REG - JSC Halyk Bank JSC Halyk Bank-37QB - 3rd Quarter Results
17/11/2023 07:00
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RNS Number : 8224T JSC Halyk Bank 17 November 2023
17 November 2023
Joint Stock Company 'Halyk Bank of Kazakhstan'
Consolidated financial results
the nine month ended 30 September 2023
Joint Stock Company 'Halyk Bank of Kazakhstan' and its subsidiaries (together
"the Bank") (LSE: HSBK) releases consolidated financial information
for the nine months ended 30 September 2023.
Consolidated income statements
KZT mln
9M 2023 9M 2022 Y-o-Y,% 3Q 2023 3Q 2022 Y-o-Y,%
Interest income 1,206,284 887,519 35.9% 425,822 335,944 26.8%
Interest expense (600,950) (406,585) 47.8% (207,395) (153,512) 35.1%
Net interest income before credit loss expense 605,334 480,934 25.9% 218,427 182,432 19.7%
Fee and commission income 150,527 128,662 17.0% 51,838 49,362 5.0%
Fee and commission expense (71,087) (70,945) 0.2% (24,117) (27,127) (11.1%)
Net fee and commission income 79,440 57,717 37.6% 27,721 22,235 24.7%
Net insurance income((1)) 26,347 (7,990) (3.3x) (2,250) (11,106) (79.7%)
Net gain on foreign exchange operations 61,195 131,667 (53.5%) 29,785 22,266 33.8%
Net gain from derivative operations and securities ((2)) 38,208 8,624 4.4x 17,034 10,013 70.1%
Other income, share in profit of associate and income from non-banking 45,637 39,326 16.0% 8,775 11,199 (21.6%)
activities
Credit loss expense ((3)) (72,398) (94,643) (23.5%) (39,739) (37,730) 5.3%
Recovery of other credit loss expense/(other credit loss expense) 1,605 (450) (3.6x) 48 452 (89.4%)
Operating expenses (154,148) (()(4)()) (140,224) (()(5)()) 9.9% (54,570) (()(6)()) (49,400) (()(7)()) 10.5%
Income tax expense (93,927) (64,110) 46.5% (33,097) (25,346) 30.6%
Net profit 537,293 410,851 30.8% 172,134 125,015 37.7%
Non-controlling interest 1 - - - - -
Net profit attributable to owners of the Bank 537,292 410,851 30.8% 172,134 125,015 37.7%
Net interest margin, p.a. 6.3% 5.4% 6.8% 5.8%
Return on average equity, p.a. 34.7% 32.1% 32.6% 27.2%
Return on average assets, p.a. 5.1% 4.2% 4.9% 3.6%
Cost-to-income ratio 17.9% 19.7% 18.0% 20.8%
Cost of risk on loans to customers, p.a. 1.1% 1.5% 1.6% 1.4%
(1) Insurance underwriting income less insurance claims incurred and
net income/(expenses) from reinsurance contracts held;
(2) Net gain from financial assets and liabilities at fair value
through profit or loss and net realised loss from financial assets at fair
value through other comprehensive income;
(3) Total credit loss expense, including credit loss expense on
loans to customers, amounts due from credit institutions, financial assets at
FVTOCI, cash and cash equivalents and other assets;
(4) Including loss from impairment of non-financial assets of KZT
-0.1bn;
(5) Including loss from impairment of non-financial assets of KZT
-0.1bn;
(6) Including loss from impairment of non-financial assets of KZT
-0.1bn;
(7) Including loss from impairment of non-financial assets of KZT
-0.1bn;
Starting from 1 January 2023, Halyk Group's financial statements have been
transited to IFRS 17 "Insurance Contracts" from IFRS 4, which resulted in
recalculation of certain P&L items for 9M 2022 and 3Q 2022. All of the
ratios were also recalculated accordingly. For more detailed information
please refer to Halyk Group's financial statements for 3Q 2023, note #4.
Net profit attributable to common shareholders to KZT 172.1bn in 3Q 2023, up
37.7% compared with KZT 125.0bn in 3Q 2022 mainly due to significant increase
in lending and transactional businesses.
Interest income for 3Q 2023 increased by 26.8% vs. 3Q 2022 mainly due to
increase in average rate and balances of loans to customers. Interest expense
for 3Q 2023 increased by 35.1% vs. 3Q 2022 mainly as a result of the growth in
average rate and share of KZT amounts due to customers. Consequently, net
interest income for 3Q 2023 grew by 19.7% vs. 3Q 2022.
