6-K
Joint Stock Co Kaspi.kz (KSPI)
g
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 6-K
________________________
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2024
Commission File Number: 001-41921
_________________________
Joint Stock Company Kaspi.kz
(Translation of registrant’s name into English)
______________________
| 154A Nauryzbai Batyr Street |
|---|
| Almaty, Kazakhstan |
| 050013 |
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F | ☒ | Form 40-F | ☐ |
|---|
1
EXPLANATORY NOTE
On April 30, 2024, Joint Stock Company Kaspi.kz (the “Company,” “we” or “us”) published on its corporate website the interim condensed consolidated financial information for the three months ended 31 March 2024 (unaudited), furnished as Exhibit 99.1 herewith.
This report of foreign private issuer on Form 6-K (the “Form 6-K”) is hereby incorporated by reference into the Company’s registration statement on Form S-8 (File No. 333-276609).
Cautionary Statement Regarding Forward-Looking Statements
This Form 6-K, including the exhibit furnished herewith, contains forward-looking statements within the meaning of the U.S. federal securities laws, which statements relate to our current expectations and views of future events. In some cases, these forward-looking statements can be identified by words or phrases such as “believe,” “may,” “might,” “will,” “expect,” “estimate,” “could,” “should,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “prospective,” “continue,” “is/are likely to” or other similar expressions. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, risks related to the following: our ability to attract sufficient new customers, engage and retain our existing customers or sell additional functionality, products and services to them on our platforms; our ability to maintain and improve the network effects of our Super App business model; our ability to improve or maintain technology infrastructure; our ability to successfully execute the new business model and reach profitability of the e-Grocery operations; our ability to partner with sufficient new merchants or maintain relationships with our existing merchant partners; our ability to effectively manage the growth of our business and operations; developments affecting the financial services industry; our brand or trusted status of our platforms and Super Apps; our ability to retain and motivate our personnel and attract new talent, or to maintain our corporate culture; our ability to keep pace with rapid technological developments to provide innovative services; our ability to implement changes to our systems and operations necessary to capitalize on our future growth opportunities; changes in relationships with third-party providers, including software and hardware suppliers, delivery services, credit bureaus and debt collection agencies; our ability to compete successfully against existing or new competitors; our ability to integrate acquisitions, strategic alliances and investments; our ability to adequately obtain, maintain, enforce and protect our intellectual property and similar proprietary rights; evolving nature of Kazakhstan’s legislative and regulatory framework; our ability to obtain or retain certain licenses, permits and approvals in a timely manner; our ability to successfully remediate the existing material weaknesses in our internal control over financial reporting and our ability to establish and maintain an effective system of internal control over financial reporting; dependence on our subsidiaries for cash to fund our operations and expenses, including future dividend payments, if any; and risks related to other factors discussed under “Risk Factors” in the final prospectus relating to our initial public offering filed with the U.S. Securities and Exchange Commission on January 19, 2024.
We operate in an evolving environment. New risks emerge from time to time, and it is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
The forward-looking statements made in this Form 6-K relate only to events or information as of the date on which the statements are made in this Form 6-K. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Joint Stock Company Kaspi.Kz | ||
|---|---|---|
| April 30, 2024 | By: | /s/ Tengiz Mosidze |
| Name: Tengiz Mosidze<br><br>Title: Chief Financial Officer |
3
EXHIBIT INDEX
The following exhibit is furnished as part of this Form 6-K:
| No. | Description |
|---|---|
| 99.1 | Interim condensed consolidated financial information for the three months ended 31 March 2024 (unaudited). |
4
EX-99.1
KASPI.KZ
JOINT STOCK COMPANY
Interim Condensed Consolidated
Financial Information For the three months ended
31 March 2024 (Unaudited)
Exhibit 99.1
Joint Stock Company Kaspi.kz
Table of Contents
Page
interim condensed consolidated financial information
FOR THE three months ended 31 march 2024 (unaudited):
Interim condensed consolidated statements of profit or loss (unaudited) 3
Interim condensed consolidated statements of other comprehensive income (unaudited) 4
Interim condensed consolidated statements of financial position (unaudited) 5
Interim condensed consolidated statements of changes in equity (unaudited) 6
Interim condensed consolidated statements of cash flows (unaudited) 7-8
Selected explanatory notes to the interim condensed consolidated financial information (unaudited) 9-34
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Profit or Loss
For the three months ended 31 March 2023 and 2024 (Unaudited)
(in millions of KZT, except for earnings per share which are in KZT)
| Notes | Three Months Ended<br><br>31 March<br><br>2023 | Three Months Ended<br><br>31 March<br><br>2024 | |
|---|---|---|---|
| REVENUE | 4,5,18 | 395,004 | 552,814 |
| Net fee revenue | 196,548 | 275,152 | |
| Interest revenue | 185,320 | 240,301 | |
| Retail revenue | 8,014 | 35,570 | |
| Other gains | 5,122 | 1,791 | |
| COSTS AND OPERATING EXPENSES | 6,18 | (187,398) | (283,717) |
| Interest expenses | (106,964) | (145,499) | |
| Transaction expenses | (5,959) | (6,331) | |
| Cost of goods and services | (31,348) | (63,078) | |
| Technology & product development | (18,004) | (26,430) | |
| Sales & marketing | (4,154) | (9,934) | |
| General & administrative expenses | (5,778) | (7,392) | |
| Provision expenses | 7 | (15,191) | (25,053) |
| NET INCOME BEFORE TAX | 207,606 | 269,097 | |
| Income tax | 8 | (33,397) | (45,657) |
| NET INCOME | 174,209 | 223,440 | |
| Attributable to: | |||
| Shareholders of the Company | 173,103 | 219,599 | |
| Non-controlling interest | 1,106 | 3,841 | |
| NET INCOME | 174,209 | 223,440 | |
| Earnings per share | |||
| Basic (KZT) | 9 | 911 | 1,160 |
| Diluted (KZT) | 9 | 903 | 1,151 |
The accompanying notes are an integral part of this interim condensed consolidated financial information.
3
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Other Comprehensive Income
For the three months ended 31 March 2023 and 2024 (Unaudited)
(in millions of KZT)
The accompanying notes are an integral part of this interim condensed consolidated financial information.
