Hello, all, and welcome to the Kaspi.kz 3rd quarter of 2021 conference call. My name is Sam, and I will be your coordinator today. If you wish to ask a question during the webinar, please use the raise hand button if you have joined via Zoom. If you have joined us on the phone, please press star followed by one on your telephone keypad. I will now hand you over to your host, David Ferguson at Kaspi.kz to begin. David, please go ahead. Thanks, Sam. Good afternoon, everyone. Very warm welcome to our third quarter 2021 conference call. For those of you who don't know me, I'm David Ferguson from Kaspi, joined by, as usual, our CEO and co-founder, Mikheil Lomtadze, and our Deputy CEOs, Tengiz Mosidze and Yuri Didenko. As has been the case in the past, we'll start with Mikheil running through the strategic update. I'll run through the financial update and the remaining 2021 guidance. The rest of the team is available for or the full team is available for the Q&A session. On that note, I'll hand over to Mikheil to start today's presentation. Over to you, Mikheil. Great. Thanks, David. We're pleased to report on another strong quarter of Kaspi.kz management team executing. We have growth across pretty much all the metrics across all our platforms. Our fastest-growing Payments in the Marketplace platforms have been showing a lot of strong dynamics. On the Payment side, we increased revenue generating TPV by 103%, followed by the revenue growth of 72% and net income 111% on the back of rollout of Kaspi Pay and Kaspi QR and onboarding the merchants on the Kaspi Pay platform. The Marketplace continued very strong performance. We have 134% growth year-over-year, 160% growth of revenue on the back of expanding take rate in the higher margin verticals. The net income grown 201%, again, on the back of the also inherited operating leverage, which is inherited in our super app business model. Fintech on the back of the growing origination. The finance value have grown 174% year-over-year, revenue 35% and net income 55% on the back of the improving cost of risk. On the consolidated level, extraordinary performance this quarter, 94% growth on the monthly transactions per active consumer. Very engaged consumer base in our super app. Revenue 55%, net income 90% year-over-year. Again, another quarter of profitable growth. We are happy to announce that the board of directors have recommended to dividend payment of KZT 468 per GDR. I would like to go through some of the strategic initiatives and the highlights. One has been historically our sort of target as the Marketplace and the Payments business are growing really fast. They're taking majority of our net income. Again, the goal for this year is to have majority of net income from those two fast-growing platforms. Now in the nine months, 50% of our net income comes from the Payments and the Marketplace businesses. Next slide. Here, as we continue growing our users, we also continue growing their engagement since we have a single app which integrates all the services across our platforms. The users can easily navigate those services, and our marketing activities are extremely efficient. As a result, now 40% of our users are using our three platforms. On the one hand, that's increased from 33% of third Q of 2020. On the other hand, there is still a huge opportunity for us to continue engaging our users in all three businesses. We also have been driving transactions. Transactions increased 94% year-over-year. Now we've reached 45.3 transactions a month per active user. Now, to put that number into perspective, PayPal reports around 44 transactions a year per active consumer. That's another indication of how powerful is our super app business model and how engaged our consumers are and how we're driving the transactions per consumer as we add more services. Again, just to repeat myself, we drive transactions because transactions is what is important for us. Transaction is where we sort of monetize ourselves, but very importantly, deliver value for consumers as they buy products or they pay for the products and when they shop. Also for the merchants, we bring them sales. The transactions is an important metric. It's growing really nicely and another justification of the competitive advantages that we have as a super app business model business. As we drive our super app, we drive and add services. We drive both monthly users and now extremely importantly, daily users. We have reached our daily users to 6.5 million, and we've increased our monthly users to 10.8 million. Another very nice quarter and actually a step up in the growth in absolute number of consumers, if you compare this number for the growth between the second Q and the first Q of this year. Extremely importantly, as our users are more engaged, we were hitting a record high DAU to MAU ratio 60%, which basically means out of 10 of our monthly users, six come to our app on a daily basis. We're achieving this, again, by our team constantly innovating, adding the new services, adding the new verticals, adding merchants, giving the reasons to spend, but also adding the government services. We are growing on all the fronts, not only with existing business, but actually with the businesses that we just added. Here is an example of one of those services which drives engagement. We work together with the government bodies. We work on digitalizing the government services so that we can make them accessible to the citizens of Kazakhstan, make them accessible for free seamlessly, and that is a remarkable achievement. Now we have, in the September of this year, we already achieved 7 million monthly users visiting the GovTech section of our app. We constantly add new services. Example of the two most recent additions would be that now users on a one spectrum of the age, they can receive pensions through our Super App. They can apply for application, get approved seamlessly online, and receive pensions. On the other spectrum of the age, our users and happy parents can actually apply for the benefits for newborn and then seamlessly get approved and also receive those benefits. Again, this service is extremely important for us, both for the country, for us personally, and for our users, and is showing extraordinary increase in the usage more than four times compared to the September of 2020. Another example of the service which shows extraordinary performance is the travel. You have been with us through the launch, which we launched that service end of last year or second half of last year, then we started to integrate the services, adding the new functionality. We started with airline tickets, then we added railway tickets, and now we have reached another milestone of 1.1 million tickets sold in the third Q. As you can see, we're not only growing nicely airline tickets, but actually we have grown dramatically, more than 10 times we have grown railway ticket sales from the moment of the launch of railway tickets in the end of the second Q. Another important number which I could also highlight, actually becomes quite a sizable business. We have increased the GMV of our Kaspi Travel to KZT 26 billion. Just to put that number into perspective, if that would be the GMV of our marketplace, it would be equal to a bit over 5% of the total marketplace GMV. Another number to also look at it is the take rate. The take rate is 3.3% on our Kaspi Travel, and that is a healthy take rate. We don't manage this business for take rate. We're growing it at this point, trying to bring the value