In 3Q 2023, net interest margin was affected by the increase in average rates
on both loans to customers and amounts due to customers following the
significant increase in interest rates. Furthermore, the share of loans to
customers in total interest-earning assets increased substantially. Moreover,
there was an increase in the average rate of FX amounts due from credit
institutions and FX interest-earning cash and cash equivalents following the
global increase of USD interest rates. As a result, net interest margin
increased to 6.8% p.a. for 3Q 2023 compared to 5.8% p.a. for 3Q 2022.
The cost of risk on loans to customers for 3Q 2023 increased to 1.6% compared
to 1.4% in 3Q 2022 due to recognition of additional provisions on some
corporate loans.
In 3Q 2023 compared to 3Q 2022, the overall dynamics of fee and commission
income and expense was driven by the increased clients' transactional
activity. Net fee and commission income for 3Q 2023 increased by 24.7% vs. 3Q
2022 due to increase in net transactional income of legal entities and
individuals ((8)).
Other non-interest income ((9)) increased by 27.9% for 3Q 2023 vs. 3Q 2022
mainly due to higher net gain from financial assets and liabilities at fair
value through profit or loss and net gain on foreign exchange operations amid
higher volatility of interest rates in 3Q 2022, which resulted in negative
revaluation on derivative financial instruments.
Net insurance income ((10)) for 3Q 2023 improved by 79.7% year-on-year, due to
overall business growth and as a result of recognition of insurance reserve
expenses on unsecured consumer loans with a borrower's life insurance bundle
in 3Q 2022.
Operating expenses for 3Q 2023 increased by 10.5% vs. 3Q 2022 mainly due to
the indexation of salaries and other employee benefits starting from March 1,
2023
The cost-to-income ratio equalled 18.0% in 3Q 2023, compared with 20.8% in 3Q
2022 due to higher operating income for 3Q 2023.
(8) Transactional income of individuals, less transactional expenses
of individuals and less loyalty program bonuses;
(9) Other non-interest income (net gain on foreign exchange
operations, net gain from financial assets and liabilities at fair value
through profit or loss, net realised loss from financial assets at fair value
through other comprehensive income, share in profit of associate, income on
non-banking activities and other income);
(10) Insurance underwriting income less insurance claims incurred and net
income/(expenses) from reinsurance contracts held.
Statement of financial position review
KZT mln
30-Sep-23 30-Jun-23 Change Q-o-Q, % 31-Dec-22 Change, abs Change YTD, %
Total assets 14,249,649 14,241,463 0.1% 14,287,295 (37,646) (0.3%)
Cash and reserves 1,010,078 1,518,976 (33.5%) 2,288,375 (1,278,297) (55.9%)
Amounts due from credit institutions 146,010 116,666 25.2% 135,655 10,355 7.6%
T-bills & NBRK notes 2,216,148 2,159,093 2.6% 1,920,189 295,959 15.4%
Other securities & derivatives 1,678,962 1,725,686 (2.7%) 1,550,337 128,625 8.3%
Gross loan portfolio 9,062,263 8,629,902 5.0% 8,280,290 781,973 9.4%
Stock of provisions (471,389) (456,216) 3.3% (422,388) (49,001) 11.6%
Net loan portfolio 8,590,874 8,173,686 5.1% 7,857,902 732,972 9.3%
Other assets 575,246 508,746 13.1% 510,914 64,332 12.6%
Assets held for sale 32,331 38,610 (16.3%) 23,923 8,408 35.1%
Total liabilities 12,068,377 12,224,183 (1.3%) 12,365,149 (296,772) (2.4%)
Total deposits, including: 9,915,794 10,174,797 (2.5%) 10,512,048 (596,254) (5.7%)
retail deposits 5,330,410 5,302,501 0.5% 5,243,764 86,646 1.7%
term deposits 4,421,606 4,320,692 2.3% 4,351,846 69,760 1.6%
current accounts 908,804 981,809 (7.4%) 891,918 16,886 1.9%
corporate deposits 4,585,384 4,872,296 (5.9%) 5,268,284 (682,900) (13.0%)
term deposits 2,968,099 2,936,368 1.1% 2,898,924 69,175 2.4%
current accounts 1,617,285 1,935,928 (16.5%) 2,369,360 (752,075) (31.7%)
Debt securities 677,452 561,214 20.7% 462,817 214,635 46.4%
Amounts due to credit institutions 885,797 958,413 (7.6%) 878,665 7,132 0.8%
Other liabilities 589,334 529,759 11.2% 511,619 77,715 15.2%
Equity 2,181,272 2,017,280 8.1% 1,922,146 259,126 13.5%
As at end of 3Q 2023, total assets were down 0.3% year-to-date due to decrease
in amounts due to customers.