| Three Months Ended<br><br>31 March<br><br>2023 | Three Months Ended<br><br>31 March 2024 | |
|---|---|---|
| NET INCOME | 174,209 | 223,440 |
| OTHER COMPREHENSIVE INCOME | ||
| Items that will not be reclassified subsequently to profit or loss: | ||
| Movement in investment revaluation reserve for equity instruments at FVTOCI | 13 | 23 |
| Items that may be reclassified subsequently to profit or loss: | ||
| Movement in investment revaluation reserve for debt instruments at FVTOCI: | ||
| Gains arising during the period, net of tax KZT Nil | 13,353 | 32,365 |
| Expected credit losses (recoveries) recognised in profit or loss | 165 | (294) |
| Reclassification of losses/(recoveries) included in profit or loss, net of tax KZT Nil | 4 | (424) |
| Foreign exchange differences on translation of foreign operations | 138 | 2 |
| Other comprehensive gain for the period | 13,673 | 31,672 |
| TOTAL COMPREHENSIVE INCOME | 187,882 | 255,112 |
| Attributable to: | ||
| Shareholders of the Company | 186,632 | 250,938 |
| Non-controlling interest | 1,250 | 4,174 |
| TOTAL COMPREHENSIVE INCOME | 187,882 | 255,112 |
4
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Financial Position
As at 31 December 2023 and 31 March 2024 (Unaudited)
(in millions of KZT)
| Notes | 31 December 2023 | 31 March<br><br>2024 | |
|---|---|---|---|
| ASSETS: | |||
| Cash and cash equivalents | 10 | 820,466 | 668,058 |
| Mandatory cash balances with National Bank of the Republic of Kazakhstan | 47,110 | 50,174 | |
| Due from banks | 17 | 30,683 | 30,156 |
| Investment securities and derivatives | 11,17 | 1,377,772 | 1,312,436 |
| Loans to customers | 12,17,18 | 4,235,957 | 4,523,841 |
| Property, equipment and intangible assets | 174,346 | 172,357 | |
| Other assets | 18 | 135,598 | 152,204 |
| TOTAL ASSETS | 6,821,932 | 6,909,226 | |
| LIABILITIES AND EQUITY | |||
| LIABILITIES: | |||
| Due to banks | 13,17 | 154 | 104,055 |
| Customer accounts | 14,17,18 | 5,441,456 | 5,252,797 |
| Debt securities issued | 17 | 99,468 | 49,830 |
| Subordinated debt | 17 | 62,369 | 60,824 |
| Other liabilities | 18 | 115,272 | 83,132 |
| TOTAL LIABILITIES | 5,718,719 | 5,550,638 | |
| EQUITY: | |||
| Issued capital | 15 | 130,144 | 130,144 |
| Treasury shares | 15 | (152,001) | (151,551) |
| Additional paid-in-capital | 506 | 506 | |
| Revaluation reserve of financial assets and other reserves | 9,719 | 41,058 | |
| Share-based compensation reserve | 16 | 34,810 | 18,776 |
| Retained earnings | 1,054,945 | 1,291,165 | |
| Total equity attributable to Shareholders of the Company | 1,078,123 | 1,330,098 | |
| Non-controlling interest | 25,090 | 28,490 | |
| TOTAL EQUITY | 1,103,213 | 1,358,588 | |
| TOTAL LIABILITIES AND EQUITY | 6,821,932 | 6,909,226 |
The accompanying notes are an integral part of this interim condensed consolidated financial information.
5
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Changes in Equity
For the three months ended 31 March 2023 and 2024 (Unaudited)
(in millions of KZT)
| Issued capital | Treasury shares | Additional paid-in-<br><br>capital | Revaluation reserve of financial assets and other reserves | Share-based compensation reserve | Retained earnings | Total equity attributable to <br>Shareholders of the Company | Non-controlling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2022 | 130,144 | (94,058) | 506 | (9,201) | 29,274 | 762,500 | 819,165 | 6,524 | 825,689 |
| Net income | - | - | - | - | - | 173,103 | 173,103 | 1,106 | 174,209 |
| Other comprehensive loss | - | - | - | 13,529 | - | - | 13,529 | 144 | 13,673 |
| Total comprehensive income | - | - | - | 13,529 | - | 173,103 | 186,632 | 1,250 | 187,882 |
| Acquisition of subsidiary with non-controlling interest | - | - | - | - | - | (2,080) | (2,080) | 2,080 | - |
| Dividends declared by subsidiary to non-controlling interest | - | - | - | - | - | - | - | (953) | (953) |
| Share options accrued | - | - | - | - | 3,750 | - | 3,750 | - | 3,750 |
| Share options exercised | - | 2,760 | - | - | (15,323) | 12,563 | - | - | - |
| Share buy-back program | - | (20,131) | - | - | - | - | (20,131) | - | (20,131) |
| Balance at 31 March 2023 | 130,144 | (111,429) | 506 | 4,328 | 17,701 | 946,086 | 987,336 | 8,901 | 996,237 |
| Balance at 31 December 2023 | 130,144 | (152,001) | 506 | 9,719 | 34,810 | 1,054,945 | 1,078,123 | 25,090 | 1,103,213 |
| Net Income | - | - | - | - | - | 219,599 | 219,599 | 3,841 | 223,440 |
| Other comprehensive income | - | - | - | 31,339 | - | - | 31,339 | 333 | 31,672 |
| Total comprehensive income | - | - | - | 31,339 | - | 219,599 | 250,938 | 4,174 | 255,112 |
| Dividends declared by subsidiary to non-controlling interest | - | - | - | - | - | - | - | (774) | (774) |
| Share options accrued | - | - | - | - | 3,889 | - | 3,889 | - | 3,889 |
| Share options exercised | - | 3,302 | - | - | (19,923) | 16,621 | - | - | - |
| Share buyback program | - | (2,852) | - | - | - | - | (2,852) | - | (2,852) |
| Balance at 31 March 2024 | 130,144 | (151,551) | 506 | 41,058 | 18,776 | 1,291,165 | 1,330,098 | 28,490 | 1,358,588 |
| The accompanying notes are an integral part of this interim condensed consolidated financial information. | |||||||||
| --- |
6
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Cash Flows
For the three months ended 31 March 2023 and 2024 (Unaudited)
(in millions of KZT)
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Interest received from loans to customers | 133,122 | 169,938 |
| Other interest received | 21,524 | 54,185 |
| Interest paid | (106,625) | (144,782) |
| Expenses paid on obligatory insurance of individual deposits | (2,353) | (3,370) |
| Net fee revenue received | 204,933 | 275,629 |
| Retail revenue received | 7,025 | 35,570 |
| Sales & marketing expenses paid | (7,450) | (8,549) |
| Other income received | 6,091 | 1,672 |
| Transaction expenses paid | (5,959) | (6,331) |
| Cost of goods and services purchased | (34,799) | (62,749) |
| Technology & product development expenses paid | (11,750) | (17,672) |
| General & administrative expenses paid | (8,984) | (10,476) |
| Cash flows from operating activities before changes in operating assets and liabilities | 194,775 | 283,065 |
| Changes in operating assets and liabilities | ||
| Decrease/(increase) in operating assets: | ||
| Mandatory cash balances with NBRK | (2,036) | (3,064) |
| Due from banks | (221) | 1,369 |
| Financial assets at FVTPL | 1,328 | (1,254) |
| Loans to customers | (101,978) | (299,081) |
| Other assets | (34,093) | (11,418) |
| Increase/(decrease) in operating liabilities: | ||
| Due to banks | 116,646 | 103,733 |
| Customer accounts | 89,325 | (179,647) |
| Financial liabilities at FVTPL | 905 | 350 |
| Other liabilities | (4,528) | (30,677) |
| Cash inflow/(outflow) from operating activities before income tax | 260,123 | (136,624) |
| Income tax paid | (32,185) | (42,234) |
| Net cash inflow/(outflow) from operating activities | 227,938 | (178,858) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| --- | --- | --- |
| Purchase of property, equipment and intangible assets | (7,193) | (9,158) |
| Proceeds on sale of property and equipment | 36 | 45 |
| Proceeds on disposal of investment securities at FVTOCI | 225,467 | 395,838 |
| Purchase of investment securities at FVTOCI | (458,498) | (299,312) |
| Acquisitions of subsidiaries, net of cash and cash equivalent acquired | (5,000) | - |
| Net cash (outflow)/inflow from investing activities | (245,188) | 87,413 |
7
Kaspi.kz Joint Stock Company
Interim Condensed Consolidated Statements of Cash Flows (continued)
For the three months ended 31 March 2023 and 2024 (Unaudited)
(in millions of KZT)
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Dividends paid by subsidiary to non-controlling interest | (953) | (774) |
| Purchase of treasury shares | (20,131) | (2,852) |
| Repayment of debt securities issued | (41,261) | (51,195) |
| Repayment of subordinated debt | (5,300) | - |
| Net cash outflow from financing activities | (67,645) | (54,821) |
| Effect of changes in foreign exchange rate on cash and cash equivalents | (9,627) | (6,142) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (94,522) | (152,408) |
| CASH AND CASH EQUIVALENTS, beginning of period | 615,360 | 820,466 |
| CASH AND CASH EQUIVALENTS, end of period | 520,838 | 668,058 |
The accompanying notes are an integral part of this interim condensed consolidated financial information.
