REG - JSC Halyk Bank JSC Halyk Bank-37QB - Half-year Report

Halyk Bank AOAnnouncement

19/08/2025 07:00

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RNS Number : 8740V  JSC Halyk Bank  19 August 2025

19 August 2025

 

Joint Stock Company 'Halyk Bank of Kazakhstan'

Interim condensed consolidated financial results

for the six months ended 30 June 2025

 

Joint Stock Company 'Halyk Bank of Kazakhstan' and its subsidiaries (together
"the Bank") (LSE: HSBK; KASE: HSBK, HSBKd; AIX: HSBK, HSBK.Y) releases interim
condensed consolidated financial information for the six months ended 30 June
2025.

 

 Consolidated Statement of Profit or Loss

KZT mln

 

                                                                                 1H 2025    1H 2024    Y-o-Y, abs  Y-o-Y,%   2Q 2025    2Q 2024    Y-o-Y, abs  Y-o-Y,%
 Interest income(()(1)())                                                        1,289,297  1,012,008  277,289      27.4%    660,100    515,754    144,346      28.0%
 Interest expense                                                                (648,564)  (508,125)  (140,439)    27.6%    (345,233)  (262,359)  (82,874)     31.6%
 Net interest income before credit loss expense                                  640,733    503,883    136,850      27.2%    314,867    253,395    61,472       24.3%
 Fee and commission income                                                       114,317    99,730     14,587       14.6%    57,451     49,656     7,795        15.7%
 Fee and commission expense                                                      (46,535)   (38,779)   (7,756)      20.0%    (23,447)   (18,488)   (4,959)      26.8%
 Fees and commissions, net                                                       67,782     60,951     6,831        11.2%    34,004     31,168     2,836        9.1%
 Net insurance income (()(2)())                                                  25,840     14,802     11,038       74.6%    10,382     5,126      5,256        102.5%
 Net gain on foreign exchange operations, financial assets and liabilities((3))  87,947     90,049     (2,102)     (2.3%)    65,531     44,360     21,171       47.7%
 Other expense/non-interest income ((4))                                         31,473     (44,039)   75,512      (171.5%)  10,857     7,369      3,488        47.3%
 Expected credit loss expense and recovery of other credit loss expense          (61,518)   (65,747)   4,229       (6.4%)    (38,580)   (46,753)   8,173       (17.5%)
 Operating expenses ((5))                                                        (146,607)  (115,858)  (30,749)     26.5%    (77,412)   (59,217)   (18,195)     30.7%
 Income tax expense                                                              (117,048)  (64,948)   (52,100)     80.2%    (66,063)   (34,319)   (31,744)     92.5%
 Net  income                                                                     528,602    379,093    149,509      39.4%    253,586    201,129    52,457       26.1%
 Non-controlling interest                                                        2          -          2           -         2          -          2           -
 Net income attributable to common shareholders                                  528,600    379,093    149,507      39.4%    253,584    201,129    52,455       26.1%

 Net interest margin, p.a.                                                       7.2%       6.9%                             7.0%       6.8%
 Return on average equity, p.a.                                                  33.6%      29.9%                            32.2%      31.7%
 Return on average assets, p.a.                                                  5.6%       4.8%                             5.3%       5.0%
 Cost-to-income ratio                                                            17.2%      18.5%                            17.8%      17.3%
 Cost of risk on loans to customers, p.a.                                        1.4%       1.3%                             1.5%       1.7%

 

 

(1)      Interest income calculated using the effective interest method
and other interest income;

(2)      Insurance revenue less insurance service expense, net finance
insurance (expense)/income and net reinsurance expense;

(3)      Net gain on financial assets and liabilities at fair value
through profit or loss, net realised (loss)/ gain from financial assets at
fair value through other comprehensive income, net foreign exchange gain;

(4)      Share in profit of associate, income on non-banking activities,
other income/(expense);

(5)      Including reversal of/(loss from) impairment of non-financial
assets;

 

 

In preparing the interim condensed consolidated financial statements of profit
or loss for the three and six months ended 30 June 2024, certain
reclassifications have been made to conform the presentation of the statement
for the three and six months ended 30 June 2025, as the current period
presentation provides a better understanding of the Group's financial
performance.

 

The reclassification of fees and commission expenses for the three and six
months ended 30 June 2024 in the amount of KZT 3,632 million and KZT 7,380,
respectively, includes the reclassification of deposit insurance service
expenses. As these expenses are directly related to deposit expenses, the
Group's management decided to reclassify them as interest expenses.

 

All of the ratios were also recalculated accordingly. For more detailed
information please refer to Halyk Group's interim condensed consolidated
financial information for the six months ended 30 June 2025, note #4b.

 

Net income attributable to common shareholders for 1H 2025 is up 39.4%
year-on-year thanks to increase in lending and transactional businesses and
due to the base effect of one-off recognized loss in a view of expected early
repayment of the deposit of KSF in accordance with the IFRS in 1H 2024. Net
income was negatively affected by excess profits tax, which was introduced on
profit from certain banking operations for 2025 only. The net income growth,
adjusted to repayment of the deposit of KSF and excess profits tax, would be
19.8%.

