REG - JSC Halyk Bank JSC Halyk Bank-37QB - 1st Quarter Results

Halyk Bank AOAnnouncement

19/05/2025 08:30

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RNS Number : 1944J  JSC Halyk Bank  19 May 2025

19 May 2025

 

Joint Stock Company 'Halyk Bank of Kazakhstan'

Consolidated financial results

for the three months ended 31 March 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 statements for the three months ended 31 March 2025.

 

 Consolidated Statement of Profit or Loss

KZT mln

 

                                                                                 1Q 2025    1Q 2024    Y-o-Y, abs  Y-o-Y,%
 Interest income(()(1)())                                                        629,197    496,254    132,943      26.8%
 Interest expense                                                                (303,331)  (245,766)  (57,565)     23.4%
 Net interest income before credit loss expense                                  325,866    250,488    75,378       30.1%
 Fee and commission income                                                       56,866     50,074     6,792        13.6%
 Fee and commission expense                                                      (23,088)   (20,291)   (2,797)      13.8%
 Fees and commissions, net                                                       33,778     29,783     3,995        13.4%
 Net insurance income (()(2)())                                                  15,458     9,676      5,782        59.8%
 Net gain on foreign exchange operations, financial assets and liabilities((3))  22,416     45,689     (23,273)    (50.9%)
 Other expense/non-interest income ((4))                                         20,616     (51,408)   72,024      (140.1%)
 Expected credit loss expense and recovery of other credit loss expense          (22,938)   (18,994)   (3,944)      20.8%
 Operating expenses ((5))                                                        (69,195)   (56,641)   (12,554)     22.2%
 Income tax expense                                                              (50,985)   (30,629)   (20,356)     66.5%
 Net  income                                                                     275,016    177,964    97,052       54.5%
 Non-controlling interest                                                        -          -          -           -
 Net income attributable to common shareholders                                  275,016    177,964    97,052       54.5%

 Net interest margin, p.a.                                                       7.5%       7.0%
 Return on average equity, p.a.                                                  34.7%      27.7%
 Return on average assets, p.a.                                                  5.9%       4.6%
 Cost-to-income ratio                                                            16.5%      19.9%
 Cost of risk on loans to customers, p.a.                                        1.2%       0.9%

 

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

(2)      Insurance revenue less insurance service expense, financial
expenses for insurance and net reinsurance expenses;

(3)      Net gain on financial assets and liabilities at fair value
through profit or loss, net realised gain/(loss) 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 (Loss from)/reversal of impairment of non-financial
assets;

 

 

In preparing the interim condensed consolidated financial statements of profit
or loss for the three months ended 31 March 2024, certain reclassifications
have been made to conform the presentation of the statement for the three
months ended 31 March 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 1Q 2024 in the
amount of KZT 3,748 million 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
statements for the three months ended 31 March 2025, note #4b.

 

Net income attributable to common shareholders for 1Q 2025 is up 54.5%
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 1Q 2024. The
net income growth adjusted to this base effect would be 19.1%.

 

Interest income((1)) for 1Q 2025 was up 26.8% vs. 1Q 2024 mainly due to
increase of balances of loans to customers.

 

Interest expense for 1Q 2025 increased by 23.4% vs. 1Q 2024 mainly as a result
of the increase in average balances of amounts due to customers, as well as
the growth in the share of KZT amounts due to customers.

 

Despite the slight increase in average rates in amount due to customers in 1Q
2025, NIM was positively impacted by the increase in share of loans to
customers in total interest earning assets, as well as increase in the share
of KZT interest-earning cash and cash equivalents. As a result, net interest
margin has grown to 7.5% for 1Q 2025 compared to 7.0% for 1Q 2024.

 

In 1Q 2025 compared to 1Q 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
1Q 2025 increased by 13.4%% vs. 1Q 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 increased
and was offset by the growth of an amount of bonuses for the loyalty program.

 

The positive dynamics of other expense/non-interest income ((4)) in 1Q 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
1Q 2024.

 

Operating expenses((5)) for 1Q 2025 increased by 22.2% vs. 1Q 2024 mainly due
to the indexation of salaries and other employee benefits,  including the
costs of the long-term incentive program.

 

The Bank's cost-to-income ratio decreased to 16.5% compared to 19.9% for 1Q
2024 amid higher operating income for 1Q 2025.

 

Cost of risk in 1Q 2025 was at normalized level within the scope of our full
year guidance and was at the level of 1.2%.