for our users, airlines, and the railway company. On the other hand, the increase is natural and organic because the railway tickets have a higher take rate than the airline tickets. That's why the take rate went up to 3.3% on the Kaspi Travel. Again, this is another example of how quickly we can ramp up services due to our super app strategy and our users seamlessly navigating different services in a single app. We have made our priority this year to develop the services for the merchants. We're extremely happy to report that the merchants reached 182,000 merchants by the third Q. That increase of 417%. Again, the way the merchants are coming to our platform, they start with the payments services, then move to mobile commerce, and then move to the commerce. As a result, we're continuously engaging more merchants, and we're becoming, for them, the partners which help them to drive sales and have access to our technology, have access to our consumer base. Around 43% of the total merchant base is now shared between the payments and the marketplace. That's another indication how much potential and growth we have for the merchants as our number one strategy priority right now is to drive number of merchants. Over time, of course, we're also catching up with engaging them in all our services across all our platforms. Another slide is as we develop the merchants, we actually are developing the infrastructure for the merchants to engage in our payment platform. We have reached a remarkable 215,000 devices for the merchants, which help them to transact with our consumers. That's a 10 times increase during 12 months. Remarkable execution from Kaspi.kz management team. Also what is extremely important is that now, I remember all these discussions 12 months ago, and now I just would like to mention that only 25% of our acquiring transactions are coming through third-party acquiring networks. 75% of the transactions comes through Kaspi Pay POS solutions, our own acquiring network, and that's also quite a remarkable achievement that enables us to control the user experience, but it also enables us to provide all the benefits for disintermediating the third parties, all the savings that we get from that exercise to the merchants. We don't take advantage of this cost cut. We actually move the savings and benefits to the merchants, and that way we have one of the lowest, if not the lowest, fee level for the acquiring services in the country. As we rolled out the payment network, as we rolled out POS solution, here is another example of how quickly and how seamlessly we can transform the user experience and the merchant experience. Discussions 12 months ago, if these QR codes have been tried in other countries, they have not been successful. Here is a living example how the country can move from plastic cards to the QR code transactions in just 12 months. The number of transactions total increased almost 14 times. What is even more remarkable, that 83% of all those transactions now done through Kaspi QR codes. That actually means that Kaspi QR has become the most popular payment network, and the payment method in the country, both for the merchants and for the users of Kaspi.kz Super App. Here is another priority for this year. As we drive merchants, clearly any marketplace achieves remarkable liquidity and the growth as it adds merchants and it adds SKUs or items listed on the platform. We have increased the number of items listed to 1.2 million by the third Q. That almost three times increase from the third Q of 2020. If you would see that the take rate and debit, we'll talk about it later, we are onboarding. We started from electronics, and now we're moving to the smaller ticket, higher margin transactions, and those verticals are growing very nicely. I think SKUs around items such as home and garden, and furniture, the groceries, beauty and personal care, clothing, all those are important verticals for us. A lot of merchants are actually joining our platform with this assortment and enabling our consumers to shop, they also increase their sales. On our e-commerce, we have been also really focused as our management team has been focused on the delivery. Delivery does deliver a lot of value for our buyers and consumers and the merchants. This is a very important service for our e-commerce business. We have grown the number of items that we are shipping now and delivering to the consumers through different delivery methods to 2.8 million, which is 138% growth. Even what is also important is not just the growth itself, but actually now it is 97% of the delivery is free for consumers, or basically delivery is free. Then we are delivering one out of two items we are delivering in less than two days, again, with help our courier partners and with help of our merchants. That will remain our important priority to develop delivery. We have two new additional services that we have launched around the delivery. The one service is that now we have launched a delivery in less than three hours. We actually launched the express delivery. That has been taken off very nicely. We're doing this together with the taxi partners, and we're also talking to some food couriers in the country to enable us to scale even further. The initial ramp-up has been extremely encouraging. We have reached in the city of Almaty, which is the largest city in the country, we have reached 10% of our delivery items now being delivered through express delivery in less than three hours. Just to remind everyone, this is the part of our customer logistics platform. We have three different levels of delivery now. If you take both merchant and user perspective, we have delivery in less than three hours. We have local delivery, usually that happens the same day. Then we have countrywide delivery that is the most complicated business to organize, but we have been able to organize that together with our partners across the country, starting from delivery stations, couriers, different type of sorting hubs. We have developed a technology which unites our entire delivery process from the single labeling to smart routing and apps for the couriers. We have multiple ideas to execute. Delivery is extremely important for us. Again, technology, data, user experience, that's what's driving our delivery. It's not building the warehouses. Then there is another addition to our delivery platform. We have launched, and we aim to build the largest lockers network in the country. There are several benefits to launching the lockers. First of all, it's 20% cheaper than operating other methods of delivery, just for the simple fact that actually a courier can deliver multiple items or many more items to a single point of delivery than door-to-door delivery to the consumers. It's also very important in the COVID environment. It's completely contactless, which means our user of the super app comes to the Kaspi Postomat, scans the QR code, the locker opens, they take their items. Reliability is extremely high because negotiating the right time for the person is something which is reducing the reliability of door-to-door delivery. In our case, we deliver to Kaspi Postomat, and then users can pick up those items at their convenient time on the way from work. Our goal is to have Kaspi Postomats located in the most convenient locations. Again, we're using our big data capabilities. We know exactly where our users are, therefore we can strategically locate those Kaspi Postomats in the best solutions. Of course, as this is a fixed