 

Interest income((1)) for 1H 2025 was up 27.4% vs. 1H 2024 mainly due to
increase of average balances of loans to customers.

 

Interest expense for 1H 2025 increased by 27.6% vs. 1H 2024 mainly as a result
of the increase in average rate and balances of amounts due to customers, as
well as the growth in the share of KZT amounts due to customers.

 

Despite the increase in average rates in amount due to customers in 1H 2025,
NIM was positively impacted by the increase in share of total interest earning
assets vs total interest bearing liabilities, as well as increase in the share
of KZT interest-earning cash and cash equivalents. As a result, net interest
margin has grown to 7.2% for 1H 2025 compared to 6.9% for 1H 2024.

 

In 1H 2025 compared to 1H 2024, the overall dynamics of fee and commission
income and expense was driven by the increased number of clients and the
growth of clients' transactional activity. Net fee and commission income for
1H 2025 increased by 11.2% vs. 1H 2024 due to increase in net transactional
income of legal entities, as well as in fees on letters of credit and
guarantees issued. Net transactional income of individuals slightly decreased
due to an increase in the amount of bonuses for the loyalty program.

 

The positive dynamics of other expense/non-interest income ((4)) in 1H 2025
was impacted by the base effect of one-off recognized loss in a view of
expected early repayment of the deposit of KSF in accordance with the IFRS in
1H 2024.

 

Operating expenses((5)) for 1H 2025 increased by 26.5% vs. 1H 2024 mainly due
to the indexation of salaries and other employee benefits,  including the
costs of the long-term incentive program as well as IT development related
costs.

 

The Bank's cost-to-income ratio decreased to 17.2% compared to 18.5% for 1H
2024 amid higher operating income for 1H 2025.

 

Cost of risk in 1H 2025 was at the level of 1.4% compared to 1.3% in 1H 2024.

 

Consolidated Statement of Financial Position

KZT mln

                                          30-Jun-25       31-Mar-25       Change           Change         31-Dec-24       Change YTD, abs      Change YTD, %

                                                                          Q-o-Q, abs       Q-o-Q, %
 Total assets                             19,615,712      18,855,912      759,800           4.0%          18,548,414      1,067,298             5.8%
 Cash and reserves((6))                   2,704,311       2,295,912       408,399           17.8%         1,780,132       924,179               51.9%
 Amounts due from credit institutions     173,881         145,250         28,631            19.7%         156,966         16,915                10.8%
 T-bills of MinFin & NBRK notes((7))      2,620,517       2,612,295       8,222             0.3%          2,738,432       (117,915)            (4.3%)
 Other securities & derivatives((8))      1,695,588       1,698,924       (3,336)          (0.2%)         1,776,082       (80,494)             (4.5%)
 Gross loan portfolio                     12,330,251      12,053,312      276,939           2.3%          12,038,868      291,383               2.4%
 Allowance for expected credit losses     (593,695)       (614,904)       21,209           (3.4%)         (573,219)       (20,476)              3.6%
 Net loan portfolio                       11,736,556      11,438,408      298,148           2.6%          11,465,649      270,907               2.4%
 Assets classified as held for sale       9,516           9,067           449               5.0%          8,833           683                   7.7%
 Other assets                             675,343         656,056         19,287            2.9%          622,320         53,023                8.5%
 Total liabilities                        16,425,274      15,574,327      850,947           5.5%          15,480,365      944,909               6.1%
 Amounts due to customers, including:     13,748,127      12,969,231      778,896           6.0%          12,990,043      758,084               5.8%
 individuals' deposits                    7,494,574       7,147,623       346,951           4.9%          7,200,363       294,211               4.1%
    term deposits                         6,372,044       6,149,036       223,008           3.6%          6,063,129       308,915               5.1%
    current accounts                      1,122,530       998,587         123,943           12.4%         1,137,234       (14,704)             (1.3%)
 legal entities' deposits                 6,253,553       5,821,608       431,945           7.4%          5,789,680       463,873               8.0%
    term deposits                         4,590,841       4,128,545       462,296           11.2%         3,811,441       779,400               20.4%
    current accounts                      1,662,712       1,693,063       (30,351)         (1.8%)         1,978,239       (315,527)            (15.9%)
 Debt securities issued                   959,338         722,046         237,292           32.9%         879,212         80,126                9.1%
 Amounts due to credit institutions       972,772         1,147,029       (174,257)        (15.2%)        814,069         158,703               19.5%
 Other liabilities                        745,037         736,021         9,016             1.2%          797,041         (52,004)             (6.5%)
 Total equity                             3,190,438       3,281,585       (91,147)         (2.8%)         3,068,049       122,389               4.0%

 

(6)      Cash and cash equivalents and obligatory reserves;

(7)      Treasury bonds of the Ministry of Finance of the Republic of
Kazakhstan and Notes of NBRK;

(8)      Financial assets at fair value through profit or loss, financial
assets at fair value through other comprehensive income and debt securities at
amortized cost, net of allowance for expected credit losses less Treasury
bonds of the Ministry of Finance of the Republic of Kazakhstan and Notes of
NBRK;

 

As at end of 1H 2025, total assets were up 5.8% due to increase in amounts due
to customers.