8
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
1. Corporate information
Overview
Kaspi.kz operates a two-sided Super App business model: the Kaspi.kz Super App for consumers and the Kaspi Pay Super App for merchants and entrepreneurs. Our offerings include payments, marketplace and fintech solutions for both consumers and merchants. Our business model, reinforced by our highly recognizable brand and continuing product innovation, generates powerful network effects, which has resulted in growth across all our platforms and strong financial performance.
Kaspi.kz Segments
Our segment reporting is based on our three business platforms:
• Payments: Our Payments Platform facilitates transactions between and among merchants and consumers. For consumers, our Payments Platform is a highly convenient way to pay for shopping transactions, regular household bills and make peer-to-peer payments. For merchants, our Payments Platform enables them to accept payments online and in-store, issue and instantly settle invoices, pay suppliers and monitor merchants’ turnover. Our Payments Platform is our main customer acquisition tool and we consider it to be fundamental for high levels of customer engagement. Having achieved scale with consumers and merchants, our Payments Platform brings more value to consumers and merchants. Payments Platform proprietary data facilitates informed decision-making across multiple areas of our business.
• Marketplace: Our Marketplace Platform connects both online and offline merchants with consumers, enabling merchants to increase their sales through an omnichannel strategy and allowing consumers to purchase a broad selection of products and services from a wide range of merchants. Marketplace has three main propositions—m-Commerce, e-Commerce and Kaspi Travel. m-Commerce is our mobile solution for shopping in person, while consumers can use e-Commerce to shop anywhere, anytime and typically with free delivery. Kaspi Travel allows consumers to book domestic and international flights, domestic rail tickets and international package holidays. We help merchants increase their sales by connecting them to our Payments and Fintech products, Kaspi Advertising and our delivery services. Other than in e-Grocery and car e-commerce, our Marketplace Platform is a “3P” model, enabling third-party merchants to sell their products directly to consumers. Following the completion of our investment in Kolesa JSC, we have access to widely recognized classifieds platforms in Kazakhstan and Autoelon.uz, an Uzbekistan car marketplace and member of the Kolesa Group.
• Fintech: Our Fintech Platform provides consumers with BNPL, finance and savings products, and merchants with merchant finance services. All Fintech services can be accessed through our Super Apps, fully digitally, with users identified using Kaspi ID biometrics technology. We incentivize consumers and merchants to prepay any finance products prior to contractual maturity without penalty, which helps to drive frequency of transactions. We lend only in local currency and we fund our financing products mainly using Kaspi Deposits, which are primarily local currency savings accounts. As we add more opportunities to transact with the Kaspi.kz Super App, we anticipate that consumers will keep more of their deposits with us. 9
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Information about the group of companies
Joint Stock Company Kaspi.kz (“the Company” or “the Group”) was incorporated in the Republic of Kazakhstan in 2008. The Company is regulated by the National Bank of the Republic of Kazakhstan (“NBRK”) and the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market. The registered address of the Company is 154A, Nauryzbai Batyr street, Almaty, 050013, the Republic of Kazakhstan.
The Group structure did not change since 31 December 2023.
The shareholders are as follows:
| June<br><br>31 December<br><br>2023<br><br>% | 31 March<br><br>2024<br><br>% | |
|---|---|---|
| Baring Funds* | 27.53 | 25.45 |
| Mikheil Lomtadze | 24.67 | 22.60 |
| Vyacheslav Kim | 23.47 | 21.40 |
| Public Investors | 20.92 | 26.88 |
| Management | 3.41 | 3.67 |
| Total | 100.00 | 100.00 |
*As at 31 December 2023 and 31 March 2024, Asia Equity Partners Limited held 21.06% and 19.00% of total shares, respectively and Baring Fintech Nexus Limited held 6.47% and 6.45% of total shares, respectively, on behalf of Baring Funds.
This interim condensed consolidated financial information was approved on 26 April 2024.
2. Basis of presentation
This interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting. This interim condensed consolidated financial information has been prepared on the assumption that the Group is a going concern, as the Group has the resources to continue in operation for at least the next twelve months. In making this assessment, management has considered a wide range of information in relation to present and future economic conditions, including projections of cash flows, profit and capital resources.
This interim condensed consolidated financial information does not include all the information and disclosures required in the annual consolidated financial statements. The Group omitted disclosures, which would substantially duplicate the information contained in its audited annual consolidated financial statements for 2023 prepared in accordance with International Financial Reporting Standards (“IFRS”), such as accounting policies and details of accounts, which have not changed significantly in amount or composition.
10
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
The exchange rates at the period-end used by the Group in the preparation of the interim condensed consolidated financial information are as follows:
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| KZT/USD | 454.56 | 446.78 |
| KZT/EUR | 502.24 | 481.81 |
3. Material accounting policies
This interim condensed consolidated financial information has been prepared under the historical cost convention, except for the revaluation of certain properties and financial instruments.
The same accounting policies, presentation and methods of computation have been followed in this interim condensed consolidated financial information as were applied in the preparation of the Group’s consolidated financial statements for the year ended
31 December 2023.
Adoption of new and revised Standards
New and revised IFRS Standards that are effective for the current year
The following amendments and interpretations are effective for the Group beginning 1 January 2024:
| IFRS S2 Climate-related Disclosures | 1 January 2024 |
|---|---|
| IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information | 1 January 2024 |
| Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) | 1 January 2024 |
| Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Amendment to IAS 1) | 1 January 2024 |
The above standards and interpretations were reviewed by the Group's management and determined to not have a significant effect on the consolidated financial information of the Group.
New and revised IFRS Standards in issue but not yet effective
At the date of authorisation of this financial information, the Group has not applied the following new and revised IFRS Standards that have been issued but are not yet effective:
| New or revised standard or interpretation | Applicable to annual reporting periods<br><br>beginning on or after |
|---|---|
| Amendment to IFRS 16 – Lease Liability in a Sale and Leaseback | 1 January 2024 |
| Amendments to IAS 1 – Non-current Liabilities with Covenants | 1 January 2024 |
The management does not expect that the adoption of the Standards listed above to have a material impact on the condensed consolidated financial information of the Group in future periods. 11
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
4. Revenue
Revenue includes fee revenue, interest revenue, retail revenue, rewards and other gains. Rewards earned by retail customers of the Group are deducted from revenue.
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| REVENUE | 395,004 | 552,814 |
| Fee revenue | 205,802 | 288,120 |
| Interest revenue | 185,320 | 240,301 |
| Retail revenue | 8,014 | 35,570 |
| Rewards | (9,254) | (12,968) |
| Other gains | 5,122 | 1,791 |
Revenue by segments is presented below:
| Three months <br>ended<br>31 March <br>2023 | Three months <br>ended<br>31 March <br>2024 | |
|---|---|---|
| Payments | 101,205 | 126,597 |
| Payments fee revenue | 76,796 | 97,810 |
| Interest revenue | 24,409 | 28,787 |
| Marketplace | 72,331 | 150,450 |
| Marketplace fee revenue | 63,436 | 114,598 |
| Retail revenue | 8,014 | 35,570 |
| Other gains | 881 | 282 |
| Fintech | 230,722 | 290,601 |
| Interest revenue | 160,911 | 211,514 |
| Fintech fee revenue | 65,570 | 77,578 |
| Other gains | 4,241 | 1,509 |
| Intergroup | - | (1,866) |
| Segment Revenue | 404,258 | 565,782 |
| Rewards | (9,254) | (12,968) |
| REVENUE | 395,004 | 552,814 |
For the three months ended 31 March 2024, intergroup represents Marketplace fee revenue that was offset by Marketing expense, for activities to attract consumers of Fintech loans.
