Hi there. Good afternoon, everybody, or good morning. Thanks a lot for your time today. Sorry we're a little bit late starting the call. As usual, I'm David Ferguson from Kaspi, joined by Mikheil , CEO and co-founder, Tengiz Mosidze, CFO and Deputy CEO, and Yuri Didenko, also Deputy CEO. We'll run through the presentation quickly. Plenty of time for Q&A at the end. On that note, I'll just hand straight over to Mikheil.
Hello, everyone. You know, traditionally, I would like to go through some of the strategic things that we have done during the year and the last quarter. I mean, the results for 2021 are strong, and we had an excellent quarter. We have the growth across all the platforms and services. Payments are up 99% in RTPV, revenue + 80%, net income + 92%. You know, marketplace has shown the very strong growth, 78% on GMV, 76% on revenue and net income, again, driven by operating leverage growing faster at 79%. Fintech has also performed strongly. You know, TFV is + 103%, revenue 49% and net income 38%.
On a consolidated level, we have done a very good job on continuing to engage with the consumers. The monthly transactions up 81%, revenue 60%, net income 60%. From last year, we have excess capital that we would like to return to shareholders up to KZT 86 billion, and we're currently considering and exploring the intention of doing the GDR buyback or the dividend distribution. You know, as we said in our press release, we believe that considering the company's profile, its performance, you know, we believe the company is undervalued, so we are considering GDR buyback program. This is just a quick probably the most complicated slide of our presentation. I mean, the point here is quite straightforward.
I mean, we have an excellent team that consistently executes and actually exceeds expectations. We have exceeded pretty much every single KPI target on the guidance. If you recall, we have updated guidance multiple times. We have exceeded and achieved our targets for 2021. As we also mentioned that we have fastest-growing marketplace and the payments businesses, and this transformation that's used in the numbers is extraordinary. We have achieved, now 51% of our bottom line is coming from marketplace and payments platforms, which are faster-growing and higher margin profitable businesses. That trend to continue in this year and years to come. I would like to quickly refresh again our sort of strategy and business model.
You know, we have the business model when we build the super app around the regular needs of the users or consumers on one side and merchants on another side. Those are the sort of two super apps we build around the daily needs of on the both sides. Again, I mean, I'm not going to go through every single service, but that's a pretty remarkable suite of services around sort of for consumers, it's around, shopping and payments and bill payments and financial products and savings and consumer loans. We have entered e-Grocery, last quarter of the last year, which is very important priority for us in 2021 and beyond.
Last year, we've launched the Kaspi Pay Super App, which again, we are launching the services around the merchants' needs just to help them drive sales and grow their business. The merchants can again increase their sales through the marketplace, you know, the advertising services. They can list their products on our eCommerce platform. They can accept payments with merchant acquiring. They can use advertising to drive their sales. We have also sort of quietly, during the last year, have been launching B2B payments, which also is a very promising business. We're very excited about it, and I will share it with you later, the details.
If you look at our business model, you know, if on the one hand, we constantly develop the services around consumers and merchants, but on the other hand, there is a real-time seamless interaction between both merchants and consumers. This is like a substantial business model which is built around some of the common things which are important and for consumer and strategic for the merchant. You have proprietary payment network, where we enable payments from consumers to merchants at the cheapest rates. You know, we have a marketplace which enables merchants to sell more, consumers to buy more, and we connect buyers and sellers. We have a delivery services. If you think sort of from the merchant perspective, that enables merchant to pretty much trade from one city to another nationwide.
Also consumers can find increasing number of items to buy. Then buy now, pay later products, which increase the, you know, purchase frequency and the size of the ticket on the one hand, but on the other hand, they give a flexibility of managing personal finance for consumers. Then marketing services. For consumer, that means more relevance of the offers and the promotions on the one hand, and then increasing sales from the merchant side. Those are the two business models which are connected with each other. Super apps which actually work with each other seamlessly, and that builds a very important competitive advantages for us. Next slide, please.
Kaspi.kz Super App is the one which is an important strategic asset that we have, and it continuously builds important competitive advantages. Has very unique features which are resulted in a very unique dynamic. For example, you know, we have grown daily usage now to 7 million users out of 11.2, and that is equal to the engagement of daily users to the monthly users of 62%. Basically over, you know, six users out of 10 monthly users are accessing the app on a daily basis, and that number is just a reflection, and actually is the result of adding the new services constantly.
Our app is extremely relevant for the users and consistently shows extraordinary dynamics and actually one of the highest engagement rates in between the super apps globally. Next slide. Here we are, we're a transaction business. Again, one of the important sort of KPIs for us, and here you see that we have now reached on a monthly basis almost 51 transactions per month per user. Again, you know, transaction is extremely important. This is how we monetize the business. This is how we deliver the value to consumers, and we deliver the value for merchants. Also transactions enable us to develop a very personalized experience because the type of data points we accumulate are very unique and they're proprietary. One of the highest, you know, transaction engagement super apps and businesses actually worldwide.
I think PayPal has less than 50 transactions per year or something like that. As we continuously increase the assortment of our marketplace and we drive our business, our cohorts continue showing a very strong performance. That's a marketplace platform cohort. As you can see, we're consistently growing and growing at a very rapid rate. Actually that's a reflection also of consistently increasing assortment of our marketplace. For example, if you take the last cohort last year, transactions or the latest transactions of the cohorts, pretty much all the cohorts are transacting at very high rates, right? They are in excess of KZT 400,000. That again is a result of increasing assortment. As soon as a consumer starts transacting, they have increasing selection of items to buy from.
That's why, you know, the cohorts are growing very nicely, very quickly, but also showing a very large significant GMV per consumer. If we go to the payments platform cohorts, that's a reflection of a user behavior. We have a very strong growth and every cohort continues to grow. At the same time, this is more of a, you know, payments business is something which is not only delivering profits and value, but also transformational experience from cash to cashless for our consumers and merchants. The users are going through this journey when they're actually moving from cash to cashless. They're exploring the new ways to pay. As a result, we pretty much every single cohort continuously showing the growth.