 

Compared with the YE of 2024, loans to customers were up 2.4% on a gross and
net basis, with retail loans growing by 4.3%, while the loan portfolio of
legal entities increased by 1.4% on a gross basis.

 

Stage 3 loans decreased to 6.6% as at the end of 2Q 2025 as a result of
workout of problem loans and loan portfolio growth.

 

Compared with the YE 2024, the deposits of legal entities and the deposits of
individuals were up 8.0% and 4.1%, respectively, due to fund inflow from the
Bank's clients.

 

As at the end of 1H 2025, the share of KZT deposits in total deposits was
72.1% compared to 69.1% as at the YE 2024, in corporate deposits the share was
74.2% vs. 70.9% as at the YE 2024, while the share in total retail deposits
was 70.1% vs. 67.5% as at YE 2024.

 

Amounts due to credit institutions increased by 19.5% vs. the YE 2024.

 

As at the end of 1H 2025, debt securities issued were up 9.1% year-to-date,
and the Bank's debt securities portfolio was as follows:

 

 Description of the security   Nominal amount outstanding  Interest rate                Maturity Date

 Subordinated coupon bonds     KZT 101.1bn                 9.5% p.a.                    October 2025
 Local bonds                   KZT 146.6bn                 13.61% p.a. - floating rate  July 2031
 Local bonds                   KZT 20.0bn                  TONIA+1.25% - floating rate  December 2027
 Local bonds listed at Astana  USD  162 mln                3.5% p.a.                    May 2027

 International Exchange
 Local bonds listed at Astana  USD  299.8 mln              3.5% p.a.                    May 2027

 International Exchange
 Local bonds listed at Astana  USD  432.2mln               3.5% p.a.                    May 2027

 International Exchange
 Local bonds listed at Astana  USD  414.6 mln              3.5% p.a.                    July 2025

 International Exchange

 

As at the end of 1H 2025, total equity of the Bank increased by 4.0% compared
to the YE 2024, mainly due to net profit earned by the Bank during 1H 2025.

 

The Bank's capital adequacy ratios were as follows*:

 

                 30-Jun-25  31-Mar-25  31-Dec-24  30-Sep-24  30-Jun-24
 Capital adequacy ratios, unconsolidated:
 Halyk Bank
 k1-1            18.5%      19.8%      19.6%      19.2%      17.6%
 k1-2            18.5%      19.8%      19.6%      19.2%      17.6%
 k2              18.5%      19.8%      19.7%      19.4%      17.7%
 Capital adequacy ratios, consolidated:
 CET 1           18.1%      19.3%      18.8%      19.0%      17.4%
 Tier 1 capital  18.1%      19.3%      18.8%      19.0%      17.4%
 Total capital   18.1%      19.3%      18.9%      19.1%      17.5%

 

* The minimum regulatory capital adequacy requirements are 9.5%, for k1, 10.5%
for k1-2 and 12% for k2, including a conservation buffer of 3% and systemic
buffer of 1% for each.

 

The interim condensed consolidated statements for the six months ended 30 June
2025, including the notes attached thereto, are available on Halyk Bank's
website: http://halykbank.com/financial-results
(http://halykbank.com/financial-results) .

 

A 1H 2025 results webcast will be hosted at 3:00pm London time/7:00pm Almaty
time (UTC +05:00) on Tuesday, 19 August 2025. A live webcast of the
presentation can be accessed via Zoom link after the registration. The
registration is open until 19 August 2025 (including), for the registration
please click here.
(https://halykbank-kz.zoom.us/webinar/register/WN_CU2vAj7hSpC7RaTyuQA5Mg#/registration)

 

 

About Halyk Bank

 

Halyk Bank is the leading financial services group in Kazakhstan, with a
diversified presence across retail, SME, and corporate banking, as well as
insurance, leasing, brokerage, asset management and lifestyle services. Halyk
Bank has been listed on the Kazakhstan Stock Exchange since 1998, the London
Stock Exchange since 2006, and the Astana International Exchange since 2019.

As of 30 June 2025, Halyk Bank had total assets amounting to KZT 19,616bn,
making it the largest lender in Kazakhstan. The Bank boasts the country's one
of the largest customer base and the most extensive branch network, with 542
branches and service outlets across nationwide. Additionally, the Bank
operates in Georgia and Uzbekistan.

 

For more information on Halyk Bank, please visit https://www.halykbank.com

 

- ENDS-

 

For further information, please contact:

 Halyk Bank

 Mira Tiyanak           +7 727 259 04 30

                        Ir@halykbank.kz

                        MiraK@halykbank.kz (mailto:MiraK@halykbank.kz)

 Rustam Telish          +7 727 330 15 66

                        RustamT3@halykbank.kz (mailto:RustamT3@halykbank.kz)

 Yekaterina Svanbayeva  +7 727 330 12 88

                        EkaterinaS@halykbank.kz (mailto:EkaterinaS@halykbank.kz)

 

 

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