Other gains (losses) are mainly net gains (losses) on foreign exchange operations and financial assets and liabilities at FVTPL. For the three months ended 31 March 2023 and 2024, the net (loss) gain on foreign exchange operations were KZT 1,909 million and KZT 923 million, respectively. For the three months ended 31 March 2023 and 2024, the net gain on financial assets and liabilities at FVTPL were KZT 2,134 million and KZT 810 million, respectively.
12
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Fee revenue and retail revenue are presented by timing of revenue recognition in the table below:
| Three months <br>ended<br>31 March <br>2023 | Three months <br>ended<br>31 March <br>2024 | |
|---|---|---|
| Goods and services transferred at point in time | 142,086 | 240,438 |
| Payments fee revenue - Transaction Revenue | 70,636 | 90,270 |
| Marketplace fee revenue - Seller Fees | 63,436 | 114,598 |
| Retail revenue | 8,014 | 35,570 |
| Goods and services transferred over time | 71,730 | 85,118 |
| Payments fee revenue - Membership Revenue | 6,160 | 7,540 |
| Fintech fee revenue - Membership Revenue | 732 | 825 |
| Fintech fee revenue - Fintech banking service fees | 64,838 | 76,753 |
| TOTAL FEE AND RETAIL REVENUE | 213,816 | 325,556 |
5. Segment Reporting
The Group reports its business in three operating segments.
The following tables present the summary of each segments’ revenue and net income:
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| SEGMENT REVENUE | 404,258 | 565,782 |
| Payments | 101,205 | 126,597 |
| Marketplace | 72,331 | 150,450 |
| Fintech | 230,722 | 290,601 |
| Intergroup | - | (1,866) |
| NET INCOME | 174,209 | 223,440 |
| Payments | 64,690 | 81,008 |
| Marketplace | 40,452 | 71,342 |
| Fintech | 69,067 | 71,090 |
Operating segments are identified based on how the Group manages the business on a day-to-day basis and the types of products and services provided. Operating segments are reported in a manner consistent with internal reports, which are reviewed and used by the management board (who are identified as Chief Operating Decision Makers, “CODM”). The operating performance measure of each operating segment is revenue and net income.
For the three months ended 31 March 2023 and 2024, costs and operating expenses that are deducted from revenue, include interest expenses of KZT 106,964 million and KZT 145,499 million, respectively, provision expenses were KZT 15,191 million and KZT 25,053 million, respectively, both attributable to Fintech Segment, share-based compensation expenses and other expenses recognised across the segments.
13
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Management believes that other segment expenses are not material for analysis of our ongoing operations.
Expenses associated with share-based compensation are recognised across the segments.
The following table presents the summary of share-based compensation expense by segments:
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| SHARE-BASED COMPENSATION | (3,750) | (3,889) |
| Payments | (1,234) | (1,468) |
| Marketplace | (391) | (495) |
| Fintech | (2,125) | (1,926) |
6. Costs and operating expenses
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| COSTS AND OPERATING EXPENSES | (187,398) | (283,717) |
| Interest expenses | (106,964) | (145,499) |
| Transaction expenses | (5,959) | (6,331) |
| Cost of goods and services | (31,348) | (63,078) |
| Technology & product development | (18,004) | (26,430) |
| Sales & marketing | (4,154) | (9,934) |
| General & administrative expenses | (5,778) | (7,392) |
| Provision expenses (see Note 7) | (15,191) | (25,053) |
Interest expenses include interest expenses on customer accounts, mandatory insurance of retail deposits and interest expenses on debt securities, including subordinated debt.
Transaction expenses are mainly composed of the costs associated with accepting, processing and otherwise enabling payment transactions. Those costs include fees paid to payment processors, payment networks and various service providers.
Cost of goods and services include costs incurred to operate retail network, 24-hour call support and communication with customers, product packaging and delivery, and other expenses which can be attributed to the Group’s operating activities related to the provision of the products and services. It also includes the price paid by us for consumer products, the subsequent sale of which generates Retail revenue.
Technology & product development consist of staff and contractor costs that are incurred in connection with the research and development of new and maintenance of existing products and services, development, design, data science and maintenance of our products and services, and infrastructure costs. Infrastructure costs include depreciation of servers, networking equipment, data center, kartomats, postomats and payment equipment, rent, utilities, and other expenses necessary to support our technologies and platforms. 14
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers.
Sales & marketing consist primarily of online and offline advertising expenses, promotion expenses, staff costs and other expenses that are incurred directly to attract or retain consumers and merchants. It also includes our charity and sponsorship activities.
General & administrative expenses consist primarily of costs incurred to provide support to our business, including legal, human resources, finance, risk, compliance, executive, professional services fees, office facilities and other support functions.
Employee benefits, depreciation and amortization expenses and operating lease expenses are presented as follows:
| Three months ended<br><br>31 March 2023 | Three months ended<br><br>31 March 2024 | ||||||
|---|---|---|---|---|---|---|---|
| Employee benefits | Depreciation & amortisation | Operating <br>lease | Employee benefits | Depreciation & amortisation | Operating lease | ||
| Cost of goods and services | (5,329) | (237) | (324) | (6,786) | - | (310) | |
| Technology & product development | (8,915) | (4,513) | (795) | (13,281) | (6,190) | (1,173) | |
| Sales & marketing | (394) | - | (12) | (691) | - | (37) | |
| General & administrative expenses | (3,674) | (868) | (98) | (4,038) | (980) | (244) | |
| Total | (18,312) | (5,618) | (1,229) | (24,796) | (7,170) | (1,764) |
Expenses associated with share-based compensation are recognised across the functions in which the compensation recipients are employed. The following table sets forth an analysis of share-based compensation expense by function for the periods indicated:
| Three months<br><br>ended<br><br>31 March 2023 | Three months<br><br>ended<br><br>31 March 2024 | |
|---|---|---|
| SHARE-BASED COMPENSATION | (3,750) | (3,889) |
| Cost of goods and services | (329) | (329) |
| Technology & product development | (1,741) | (2,235) |
| Sales & marketing | (126) | (135) |
| General & administrative expenses | (1,554) | (1,190) |
15
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
7. Provision expenses
The movements in loss allowance for the three months ended 31 March 2023 were as follows:
| Loans to customers | Due from banks | Financial assets at fair value through other comprehensive income | Cash and cash equivalents | Other <br>assets | Contin-gencies | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 3 | Stage 1 | ||
| Loss allowance for ECL <br>as at 31 December 2022 | 67,604 | 11,785 | 135,313 | 6 | 82 | 656 | - | 3 | 7,794 | 39 | 223,282 |
| Changes in provisions | |||||||||||
| -Transfer to Stage 1 | 5,214 | (1,152) | (4,062) | - | - | - | - | - | - | - | - |
| -Transfer to Stage 2 | (2,651) | 3,784 | (1,133) | - | - | - | - | - | - | - | - |
| -Transfer to Stage 3 | (2,701) | (7,513) | 10,214 | - | - | - | - | - | - | - | - |