 

 

 

 

 

 

 

 

Consolidated Statement of Financial Position

KZT mln

 

                                          31-Mar-25       31-Dec-24       Change YTD, abs      Change

                                                                                               Q-o-Q, %
 Total assets                             18,855,912      18,548,414      307,498              1.7%
 Cash and reserves((6))                   2,295,912       1,780,132       515,780              29.0%
 Amounts due from credit institutions     145,250         156,966         (11,716)             (7.5%)
 T-bonds of MinFin((7))                   2,612,295       2,738,432       (126,137)            (4.6%)
 Other securities & derivatives((8))      1,698,924       1,776,082       (77,158)             (4.3%)
 Gross loan portfolio                     12,053,312      12,038,868      14,444               0.1%
 Allowance for expected credit losses     (614,904)       (573,219)       (41,685)             7.3%
 Net loan portfolio                       11,438,408      11,465,649      (27,241)             (0.2%)
 Assets classified as held for sale       9,067           8,833           234                  2.6%
 Other assets                             656,056         622,320         33,736               5.4%
 Total liabilities                        15,574,327      15,480,365      93,962               0.6%
 Amounts due to customers, including:     12,969,231      12,990,043      (20,812)             (0.2%)
 individuals' deposits                    7,147,623       7,200,363       (52,740)             (0.7%)
    term deposits                         6,149,036       6,063,129       85,907               1.4%
    current accounts                      998,587         1,137,234       (138,647)            (12.2%)
 legal entities' deposits                 5,821,608       5,789,680       31,928                0.6%
    term deposits                         4,128,545       3,811,441       317,104               8.3%
    current accounts                      1,693,063       1,978,239       (285,176)            (14.4%)
 Debt securities issued                   722,046         879,212         (157,166)            (17.9%)
 Amounts due to credit institutions       1,147,029       814,069         332,960               40.9%
 Other liabilities                        736,021         797,041         (61,020)             (7.7%)
 Total equity                             3,281,585       3,068,049       213,536              7.0%

(6)      Cash and cash equivalents and obligatory reserves;

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

(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;

 

As at end of 1Q 2025, total assets were up 1.7%.

 

Compared with the YE of 2024, loans to customers were up 0.1% on a gross and
were down 0.2% on a net basis, with retail loans growing by 2.3%, while the
loan portfolio of legal entities decreasing by 1.0% on a gross basis.

 

As at the end of 1Q 2025, Stage 3 loans increased from the level of 6.3% to
6.8% year-to-date as a result of the moratorium on the sale of problem retail
loans to collection agencies till May 2026.

 

Compared with the YE 2024, the overall dynamics of amounts due to customers
was impacted by the of KZT appreciation vs. USD, where the deposits of legal
entities were up 0.6% and the deposits of individuals were down 0.7%.

 

As at the-end of 1Q 2025, the share of KZT deposits in total deposits was
68.8% compared to 69.1% as at the YE 2024, in corporate deposits the share was
70.3% vs. 70.9% as at the YE 2024, while the share in total retail deposits
was 67.6% vs. 67.5% as at YE 2024.

 

Amounts due to credit institutions increased by 40.9% vs. the YE 2024, due to
increase in loans under REPO agreements.

 

As at the end of 1Q 2025, debt securities issued were down 17.9% year-to-date
due to repayment of local bonds for KZT 131.7 in February 2025, 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  180 mln                3.5% p.a.                    May 2025

 International Exchange
 Local bonds listed at Astana  USD  298 mln                3.5% p.a.                    May 2025

 International Exchange
 Local bonds listed at Astana  USD  415mln                 3.5% p.a.                    July 2025

 International Exchange

 

As at the end of 1Q 2025, total equity of the Bank increased by 7.0% compared
to the YE 2024, mainly due to net profit earned by the Bank during 1Q 2025.

 

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

 

                 31-Mar-25  31-Dec-24  30-Sep-24  30-Jun-24  31-Mar-24
 Capital adequacy ratios, unconsolidated:
 Halyk Bank
 k1-1            19.8%      19.6%      19.2%      17.6%      19.0%
 k1-2            19.8%      19.6%      19.2%      17.6%      19.0%
 k2              19.8%      19.7%      19.4%      17.7%      19.2%
 Capital adequacy ratios, consolidated:
 CET 1           19.3%      18.8%      19.0%      17.4%      19.5%
 Tier 1 capital  19.3%      18.8%      19.0%      17.4%      19.5%
 Total capital   19.3%      18.9%      19.1%      17.5%      19.7%

 

* 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 three months ended 31
March 2025, including the notes attached thereto, are available on Halyk
Bank's website: http://halykbank.com/financial-results
(http://halykbank.com/financial-results) .

 

A 1Q 2025 results webcast will be hosted at 3:00pm London time/7:00pm Almaty
time (UTC +05:00) on Tuesday, 20 May 2025. A live webcast of the presentation
can be accessed via Zoom link after the registration. The registration is open
until 20 May 2025 (including), for the registration please click here.
(https://halykbank-kz.zoom.us/webinar/register/WN_a4PEJ17RR5KyJuZE5Lj37A)

 

 

 

 

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 31 March 2025, Halyk Bank had total assets amounting to KZT 18,855.9bn,
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

                  MiraK@halykbank.kz

 Rustam Telish    +7 727 330 15 66 RustamT3@halykbank.kz

 Nurgul Mukhadi   +7 727 330 16 77

                  NyrgylMy@halykbank.kz

 

 

 

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