Net income after income tax Total assets Total liabilities

Segmentanalysis(continued)
Corporate Banking
170,830 22,470 (14,604) (132,014) 46,682 (52,722) (6,040) 35,049 (101) (20,164) (4,495) 4,249 4,249 1,642,359 329,158

Small and medium busines

38,679 5,709 (3,829) (19,957) 20,602 (5,623) 14,979 9,100 (210) (9,649) 123 14,343 14,343 295,840 140,980

Retail Unallocated banking Investing activity amounts Elimination

81,803 28,186 (28,996) (37,748) 43,245 (9,431) 33,814 5,149 (732) (27,765) (25) 10,441 10,441 526,287 346,719 32,190 214,547 (131,850) (81,193) 33,694 (12) 33,682 14,986 (280) (7,773) 4,234 44,849 44,849 1,526,106 2,836,257 (54) (54) (22) (76) 4,386 (991) (2,356) (308) 655 (9,832) (9,177) 245,376 10,841 (270,912) 270,912 (13,333) 13,333 (1,171,351) (1,051,369)

Total
323,448 (179,279) 144,169 (67,810) 76,359 55,337 (2,314) (54,374) (4,705) 4,234 74,537 (9,832) 64,705 3,064,617 2,612,586

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Notes to the 2008 Consolidated financial statements (continued)

(Millions of Kazakhstani Tenge) 30. Segmentanalysis(continued)

Geographical segments. Segment information for the main geographical segments of the Group for the years ended 31 December 2008 and 2007 is set out below:

Kazakhstan
Segment assets External revenues Capital expenditure Credit related commitments Segment assets External revenues Capital expenditure Credit related commitments

OECD
595,956 204,351 44,456 208,669 109,810 20,476

Non OECD
941,896 263,069 335 65,244 976,537 158,402 1,653 57,529

Total
3,508,809 930,695 7,069 363,490 3,188,710 510,879 15,855 334,171

2008

1,970,957 463,275 6,734 253,790 2,003,504 242,667 14,202 256,166

2007

External revenues, assets and credit related commitments have generally been allocated based on domicile of the counterparty. Cash on hand, property and equipment and capital expenditure have been allocated based on the country in which they are physically held.

31.

Relatedpartytransactions

In accordance with IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. Related parties, except those, who are subject to the restriction of the legislation, may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

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Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 31. Relatedpartytransactions(continued)

31 December 2008 Key management Associates personnel
8,210 1,439 (8,354) 1,295 1,295 12%-19% 2010-2016

As at 31 December 2008 and 2007 the Group had the following transactions with related parties:
31 December 2007 Key management Other related Associates personnel parties
8,683 7,742 (8,215) 8,210 8,210 12%-16% 2009-2027 6,510 5,790 (10,948) 1,352 1,352 12%-19% 2008-2026

Shareholders
Loans outstanding at 1 January, gross Loans issued during the period Loan repayments during the period Loans outstanding at 31 December, gross Less: allowance for impairment at 31 December Loans outstanding at 31 December, net Interest rates Maturities Amounts due from credit institutions (deposits) Deposits at 1 January Deposits placed during the period Deposits withdrawn during the period Deposits at 31 December Interest rates Maturity Amounts due from credit institutions (loans) Loans at 1 January Loans placed during the period Loans withdrawn during the period Loans at 31 December Less: allowance for impairment at 31 December Loans at 31 December Interest rates Maturity

Other related parties

1,352 2 (1,347) 7 7 15% 2010-2014

Shareholders

5,096 24,842 (23,579) 6,359 12%-14% 2009

5,582 (5,582) 11% 2008

2,246 8,307 (5,457) 5,096 9% 2008-2009

6,570 19,887 (20,875) 5,582 11%-14% 2008

9,497 26,394 (28,562) 7,329 (3,683) 3,646 7%-15% 2009-2013

8,398 (8,398) 8% 2008

12,625 17,892 (21,020) 9,497 9,497 8%-13% 2008-2

3,190 9,374 (4,166) 8,398 8,398 8%-11% 2008-2013

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Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 31. Relatedpartytransactions(continued)

31 December 2008 Key management Associates personnel
430 494,489 (488,036) 6,883

Shareholders
Amounts due to credit institutions Loans at 1 January Loans received during the period Loans repaid during the period Loans at 31 December Interest rates Maturity Financial assets at fair value through profit or loss Balances at 1 January Securities purchased during the period Securities sold during the period Balances at 31 December Interest rates Maturity Cash and cash equivalents Deposits at 1 January

Other related parties

558 (558) On demand

Shareholders

31 December 2007 Key management Other related Associates parties personnel

3,529 79,809 (82,908) 430 up to 10% 2008 17,481 329,572 (346,495) 558 On demand

up to 11% On demand-2009

1,619 416 (2,035) 9% 2008

1,620 336 (337) 1,619 9% 2008

1,281

128

617

Deposits received during the period Deposits repaid during the period Deposits at 31 December Less: allowance for impairment at 31 December Deposits at 31 December, net of impairment Interest rates Maturity