If you take, for example, our consumers, you know, before 2016, which is this gray line on the presentation, I mean, it just continues growing every year again and again. Every other cohort is catching up. You know, very important business, very strategic, but also continuously growing very nicely. We will also would like to show you some of the way we look at our businesses. Here is, you know, most of our products. This is not the exhaustive list of the products and services, but those are the main products which, you know, we monetize, so important for revenue. Here, as you can see, we have a very wide range of the products, but also the penetration. Some of the products, they have been driving the consumer acquisition.
Those are usually the payment products. They are continuously growing in terms of volume of the business per consumer as we continuously adding merchants. But at the same time, they have been important for consumer acquisition. Then there is also the list of the products in our product suite for consumer, which has a huge growth potential. Things like Kaspi Travel, for example, it's only 8% of our monthly users, or eCommerce is only 2.6 million of the monthly users. That basically just gives you a feeling how much growth we have in most of the products, but the payments business, which I've just showed you, the cohort, also continuing to grow very strongly because of the volume of the business we generate now per acquired consumers.
You know, because we have a super app, all these products are accessible through the screen of the smartphone. Extremely efficient from the operating perspective and extremely highly engaged potential for us. There is a next slide that is example for us of Kaspi Travel. Kaspi Travel is an example of the business that we can scale. We've launched this business, you know, basically in the fourth Q of 2020. In the fourth Q of 2021, we already sold almost 2 million tickets, so it's 28 x more than 12 months before in the fourth Q of 2020. The GMV also growing almost 20 x. We are also increasing. Apart from the fact that we're growing this business, you know, it has a huge potential.
It's only 0.8% of our monthly users. At the same time, it's growing very nicely, and the take rate is growing just because we add the new services like railway tickets, which are higher take rate business. We will continue adding new products around the travel for our consumers. The same view we can take of the merchants. The merchant has been an extremely important priority for us. You know, basically, our merchant business virtually didn't exist in 2020. We've started extremely rapidly last year. We have scaled number of merchants and stores to 242,000, which is 353% increase year-over-year. That's just a reflection of how we can drive the execution.
On the back of having the commercially-minded buyers, you know, we are extremely attractive for the merchants in order to grow their business. Very strong growth continues this year. If we look at the merchant products again, I mean, those are very new products, but at the same time, strategy is quite similar. The payments is the source for merchant acquisition and consumer acquisition. We have been growing merchant number of merchants on the back of QR transactions, mobile commerce, instant invoicing, which we've launched last year. Basically just building sort of the payment network. Now then there are products which we also are adding to our suite of Kaspi Pay Super App products, so financing, e-commerce, delivery, and the marketplace marketing services.
Now again, not 100% of the merchants will be fit for delivery or fit for e-commerce, but still there is a huge potential, and our priority at this stage is just to acquire merchants, deliver them value, help them increase sales, and then start using sort of specific use cases so that we can add new products which deliver even more value. That's the kind of network effect which our business is, you know, built in our business model. We've launched and basically an acquiring business, started to scale last year. When we were doing our IPO, I remember again the discussions about the fact that, you know, actually majority of our transactions are depending on third-party acquiring. We've proved that actually we have an execution capabilities.
What we told at the time of our IPO, the time runs very fast. Also during last year, you know, we have consistently increased the share of our acquiring business in our total payment business. Now 82% is our own acquiring. Majority of it is a QR, and then only 18% is a third-party acquiring. That just tells you that basically, you know, we have our own network and we pretty much don't depend on the third-party acquiring businesses. QR code is another sort of example for our execution. I mean, those are the slides. Those slides will become sort of traditional slides on our payment segment because, you know, this is me reporting that we have done it during 2021.
86% of the Kaspi QR is a share of the transactions, and this has become now the most popular payment method in the country. We have been able to basically just execute, and we pretty much live from the card, the plastic card. Now all our users are in a vast majority of the cases transact with a QR code. They don't need the plastic, and they transact straight from their mobile phone with the merchants. Now we are working on even on things which are sort of QR, you know, device to device. You know, our users now interact with vending machines. Yeah, I don't know how to say it in English.
When you are entering through the entrance just to identify yourself and the gate opens. This type of device to the QR code interaction will increase this engagement and also the convenience for our consumers. The e-commerce has been an important priority, so we're growing on both sides. Actually, we're growing merchants. That increases the selection. That increases SKUs. That becomes more interesting for consumers, therefore consumers are growing. The more consumers we have, the more merchants want to enter the platform. We have increased the number of SKUs more than 3x to 1.5 million.
Those are extremely high relevance products because we leverage the data in order to look for specific verticals and specific categories, for example, home and garden has been quite important category for us. As we grow SKUs, the GMV is obviously growing and the sales of the merchants are growing. We have entered e-Grocery market last year. We have done different tests with different type of formats. Now we believe that we are ready to scale, and we have started to ramp up our e-Grocery business together with the number one food retailer in the country, Magnum, in the last quarter of last year. The market itself is huge. It is around $12 billion.
The business model that we came up with is all about sort of significant assortment, sort of weekly purchase with a significant ticket. We're talking about dark stores which have 33,000 SKUs, that average ticket of around $18. Because the ticket is also large enough, you know, the economics of this business are completely different from sort of high-frequency, small ticket transactions. We can allow free delivery. We're doing delivery speed for this sort of family household purchases the same day. Those items are currently delivered from the dark store. We operated in Almaty as we started with basically one dark store.
As we have been operating sort of the pilot, you know, while operating the pilot, we have become number one e-Grocery business in the country. We have achieved KZT 1.1 billion GMV in the fourth Q. We have achieved 128,000 orders, and this is only 36,000 consumers. As we continue adding the convenience, as we continue adding the data and relevance for the purchases, we'll basically grow the consumer base, but also this year we'll start working on scaling this business across the country. The feedback is extremely positive. Engagement is huge, and that business drives not only GMV, but also drives the engagement and relevance of our app.
Between the Magnum and Kaspi, we basically have the joint activity, which means the Magnum itself is operating the dark store and everything related around the operation of the dark store, actually including the delivery. Kaspi is bringing sales through the front end of the consumer relationship, brings highly personalized orders. We also are enabled to work on the assortment, the pricing, so there is a lot of added value from Kaspi to this relationship. We truly believe the combination of our efforts with the largest food retailer and the largest technology and the fintech company, you know, brings a lot of relevance for the users, and 1+1 will be three. At the same time, the take rate is healthy. The business is...