footprint, it also delivers the benefits for the environment just because there is less travel, there is less pollution, less congestion, and so on and so forth. Again, we're extremely excited about this opportunity. We will have about 300 of them by the year-end. We will have about 1,500-2,000 of the lockers by end of next year. In terms of investment, again, our team is extremely efficiency-oriented as usual, as we've proven ourselves multiple times. The price of a locker is around $4,000. It's equipped with our technology and the QR codes, is fully seamless, the lockers can be also beautiful. It's very nice looking lockers, and we hope it drives our delivery business going forward. Another update and development. We've discussed on the last calls that we've selected Ukraine as the country which we would like to bring our business model and digitalize further the experience in Ukraine itself and bring value for consumers and merchants. We've selected Ukraine for several reasons. The cash withdrawals being quite high, almost 50%, the low penetration of retail, 8% of total retail trade, the very low consumer leverage of 4.5% of GDP, and 70% smartphone penetration. All of that to put together, it's basically a great place for us to replicate the Kaspi.kz Super App. We've completed Portmone acquisition. That's a payment platform which enables us to build the bill payment business. Even though there is no material financial impact on our financials, it does provide enough capabilities for us to launch regular payments around the households, starting from utility, electricity, taxes, education, and so on and so forth. Very similar business that we have in Kazakhstan. We have also approached the bank license acquisition, so we're acquiring the bank. We have signed the SPA. The acquisition of the bank is only for the bank license purposes because we'll be able to open accounts, mobile wallets. Basically scale our payments and fintech products in the country. That is the only rationale and has no material impact on our financials. The bank we're acquiring doesn't really have branches, no loan portfolio, very limited operating activities. We've signed an SPA. Hopefully, we close the transaction first half 2022, after we receive all the regulatory approvals for that acquisition. David, back to you. Great. Thank you, Mikheil. I'll run through each of the three operating segments, starting with the payments platform. The payments platform is the gateway to the Kaspi ecosystem. It is the foundation upon which everything else is possible. As Mikhail said earlier, and for those of you who've spoken with me over the course of the year, one of the most, if not the most important priority this year has been to onboard merchants into the ecosystem. Here is ongoing evidence of execution in that regard. Number of merchants up 521% year-on-year. That's a dramatic change in the merchant proposition, 180,000 merchants versus just under 30,000 merchants when we IPO'd 12 months ago. It's also an acceleration versus the second quarter. That 521% was just under 450% in the second quarter. The momentum is showing no signs of slowing down, number one. Number two, on the consumer side of things, despite the fact that the payments platform is our largest, most penetrated platform, still very, very robust growth in number of consumers, up 28% year on year. Looking at payment values, TPV, again, just to put color on this, what is important is this is funds flowing in to the ecosystem, indicative of the health of the ecosystem. As a lead indicator, this continues to show very, very strong growth. Indeed, that's the case in the third quarter, up just over 100%. RTPV, payment volumes which we monetize. What you see here is that for the first time, RTPV, albeit only slightly, is growing faster than TPV. That is a result of the strategy we outlined 12 months ago and have executed on over the course of this year, i.e., to roll out Kaspi Pay opportunities for people to transact commercially within the country. Here you see evidence that that is playing out. Again, that is important because, again, if we think back to the IPO 12 months ago, there was a lot of skepticism around the ability to monetize TPV volumes. Here you see evidence that that is playing out increasingly at a faster rate. Another way you can look at this is, number one, as I said, peer-to-peer will remain an important part of the mix, certainly as long as the economy in Kazakhstan has a high cash element to it. You see that that's the case. This is a future opportunity for monetization. Not all of peer-to-peer volumes, but a proportion of them. Number one. Number two, RTPV. Again, what you see here is this is evidence of the success of Kaspi Pay within monetized volumes. Kaspi QR and card transactions are growing in share at the expense of bill payments, at the expense of monetized peer-to-peer. Ticket size for QR is higher than for bill payments. QR is growing at a faster rate than bill payments. Another lead indicator that you can look at is funds, again, kept in wallet, average interest-free balances. People move money to Kaspi. People store funds in their wallet to ultimately spend, transact, hence why this is a lead indicator for RTPV in Q4 and into next year. What you see here is again remains absolutely robust, up 58% year-over-year. That is a very similar rate to the rate we saw in the second quarter. What does that mean in terms of financials? Strong revenue growth with stable take rate over the course of the year, 1.2%, consistent with the guidance that we provided, is dropping through to the bottom line. Principally, that is a result of what Mikheil talked about, and that's the reduction in third-party processing costs, with now 75% of gold volumes processed in-house. The other 25% are Visa and Mastercard, combined with just the natural operational gearing within the business payment platform. In addition to strong top-line growth, delivers another record high margin, just short of 65%. Moving on to marketplace, merchants, and consumers. What I may have talked with some of you about previously is growth in payment merchants over time should translate into growth in marketplace merchants, initially via m-commerce, and for some of those merchants over time via e-commerce. You see that again, that is exactly what is playing out. Marketplace merchants up at a very strong rate, just short of 200%. That is an acceleration from the rate of growth we saw in the second quarter. That number in the second quarter was about 130%. Merchants are upgrading via the Kaspi Pay app to m-commerce and e-commerce on the one hand. On the other hand, consumer growth in response to more merchants, more SKUs, more opportunities for transact, combined with things like free delivery, are also seeing very strong growth, up 40% year-on-year. That is an acceleration from the second quarter when active consumers were up around 35% year-on-year. There's numerous lead indicators that you can look at here where momentum remains very, very strong. Growth in merchants, growth in consumers translates into strong growth in GMV, up 134% year-on-year. That is a slowdown in the rate of growth versus the second quarter when the base was distorted by COVID-related factors, still, clearly a very strong rate of growth, number one. As you'll see later on, we've upgraded marketplace guidance, ahead of where we'd expected to be. Mikheil mentioned it earlier, take rate continues to move up around 100 basis points year-on-year in the quarter to 8.4%. That