859,637 (858,943) 695 (28) 667 1%-12% On demand2009

(1,281) On demand

48,639 (48,766) 1 1 On demand

358,894 (358,230) 1,281 1,281 On demand

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Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 31. Relatedpartytransactions(continued)

31 December 2008 Key management personnel Associates
9,145 (7,741) 1,404 2%-3% 2009-2010 3,105 2% 2009 1,319 (189) 147 64 (11,452) 163 28 (76) (51) 4,151 48,083 (51,529) 705 9%-13% 2009-2011 3 3 2009-2010 553 (113) 1 1

Shareholders
Amounts due to customers Deposits at 1 January Deposits received during the period Deposits repaid during the period Deposits at 31 December Interest rates Maturity Commitments and guarantees issued Less: allowance for impairment 18 668 (680) 6 On demand

Other related parties

4,796 1,379 (5,888) 287 9%-10% 2009-2011 2 1,721 (17) (34) 9 68

Shareholders
4,583 55,158 (59,723) 18 On demand

31 December 2007 Key management Other related parties personnel Associates

3,796 3,796 2%-7% 2008-2009 503 3% 2008 1,284 (57) 147 16 46 40 982 78,375 (75,206) 4,151 up to 12% 2008-2012 17 17 2008-2010 8 2011 1,614 (255) 500 18,901 (14,605) 4,796 10% 2008 8,557 8,557 2%-3% 2008-2011 1,456 2%-3% 2008 666 1,127 (8) (2) 2 34 (245)

Interest rates Maturity Commitments and guarantees received Interest rates Maturity Interest income on loans Interest income on due from credit institutions Interest expense on due to credit institutions Interest expense on due to customers Interest income on financial assets Interest income on deposits up to 90 days Allowance for impairment Fee and commission income Other income Fee and commission expense Other expense

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Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 31. Relatedpartytransactions(continued)

As at 31 December the Group had the following transactions with related parties: The aggregate remuneration and other benefits paid to members of the Management Board and Board of Directors for 2008 was KZT 624 million (2007 - KZT 610 million). As at 31 December 2008 the Bank had loans totaling to KZT 807 million issued to the Group management for investment to mutual investment funds, managed by a subsidiary of the Group (2007 - KZT 4,381 million), the rest of loans are presented by consumer loans. Included in the table above are the following transactions with related parties outstanding as at 31 December 2008 and 2007: Operations with associates such as: loans - including provisioning matters, due from credit institutions (loans issued and deposits placed) with the Group and guarantees and letters of credit to investees, and mutual investments. Shareholders: loans - including provisioning matters, deposits placed with the Group. Members of Board of Directors: loans - including provisioning matters, deposits attracted with the Group, total remuneration paid during the period.

32.

Capitaladequacy

The Group maintains an actively managed capital base to cover risks inherent in the business. The adequacy of the Groups capital is monitored using, among other measures, the ratios established by the Basel Capital Accord 1988 and the ratios established by the FMSA in supervising the Bank. The primary objectives of the Groups capital management are to ensure that the Group complies with externally imposed capital requirements and that the Group maintains strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholders value. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes were made in the objectives, policies and processes from the previous years. As at 31 December 2008, the amount drawn by the Group under bond programs and loan facilities amounted to KZT 1,891,092 million. In accordance with the contractual terms of certain bond programs and loan facilities, the Bank is required to maintain certain financial ratios, particularly with regard to its liquidity, capital adequacy and lending exposures. Furthermore, the Bank is required to maintain a certain level of credit rating from major international rating agencies. The Bank was in breach of these capital adequacy and lending exposure covenants on syndicated loans, bond programs and certain other facilities as at 31 December 2008. In addition, in April 2009, the credit ratings of the Bank from major international rating agencies have been decreased to default levels. Accordingly, certain credit facilities are in default and have become callable by the lenders. The Banks default under these covenants resulted in accelerations and crossdefaults under the terms of the respective agreements. Due to the Banks inability to repay all its debt as called by creditors in full, the Bank may not be able to meet all its obligations. Subsequent to 31 December 2008, certain lenders have requested repayment of debts amounting to USD 550 million citing default and/or acceleration clauses. If those lenders continue to exercise and other lenders seek to exercise rights under acceleration and default clauses, the Bank may not be able to meet its obligations. The Group, with the Government's support, is in the process of restructuring these debts and the Banks controlling shareholder and the management considers that the restructuring of the above facilities will be completed in 2009.