As you know, the food and supermarket business is a low margin business and having achieved 3.3% take rate. This is excluding Kaspi Pay. On top of it, 0.95 is a Kaspi Pay payment fee. That's a very healthy business, and we're extremely bullish. That's a priority for us. One of the important strategy priorities for us this year. As we grow our e-commerce business, the delivery is becoming also important. We continuously scale the delivery now. You know, we have done 2.4 million orders in the fourth Q. The majority of those are orders are deliveries. 60% is pickup. That's kind of convenient for the consumers.
Most of the deliveries are free, and most of the, you know, over half of the deliveries are done, you know, in less than two days. Delivery is clearly the backbone for the growth of our e-commerce. As we talked on the last call, we have Next slide. We have started with postamats. As we have promised, we have delivered 300 operational lockers by the end of last year in Almaty. Extremely successful. With only 300 lockers, we've achieved almost 5% of our deliveries in Almaty done through the lockers. We have extremely positive feedback from our consumers, and we are on track to build the largest postamat network in the country by the year-end, with a total over 3,000 lockers. Again, 300 lockers, almost 5% of deliveries.
The 3,000 lockers therefore will be a very big part of our deliveries. We have very positive feedback from our consumers. They love the convenience of picking up items on the way going home. You know, as we have planned, as we have promised, we have executed and the product delivers very highly satisfied consumers. We have also quietly sort of identified the merchant use case. Again, that's a B2B payments.
B2B payments is actually when the micro store, let's assume the convenience store, in your building, is able to, you know, select a supplier when the items get delivered, then scans a QR code on the invoice and instantly pays. The money basically hits the merchant, sorry, the wholesaler or the distributor supplier instantly. The invoice is done and paid seamlessly. This is an example of us identifying the use case on the back of P2P and the Kaspi Pay, sort of, merchant needs. This is one of the businesses which we quietly scaled during last year. We believe it's a significant potential on the merchant side. There are numbers, for example, on the next slide. Thanks, David. Here we...
Yeah, here you can see the growth rates, which are extraordinary. We have grown that business during the year very nicely. We have grown it to KZT 55 billion from basically nonexistent business. You know, we have done 1.5 million transactions in the fourth Q of 2021, up from 27,000 transactions in the fourth Q of 2020. It delivers very healthy take rate of 0.8%. Again, you know, it's based on the regular needs of the merchant. We believe we can continue scaling this business, and B2B payments is a significant growth opportunity for our payments platform. Next slide. Great. Back to you, David.
Great. Thank you, Mikheil. I'll run you all through the Q4 and full year 2021 financial results, and then I'll talk about the 2022 financial guidance. As always, starting on the payments platform. I think you've all heard me say before, I'll say it again, last year's strategic priority was to grow the merchant side of the business. You saw consistently strong growth throughout the year, and again, that was evident in the fourth quarter of the year with active merchants up 400,000. If you think about the transformation in the business, it's fair to almost say that 12 months ago, just around the time of the IPO, we barely had a merchant business.
Today, we have just short of 250,000 merchants at the end of last year, and it's not over. That number will continue to see strong growth this year. It won't see the same level of growth that it's seen in 2021. The base is clearly much higher, but there's still more to go for. On the consumer side of the equation, 25% growth in active consumers to just under 10 million. A robust number consistent with trends throughout the first nine months of the year. Clearly, as we go north of 10 million consumers, there is less scope for this number to move up. But trends still remain very, very healthy and robust. Payment platform funds coming into the ecosystem to enable transactions is indicative of the general health of Kaspi.kz.
What you see here is, again, ongoing strong growth in TPV payment volumes moving into Kaspi, number one, and more importantly, number two, strong growth in monetized payment volumes, RTPV, up just under 100%, 99% year-over-year in the fourth quarter. This is important because, again, strategic priority last year was to roll out Kaspi Pay, grow the merchant side of the business, and monetize B2C transactions, particularly in offline retail. What you see with this RTPV number is that, number one, Kazakhstan continues to move to a non-cash economy. Number two, with Kaspi Pay, formalization of that economy continues to take place at a very, very rapid rate. Here, essentially looking at things from the same things from a different angle. P2P will always be an important part of the platform.
It's the way by which consumers can move funds into Kaspi. It drives consumer engagement, and you see there that it remains a very strong component, 76% of volumes. What you also see is that Kaspi QR monetized volumes is increasing in its share. Here too, just looking at monetized volumes, again, you see that Kaspi QR is growing in share relative to other monetized products such as bill payments, such as international peer-to-peer. Again, these are trends that should remain in place in 2022, and actually for that matter, well into the medium term. Another way of looking at funds flow into the business is interest-free balances, the funds that people keep in their wallet to enable transactions. Here again in the fourth quarter, up 48% year-on-year. Again, another strong number.
Really what strikes me with all of these numbers in the payment platform is both strong growth and consistent trends throughout the whole of 2021. That means momentum is strong going into 2022. Ultimately, in terms of what that means for payment platform financials. Both within the fourth quarter and for the full year, you saw strong revenue growth. It is slightly lower than RTPV growth as we flagged. There is a shift in take rates, Kaspi Pay 0.95%. So mechanically as that just becomes a larger component of RTPV, take rate moves down. That will be again evidenced this year, 1.2 consolidated will become 1.1%. That's in the guidance.
Overall strong revenue growth, and that has dropped through to the bottom line, a reflection of both the gearing within the business and what's been happening as we've moved volumes to our own proprietary network, disintermediating third parties. Mikheil showed you in one of the earlier slides that third parties account now for only 18% of processed transactions. Moving on to marketplace. A similar message. Priority number one was to grow payment merchants. The natural consequence of that is that once we've onboarded merchants onto payment products, they're upgrading onto marketplace products. First mCommerce, secondly, eCommerce. You see very clearly that that is playing out. Merchants up 281% in the third quarter. That number was around 187% growth in the third quarter.