is principally a function of change in mix. Monetization of delivery, monetization of Kaspi marketing services are playing a part, it's not particularly meaningful at this stage. At this stage, the driver is mix change. We move into next year, delivery monetization, marketing services, other things can become additive in a more meaningful way to that number. To put some color on that, what you see, these are the top five fastest-growing marketplace categories, and four of those five are take rate accretive, only Tire and auto accessories is below average take rate. To give a bit more color on GMV trends, first of all, just on e-commerce, what is important to bear in mind here is growth in e-commerce up 69% year-on-year, growth in purchases up 121% year-on-year. What is happening is we add more merchants, as we add more SKUs, it is true that some of those SKUs are in lower ticket categories. If you think that we started from consumer electronics, probably the highest ticket category that you can find. If you add beauty and healthcare products, probably one of the lowest ticket categories you can find. Growth in purchases is at a faster rate, and the broadening of SKUs does on the one hand mute GMV growth, but on the other, that is partially offset by the revenue level by many of these new categories being higher take rate. That dynamic is less relevant for m-commerce. M-commerce is always lower ticket size, and actually what you see here is you're seeing some growth in ticket size from a materially lower base. M-commerce is principally growing as a function of just that dramatic growth in new merchants. As I talked about earlier, merchants start with pay, m-commerce is the second product, e-commerce is the third derivative. Growth in merchants driving m-commerce growth and also boosted by some growth in ticket size from a lower base. What you see here is that broadly speaking, e-commerce and m-commerce are roughly equal within the mix. M-commerce is slightly more, I think for modeling purposes, I wouldn't make a sort of a big distinction between the two at this point. Revenue boosted by GMV growth, boosted by travel. Mikheil talked about that earlier. Just for the benefit of everyone, travel is not booked in marketplace GMV, but is booked in marketplace other revenue, is a contributing factor here. Growth in revenue boosted by higher take rate. Here within the platform, driving margin improvement. There is a muting factor there, and that's the investment in free delivery. Approximately Kaspi covers around two third of delivery costs. Merchants cover around one third of delivery costs at this point. That is an offsetting factor. It's within our budget, and again, you see the marketplace is delivering a margin as high as it's ever delivered previously. Record levels. Finally moving on to the Fintech platform. Very robust growth in deposits, 32% consistent with the trend you saw in the previous quarter. What you're also starting to see is an acceleration in loan consumers up 31% year-on-year. That is just a natural consequence of COVID to some extent being in the past, the outlook becoming more predictable, the economic environment, consumer environment showing more favorable trends. We are ramping up origination of which loan consumers is new consumers is one driver of that. Taken together, this drives strong TFE growth up 174% year-on-year. That is a function of, again, improving economic outlook, our willingness to originate, number one. Number two, a strong above budgeted trends in marketplace. There's a couple of other things that you see going on that are important. TFE to loan portfolio conversion rate continues to move up. We are turning the balance sheet. We are using the balance sheet more efficiently. 2.3 tells you that the average duration of all our lending portfolio is around five months. Clearly, buy now, pay later is a lot lower than that. General purpose is above that on average, come out at around five months. That is a material change versus where we were in the third quarter of 2020, 1.4 times, where a more cautious consumer was less willing to prepay. What you're seeing here is that the consumer is taking smaller ticket lending, is prepaying more frequently. That is actually yield neutral, but it is cost of risk positive. Not only do we use the balance sheet more efficiently, we use the balance sheet more profitably. Here is the mix. I sort of say that general purpose and buy now, pay later are broadly similar share within the mix. We have ramped up general purpose origination as the COVID or economic outlook has stabilized and improved. What you'd naturally expect to see in the fourth quarter on the run-up to the sort of the holiday season is the buy now, pay later will move slightly up within the mix. On balance, these two are broadly similar. The other point to note is our merchant finance product, which we launched only really 12 months ago. This is again a derivative of Kaspi Pay merchants. First, a merchant signs up to Kaspi Pay. That is fundamentally an acquiring product. From that, they have access to other products and services, including working capital to invest, grow their business, ultimately to drive more transactions. That's up to around 7% of TFE, and I think you'll see that move slightly higher in the mix in the fourth quarter and going forward. Very, very strong growth from a product that barely existed 12 months ago. What you see here is that TFE growth is north of 100%, loan portfolio growth 56%. Again, that is, I'm reiterating the point that we are just churning the balance sheet more efficiently, a mix of a function of smaller ticket lending, and that's relevant to both the general purpose and the buy now, pay later product that the ticket sizes for both continue to come down and consumers incentivized to borrow, prepay, borrow again. Loan-to-deposit ratio has increased to around 79%, and I would consider that a more normalized level going forward. Here, too, you see the same trend that's been consistent throughout the Q3 numbers and throughout 2021, namely strong revenue growth, up 35% year-on-year. Again, that's on the back of origination. Some as budgeted and guided for muting in the yield as the buy now, pay later increases within the mix, but more than offset at the profitability level. Net income up 55% year-on-year. Profitability up to 43%, and that is a function of origination continuing to scale and us getting better at originating, i.e., lower cost of risk. Other metrics that you could look at to illustrate that would be ROE 77%, very, very strong. Cost of risk. To put a bit more color around the 1.5%, I would say that broadly speaking, there are sort of two factors contributing to lower cost of risk. One is we're getting better at origination. That's a function of all of the data that we continue to collect, particularly from the payment foundation, number one. Number two, better collection of loans that do go overdue. Roughly, you could think about the two factors as having an equal contribution to that lower cost of risk. You should also take into account that the third quarter of 2020 is a distorted base because of COVID. Better origination is also translating into lower NPLs, down to just over to 5%. Other risk metrics that you can look at. For those of you who were on the full year 2020 call back in February, one of the things you may recall I mentioned is that origination trends in 2021 should be consistent with trends in 2019, not 2020. The point there was that in 2020, because of COVID, we scaled back origination. We were more conservative, and we only lent to the highest quality of consumer. Now origination has normalized. 