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Notes to the 2008 Consolidated Financial Statements

(Millions of Kazakhstani Tenge) 33. Subsequentevents

On 23 January 2009 the Bank has repaid, at maturity, its notes for the total amount of USD 250,000 thousand, issued under the Banks Global Medium Term Notes Program. On 2 February 2009 in accordance with the Law of the Republic of Kazakhstan on Banks and banking activity the FMSA has made an offer to the Government and the Government represented by JSC Sovereign Wealth Fund Samruk-Kazyna (Samruk-Kazyna) agreed to purchase the controlling stake in the Banks capital. The purchase was carried out through issue of additional 25,246,343 shares at the price of KZT 8,401 per share, for the total amount of KZT 212,095 million, which provided the Government with 75.1% interest in the Banks capital. On 4 February 2009 the Kazakh Tenge devalued against US Dollars and other major currencies. The exchange rates for USD 1 before and after devaluation were KZT 120 and KZT 150, respectively. Should the devaluation happen as at 31 December 2008, its effect on the Groups consolidated income statement would be KZT 68,543 million less. In February 2009, in order to support the Banks liquidity, the Government decided to transfer some of the state owned entities accounts to the Bank. This provided the Bank with additional funds for the total amount of KZT 129,690 million. In March 2009, the Bank repaid, at maturity, its bilateral loan to Morgan Stanley for the total amount of KZT 46,620 million. On 10 March 2009 the Bank has also repaid USD 193,366,666.67 in accordance with the schedule part of the Global Syndicated Loan Facility. On 3 March 2009 the National Bank of the Republic of Kazakhstan has decreased the obligatory reserve requirements for commercial banks from 2% to 1.5% on internal obligations and from 3% to 2.5% on external obligations. During March 2009, the Bank has made several placements of its notes at local market for the total amount of KZT 645 billion, with final maturity of 2024 and with repayments starting from 2015. All of these notes were purchased by Samruk-Kazyna. On 14 February 2009 the Bank has signed a general agreement with Samruk-Kazyna and DAMU Fund for development of entrepreneurship, on providing the Bank with funds in the amount of KZT 22 billion for the purposes of financing and refinancing of small and medium size entities under the Governments anti-crisis program, for the period of seven years. In March 2009 the Group acquired 33,978,708 shares in its associate Sekerbank for amount of KZT 2,996 million from an additional share issue and to maintain its current share interest of 33.98%. In February 2009 rating agencies have downgraded ratings of the Banks notes issued under the Diversified payment rights program from Baa3 to B1, which lead to a breach of the covenants of the notes. On 20 April 2009 certain lenders demanded from the Bank accelerated repayment of the Banks debt due to these creditors for the total amount of USD 550 million, based on a breach of financial and non-financial covenants of the Banks debt agreements, as a result of change in control by Samruk-Kazyna and as a result of downgrade of the Banks ratings in 2009. Since the Banks debt agreements with other creditors have a cross-default clauses, in order to avoid acceleration claims by other creditors, the management of the Bank has decided to suspend repayments of principal amounts of all of its debt, starting from 20 April 2009, until such time that the Bank finalizes its negotiations with all the creditors on restructuring of the Banks debt. The Bank has also announced that it will continue interest payments on its debts. For the period from January to April 2009 international ratings agencies have downgraded in stages, the Banks short and long-term counterparty credit ratings, as follows: Standard&Poors from BB to D; Fitch from BB to RD, Moodys from Ba1 to Caa3. This has lead to breach of some of financial and non-financial covenants of the Banks debt agreements, as described in Note 2.

66

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ISSUER JSC BTA Bank 97 Zholdasbekov Street Samal 2 Microdistrict Almaty 050051 Republic of Kazakhstan TRUSTEE BNY Corporate Trustee Services Limited The Bank of New York Mellon One Canada Square London E14 5AL United Kingdom PRINCIPAL PAYING AGENT AND TRANSFER AGENT The Bank of New York Mellon The Bank of New York Mellon One Canada Square London E14 5AL United Kingdom LUXEMBOURG LISTING AGENT The Bank of New York (Luxembourg) S.A. Aerogolf Center-1A, Hoehenhof L-1736 Senningerberg Luxembourg REGISTRAR The Bank of New York Mellon (Luxembourg) S.A. Aerogolf Center-1A, Hoehenhof L-1736 Senningerberg Luxembourg DEPOSITARY The Bank of New York Mellon 101 Barclay Street 22nd Floor New York New York 10286 United States of America ISSUERS AUDITORS Ernst & Young LLP Esentai Tower 77/7, Al Farabi Ave. Almaty, 050059 Republic of Kazakhstan

ISSUERS LEGAL ADVISORS White & Case LLP 5 Old Broad Street London EC2N 1DW United Kingdom White & Case Kazakhstan LLP 117/6 Dostyk Ave Almaty 050059 Kazakhstan