Analysts talk about some stabilization of International Financial Markets, how do you think it can influence the situation of the Kazakhstani banking sector?

I would agree that we are seeing some early signs of financial market stabilization but it's premature to assume that a recovery is fully underway. There are still a number of issues facing financial institutions and while at least for many of the major global players it would appear that concerns about solvency have been mostly taken off the table, there is still a question about how quickly and how robustly we see credit flowing again. In this early stage, I actually don't anticipate that there will be much effect at all on Kazakhstan's banking sector. Until the full extent of the system's portfolio loan quality is known and the adequacy of loan loss provisioning can be confidently assessed, I would not expect any increase in money flows into the Kazakh banks nor change in sentiment about the risk levels that exist today. I think the markets will first want to see that the international borrowings that are coming due for a number of Kazakh banks over the next few quarters are retired in accordance with their terms, and secondly, there is no question that everyone is waiting to see how the debt restructuring at BTA and Alliance works out. I think at least for the near term, the Kazakh banks are going to be mostly constrained to the growth that can be supported by their deposit bases and to some extent, onshore debt issuance, as I don't see access to the international debt capital markets coming back quickly even for the higher quality banks.

Up to now foreign banks are not really an alternative to the largest local banks. Why?

First of all, I think its important to make a distinction here because I can assure you that if the foreign banks operating in Kazakhstan were not a real alternative to the largest local banks, none of us would be here. I would prefer not to comment on the strategies and market ambitions of the other foreign banks, so let me talk about Citibank Kazakhstan specifically. Comparing us against the largest local banks, it is certainly evident that we are not trying to be all things to all people with hundreds of branches throughout the country. But we are absolutely an alternative as you put it for the largest local corporations, financial institutions, state-owned companies, and multinational subsidiaries in Kazakhstan. In many cases we are their bank of choice. These are our core customer segments and I am completely confident in our ability to compete and win business against our competition both local and foreign. We continue to add clients, our balance sheet is growing with a significant increase in deposits, we continue to invest in our business and based on the publically available information that is published on the FSA's website, Citibank Kazakhstan has been one of the most profitable banks in the country this year. I think that our profitability speaks to both our customers' trust and loyalty in banking with us and the fact that the credit quality of our portfolio has held up extremely well. So, I would say that for the client segments we choose to serve and in the product offerings and banking solutions that we can make available to these clients, we are a very real alternative to the largest local banks.

Is Citibank Kazakhstan still the bank for large Western corporate clients, are they affected by crisis and what is the quality of the portfolio?

This is a very important group of clients for us, although I would replace the "Western" in your question with the word "global" as Citibank Kazakhstan has a fairly significant number of relationships with subsidiary companies operating here from say Japan, China and Korea in addition to the US and Europe. Citi's ability to service global companies globally has always been a critical competitive advantage for us. For over 100 years and in what is now over 100 countries, this is what we do and I think we do it better than any other financial institution in the world. If I look broadly at our global clients in Kazakhstan which given the sheer number of companies also means looking across virtually all industry segments, it is a bit hard to make a generalization about the affect of the crisis other than to say that it has affected everybody to some extent. Its pretty hard to overcome an economic slowdown. I do think though that Kazakhstan may be able to come out of this economic downturn a bit earlier than some people expect, the positive GDP growth in the second quarter for example being an encouraging sign. What I haven't seen from our global clients is any over-reaction to the slowdown, shutting the doors and leaving the country. Almost by definition, global corporations have seen ups and downs in emerging market economies before, but most take at least an intermediate if not a long term view about their business. And frankly, if Kazakhstan can get close to a flat GDP or maybe as some predict, a slightly positive growth this year, while its not great news for the global companies operating here, its certainly not a disaster scenario either. In my discussions with our clients, they're tightening their belts, making some product/pricing adjustments, what you would expect. But they are committed to their businesses in Kazakhstan and hope to be well positioned for growth when things improve. On your final point, our portfolio quality with our global subsidiaries is excellent. And that's also the case across our entire portfolio.

Is there any interest for your bank in other segments of Kazakhstani market?

I think that at least for the time being we'll stick with the same strategies and market focus that have made us successful in Kazakhstan but of course we are also always looking for opportunities. Do I have all the clients I think we should have. No. Do I have the share with all our clients that I think we should have. No. Should we continue to invest in making our product offerings the most innovative in the market. Absolutely. So, not changing course or not entering new customer segments doesn't mean that I don't see significant growth potential for us. We are now applying to open new Representative Offices in Atyrau and Aktau to expand our footprint beyond our Head Quarter in Almaty and branch in Astana. We were just named the Best Corporate/Institutional Internet Bank in Kazakhstan by Global Finance Magazine for the second consecutive year. Citi recently was one of two arrangers for KazMunaigaz's highly successful USD 1.5 Billion Eurobond/Retap, the first Kazakh bond brought to the market since last July's USD$ 3 Billion offering from KazMunaigaz which was also co-arranged by Citi. This year we have been providing a number of our clients with innovative hedging solutions, a key area of focus for us as companies look to improve their risk management capabilities. So, I think there is still plenty for us to do in Kazakhstan and plenty of room for growth without chasing new market segments.

Why has Citibank left Kazprime?

The agreement for membership in Kazprime calls for all member banks to have credit lines available for each bank that is part of the agreement. I obviously can't be specific, but it shouldn't come as a surprise to anyone familiar with the well publicized developments in Kazakhstan's banking market that Citi does not have lending limits for each and every bank in the agreement. We do continue to have lending limits for those banks that meet our risk and credit criteria, and will continue our dialogue with the Kazprime Committee and review the situation as it develops. We remain committed to the Kazakhstan market and our clients here, and leaving Kazprime in no way diminishes that commitment nor our ability to serve our clients.