2019 is a more comparable base, and these risk metrics are trending in line to some extent with 2019 trends. That wraps up on the three respective platforms. Overall, again, the picture is the same. Revenue growth up 55% year-on-year in the third quarter. Materially faster growth ultimately driven by ecosystem fundamentals, strong merchant and consumer growth, more opportunities to transact, whether it be via Payments, whether it be via Marketplace, including Kaspi Travel, or whether it be as a result of higher origination with lower risk dropping through to the bottom line. A very, very strong performance which has put us in a position to upgrade KPIs and/or financial metrics for every division, Payments, Marketplace, and Fintech. I won't read through every line here, but the rationale for upgrade in each section is consistent effectively with the trends that you've seen over the course of this year. Ultimately, consolidated net income moves up to around guidance for 2021, moves up to around KZT 445 billion. That's the fair upgrade over the course of this year to net income guidance. Just to sort of preempt the question, today's call is about nine-month 2021 results and the outlook for the remainder of the year. We'll update on the outlook for 2022 in February of next year, but at this stage, it would be too premature to provide guidance around next year. I've illustrated to you how many of the lead indicators are in. The momentum is very, very positive. If you ask for 2022 guidance, that's the answer you'll get today. Here is the full guidance update by platform. I think on that note, we'll turn the call over to Q&A. The team is all available. Please, Sam, we're ready when you are. Thank you. If you would like to ask a question today, please press the raise hand icon on your screen if you have joined via Zoom, or if you have joined us on the phone line, please press star followed by one on the telephone keypad now. When preparing to ask your question, please ensure your line is unmuted locally. Our first question comes from Nida Iqbal Siddiqui. Your line is now open. Please state your company name and proceed with your question. Hi, this is Nida Iqbal from Morgan Stanley. Congratulations on the great results today. I had a question about the expansion into Ukraine. It would be very helpful if you can perhaps talk about the competitive landscape in Ukraine, please. Okay. maybe that's a question for Mikheil. Yes, sure. Well, in general, I would say that we look really at the country dynamics, which we have described. Again, the penetration of the cash versus cashless transactions, financial services in e-commerce. All of those numbers clearly indicate that there is a lot of room from the market penetration perspective. We as a company, even though maybe some other people would think that we're extremely competitive company, actually, we are the company which does not compete. This is the company which is focused on the quality of the products that it launches. We're the product company, and the experience of the consumers and the merchants is the most important competitive advantage that we have. As a result, we actually are growing our business. We're creating the markets. We're not just going after existing markets, right? Kazakhstan is a great example. We help the country to transform from cash to cashless economy. All the products we have developed are super high quality. The growth rates are extraordinary, and we've created the markets for ourselves. That would be the strategy for any other markets. We just want to make sure that the market structure is there. We, of course, also for entry, will be looking for potential partnerships on the consumer merchant basis with different players, because the way that we've developed in Kazakhstan is different. Now we have a super app, and we started, we didn't have a super app. That's basically would be the comment on the Ukraine. Again, we're execution driven, we're product focused, and we're obsessed about technology. That is our competitive advantages, and we believe that under-penetrated rates across all the markets provide enough opportunity for us to enter Ukraine. Thank you. That's very helpful. Just to clarify, in terms of the plan for Ukraine, it would be to go in with all three of your products as you have now in Kazakhstan, marketplace, payments, and fintech at the same time? Well, we don't really like to comment about our future plans, so we only usually describe the plans which are available and the products which already are being launched. From that perspective, I can mention only and describe to you the way that we approach the strategy. Strategy, in our case, is driven by the super app. Super app architecture and super app products, it's almost like a combination of different type of services, different type of apps in a single app. As a result, we will enter other countries with the product which we believe provides the most value for users, because the product that provides the most value for users drives the user acquisition. That basically would be our general concept of the strategy. Also, another comment that I would like to make, we're extremely focused company. Extremely focused means we don't like to be stretched too thin across multiple products, across multiple markets. We have extremely, again, focused strategy. We will pick the narrow product line which will deliver the most value for the users, and as a result, we will be able to grow our business. Thank you very much. Thank you. Our next question comes from Gabor Kemeny. Gabor, state your company name and please proceed with your question. Hi. This is Gabor Kemeny from Autonomous Research. A few questions from me. Firstly, on your market shares, could you please give us an update on your latest market shares in e-commerce and digital payments? More broadly, how do you think about your addressable market in the marketplace segment? Pretty impressive growth here. It would be useful to get a sense of how you see your potential market in this segment with a two, three -year view, if you could help with that. Moving to the marketplace take rate and some positive trends here, would you be able to quantify the contribution from the value-added services, like delivery and the promotional campaigns in the take rate, and how do you think about your ability to increase your merchant take rate from here? Thanks. Okay. Thanks for the questions, Gabor. Maybe I'll take the first and the third on market share and take rate, and then I'll ask Mikheil to talk more broadly about sort of medium-term addressable market. I guess on market shares, I'd say it's probably not the right way to look at things on a quarter-by-quarter basis. If you look back to the first half of the year, in e-commerce, PwC produced a report, and our market share had increased to around 68% from low 60s in 2020. That's as of the first half of the year. On the payment side of things, share for Kaspi Pay terminals, again, we provided the number in the first half of the year of being just over 50%. I think you can assume from the numbers that you've seen today, it's continued to move up. It'll probably be more appropriate to update on that at the end of this year. That's the first question on market shares. As for consumer lending and fintech, sorry, I'd say if you look back historically, in unsecured consumer lending, our