You can see not only strong but also accelerating merchant momentum in the marketplace business. Again, to reiterate, that is on the back of the foundations that were built last year with Kaspi Pay. Again, this is a trend that isn't over at the end of 2021. It will continue into 2022 and over the medium term here as well. Growth in merchants, more things to buy, more SKUs, leads to growth in RTPV, sorry, GMV per consumer, number one. It leads to growth in active consumers, number two. Here again, you see strong growth up 44% year-on-year in active consumers. As Mikheil talked about, marketplace and particularly eCommerce is a platform that still offers great growth potential over the next couple of years.
Strong growth in consumers, strong growth in merchants translates into strong growth in GMV, up 78% year-on-year in the fourth quarter. Take rate trends throughout the year consistent with full year guidance, which was revised up during the course of the year. Take rate guidance of around 8.5%. Within each quarter, there can always be variability, but a strong end to the year with take rate principally boosted by changes in mix that will remain a theme to a lesser extent, monetization of marketing services and logistics. Those factors played a small role in 2021. They'll play a small role in 2022, but again, they will become more important to growth over the medium term.
You see here, looking at individual verticals, three of the top five verticals, the top three growing verticals were all additive to take rate. It can be a mix of factors going forward, and Mikheil talked about e-Grocery. That is clearly lower take rate. It will take time for that to achieve meaningful scale. But of course, what that gives you is engagement and material volumes. If we break down eCommerce and mCommerce, eCommerce GMV growing at 57% year-on-year in the fourth quarter. eCommerce number of purchases growing considerably faster, up 73% year-on-year. It's worth just remembering that our ticket size on eCommerce is high, one of the highest in the world.
As we're adding more merchants, more SKUs, they are often at lower price points, but are enabling us to provide more of the things we all buy on a day-to-day basis. That's ticket size dilutive, but you see that the number of purchases increases at a faster rate than GMV. Again, a trend that I would expect to remain visible into 2022. With mCommerce, the difference is less pronounced. Ticket sizes are lower and will remain lower on mCommerce. Here the growth is being driven by two things. One, just volume. mCommerce is being the first participant of the sort of payment merchants migrating to marketplace. Over time, those merchants will migrate to eCommerce. Secondly, in 2021, mCommerce benefited from the base effect, the reopening of street retail post-COVID restrictions in 2020.
While for 2022, we're not formally guiding between mCommerce and eCommerce, generally speaking, I'd expect both sides to grow at broadly similar rates. Here you see the split. mCommerce did grow at a faster rate, an increase in share in 2021. Again, as I said earlier, going forward, broadly similar rates of growth between the two platforms. What did that mean for marketplace financials? GMV growth and revenue growth strong and in line. Strong profitability growth, and that is even taking into account one of the drivers of eCommerce this year has been investment in subsidized delivery. That's free delivery for the consumer, subsidized, we subsidize on behalf of the merchants.
Despite that investment, you see the strong profitability growth and high margins overall remain intact, and again, that is a theme reflected in the guidance for 2022. Finally, moving on to the fintech platform. Strong growth in deposits over the course of the year, up 32% year on year in the final quarter. A trend that was consistent. Strong growth in loan consumers, up 34%. Actually, broadly, loans and deposits growing at similar rates, number of consumers and trends, again, consistent throughout the year. If you think back to 2020, lending TFV origination was subdued, certainly in the first half of 2020. It started to return to growth in the autumn of 2020, and has consistently accelerated over 2021, principally on the back of a stable economic backdrop.
Strong TFV origination, up 103% year-over-year. What you see is rapid conversion, more quickly than we had predicted. This is telling you the healthy consumer is borrowing, is prepaying and borrowing again. They're taking what they need when they need it and carrying low levels of total indebtedness. It's the nature of the fintech product. Small ticket, short duration, low risk type lending. Here you see that over the course of the year, buy now, pay later and general purpose loans accounted for a broadly similar level of origination, BNPL slightly more. BNPL, you should remember, is materially lower ticket than general purpose lending. BNPL ticket size is roughly around $140. General purpose ticket size is roughly around $450, depending on what exchange rate you use.
There is a difference in size there. Going forward this year, the mix won't change dramatically. Today, we'd expect buy now, pay later to grow slightly faster than general purpose, but net-net, broadly these, the mix will stay the same. Similarly, merchants and microfinancing, a product that has scaled from zero 18 months ago, will grow faster, will increase in its share, but the mix isn't going to change dramatically. Average loan net portfolio growth is 72%, so this reflects the fact that higher conversion, we're turning the balance sheet twice during the year. Loan growth below origination growth. Yield reduction, a function of buy now, pay later. Lower yield, a function of the growing share from merchant financing. Lower yield going forward. Again, that will remain a theme in 2022.
Strong growth in savings, in deposits to fund origination. Worth remembering at this point in time, all of our origination is in local currency. 80% of our deposits are also in local currency, and we have probably the highest share of local currency deposits in the financial system. We are not a business with material US dollar or foreign currency exposure. What did that mean for the fintech business? Improving revenue growth over the course of the year. Higher origination takes time to feed into the P&L, so you see full year revenue growth of 25% versus 49% in the final quarter. Given the ramp-up in origination in the second half of last year, you should expect strong revenue growth in the first half of this year.
Despite lower yield, the combination of tight cost control, strong risk metrics, seeing strong translation into profitability, growth. On risk, consistently low cost of risk during the course of the last year. A number of factors behind that, but principally improvements in origination. To a lesser extent, improvements in collection processes, all supported by fundamentally a low risk product, the point I made earlier, and a stable, consumer backdrop. Whatever risk metrics you look at, whether it be, non-performing loans or anything else, you see the overall risk metrics consistently improved during the course of 2021, putting us in good shape at the start of this year. Again, more color here on metrics.
I've talked about on previous calls, you would see a normalization in vintages in 2021, post very high quality, restricted but high quality origination in 2020 linked to COVID, and that is exactly what has played out. Net-net, where does that leave us for the year? It leaves us with strong financial growth, revenue growth of 46% year-on-year, net income up 66% year-on-year. Over the course of the year, every platform delivering margin improvement. Group net income of KZT 455 billion, both ahead of guidance provided in October of last year and guidance that was upgraded multiple times throughout 2021. Moving on to 2022. I will just sort of quickly address here events in January.