| Net changes, resulting from changes in credit risk parameters | (13,665) | 13,728 | 3,979 | (2) | 3 | 170 | - | 10 | 356 | 30 | 4,609 |
| New assets issued or acquired | 19,525 | - | - | - | 10 | - | - | - | - | - | 19,535 |
| Repaid assets (except for write-off) | (8,926) | (889) | (3,343) | - | (18) | - | - | - | - | - | (13,176) |
| Modification effect | - | - | 4,223 | - | - | - | - | - | - | - | 4,223 |
| Total effect on Consolidated Statements of Profit or Loss | (3,066) | 12,839 | 4,859 | (2) | (5) | 170 | - | 10 | 356 | 30 | 15,191 |
| Write-off, net of recoveries | - | - | (3,752) | - | - | - | - | - | - | - | (3,752) |
| Foreign exchange difference | - | - | 4 | - | - | - | - | - | - | - | 4 |
| As at 31 March 2023 | 64,400 | 19,743 | 141,443 | 4 | 77 | 826 | - | 13 | 8,150 | 69 | 234,725 |
16
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
The movements in loss allowance for the three months ended 31 March 2024 were as follows:
| Loans to customers | Due from<br><br>banks | Financial assets at fair value through other comprehensive income | Cash and cash<br><br>equivalents | Other <br>assets | Contin-gencies | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Stage 1 | Stage 2 | Stage 3 | POCI | Stage 1 | Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 3 | Stage 1 | |||
| Loss allowance for ECL as at <br>31 December 2023 | 59,939 | 16,290 | 166,042 | 261 | 6 | 114 | 158 | 1,136 | 23 | 5,640 | 35 | 249,644 | |
| Changes in provisions | |||||||||||||
| -Transfer to Stage 1 | 9,720 | (2,272) | (7,448) | - | - | - | - | - | - | - | - | - | |
| -Transfer to Stage 2 | (2,369) | 6,001 | (3,632) | - | - | - | - | - | - | - | - | - | |
| -Transfer to Stage 3 | (4,173) | (11,796) | 15,969 | - | - | - | - | - | - | - | - | - | |
| Net changes, resulting from changes in credit risk parameters | (11,755) | 15,114 | 6,027 | 852 | (1) | 196 | (17) | (575) | (19) | 399 | 46 | 10,267 | |
| New assets issued or acquired | 21,867 | - | - | - | 102 | - | - | - | - | - | - | 21,969 | |
| Repaid assets (except for write-off) | (8,771) | (1,296) | (3,323) | - | - | - | - | - | - | - | - | (13,390) | |
| Modification effect | - | - | 6,207 | - | - | - | - | - | - | - | - | 6,207 | |
| Total effect on Consolidated Statements | 1,341 | 13,818 | 8,911 | 852 | (1) | 298 | (17) | (575) | (19) | 399 | 46 | 25,053 |
17
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
| of Profit or Loss | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Write-off, net of recoveries/ recoveries | - | - | (16,951) | - | - | - | - | - | - | 771 | - | (16,180) |
| Foreign exchange difference | - | - | 1 | - | - | - | - | - | - | - | - | 1 |
| As at 31 March 2024 | 64,458 | 22,041 | 162,892 | 1,113 | 5 | 412 | 141 | 561 | 44 | 6,810 | 81 | 258,518 |
Net changes, resulting from changes in credit risk parameters include decrease of provisions due to partial repayment of loans.
As at 31 December 2023 and 31 March 2024, the allowance for impairment losses on financial assets at FVTOCI of KZT 1,408 million and
KZT 1,114 million, respectively, is included in the ‘Revaluation reserve of financial assets and other reserves’ within equity.
During the three months ended 31 March 2024, the Group implemented amendments to its provision methodology, according to which, after 1080 days past due there is no reasonable expectations of recovering of collateralized defaulted car loans. As such the car loans are fully written off when past due by more than 1080 days. The effect of change of the policy for prior periods is not material. 18
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
8. Income tax
The Group provides for taxes for the current period based on the tax accounts maintained and prepared in accordance with the respective tax regulations of the Republic of Kazakhstan, the Republic of Azerbaijan, Ukraine and Uzbekistan, where the Company and its subsidiaries operate and which may differ from IFRS.
The Group is subject to certain permanent tax differences due to non-tax deductibility of certain expenses and a tax-free regime for certain income.
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Temporary differences relate mostly to different methods of income and expense recognition as well as to recorded values of certain assets.
Deferred income tax liabilities comprise:
| 31 December 2023 | 31 March<br><br>2024 | |
|---|---|---|
| Vacation reserve, accrued bonuses and share-based compensation | 1,242 | 1,246 |
| Property, equipment and intangible assets | (4,012) | (2,655) |
| Other | 527 | (593) |
| Net deferred tax liability | (2,243) | (2,002) |
Relationships between net income before tax and income tax expenses are explained as follows:
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| Net income before tax | 207,606 | 269,097 |
| Tax at the statutory tax rate of 20% | (41,521) | (53,819) |
| Non-taxable income | 8,791 | 8,980 |
| Non-deductible expense | (667) | (818) |
| Income tax expense | (33,397) | (45,657) |
| Current income tax expense | (34,889) | (45,898) |
| Deferred income tax benefit | 1,492 | 241 |
| Income tax expense | (33,397) | (45,657) |
Non-taxable income was represented by interest income on governmental and other qualified securities in accordance with the tax legislation. Statutory income tax rate is 20% in Kazakhstan and Azerbaijan, 18% in Ukraine and 15% in Uzbekistan.
19
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
| 31 March<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Net deferred tax liability: | ||
| At the beginning of the period | (3,205) | (2,243) |
| Change in deferred income tax balances recognised in profit or loss | 1,492 | 241 |
| At the end of the period | (1,713) | (2,002) |
9. Earnings per share
Earnings per share are determined by dividing the net income attributable to shareholders
of the Company by the weighted average number of common shares outstanding during the reporting period. For the purpose of diluted earnings per share calculation, the Group considers dilutive effects of share based compensation.
| 31 March<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Net income attributable to the shareholders of the Company | 173,103 | 219,599 |
| Weighted average number of common shares for basic earnings per share | 190,006,020 | 189,279,242 |
| Weighted average number of common shares for diluted earnings per share | 191,653,398 | 190,741,341 |
| Earnings per share – basic (KZT) | 911 | 1,160 |
| Earnings per share – diluted (KZT) | 903 | 1,151 |
Reconciliation of the number of shares used for basic and diluted earnings per share:
| 31 March | 31 March | |
|---|---|---|
| 2023 | 2024 | |
| Weighted average number of common shares for basic earnings per share | 190,006,020 | 189,279,242 |
| Number of potential common shares attributable to share-based compensation | 1,647,378 | 1,462,099 |
| Weighted average number of common shares for diluted earnings per share | 191,653,398 | 190,741,341 |
10. Cash and cash equivalents
| 31 December <br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Cash on hand | 259,639 | 179,826 |
| Current accounts with other banks | 274,534 | 198,221 |
| Short-term deposits with other banks | 216,217 | 290,011 |
| Reverse repurchase agreements | 70,076 | - |
| Total cash and cash equivalents | 820,466 | 668,058 |
Cash on hand includes cash balances with ATMs and cash in transit.
As at 31 December 2023 and 31 March 2024, current accounts and short-term deposits with NBRK are KZT 90,098 million and KZT 220,414 million, respectively.
20
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
As at 31 December 2023 and 31 March 2024, the fair value of collateral of reverse repurchase agreements classified as cash and cash equivalents, are KZT 70,160 million and KZT Nil, respectively.