market share has been around 30%, sometimes a little bit less than that, sometimes a little bit more than that. Broadly, I'd expect that to remain the case today and going forward. What is happening is that we are churning the balance sheet more and more. Whilst in value terms our share hasn't necessarily increased, in terms of number of loans, it will have increased considerably. That's on market shares. On take rate, I would say that the vast majority of the increase in take rate is mix effect. Take rate increased by around 100 basis points. How much of that can you attribute to monetization of delivery and monetization of marketing services? A small component of that, I would say, let's say 20 to 30 basis points, something in that magnitude. For delivery at this stage, the focus is on scaling volume, number one. With volume, you can improve unit economics, number two. With improved unit economics, we can take our, what is effectively a subsidy away, and push the cost of delivery onto the merchant, which is where it should be. That isn't a one or two -quarter proposition. That's a multi-year challenge. You can see that things like Kaspi Express delivery, Kaspi Lockers are providing the merchant and the consumer, but providing delivery partners with more value-added services, which ultimately over the medium term will increase your ability to monetize. That would be on logistics. On marketing services, advertising, it's exactly the same. It's about building volume from both merchants, from brands within the ad platform, the auction mechanism. This year is all about volume and is all about very light monetization. As you demonstrate a return on investments to advertisers, there'll be opportunities to improve monetization, and the initial indications are from both brands and from advertisers are very encouraging. Again, these are products that have been launched and will be material to financials, not in 2021, 2022, 2023, over the next three to five years. Maybe I'll stop there and hand over to your second question on addressable market to Mikheil. Sure. First of all, I would mention that our addressable market is we are creating our addressable market. That's what I've mentioned on the previous question, which means we're growing at such a fast rate that we're actually building the digital sort of market. We're building the online services, online payments, the e-commerce, shopping, travel market. We're digitalizing, moving them from offline to online and making everything seamless and cashless. That's basically how we're growing. We have provided cohort analysis in the annual call. We thought that the quarterly cohort analysis on sort of GMV and RTPV would be too much to do on a quarterly call. Annual call we'll update. Continuous and extremely strong growth, and that actually is based on the three pillars of our strategy. Number one sort of strategic priority is to acquire users based on sort of high-frequency services, which are highly applicable to the users. Build the usage of those services, engagement of the users in a specific product. The third, engage users across the products. That's what you see increased, for example, usage by the users of our different platforms. All of that is enabled by the Super App strategy because users seamlessly navigate. Those three pillars are the strategy for the growth. As you can see, the growth rates, we see a lot of opportunity in the years to come in Kazakhstan itself, which is our core market. The second growth opportunity, which we just scratched the surface, is the merchants. We had pretty much no merchant business last year. With launch of Kaspi Pay, we're just starting to ramp up different services for merchants, and that would be another pillar of the growth as we have a Super App strategy for consumers, and we have a Super App strategy for the merchants with different type of services. Very helpful. Thank you. Our next question comes from Mikhail. Sorry. Mikhail, please proceed with your question. Yes. Hi, this is Mikhail Butkov from Goldman Sachs. Thank you very much for the presentation, and congratulations on strong results. My first question is as a follow-up on Ukraine, actually. Could you maybe provide some color or indication how capital-intensive actually this project might be? Yeah. Mikhail, I'll answer that. I think you know that the whole sort of fundamental philosophy of Kaspi is we do things, number one, via a Super App strategy. We try and leverage the user base over multiple addressable or monetizable markets. There's an OPEX cost there rather than a CapEx cost. Number one. Number two, with regard to CapEx specifically, again, fundamental philosophy of the company, we do things in a CapEx-light way. You see that particularly, probably the most obvious example is in our marketplace business. We have one of the most profitable marketplace businesses in the world, and in part, a CapEx-light strategy has played its part in achieving that. If you look for the first nine months of the year, CapEx was just over $30 million for the entire Kaspi.kz group. That is absolutely nothing in the context of KZT 445 billion targeted of net income, and most of that, or an important part of that, was the funding of physical POS terminals over the last 12 months. Long answer to your question is that Ukraine is not envisaged to be long-term capital heavy. Thank you. Another question is on payments business. What share of TPV actually do you see as reasonable potential to monetize that? I think you mentioned that there is some opportunities in peer-to-peer segment. You continue to roll out the acquiring services. Over the medium term, what percentage of TPV do you think can be reasonably monetized? Thank you. I'll start on that and say if you look in developed markets, if you look at PayPal, for example, a sizable minority of their payment volumes are peer-to-peer. Let's say for PayPal, it's something in the region of around 30%. PayPal peer-to-peer never goes away. Over time, it can go from being a majority to a minority. The question shouldn't really be around it going away because it's absolutely fundamental to the vibrancy of the ecosystem. You've seen that the delta between RTPV growth and TPV growth narrowed. Now RTPV is slightly above TPV. I would expect that trend to continue and the mix to change gradually over time, but we'd probably stop short of sort of going into more detail than that. All right. Thank you. That is all from my side. Our next question come from Martin. Martin, your line is now open. Please state your company name and proceed with your question. Hi, this is Martin from AtomView Capital. Hi, David. Hi, Mikhail. Congratulations again on the results. A few quick questions from me. Can you tell us what you think about a potential listing in New York? Is that in the plans? If yes, on what timeline? The second question would be about international expansion. You said you don't want to spread yourself too thin. Are you looking at other countries at the same time? Which countries are you interested in expanding into at the moment? Is perhaps Turkey and Egypt on the list? The final question is about the merchant finance or the microfinance business. Now that all these businesses have your POSs and you can see their transactions and you can see their shops on your marketplace. You have collected, or you're collecting huge amounts of data, like no other bank in the world, it seems. Does that mean that you can now crack the complexity of small business lending? You mentioned at IPO that