For those of you who I spoke to at the time, I said that the disruption that took place would not have a material impact on our 2022 financials. I stand by that comment to today. January, and particularly the first two weeks of January, are low season in terms of transaction activity. What you can see here is that even taking into account the disruption in January, year-on-year growth was strong and year-on-year growth is fully normalized in February 2022. The business recovered very, very quickly. As a result, here is the full year 2022 guidance. I won't run through it line by line, but I would just simply make the following point.
Digitalization and the structural growth story that stems from that is as strong today as it has ever been in Kazakhstan and across the broader region. Within the last week, there has been a material deterioration in regional macro visibility that makes forecasting difficult. We are not immune to macro factors, namely in the form of FX. To the extent that that impacts inflation, consumer purchasing power, then it will have implications for our business. However, structural growth will remain intact. We are confident in delivering growth, good, healthy growth this year. Given the macro volatility and uncertainty, we believe we've taken a conservative approach to guidance, and versus previous years, we've provided a wider range of estimates than we would normally look to do so. Experience tells us that FX volatility is actually usually only for a limited period of time.
Things do stabilize relatively quickly. As we report Q1's H1 numbers, we'll hopefully be able to provide more precise guidance as the broader macro backdrop stabilizes and visibility once again improves. Net-net, 20%-30% net income growth for the year is very, very robust growth in the context of what is a difficult macro environment. On that note, I'll pause. Sam will open the line up to Q&A, and the entire management team is on call and happy to answer your questions. Thank you.
Thank you, David. Just a reminder, if you'd like to ask a question, please use the Raise Hand button on your Zoom toolbar. If you're dialing in over the phone, please dial star four double one on your telephone keypad. Our first question is from Kirill Panarin from Ren, from Renaissance Capital. Kirill, your line will be open now if you'd like to proceed with your question. Please ensure that you're unmuted locally, Kirill.
Yeah. Hi, everyone. Thanks for the opportunity. I have four questions, please. Firstly, can you talk about how you believe Kaspi will be impacted by events in Russia? And please also clarify any direct exposure to Russian banks, in particular, those with subsidiaries in Kazakhstan. That's one. Number two, you talked about the buyback program up to KZT 86 billion. When would you expect this to commence? Number three, you've changed your revenue accounting policy. Can you please provide a bit more color on the rationale for this? And then finally, on the potential economics in grocery, will it require material investments this year? And do you consider launching express delivery and managing the last mile on your own? That's it. Thank you.
Okay. Thanks a lot for your questions, Kirill. I would say that probably the first two are probably the questions that everyone wants answers to. Maybe I'll pass those to Mikheil, and also the question on grocery. Then I can quickly take at the end the question on changing accounting policy. Over to you, Mikheil.
Yeah, sure. In terms of the exposure to Russia, either banks or the, t he merchants, we have pretty much no exposure. We are a Kazakh business based in Kazakhstan, you know, because we have been growing in Kazakhstan, so we have virtually no, you know, cross-border with Russia and the merchants in the marketplace side. We virtually have no exposure to Russian banks. That's basically the response to your first question is no. In terms of the buyback, I mean, again, we have, you know, up to KZT 86 billion to return to the shareholders. You know, we have an intention to do a buyback program. You know, we'll be launching this as soon as feasible.
The split between the dividends and the buyback, you know, we'll be looking at the market conditions. You know, we truly believe that the buyback is the appropriate way to go just because we believe the company is undervalued. In terms of the grocery, I mean, again, there is a huge synergies, right? We're just scratching the surface. I mean, we just started to warm up pretty much. By, you know, warming up, we already are number one, growing really fast and just being in one city with one dark store. It just tells you how much potential is there. There are a lot of synergies between us and the retailers and Magnum specifically.
You know, Magnum at this point is the one who is taking care of delivery. Obviously there are a lot of synergies on the last mile side as well, which we're developing on the Kaspi.kz side. The growth will be our priority for e-Grocery and we'll be putting all our capabilities to ensure the growth. Also we're extremely excited just because we have such an incredible feedback from our consumers. I mean, one of the feedback I was reading recently is that the older generation is even providing us a feedback that they don't walk to the store anymore. So convenient it is with a one-click ordering the items which they love to order regularly.
If the older generations of, you know, around 60 years old is able to use our e-Grocery platform, I mean, you can imagine how much potential we have here. Again, our priority is the growth and, you know, our team is prioritizing the assortment, the scaling across different cities. We have a very successful pilot, which is pretty much ready to scale.
I'll just take your question on change in revenue accounting, Kirill. For the benefit of everyone, this relates to Kaspi Bonus. Kaspi Bonus is points that our consumers accrue for transactions on the platform that they can spend with merchants on the platform. In our annual consolidated accounts, previously, we've classified this as marketing spend. However, in practice, it is more closely aligned with IFRS 15, which relates to revenue from contracts and requires it to be recognized as a deduction to revenue. We show net revenue. That's the main point. But I would say in practice, however, if you look at our marketing budget, 85% of it is Kaspi Bonus, and that is a great tool for us to drive engagement on the platform and to drive cross-platform penetration.
From the perspective of management accounts rather than IFRS, from the perspective of segment reporting, we will continue to recognize the bonus points within marketing spend. The final point, however, to make is that this is just presentational. It has no impact on net income. It has no impact on cash flow generation of the company. Does that answer your questions, Kirill?
Yep, that's great. Very useful. Thanks a lot.
Thank you. Next questions, please, Harry.
Thank you, David. Our next question is from Gabor Kemeny from Autonomous Research. Gabor, your line is now open if you'd like to proceed.
Yes. Hi, everyone. Well, firstly, it's great to see that the business has been so little impacted by the early January events. It would be interesting if you could give us a sense whether and how it has impacted your business planning and especially credit underwriting. I also saw that there were some changes in capital requirements after the January events. Has that impacted Kaspi at all? Second thing would be on the take rate. You are guiding for flat 8.5%, and you flag your macro environment. To what extent is this guidance being impacted by geopolitics? Or maybe in other words, where would you see the take rate trending on underlying structural basis?
