Key Sustainability Events in 2024

In 2024, the Bank integrated a climate agenda into its operations, marking an important step toward enhancing resilience to climate change. Climate-related risks have been incorporated into the Bank’s overall risk management framework. During the reporting period, in cooperation with an international consulting company, conducted an assessment of physical and transition risks, carried out climate stress testing, approved a methodology for identifying climate-related opportunities, and developed a Roadmap for implementing climate risk assessment. In 2025, the Bank plans to set interim and long-term targets aligned with a science-based approach to reduce its carbon footprint, both from its own operations and from its financed loan portfolio. The achievement of these targets is expected to be driven by a number of developed initiatives.

Starting in 2024, the Bank began assessing its own greenhouse gas emissions under Scope 3, as well as financed emissions across its entire portfolio, with the aim of improving the management of its environmental impact and developing interim targets to achieve its overall carbon neutrality goals by 2060. The methodology for calculating greenhouse gas emissions was developed jointly by the Bank and an external expert organization.

In November 2024, during the Kazakhstan Global Investment Roundtable (KGIR-2024) chaired by the Prime Minister of the Republic of Kazakhstan, the Bank signed a Memorandum of Understanding with the Asian Development Bank (ADB) to support the development of gender-focused and green mortgage programs. The Bank plans to attract KZT 90 billion in loan financing from ADB to further develop these initiatives.

Throughout the reporting year, the Bank undertook significant efforts to develop and expand its product portfolio, including the following initiatives:

• Launch of the Nauryz and Otau housing programs, aimed at improving housing conditions for citizens of Kazakhstan, including residents of single-industry towns, small towns, district centers, and rural settlements.
• Launch of the Asyl Meken pilot project, focused on improving housing conditions for residents of rural settlements. This project is implemented following the President’s directive to shift the Bank’s focus from regional centers to districts, single-industry towns, and villages, supporting rural infrastructure development and improving housing accessibility.
• Launch of the AQYL Educational Savings Deposit, allowing citizens to gradually accumulate funds for vocational and higher education both in Kazakhstan and abroad.
• As part of youth housing initiatives, agreements were signed with akimats for the implementation of regional programs such as Elorda Zhastary in Astana, Almaty Zhastary in Almaty, Aktobe Zhastary in Aktobe region, Alatau Zhastary in Almaty region, Atyrau Qala Zhastary and Atyrau Audan Zhastary in Atyrau region, Aulieata Zhastary in Zhambyl region, Zhaiyk Zhastary in West Kazakhstan region, Karagandy Zhastary, Temirtau Zhastary, and Saran Zhastary in Karaganda region, Kostanai Zhastary in Kostanay region, Syr Zhastary in Kyzylorda region, Mangystau Zhastary in Mangystau region, Ertis Zhastary (Ekibastuz) in Pavlodar region, Qyzylzhar Zhastary in North Kazakhstan region, and Ulytau Zhastary in Ulytau region.
• In the context of expanding regional programs, agreements were signed with akimats of Shymkent (Qamqor), Akmola region (Program for Emergency Services), Aktobe region (For Victims of Floods, For Employees of JSC TNK Kazchrome), Atyrau region (Berekeli Baspana-Atyrau), East Kazakhstan region (Shygys Mamany, Program for Ridder Single-Industry Town), Zhetysu region (Zheruiyk), Kostanay region (Local Executive Body for Employees of Sokolov-Sarbai Mining and Processing Production Association JSC), and Pavlodar region (Local Executive Body for Employees of Eurasian Energy Corporation JSC).
• As part of the implementation of separate regional programs, agreements were concluded with akimats of the cities of Astana, Almaty, Shymkent, and the regions of Akmola, Aktobe, Almaty, Atyrau, East Kazakhstan, Zhambyl, Zhetysu, West Kazakhstan, Karaganda, Kostanay, Mangystau, Pavlodar, Ulytau, and North Kazakhstan.
• The Bank expanded its cooperation under the Corporate lending product, aimed at financing housing for company employees. Agreements were signed with companies within the Eurasian Resources Group (ERG), including Kazchrome TNС JSC, BK-STROY LLP, Sokolov-Sarbai Mining and Processing Production Association JSC, Eurasian Energy Corporation JSC, as well as Bogatyr Komir LLP, Daily Food Astana LLP, and Daily Food Ltd. LLP.
• As part of the Rental Housing with Subsequent Purchase project, agreements were concluded with the akimat of Aktobe region to assist flood victims affected by the state of emergency; with the akimat of Kostanay for tenants on the waiting list for housing; and with OKS-SHYMCITY LLP for tenants employed by Seitzhan School.