Compared with the end of 2022, loans to customers were up 9.4% on a gross and
9.3% on a net basis. The increase in the gross loan portfolio was attributable
to a rise of 5.9% in corporate, 7.3% in SME and 16.7% in retail loans.
Despite some increase in absolute terms, Stage 3 loans decreased to 7.8% as at
the end of 3Q 2023 mainly due to increase of Stage 1 loans.
Compared with the end of 2022, the deposits of legal entities were down 13.0%
mainly due to overall transfers of funds across the banking sector into
higher-yielding securities market in light of elevated interest rates.
Compared with the end of 2022, the deposits of individuals were up 1.7% due to
fund inflow from the Bank's clients.
As at the-end of 3Q 2023, the share of KZT deposits in total corporate
deposits was 68.8% compared to
60.6% as at the YE 2022, while the share in total retail deposits was 60.0%
vs. 52.6% as at YE 2022.
As at the end of 3Q 2023, debt securities issued were up 46.4% year-to-date,
mainly due to the issuance of bonds listed on AIX in the amount USD 500
million with a coupon rate of 3.5%. As at the date of this press-release, the
Bank's debt securities portfolio was as follows:
Description of the security Nominal amount outstanding Interest rate Maturity Date
Local bonds KZT 100 bn 7.5% p.a. November 2024
Local bonds KZT 131.7 bn 7.5% p.a. February 2025
Subordinated coupon bonds KZT 101.1 bn 9.5% p.a. October 2025
Local bonds listed at Astana USD 186.5 mln 3.5% p.a. May 2025
International Exchange
Local bonds listed at Astana USD 299.7 mln 3.5% p.a. May 2025
International Exchange
Local bonds listed at Astana USD 221.3 mln 3.5% p.a. July 2025
International Exchange
In 9M 2023, total equity of the Bank increased by KZT 259.1bn or by 13.5%
compared to the YE 2022, mainly due to net profit earned by the Bank during 9M
2023, which was partially offset by the payment of dividends.
The Bank's capital adequacy ratios were as follows*:
30-Sep-23 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22
Capital adequacy ratios, unconsolidated:
Halyk Bank
k1-1 18.6% 18.1% 20.2% 18.5% 18.5%
k1-2 18.6% 18.1% 20.2% 18.5% 18.5%
k2 19.0% 18.4% 20.6% 18.9% 19.1%
Capital adequacy ratios, consolidated:
CET 1 18.2% 17.9% 20.2% 18.3% 17.8%
Tier 1 capital 18.2% 17.9% 20.2% 18.3% 17.8%
Total capital 18.5% 18.3% 20.5% 18.7% 18.3%
* 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 consolidated financial information for the nine months ended 30 September
2023, including the notes attached thereto, are available on Halyk Bank's
website: http://halykbank.com/financial-results
(http://halykbank.com/financial-results) .
A 9M & 3Q 2023 results webcast will be hosted at 1:00 p.m. London
time/8:00 a.m. EST on Monday, 20 November 2023. A live webcast of the
presentation can be accessed via Zoom link after the registration. The
registration is open until 20 November, 2023 (including), for the registration
please click here.
(https://halykbank-kz.zoom.us/webinar/register/WN_mmqm9pY7QXKrTGjxYLhWHQ#/registration)
About Halyk Bank
Halyk Bank is Kazakhstan's leading financial services group, operating across
a variety of segments, including retail, SME & corporate banking,
insurance, leasing, brokerage and asset management. Halyk Bank has been listed
on the Kazakhstan Stock Exchange since 1998, on the London Stock Exchange
since 2006 and Astana International Exchange since October 2019.
With total assets of KZT 14,249.6bn as at September 30, 2023, Halyk Bank is
Kazakhstan's leading lender. The Bank has the largest customer base and
broadest branch network in Kazakhstan, with 571 branches and outlets across
the country. The Bank also operates in Georgia, Kyrgyzstan 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
Margulan Tanirtayev +7 727 259 04 53
Margulant@halykbank.kz
Nurgul Mukhadi +7 727 330 16 77
NyrgylMy@halykbank.kz
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