Just a final technical question, is the KZT 86 billion you are earmarking to dividends and buybacks deducted from the capital ratios under local accounting? Thank you.
Okay. Thanks for your questions, Gabor. Maybe I'll start and then I'll pass over to Mikheil. The third and final question is easy to answer. Yes, it is reflective. Just again, for the benefit of everyone, the capital ratios relate to Kaspi Bank. Funds at the end of the quarter, in this case, end of the year, are upstream to Kaspi Group from all of the entities, whether that be bank, whether that be travel, whether that be Kaspi Pay. What we talk about that KZT 86 billion, that's cash that's sitting at the group level and can therefore be paid out in theory to date, and therefore the capital adequacy ratios reflect that. That would be your third question.
On your first question, I'll just go back to the slide that I showed. You know that the events that took place in Kazakhstan were for a very limited period of time with the severe disruption days. You know it was also during a holiday week. You can see here that RTPV by February was growing north of 66% versus guidance for this year for the full year of 40%-50%. You can see that the business was firing on all cylinders within a very short period of time. Therefore, you shouldn't assume that it led to any material change in our planning. We do note in the guidance that the net income guidance for 2022 is adjusted guidance.
As always, that's adjusted for the LTIP program, and it is adjusted for a one-off contribution, voluntary contributions to Kazakhstan Khalkyna Fund of KZT 10 billion, sorry, Kazakh tenge. Therefore, that is in the numbers, but that's sort of taken into account in the guidance. There's no other sort of regulatory changes to flag that have impacted the business plan. Finally, was it marketplace take rates that you're asking about?
Yes. Yes.
I'd say that there'll be a mix of factors. There'll be some positive, some negative. Generally, I would say the positive will be change in verticals. That will be a positive. I would say there's another factor that drives take rate, that's promotional events. Probably today, if you're thinking about promotional events and looking into March, which is an important sales period, you're probably looking at being conservative about promotional events and erring on the side of caution. It's clearly not the right backdrop to be marketing aggressively. That would be a negative factor in response to the current situation. I'll pause there, and maybe Mikheil would like to add something, particularly on the regulatory side of things.
Yes. I mean, first of all, I would like to add on the January events that, you know, our team has done an extraordinary job when, you know, pretty much Kaspi.kz Super App was the only service in the country which enabled people to move the money, pay the bills, and it was actually working without internet because we worked with the government bodies to enable access to our services, you know, when the internet was limited. We have received a lot of incredible feedback from our consumer. Everybody was shocked because Kaspi.kz was the app which was operational. Pretty much nothing else wasn't operational for a couple of days. That's why it also didn't have any immaterial impact.
On the regulatory side of things, there are no changes at this stage. I'm not sure what you're, you know, really referring to. There is always the discussion about identifying some of the sort of segments which are high risk and whether the growth is too fast or too risky for consumer lending side of things. That this discussion has been always there and we're engaged, but our sort of numbers also speak for themselves. I mean, we have best-in-class credit quality. You know, we don't have excessive leverage for consumers, and we are actually meant to improve people's life.
Our consumer finance products and BNPL more specifically is targeted for that mission, and therefore that reflected also in a very strong quality of our risk. But other than that, I mean, you know, I'm not sure what, you know, you're referring. There's no changes to the regulation.
Okay. That's very reassuring. Thank you.
Thank you.
Thank you. Our next question is from Nida Iqbal from Morgan Stanley. Nida, your line is now open if you'd like to proceed. Please unmute yourself locally.
Hi. Thank you. Thank you for the presentation. I have a few questions. Firstly, on your 2022 guidance, you know, where do you think the guidance could surprise to the upside? At the same time, on the other hand, where do you see the most risks coming from? That's one question. The second is about B2B payments. If we could get some color on, you know, how big the potential TAM for these could be. Thirdly, you touched on this briefly during the presentation, but if you could just talk about the potential impact on Kaspi from risk of currency volatility in Kazakhstan, and also the recent rate hikes that we've seen.
I have another question, but I'll wait for the first three to be answered, if that's okay. Thank you.
Mikheil, do you wanna take the question on B2B, and then I can do guidance?
Yeah, sure. I mean, on the B2B side of things, I mean, if you think about the nature of this business is actually wholesale, which flows down to retail. That's basically just an indication of how significant the potential is. Also we are very excited because that is a potential for and this product is very relevant for micro businesses, which means it's also extremely, sort of, you know, valuable for the country's economic growth, just because we're talking about small and micro businesses. Just to give you a sense, if you take on the
For example, on the merchant side of things, or wholesalers, I mean, the ones which are actually distributing the items, you know, we have around 270 suppliers in the B2B platform at the moment. We just started to scale. You saw the growth rates. Again, the nature of this business, it's a wholesale distributors, the volume fueling to retail. That's a good indication of the potential of B2B.
On your-
David, I don't know. You take the guidance? Yeah.
Yeah. On your question with regards to sort of upside, downside to guidance, I probably won't be that helpful. I mean, this is the guidance that we've put out. We've spent a lot of time considering this guidance over the last couple of days in light of everything that is going on. I repeat my previous remarks. We're as confident as we've ever been in terms of digitalization opportunity, number one. We're as confident as we've ever been, number two, in terms of our ability to execute in whatever environment might prevail, number two. There is both upside and downside as macro risk, and we've deliberately given wide ranges to take account of that. Beyond that, there's probably not much more I can add. We'll report Q1s in, well, end of April.
Hopefully there will be more regional and global visibility on the macro outlook at that point, and that's probably as much as I can say. To your third question, which is kind of similar, I mean, what I suppose I would say there is, yeah, it is a fair point that you would say that, if the main macro risk here is FX devaluation, then a direct impact of that is higher interest rates, higher funding costs for the business. We would think we've built that into the guidance. If you look at the net income profitability, the fintech business is the business that we are currently guiding for margin downside or a margin reduction in 2022. That's the reason. Higher funding costs, principally.
We've tried to capture that. That's as much as I can probably say. You said you've got a fourth question?