you would be willing to lend up to 20% of TPV for those businesses. Is that still the case now, or are you willing to go higher with this extra data? That would be very interesting what your plans are there. Okay. Thanks for the questions, Martin. I'll take the first on U.S. listing, then I'll ask Mikheil to comment on second international expansion, Turkey, Egypt. Third, outlook, I guess, for merchant financing. Listing in the U.S., what we have said to investors is that we do see some benefits around the U.S. and believe actually not just some benefits, that it could be a more appropriate long-term home for Kaspi.kz. There's numerous reasons for that. Certainly, one of those would relate to liquidity, stocks trading in it. We observe that stocks a similar size, similar market cap to us trading in the U.S., have materially higher liquidity, which is an issue for our U.K. listing. Over time, there is a commitment internally to addressing that. At this point in time, no formal decision has been made. When a formal decision is made by management, approved by the board of directors, we'll present it to the management, but it would be wrong for me to pre-announce specifics today. You can take away, and others can take away from this call that it is something that we see many benefits from. Maybe I'll pass to Mikheil for questions two and three. The other markets, nothing really that we can specifically discuss at this stage. Again, I would still reinforce the fact that we are extremely focused company. Which basically means that we know that when we channel our execution skills into a specific direction, we achieve the most result. Therefore, Ukraine is there, it's on the map, but nothing really specific at the moment that we want or can discuss on the other markets. Regarding the merchants, you are exactly right. That's the product which we have launched. That product is driven by the technology and driven by the data. We're making risk decisions seamlessly, so which means seconds. It's actually pretty much the same way that we make decisions for consumers. The same way as we deliver the products for consumers, we deliver the merchant finance products to merchants, which means through the mobile app. Our merchants actually, in a vast majority of the cases, don't have to sign anything unless there is a purely regulatory requirement to update certain piece of data. Vast majority of the financing being delivered through Kaspi Pay Super App, which is super app for the merchants. That what is driving the customer satisfaction. There are all other elements of the product in the merchant finance which are attached to it, prepaid without fees, without penalties, any time. It automatically get deducted from your sales. There is a lot of features in the product which are providing very high merchant user experience, foundational to our experience with the consumers. We're just basically replicating that technology, that data-driven risk assessment, and as a result, delivering the extraordinary growth and the value for our merchant partners. You're right. And can I just- of the payment value and the GAV. Yes, please. Thank you, Mikheil. Just to follow up on this, you said during the IPO process that you would be willing to lend up to 20% of payment volume to those merchants. Yes. Is this still the case? Right now it's a very small business, right? You have about KZT 30 billion of RTPV. You're only lending KZT few hundred million to those merchants. Is this just the beginning, and we should be seeing this scale up, or how do you feel about this product? Yes. It's just the beginning. We're just at the very early stage of the product launch. It's still a sizable amount of the total financing volume. If you are thinking in terms of the inherited structure of the product, you are right. Up to 20% of the volumes that are done with us. Also it's extremely important to keep in mind the way the strategy we approach the financing, either for users or for the merchants. We don't push financing on the merchants. We don't push financing on the users. They make decisions when they see the app and ability to take it in the app. We're taking this extremely responsibly, and yeah, the product has already very high traction, but you are right in terms of the structure of the product. It's up to 20% of the business with us. That's right. Thank you very much, Mikhail. Just a final follow-up on the international expansion. You would not want to do two countries at the same time, two new countries, or you would be open to that if you find a right place? I think you responded with your question after if. Yes, if there is a right opportunity, of course, we'll act on it. In general, we are extremely conscious, and we put capital in extremely efficiently. Yes, if there is a right opportunity, of course, we'll consider it. Okay. Thank you very much. Our next question comes from Simon, Ravi Vish. My apologies. Ravi, your line is now open. Please proceed with your question. Ravi, you might be on mute. Can you hear me now? Yeah, we can hear you now. Go ahead, please. Thank you. Congratulations, David and Mikheil. Great to see the fantastic growth. In this kind of fast-growing environment, what are the challenges you're seeing now, and what are the additional risks that could come your way that you're worried about, including any regulatory issues? Thank you. Maybe that's a question for Mikheil. Because we are approaching our growth extremely responsibly, we always lay down the foundation from the product perspective and technology perspective and the services which support the growth, which support the consumer service. From that point of view, operational-wise, we're a very solid company which does a lot of planning before it starts scaling. Again, technology allows us to do that. We are, of course, having the best people in our company is the most important priority, which is a constant priority. We were very happy to report that we have expanded the stock option plans or equity rewards for now 74 people included, and we will be continuously increasing the number of people that can share the success of the company. The shareholders can also motivate people to perform. In terms of the working with the state and with the government, we're working hand in hand on continuously digitalizing the services. Right now, government services, now 7 million people are coming monthly to our section of the government services. That's a suite of the products which comes from distributing pensions to the benefits for newborn. You can register your business. You can pay taxes. We're actually helping the state to efficiently distribute the government services to the citizens, but also achieve the financial efficiency in terms of the tax payments and so on and so forth. I guess that's the priority of the government and the state as well, has been mentioned on numerous meetings. We take it seriously. The state takes it seriously, and we take the well-being of the people extremely seriously as the company that is driving the quality of life and standards in the country. That would be basically where we stand. Thank you for that. On a different note, obviously inflation has been rising in Kazakhstan as elsewhere in the world, and I suppose potentially interest rates could go up as well. What do you see as a trend of inflation going forward in the country, and how might it impact Kaspi in particular? Well, in terms of our business, we're a local currency business, really. We're the platform where people