Freedom Bank has the potential to grow fourfold in Kazakhstan, according to the CEO of Freedom Holding Corp., Timur Turlov, who presented the holding’s results for the 2024 fiscal year.
«We have launched many interesting projects that are now soaring. All of them have great potential for further growth. We are reviewing the profiles of our competitors serving 15 to 16 million people. Freedom has one million clients in the bank and about five million customers in its entire ecosystem. So, our potential in cross-selling is tremendous. In Kazakhstan alone, we can grow fourfold to catch up with our competitors. At the same time, we are growing not only in the banking sector but also in the sphere of insurance, investment banking and ecosystem projects such as air and event ticket sales,» Turlov said.
The CEO of Freedom Holding Corp. also revealed which business lines the bank is betting on to grow faster. Issuing digital mortgages is one of them, as Freedom has been ranked the leader in this business segment for quite a while.
«In 2022, when money was cheaper and there were many good programs, we managed to issue more mortgage loans than any other bank in our country. In some months, we even outperformed all the banks combined. As of today, the mortgage rate is 16% to 19%. This is very expensive because of the high base rate. Nevertheless, we are convinced that the situation will improve and the market will rebound. Our potential in the sphere of mortgage loans is astonishing,» Turlov highlighted.
Another growth point is car loans. This business line is developing rapidly, driven by online insurance. This online product allows customers to acquire insurance remotely and obtain compensation within two hours of an accident. Thanks to close integration with the databases of the Ministry of Internal Affairs of Kazakhstan and operators of street surveillance systems, Freedom has effectively minimized the number of fraud cases.
«We used to hold leading positions in the car loan segment as well. We grew fast but then realized that we had no resources to lend to people as we faced a shortage of liquidity in Kazakhstan. Our deposit base growth simply fell behind the loan-issuing process in terms of speed. Therefore, our portfolio hasn’t changed much over the past twelve months. Many of those loans were already paid off,» Turlov said.
He also pointed out that Freedom Bank is one of the biggest banks in Kazakhstan in terms of lending to small and medium-sized businesses. With the help of integration with public databases, the bank has effectively learned how to manage risks associated with each client.
«This was almost impossible within traditional assessment methods in the past. Nobody thought it was a good idea to issue a business loan of $15,000 on average. It was much more interesting to issue a $1.5 million loan because assessment costs were the same for both small and big businesses. As a result, banks weren’t interested in microbusinesses at all due to the risk of fraud and high costs of assessment,» Turlov explained.
According to the head of Freedom Holding Corp., the bank will double the volume of issued loans next year if it raises additional investments of $1 billion.
«If we manage to raise funding from investors for our banking business, the bank will be able to issue more high-quality loans with a good profit margin to those entrepreneurs who are no longer interested in consumer loans with a 45% interest rate, preferring loans with 26% to 28% interest rates. Even though these rates are also very high, they are 20% cheaper than our competitors’ rates. This opens a new market for people, facilitating the development of entrepreneurship and enhancing competition, which also allows our shareholders to earn good money,» the CEO of Freedom Holding Corp. underlined.
Apart from the bank’s achievements, Turlov also talked about the ecosystem developed by the holding. For example, Ticketon, one of Freedom’s biggest acquisitions, is going to pay back all the investments next year thanks to its growing revenue. With the help of this service, the holding has access to two million people in Kazakhstan, who can receive nice bonuses if they pay for their tickets with cards issued by Freedom Bank. The same bonuses can be obtained by those who use Aviata, another service within the holding ecosystem.
«The ecosystem we are deploying right now is bound to be profitable. I think we are in a better position to do so than ever before. We are entering new markets and preparing to learn new things. Even with those business lines we have in Kazakhstan now, we are bound to succeed in Europe. This is going to be a very interesting story, as long as something unavoidable like a crisis doesn’t happen,» Turlov summarized.