Yes, please. I just have a follow-up on the guidance as well. I noticed that on the payment side as well, you're not guiding to much of margin expansion, which we've been seeing a lot of with the operating leverage. So maybe if we can get some color on the higher product development and marketing that's been mentioned on that slide. And then my last question is basically do you see a risk that you know Baring Vostok may have to sell their position if they need to exit from their Russia funds?
On the payments profitability, I would say, look, around 60% margins is a very, very high level of profitability. In the context of this macro environment, being able to deliver that is a pretty good result. That's my first point. It would be fair to say that over the last few years, clearly we have benefited from the disintermediation of third-party costs. Now with third parties only accounting for around 18% of volumes, there's less to go from on that cost saving, if you like. That would be the second point. We'll always, in any platform, the investments in new product initiatives in payments, Mikheil has just talked to you about, B2B payments as being a massive opportunity.
We can take a level of investment given the scale that we have. That's probably as much as we can say there. Maybe on Baring Vostok, I mean, I would just simply say that I don't think it is appropriate on this call to sort of comment on any shareholder and speculate around what they may or may not do. I don't know if Mikheil has anything else to add.
No, I mean, in general, I would just agree and reinforce the fact that we've spent a lot of time on this guidance. Again, what you have here? We have long-term strategies. What do you have here? You have the incredible team that puts their heads down and just works really hard and constantly executes and then executes again and then executes again. We have a lot of experience and the guidance you see and the ranges you see. They just take into account some of the things we just don't control. Ultimately, we control our business and operation, and we're super confident in the execution in the years to come.
This is just a temporary bump that we have on the way in terms of the macro environment. That's number one. In terms of the shareholders, we're not aware of any of these type of discussions, and I would agree with David, yeah. I mean, if you have any questions, you can go ahead and ask any individual shareholder, but the company. It's not the company's business to respond to shareholders' inquiries.
Thank you very much.
Thank you. Our next question is from Simon Nellis from Citi. Simon, your line is now open. If you'd like to unmute yourself locally and proceed with your question.
Oh, hi, Mikheil, David. Thanks for the opportunity. I should have clicked Raise My Hand sooner. Most of the questions that I needed to ask were already asked. Maybe just one last one on re-regulation, though. I thought that the central bank had mentioned they might be introducing some rate caps. Has that happened or are they? Is there any talk about that? That would be my first question. Also, just in terms of the contributions to the social funds, do you expect to have to make more of them going forward? Last on e-Grocery, is this business a drag on marketplace profits, or is it already profitable this year in your targets?
Just trying to figure out when we might see some kind of uplift to the marketplace earnings from e-Grocery as it's rolled out. Thank you.
Probably the first and the second question for you, Mikheil.
Sure. I think in terms of the regulation, you know, we have this question, you know, pretty much on every call, right?
Mm-hmm.
From that perspective, I mean, we do have. I mean, there is always the discussion of finding the right balance between the growth of consumer lending and the risk, whether the growth is too much and consumer is over-leveraged. There is a discussion that is going on. There is a bankruptcy law which has been currently discussed, and that's a good thing because eventually, I mean, if you think about the country and the history of its banking sector, I mean, you know, there were banks that didn't perform well.
There are banks that have not been good in terms of the risk, and therefore the bankruptcy law is just a nice thing to clean up the quality of the portfolio, but also enable borrowers to have sort of the way out and get back to the civilized, you know, financial products or the banking products. I mean, the country cannot be without the bankruptcy law. I mean, it's got people and companies that need to have some way out. There is a discussion about it, and I think discussion is balanced and reasonable. The law is in the works. That's number one, you know, sort of specific thing that's being worked at the moment.
In terms of the social fund, I mean, we would like to be, I mean, we're the largest and the most valuable company in the country, and we're the most loved company in the country. The social fund, it was a contribution that we've decided to make when the fund initiative was announced. You know, that fund mission is clearly 100% fit with our company's mission, which is improving people's lives. There are projects which are related to education, healthcare, and we just wanted to be, you know. We basically were the first one pretty much contribute. Again, we just wanted to set the example for others. We're quite happy that, you know, the others sort of came in, big companies or, you know, businessmen individually.
In terms of the grocery and the growth in the grocery, the guidances that you have, those guidances are considering the grocery growth. I mean, we are prioritizing this growth as a technology platform from our side, and there are a lot of technology resources and our capabilities that we're bringing to the table by partnering with the largest retail chain. That's sort of the strategy that we would like to pursue at the moment. But again, I mean, if we need to put more resources just to see the more growth, then we'll be considering it. I think there are always the question about how we manage our business, right? Every single time we launch something, you know, there is discussion about capital investments.
We always say that, you know, we negotiate like crazy, we plan like crazy, we're extremely prudent, and as a result, we always deliver or exceed on the numbers and profitability, numbers of ourselves. I mean, 3,000 lockers, you know, customer acquisition during the growth, all that has been done but still done delivery rollout has been done with very prudently. From that perspective. e-Grocery, if it becomes significant business, then we will be probably thinking about sort of standalone presentation just because it has lower ticket, lower take rate-
Yeah.
as the nature of the sort of business in any other country.
that business, the economics will be shown in the marketplace, yeah?
At the moment, yes.
Yeah.
In the future, we will decide if we want to.
Just strip it out. Yeah.
Separate. Exactly.
Okay. Thank you.
Thank you for your question, Simon. Our next question is from Stefan Roscher. Stefan, your line is open if you'd like to proceed with your question.
Yeah. Hi. Hi. Well, first of all, congratulations on the numbers. Very well done. I have a little bit a question on the situation in Kazakhstan. We obviously had these problems in January and just what the big worry, I guess, is with what we are seeing in the region. I am not sure to which extent you can comment, but is there any kind of reforms happening in the country? Is there anything which you could kind of say which should help, that we will not have a repeat of what happened in January, a couple of months or a couple of years down the line?
I think that that's a question for Mikheil.
Sure. Well, I mean in general, yeah, in general, I would say there are a lot of very promising initiatives, you know, things which are related to, you know, fight with the corruption, you know, building the wealth for the population and prosperity in the country. There are a lot of very sort of promising, very promising initiatives. That all looks as far as we are concerned or we are consulted or involved, I mean, we believe that, you know, that would be great for the country eventually.