11. Investment securities and derivatives
Investment securities and derivatives comprise:
| 31 December <br>2023 | 31 March<br><br>2024 | ||||
|---|---|---|---|---|---|
| Total financial assets at FVTOCI | 1,377,130 | 1,311,350 | |||
| Total financial assets at FVTPL | 642 | 1,086 | |||
| Total investment securities and derivatives | 1,377,772 | 1,312,436 | |||
| Financial assets at FVTOCI comprise: | 31 December <br>2023 | 31 March<br><br>2024 | |||
| Debt securities | 1,376,728 | 1,310,928 | |||
| Equity investments | 402 | 422 | |||
| Total financial assets at FVTOCI | 1,377,130 | 1,311,350 | |||
| Interest <br>rate, % | 31 December <br>2023 | Interest <br>rate, % | 31 March<br><br>2024 | ||
| --- | --- | --- | --- | --- | |
| Debt securities | |||||
| Bonds of the Ministry of Finance of the Republic of Kazakhstan | 0.60-16.70 | 930,726 | 0.60-16.70 | 1,039,584 | |
| Corporate bonds | 2.00-15.88 | 252,946 | 2.00-15.88 | 269,518 | |
| Sovereign bonds of foreign countries | 0.63-3.50 | 1,687 | 0.63-3.50 | 1,826 | |
| Discount notes of the NBRK | 14.44 | 191,369 | - | ||
| Total debt securities | 1,376,728 | 1,310,928 | |||
| A- and higher | BBB+ to BBB- | BB+<br><br>to B- | Not<br><br>rated | Total | |
| --- | --- | --- | --- | --- | --- |
| Debt securities as at 31 December 2023 | 33,681 | 1,335,500 | 4,037 | 3,510 | 1,376,728 |
| Debt securities as at 31 March 2024 | 35,169 | 1,268,617 | 4,169 | 2,974 | 1,310,928 |
As at 31 December 2023 and 31 March 2024, restricted deposits included in due from banks with investment credit ratings (higher than ‘BBB-‘) in favor of international payments systems were KZT 27,357 million and KZT 27,894 million, respectively.
As at 31 December 2023 and 31 March 2024, investment securities were not pledged or somehow restricted, except for bonds of the Ministry of Finance of the Republic of Kazakhstan, notes of NBRK and corporate bonds pledged under repurchase agreements with other banks totaling KZT 154 million and KZT 87,039 million, respectively (Note 13).
21
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
12. Loans to customers
| 31 December 2023 | 31 March<br><br>2024 | |
|---|---|---|
| Gross loans to customers | 4,478,489 | 4,774,345 |
| Allowance for impairment losses (Note 7) | (242,532) | (250,504) |
| Total loans to customers | 4,235,957 | 4,523,841 |
All loans to customers issued by the Group were allocated to the Fintech segment for internal segment reporting purposes.
Movements in allowances for impairment losses on loans to customers for the three months ended 31 March 2023 and 2024 are disclosed in Note 7.
As at 31 December 2023 and 31 March 2024, accrued interest of KZT 46,207 million and KZT 53,126 million, respectively, was included in loans to customers.
Loans with principal or accrued interest in arrears for more than 90 days are classified as
non-performing loans (“NPL”). Allowance for impairment losses to NPLs reflects the Group’s total provision as a percentage of NPL’s. Considering the ratio represents allowance for impairment losses for all loans as a percentage of NPLs, the ratio can be more than 100%. These loans were classified in Stage 3.
The following table sets forth the Group’s outstanding NPLs as compared to the total allowance for impairment losses on total loans to customers:
| Gross NPLs | Total allowance for impairment | Total allowance for impairment losses to<br><br>Gross NPLs | |
|---|---|---|---|
| As at 31 December 2023 | 244,161 | 242,532 | 99% |
| As at 31 March 2024 | 254,823 | 250,504 | 98% |
Provision expenses on loans to customers:
| Three months<br><br>ended<br><br>31 March<br><br>2023 | Three months<br><br>ended<br><br>31 March<br><br>2024 | |
|---|---|---|
| Provision expenses on loans to customers: | ||
| Loans to customers | (14,632) | (24,922) |
| Total provision expenses on loans to customers | (14,632) | (24,922) |
The Group did not provide loans, which individually exceeded 10% of the Group’s equity.
The gross carrying amount and related allowance for impairment losses on loans to customers by stage were as follows:
22
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
| Stage 1 | Stage 2 | Stage 3 | |||
|---|---|---|---|---|---|
| 12-month ECL | Lifetime <br>ECL | Lifetime <br>ECL | POCI | Total | |
| Gross loans to customers | 4,048,478 | 55,804 | 363,703 | 10,504 | 4,478,489 |
| Allowance for impairment losses | (59,939) | (16,290) | (166,042) | (261) | (242,532) |
| Carrying amount as at 31 December 2023 | 3,988,539 | 39,514 | 197,661 | 10,243 | 4,235,957 |
| Stage 1 | Stage 2 | Stage 3 | |||
| --- | --- | --- | --- | --- | --- |
| 12-month ECL | Lifetime <br>ECL | Lifetime <br>ECL | POCI | Total | |
| Gross loans to customers | 4,308,013 | 76,796 | 376,438 | 13,098 | 4,774,345 |
| Allowance for impairment losses | (64,458) | (22,041) | (162,892) | (1,113) | (250,504) |
| Carrying amount as at 31 March 2024 | 4,243,555 | 54,755 | 213,546 | 11,985 | 4,523,841 |
During the three months ended 31 March 2023 and 2024, the Group has restructured loans to customers, which were classified as NPL, in the amount of KZT 21,122 million and KZT 27,974 million, respectively, by providing an interest free extended repayment schedule. During the three months ended 31 March 2023 and 2024, KZT 6,331 million and KZT 11,564 million, respectively, of restructured loans were collected.
As at 31 December 2023 and 31 March 2024, the Group’s restructured loans in
Stage 3 amounted to the gross carrying amount of KZT 57,571 million and KZT 65,045 million, respectively.
As at 31 December 2023 and 31 March 2024, the Group’s restructured loans in Stage 2 amounted to the gross carrying amount of KZT 8,821 million and KZT 10,423 million, respectively.
As at 31 December 2023 and 31 March 2024, the Group’s restructured loans in Stage 1 amounted to the gross carrying amount of KZT 1,568 million and KZT 4,396 million, respectively.
As at 31 December 2023 and 31 March 2024, the Group recognized restructured loans as POCI loans with gross carrying amount of KZT 10,504 million and KZT 13,098 million, respectively.
13. Due to banks
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Recorded at amortised cost: | ||
| Repurchase agreements | 154 | 87,020 |
| Time deposits of banks and other financial institutions | - | 17,035 |
| Total due to banks | 154 | 104,055 |
As at 31 December 2023 and 31 March 2024, accrued interest of KZT 1 million and KZT 203 million, respectively, was included in due to banks.
23
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Fair value of securities pledged as collateral of repurchase agreements, which were classified as due to banks as at 31 December 2023 and 31 March 2024, amounted to
KZT 154 million and KZT 87,039 million, respectively.
14. Customer accounts
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Individuals | ||
| Term deposits | 4,316,825 | 4,351,710 |
| Current accounts | 826,328 | 663,352 |
| Total due to individuals | 5,143,153 | 5,015,062 |
| Corporate customers | ||
| Term deposits | 44,233 | 47,199 |
| Current accounts | 254,070 | 190,536 |
| Total due to corporate customers | 298,303 | 237,735 |
| Total customer accounts | 5,441,456 | 5,252,797 |
As at 31 December 2023 and 31 March 2024, accrued interest of KZT 44,044 million and KZT 45,971 million, respectively, was included in term deposits within customer accounts.
As at 31 December 2023 and 31 March 2024, customer accounts of KZT 60,260 million and KZT 51,117 million, respectively, were held as security against loans to customers.
As at 31 December 2023 and 31 March 2024, customer accounts of KZT 97,806 million (1.80% of total customer accounts) and KZT 96,449 million (1.84% of total customer accounts), respectively, were due to the top twenty customers.