shop, people transact. Inflation has been rising across the world. In our case, I think we're a solid company operationally which works with consumers and merchants, and we just put our head down and concentrate on the things that we control, really. What we control is high-quality products and high quality in a merchant and user experience. That would be my comment on the inflation. I don't know, David, if you want to add. Yeah. I would just say, so I think we need to wait a bit of time. As Mikheil mentioned, everywhere in the world, inflation is an issue post-COVID. Let's see where trends normalize in 2022, number one. Having said that, if we look in our fintech business or if we look in our payments and fintech business, if we look at all the lead indicators around the health of the consumer spending, we see that trends are improving, not deteriorating. Certainly on balance, the broader economic environment, including inflation, we're seeing a materially more healthy consumer than was the case six, 12 months ago. Again, let's give it a little bit of time to see how that pans out into 2022. Thank you. One would think that the increasingly higher inflation would potentially dampen consumer demand, and therefore impact marketplace volumes, and potentially impact demand for loans as well. Am I right, or is that your sense or not? The comment I mentioned earlier around the health of the consumer stands. That's what we're seeing today in real time. The other important point, yes, you may be right, Ravi, if you think about the growth numbers that we're delivering, every platform is growing north of 100%. The structural far outweighs the cyclical. Mikheil talked about creating markets that didn't exist, shifting the economy from cash to digital payments, growth in e-commerce. I'm not saying that the cyclical factors don't have any part. They clearly do. We have positioned this business in high areas of structural growth, irrespective of the cyclical environment. Great. Thank you very much, David and Mikheil. Our next question comes from Simon Ellis. Simon, please state your company name and proceed with your question. Oh, hi. Thanks very much, David and Mikheil. Very strong results. I'm quite impressed you keep upgrading your guidance. I wonder how many quarters you can keep doing that. I guess my question, just following up on the last one is, what's your rate sensitivity? The NBK has been hiking rates. I think they're expected to continue doing that. I guess that means you'll make higher interest on your interest rate balances and your payments business. What's the interest rate sensitivity on the fintech balance sheet? That would be question number one. The question I usually ask, actually, just on your capital ratios, do they reflect the dividend that you're preparing to pay, or has that not been deducted from CET1? If Tengiz is back there somewhere to answer that one. Okay. Well, I'll try and answer the second question on the capital ratio first of all. Yeah, what you see in the presentation with regard to capital ratios I'll see if I can get it up now quickly. Wrong way. Sorry, one second. Yeah. Here. This is for Kaspi Bank. This is post-dividend. Yes, this takes the tier 1 11% regulatory capital that you see. That is after dividend, which has been upstreamed from Kaspi Bank to, and now sits in Kaspi Group balance sheet. Regulatory capital relates to Kaspi Bank balance sheet. Right. Okay. It reflects that KZT 90 billion. Yeah. Okay, that you will pay. For the benefit of everyone, you could say that roughly 50% of the dividend comes from the bank and roughly 50% of the dividend comes from the other subsidiaries, principally Shop and Payments, and that's upstreamed to group. That's happened. That was your second question. Your first question with regard to rate sensitivity. I think the point that I would make, and if any of the other guys want to jump in, they can, is that the core product, number one, is buy now, pay later. How we would like you to use that product, this isn't the case in entirety, but how we would like you to use that is buy, repay within the three-month period, interest-free period, the grace period. That's one. The second answer would be that, again, if you look at all of the lending, whether it be buy now, pay later, or whether it be the general purpose lending, it is small ticket type lending. In the third quarter, the average ticket size for the buy now, pay later loan was approximately $65. It was about $450 approximately, even for the general purpose loan, it's only $450. Small ticket lending as a whole, I would say, would be amongst the least interest rate sensitive lending. Small ticket, number one. Small duration. I mentioned that the overall duration of the balance sheet has come down, and it's likely it could well continue to come down further to around five months. Within that, you've still got things like the car loans, which are 16, 17 months pushing the average up. The bulk of the balance sheet is very short duration. People are borrowing for transaction, to facilitate a transaction, the convenience that comes with that, and often repaying at the end of the week, at the end of the month, within a relatively short period of time, and therefore, the nature of that product is not especially interest rate sensitive. Okay, it sounds like you're relatively neutral. I guess on the securities book, which is around a third of the balance sheet, because you've been growing deposits pretty nicely, that would also be short maturities as well, right? Yeah. It is short maturity, low risk lending. Yes, I mean, there would be some benefit in a higher interest rate environment, but I don't think it would be material. Okay. Maybe just one last question on Azerbaijan. I think that shows up primarily in the marketplace, other revenue as well. Is it fair to say that the growth in that line item is mostly coming from travel and not from Azerbaijan? Yeah. Correct. Marketplace other revenue principally includes travel, it includes Azerbaijan, which for the benefit of everyone is classified businesses in Azerbaijan, and it includes initial monetization of Kaspi Logistics. There may be some other things in there, but that's only the three most important components. Well, you've seen, we've given you, certainly in the press release and in the presentation, the numbers for Kaspi Travel. It has scaled. If you think about addressable markets, it probably certainly today is a larger addressable market. You can see that it's scaled very quickly. Mikheil mentioned that it's up to around, I think 5% of marketplace GMV, scaling really quickly. Yes, you are right, that is the bulk of other revenue. Azerbaijan is being monetized, but principally it's about usage, building users for the classified titles with very light monetization rather than sophisticated value-added services. They can come over time. They're not there today. Okay. Yeah, most of my other questions have been answered. Thanks very much. Okay, you're welcome, Simon. There are no further questions. I'll hand over to the management team for any final remarks. Thank you everyone for your time today. If you do have follow-up questions for me or the team, please get in touch and we'll be happy to speak and help you. Thank you for your time today. Nice to see everyone, and looking forward to connecting over the next couple of months. Thank you. Goodbye. Thanks, Sam, for organizing the call. Thank you. Bye bye. This concludes today's webinar. You may now disconnect from the call. Thank you.