There is only one thing which probably is important in the long term is that the wealth of the people and the well-being of the people to be growing. That's, we believe, is the mission of all those changes. We as a company, again, we're focused on the things which we control and, you know, we believe that we're putting a lot of energy and efforts in increasing the well-being of the people, and that's why we are as a brand company which is loved. We're quite encouraged by the changes we see and the initiatives we see on the government side.
Okay. Thank you very much, and keep up the good work. Thank you.
Thank you very much, Stefan. As a quick reminder, if you'd like to ask a question today, please use the Raise Hand button if you've joined us via Zoom. Our next question is from Ronak Gadia from EFG. Oh, I'm afraid Ronak's hand has just disappeared, so I won't be able to. Oh, there we go. Apologies. One moment. Ronak, your line is now open if you'd like to proceed.
Thank you. Thanks Mikheil and David for taking the time and taking the questions. Two or three questions. Firstly, if you look at the actions of the National Bank of Kazakhstan the last week or so, raising rates, increasing the tenge deposit protection facility, it seems like there's a bit of concern about maybe flight of deposits or dollarization within the system. Are you seeing similar trends at Kaspi with your deposits? My second question is on your margins. When I look at your guidance, it seems like the volume growth outlook still remains quite strong, but margins generally across the three platforms seem to be lower. I just wanted to ask, is this just something that's cyclical, i.e.
You know, we're seeing increased investments coming through this year, and then as volumes pick up, you should start to see margins pick up in later years? Or are we now starting to see a more structural decline in margins as sort of more low-value products start getting introduced? And the third question is, can you just give us an update on Ukraine following the expansion following the acquisition of the licenses and the companies, what's, you know, what's the current status of the expansion in the country given what's happening there? Thank you.
Do you wanna take the questions, Mikheil? Maybe I'll say something at the end on the margin, but I'll hand it over to you.
I think I can just quickly go through all of them pretty much. That will be simpler. In terms of the National Bank, I mean, this is basically a playbook which has been done before. For example, the deposit protection sort of a + 10% premium from the government, this is what has been done and, you know, several years ago in the same sort of circumstances. I mean, there is, from our perspective, you know, we're just, you know, involved and sort of consulting with everyone else just to make it simple so people really, you know, sort of get this 10% premium so that they're commercially incentivized to keep the tenge deposits.
Our very deep experience in this type of situations also tells us that this is very temporary, as usual, and the nature of our business. Again, our nature of our business, if you take consumer profile, it's quite straightforward. I mean, our deposits are, you know, just several thousand dollars on average. Those deposits are related to regular spending and the family budget. And as a result, you know, they have the highest ratio of the local currency deposits among all the players in the country. That's just because of the nature of the product, and again, nature of the profile of our consumers. In terms of the margins, I would just repeat what David really said. I mean, the margins you see on the Fintech side.
On the Fintech side, again, the share of BNPL is growing, the share of merchant finance is growing. As a result, that also has its own influence on, in terms of, the product distribution on the margins of our Fintech side. If you look at the Marketplace and the Payments, I mean, the margins are, you know, high. Also if you look in general in terms of trends, I mean, you can, I mean, we cannot become 100%, I think in merchant business. I guess, you know, when we're guiding even in this environment, mid-60s% and around 60% on the Payments and mid-60% on the Marketplace, this is as good as it can get.
If you can name me a marketplace business globally with such a marginality, I will take the first plane to fly there and learn from them. In terms of Ukraine, it's, I mean, it's extremely. We bought the payments company there, so we have team there, so it's extremely sad, very emotional. It's not, it's unfortunately outside of our control. The one thing we can really say is that we just hope that the situation stabilizes as soon as possible and, you know, we can get down to our planning, and we can get down to just evaluating, you know, how quickly and what can be done.
I mean, there is, you guys see it every day on the news, so you know better than us. The only thing I can say is just, we're extremely sad and bothered and supportive for our employees and the friends and actually friends everywhere, all nationalities, really.
Thanks. Thanks for that, Mikheil. Just as a quick follow-up on the margins questions. You know, you're absolutely right. Even, you know, in the current environment, your margin outlook of 60%-65% is amazing. That really is the point when we compare Kaspi to, you know, other similar type of players globally, Kaspi's margins are, you know, much higher. My question really was, you know, now that we're seeing maybe margins decline, are we gradually seeing Kaspi's margins now converge to what we're seeing the other global players report? Or can Kaspi still sustainably keep their margins above, you know, above their global peers in the medium term?
Well, I mean, I think that, you know, I don't know if David wants to build on my comment, but in general, I would say that, you know, I just don't expect our margins to be close to the global peers because usually the global peers have no margin. In our case, you know, again, we're execution driven. We have super app strategy. Everybody or most of other guys are just thinking about the super app strategy but still have 15 multiple apps. In our case, you know, we have significant network effect, and that's why most of the businesses contribute to our numbers. They're not demanding a cut from our numbers.
From that perspective, yeah, I mean, we're just no change in our business model. Yeah, I think we're good in margins and I don't think we would like to achieve the margins which are negative in most of the global peers.
Yeah. I mean, I'll just add to that. You know, number one is this super app model where we're leveraging consumer over multiple products. So that's the key differentiation, number one. Number two, profitability. We're achieving that through scale, which we continue to build with these sort of growth rates rather than via pricing. Number three, fundamental to the model. It's not quite your question, but fundamentals of model is low CapEx. I don't see any of those things changing dramatically in the near term. Margins can go up, margins can go down, but I expect them to remain sort of best in class through the cycle.
Thanks, guys.
Thank you for your question, Ronak. I'm afraid we have no further questions, so I'll hand back to David and Mikheil for any further remarks.
Well, thank you, Harry. Thanks everyone for participating in today's call. If you do have follow-up questions, please get in touch with me or the team. We'll be happy to help. Thank you again for your time, and looking forward to speaking over the next few weeks into our Q1 results at the end of April. Thank you.
Thank you. Thank you. Be safe. Thanks a lot.
Thank you to everyone who has joined us today. This concludes the webinar, and you may now disconnect from the call.