In the reporting year, the Bank attracted KZT 61.3 billion from local budgets to implement social housing programs.

In 2024, a total of 1,990,790 citizens of Kazakhstan received government bonuses deposited into their Otbasy Bank accounts, with a total of KZT 81.9 billion distributed to depositors (based on 2023 results). These bonuses, provided under the housing savings system, were guaranteed by the state to help citizens more quickly save for their own homes.

The Bank obtained a license for additional financial operations, including the opening of current accounts for the allocation of targeted savings for housing improvement or educational expenses, issued by the Agency for Regulation and Development of the Financial Market. As part of this license, the Bank launched a new function under the National Fund for Children program beginning in 2024.

A memorandum of understanding was signed between the Bank, the Union of Builders of Kazakhstan, and the Association of Islamic Finance and Business (AIFB) to promote the development of Islamic finance in Kazakhstan. Additionally, the Bank signed a memorandum with CSQlaw Kazakhstan Branch, a subsidiary of a Malaysian company. This cooperation includes comprehensive training for Bank employees in Islamic finance and Sharia-compliant financial law.

As part of its ESG policy implementation, the Bank issued its first social bonds in 2024. Specialized trading was held on KASE for the placement of these social bonds, through which the Bank raised KZT 209.849 billion in financing for lending purposes. This included five-year social bond placements under the third bond program at annual interest rates of 14.25 % (KZT 170.5 billion) and 15.25 % (KZT 39.349 billion). The proceeds from these social bonds were used to finance the Nauryz social housing program.

In 2024, the Act of the Republic of Kazakhstan “On Amendments and Supplements to Certain Legislative Acts of the Republic of Kazakhstan Regarding Housing Policy Reform” was adopted. Under this Act, the Bank will be granted the status of a national development institution, which entails new responsibilities in addition to its existing functions. These include maintaining and updating the unified national electronic database, managing and updating the Housing Provision Center database, making decisions on the allocation of housing from municipal housing stock or housing rented by local executive authorities from private housing stock, subsidizing part of the rental payments for privately rented housing, and issuing preferential housing mortgage loans under the housing savings system.

During the reporting year, the Bank launched the Asar charitable campaign among its employees to provide financial assistance to flood victims. In total, more than KZT 9.4 million, equivalent to a one-day salary from contributing employees, was donated. Additionally, the Bank granted loan deferments of 30, 60, or 90 calendar days to borrowers affected by floods, with the option to extend loan terms for the duration of the payment deferment.

In 2024, the Bank was for the first time assigned an ESG rating by the international rating agency Sustainable Fitch. The Bank received a score of “3” and an overall rating of “55”, driven by the positive social impact of its mortgage loan portfolio. A significant share of the Bank’s portfolio is directed at expanding access to adequate, safe, and affordable housing and basic services for certain vulnerable groups.

In 2024, as part of the Bank’s ESG policy implementation, certain changes were made to its organizational structure. A new Sustainable Development Office was established within the Department of Planning and Strategic Analysis. Its primary function is to implement and coordinate matters related to sustainable development and ESG.

The Bank held an Issuer Day event on the KASE platform. During the event, Lyazzat Ibragimova, the Chair of the Management Board, delivered a presentation and provided participants with up-to-date information on the Bank’s financial performance for 2023, planned bond issuances, and upcoming housing development projects.