As at 31 December 2023 and 31 March 2024, customer accounts were predominately denominated in KZT, comprising 91% and 91%, respectively, and customer accounts in other foreign currencies were 9% and 9%, respectively.
15. Share capital
The table below provides a reconciliation of the change in the number of authorised shares, issued and fully paid shares, treasury shares and shares outstanding:
| Authorised shares | Issued and fully paid shares | Treasury shares | Shares outstanding | |
|---|---|---|---|---|
| Common shares | ||||
| 1 January 2023 | 216,742,000 | 199,500,000 | (9,190,030) | 190,309,970 |
| GDR options exercised (Note 16) | - | - | 618,788 | 618,788 |
| GDR buyback program | - | - | (1,595,293) | (1,595,293) |
| 31 December 2023 | 216,742,000 | 199,500,000 | (10,166,535) | 189,333,465 |
| GDR options exercised (Note 16) | - | - | 740,339 | 740,339 |
| GDR buyback program | - | - | (64,914) | (64,914) |
| 31 March 2024 | 216,742,000 | 199,500,000 | (9,491,110) | 190,008,890 |
24
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
During the years ended 31 December 2022, 2023 and three months ended 31 March 2024, the Board of Directors approved six separate GDR buyback programs.
The Group accounts for GDRs repurchased in Treasury Shares component of Share Capital.
One GDR represents one share.
The following table summarizes the details of the GDR buyback programs:
| Start date | Termination<br>date | Number of GDRs acquired | Total<br><br>amount paid | |
|---|---|---|---|---|
| 1st buy-back program | 22 April 2022 | 21 July 2022 | 998,429 | 22,841 |
| 2nd buy-back program | 22 July 2022 | 21 October 2022 | 788,153 | 21,325 |
| 3rd buy-back program | 22 October 2022 | 24 February 2023 | 1,131,380 | 38,474 |
| 4th buy-back program | 22 March 2023 | 21 July 2023 | 531,995 | 18,740 |
| 5th buy-back program | 22 July 2023 | 21 October 2023 | 283,689 | 12,614 |
| 6th buy-back program | 22 October 2023 | 16 January 2024 | 303,286 | 13,233 |
| 31 March 2024 | 4,036,932 | 127,227 |
The Group accounts for GDRs repurchased as treasury shares.
The table below provides a reconciliation of the change in outstanding share capital fully paid:
| Issued and<br><br>fully paid shares | Treasury <br>shares | Total | |
|---|---|---|---|
| Balance at 1 January 2022 | 130,144 | (94,058) | 36,086 |
| GDR options exercised | - | 2,760 | 2,760 |
| GDR buyback program | - | (60,703) | (60,703) |
| Balance at 31 December 2023 | 130,144 | (152,001) | (21,857) |
| GDR options exercised | - | 3,302 | 3,302 |
| GDR buyback program | - | (2,852) | (2,852) |
| Balance at 31 March 2024 | 130,144 | (151,551) | (21,407) |
16. Share-based compensation
In 2023, the share option program was expanded to include more senior executives and other core Group personnel. The share-based awards are used to attract, incentivize and retain employees over the long-term by the management of the Group.
Share-based compensation expense
According to IFRS 2, this accelerates the recognition of compensation expenses resulting in a higher proportion of expenses being recognized in the early years of overall plan.
| 31 March 2023 | 31 March 2024 | |
|---|---|---|
| Share-based compensation expense | (3,750) | (3,889) |
| Share options | (3,750) | (3,889) |
GDR Options 25
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
The fair value of GDR options at the date of grant is determined using the Black-Scholes model. The fair value determined at the grant date is expensed over the five year vesting period, based on the Group’s estimate of the number of GDR options that will eventually vest. Recipients of GDR options are entitled to receive dividends once GDR options vested and exercised.
The inputs into the Black-Scholes model are as follows:
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Black-Scholes model inputs: | ||
| Weighted average share price in USD | 67.3 | 67.3 |
| Expected volatility | 42.4% | 42.4% |
| Risk-free rate | 4.2% | 4.2% |
| Dividend yield | 7.0% | 7.0% |
Expected volatility is based on the historical share price volatility over the past 3 years.
The following table summarizes the details of the GDR options outstanding:
| 31 December 2023<br><br>(GDRs) | 31 March<br><br>2024<br><br>(GDRs) | |
|---|---|---|
| Outstanding at the beginning of the period | 2,266,166 | 2,202,438 |
| Granted | 564,800 | - |
| Forfeited | (9,740) | - |
| Exercised | (618,788) | (740,339) |
| Expired | - | - |
| Outstanding at the end of the period | 2,202,438 | 1,462,099 |
In the period ended 31 December 2023 and 31 March 2024, 618,788 GDR options and 740,339 GDR options, respectively, were exercised and GDRs were issued from treasury shares.
The following table represents Share-based compensation reserve outstanding:
| Share-Based<br><br>Compensation reserve | |
|---|---|
| 1 January 2023 | 29,274 |
| GDR options accrued | 20,859 |
| GDR options exercised | (15,323) |
| 31 December 2023 | 34,810 |
| GDR options accrued | 3,889 |
| GDR options exercised | (19,923) |
| 31 March 2024 | 18,776 |
26
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the Three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
17. Fair value of financial instruments
a. Fair value of financial instruments
IFRS defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
b. Fair value of the Group's financial assets and financial liabilities measured at fair value on a recurring basis
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used). 27
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
| Financial assets/financial liabilities | Fair value as at<br><br>31 December<br><br>2023 | Fair value as at<br><br>31 March<br><br>2024 | Fair value hierarchy | Valuation technique(s) and key input(s) |
|---|---|---|---|---|
| Non-derivative financial assets at FVTOCI (Note 11) | 3,968 | 3,231 | Level 1 | Quoted prices in an active market. |
| Non-derivative financial assets at FVTOCI (Note 11) | 1,370,806 | 1,300,475 | Level 2 | Quoted prices in markets that are not active. |
| Non-derivative financial assets at FVTOCI (Note 11) | 2,322 | 7,588 | Level 3 | DCF method with weighted average discount ratio 18.3% |
| Unlisted Equity investments classified as financial assets at FVTOCI (Note 11) | 34 | 56 | Level 3 | Adjusted net assets based on most recent published financial statements of unlisted companies with discount for marketability and liquidity. Discount ratios varies from 10% to 30%. |
| Derivative financial assets (Note 11) | 642 | 1,086 | Level 2 | DCF method. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. |
| Derivative financial liabilities (Note 11) | 1,165 | 1,515 | Level 2 | DCF method. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. |
As at 31 December 2023, the fair value of the investment securities in Level 2 includes short-term and long-term sovereign debt securities of KZT 407,086 million and KZT 713,131 million, respectively. As at 31 March 2024, the fair value of the investment securities in Level 2 includes short-term and long-term sovereign debt securities of KZT 293,636 million and KZT 745,948 million, respectively. Those investment securities are by nature and for regulatory purposes treated as high quality liquid assets, but are classified as Level 2 due to insufficient trading on regulated market.
There were no transfers between Level 1 and Level 2 in the period.
28
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
The reconciliation of Level 3 fair value measurements of financial assets is presented as follows:
| Fair value through other comprehensive<br><br>income | |||
|---|---|---|---|
| Unquoted debt securities | Total | ||
| 1 January 2024 | 2,322 | 2,322 | |
| Total gains or losses: | |||
| - in profit or loss | - | - | |
| - in other comprehensive income | 152 | 152 | |
| Purchases | 5,114 | 5,114 | |
| Issues | - | - | |
| Disposals/settlements | - | - | |
| Transfer into level 3 | - | - | |
| Transfers out of level 3 | - | - | |
| 31 March 2024 | 7,588 | 7,588 |
During the three month ended 31 March 2023, there were no transfers between Level 1, Level 2 and Level 3.
c. Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosures are required).
Except as detailed in the following table, management of the Group considers that the carrying amount of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.
| 31 December 2023 | |||
|---|---|---|---|
| Carrying<br><br>amount | Fair<br><br>value | Fair value<br><br>hierarchy | |
| Due from banks | 30,683 | 30,048 | Level 2 |
| Loans to customers | 4,235,957 | 4,230,722 | Level 3 |
| Due to banks | 154 | 154 | Level 2 |
| Customer accounts | 5,441,456 | 5,382,189 | Level 2 |
| Debt securities issued | 99,468 | 96,666 | Level 2 |
| Subordinated debt | 62,369 | 60,895 | Level 2 |
| 31 March 2024 | |||
| --- | --- | --- | --- |
| Carrying<br><br>amount | Fair<br><br>value | Fair value<br><br>hierarchy | |
| Due from banks | 30,156 | 29,552 | Level 2 |
| Loans to customers | 4,523,841 | 4,344,341 | Level 3 |
| Due to banks | 104,055 | 104,028 | Level 2 |
| Customer accounts | 5,252,797 | 5,206,967 | Level 2 |
| Debt securities issued | 49,830 | 48,096 | Level 2 |
| Subordinated debt | 60,824 | 58,650 | Level 2 |
29
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Assets and liabilities for which fair value approximates carrying value
For financial assets and liabilities that have a short-term maturity (less than 3 months), it is assumed that the carrying amounts approximate to their fair value. This assumption is also applied to demand deposits and savings accounts without a maturity.
Due from banks
The estimated fair value of term due from banks is determined by discounting the contractual cash flows using interest rates currently offered for due from banks with similar terms.
Loans to customers
Loans to individual customers are made at fixed rates. The fair value of fixed rate loans has been estimated by reference to the market rates available at the reporting date for loans with similar maturity profile.
Due to banks
The estimated fair value of due to banks is determined by discounting the contractual cash flows using interest rates currently offered for due to banks with similar terms.
Customer accounts
The estimated fair value of term deposits is determined by discounting contractual cash flows using interest rates currently offered for deposits with similar terms. For current accounts which are non-interest bearing, the Group considers fair value to equal carrying value, which is equivalent to the amount payable on the balance sheet date.
Debt securities issued, subordinated debt
Debt securities issued and subordinated debt are valued using quoted prices.
30
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
18. Transactions with related parties
In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The Group had the following transactions outstanding with related parties:
| 31 December 2023 | 31 March 2024 | |||
|---|---|---|---|---|
| Transactions with related parties | Total<br><br>category<br><br>as per<br><br>financial statements captions | Transactions with related parties | Total<br><br>category<br><br>as per<br><br>financial statements captions | |
| Consolidated statements of financial position | ||||
| Gross loans to customers | 2,435 | 4,478,489 | 2,281 | 4,774,345 |
| - entities controlled by the key management personnel of the Group | 2,435 | 2,281 | ||
| Allowance for impairment losses on loans to customers | (2) | (242,532) | (26) | (250,504) |
| - entities controlled by the key management personnel of the Group | (2) | (26) | ||
| Other assets | 1,196 | 135,598 | 4,114 | 152,204 |
| - entities controlled by the key management personnel of the Group | 1,196 | 4,114 | ||
| Customer accounts | 15,259 | 5,441,456 | 9,170 | 5,252,797 |
| - entities controlled by the key management personnel of the Group | 9,526 | 1,113 | ||
| - key management personnel of the Group | 5,662 | 7,957 | ||
| - other related parties | 71 | 100 | ||
| Other liabilities | 5,050 | 115,272 | 3,111 | 83,132 |
| - entities controlled by the key management personnel of the Group | 5,004 | 3,067 | ||
| - key management personnel of the Group | 46 | 44 |
31
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
| 31 March 2023 | 31 March 2024 | ||||
|---|---|---|---|---|---|
| Transactions with related parties | Total category <br>as per financial statements caption | Transactions with related parties | Total category <br>as per financial statements caption | ||
| Consolidated Statements of Profit or Loss | |||||
| Net fee revenue | 32 | 196,548 | 971 | 275,152 | |
| - entities controlled by the key management personnel of the Group | 3 | 944 | |||
| - key management personnel <br>of the Group | 27 | 27 | |||
| - other related parties | 2 | - | |||
| Interest revenue | 71 | 185,320 | 56 | 240,301 | |
| - other related parties | 71 | 56 | |||
| COSTS AND OPERATING EXPENSES | |||||
| Interest expense | (127) | (106,964) | (254) | (145,499) | |
| - entities controlled by the key management personnel of the Group | (62) | - | |||
| - key management personnel of the Group | (4) | (253) | |||
| - other related parties | (61) | (1) | |||
| Transaction expenses | - | (5,959) | (5) | (6,331) | |
| - entities controlled by the key management personnel of the Group | - | (5) | |||
| Cost of goods and services | (26) | (31,348) | (1,935) | (63,078) | |
| - entities controlled by the key management personnel of the Group | (26) | (1,935) |
Up until its acquisition in October 2023, Kolesa Group was an entity controlled by the key management personnel of the Group and was a party to an agreement, under which we were paying fees to Kolesa Group for car loans generated on Kolesa’s car classifieds platform. During the three months ended 31 March 2023 and 2024, transaction costs attributable to origination of loans to customers and paid to entities controlled by the key management personnel of the Group, were KZT 1,575 million and KZT Nil, respectively.
During the three months 31 March 2023 and 2024, the total value of goods purchased from entities controlled by the key management personnel was KZT Nil and KZT 1,793 million, respectively, from which KZT Nil and KZT 1,726 million, respectively, recognised in cost of goods and services.
32
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
Compensation to directors and other members of key management is presented as follows:
| Three months ended<br><br>31 March 2023 | Three months ended<br><br>31 March 2024 | ||||
|---|---|---|---|---|---|
| Transactions with related parties | Total category as per financial statements captions | Transactions with related parties | Total category as per financial statements captions | ||
| Compensation to key management personnel: | |||||
| Employee benefits | (148) | (18,312) | (104) | (24,796) | |
| Share-based compensation | (1,192) | (3,750) | (454) | (3,889) |
33
Kaspi.kz Joint Stock Company
Notes to the Interim Condensed Consolidated Financial Information (Continued)
For the three months ended 31 March 2024 (Unaudited)
(in millions of KZT)
19. Regulatory matters
The management of Kaspi Bank JSC (“the Bank”-subsidiary of the Company) monitors capital adequacy ratio based on requirements of standardised approach of Basel Committee of Banking Supervision “Basel III: A global regulatory framework for more resilient banks and banking systems” (December 2010, updated in June 2011).
The capital adequacy ratios calculated on the basis of the Bank’s consolidated financial statements under Basel III with updated RWA methodology are presented in the following table:
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Tier 1 capital (k1.2) | 17.4% | 16.8% |
| Total capital (k.2) | 18.1% | 17.8% |
The Bank complies with NBRK’s capital requirements. The minimum regulatory capital adequacy requirements are 6.5% for k1.2 and 8% for k.2, excluding a conservation buffer of 3% and systemic buffer of 1% for each.
The following table presents the Bank’s capital adequacy ratios in accordance with the NBRK requirements:
| 31 December<br><br>2023 | 31 March<br><br>2024 | |
|---|---|---|
| Tier 1 capital (k1.2) | 12.6% | 12.4% |
| Total capital (k.2) | 13.0% | 12.8% |
20. Subsequent events
On 19 April 2024, the Board of Directors of the Company proposed a dividend of KZT 850 per share, subject to Shareholder approval.
34