REG - JSC Halyk Bank JSC Halyk Bank-37QB - 9M and 3Q financial results
18/11/2024 14:15
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RNS Number : 6598M JSC Halyk Bank 18 November 2024
18 November 2024
Joint Stock Company 'Halyk Bank of Kazakhstan'
Interim condensed consolidated financial results
for the nine months ended 30 September 2024
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 nine months ended 30
September 2024.
Interim Condensed Consolidated Statement of Profit or Loss
KZT mln
9M 2024 9M 2023 Y-o-Y, abs Y-o-Y,% 3Q 2024 3Q 2023 Y-o-Y, abs Y-o-Y,%
Interest income(()(1)()) 1,571,860 1,206,284 365,576 30.3% 559,852 425,822 134,030 31.5%
Interest expense (768,345) (600,950) (167,395) 27.9% (267,600) (207,395) (60,205) 29.0%
Net interest income before credit loss expense 803,515 605,334 198,181 32.7% 292,252 218,427 73,825 33.8%
Fee and commission income 153,568 150,527 3,041 2.0% 53,838 51,838 2,000 3.9%
Fee and commission expense (76,273) (71,087) (5,186) 7.3% (27,996) (24,117) (3,879) 16.1%
Fees and commissions, net 77,295 79,440 (2,145) (2.7%) 25,842 27,721 (1,879) (6.8%)
Net insurance income (()(2)()) 26,276 26,347 (71) (0.3%) 11,474 (2,250) 13,724 (x5.1)
Net gain on foreign exchange operations, financial assets and liabilities((3)) 149,035 102,511 46,524 45.4% 58,986 42,858 16,128 37.6%
Other expense/non-interest income ((4)) (27,735) 45,637 (73,372) (x0.6) 14,186 8,775 5,411 61.7%
Expected credit loss expense and recovery of other credit loss expense (96,928) (70,793) (26,135) 36.9% (31,181) (39,691) 8,510 (21.4%)
Operating expenses ((5)) (180,699) (154,148) (26,551) 17.2% (64,841) (54,570) (10,271) 18.8%
Income tax expense (111,944) (94,549) (17,395) 18.4% (46,996) (32,306) (14,690) 45.5%
Net income 638,815 539,779 99,036 18.3% 259,724 168,964 90,760 53.7%
Non-controlling interest 2 1 1 - 2 - 2 -
Net income attributable to common shareholders 638,813 539,778 99,035 18.3% 259,722 168,964 90,758 53.7%
Net interest margin, p.a. 7.1% 6.3% 7.3% 6.8%
Return on average equity, p.a. 32.7% 34.3% 38.2% 31.3%
Return on average assets, p.a. 5.2% 5.1% 6.0% 4.8%
Cost-to-income ratio 17.6% 17.9% 16.1% 18.3%
Cost of risk on loans to customers, p.a. 1.3% 1.1% 1.2% 1.6%
(1) Interest income calculated using the effective interest method
and other interest income;
(2) Insurance revenue less insurance service expense and net
reinsurance expense;
(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 (expense)/income;
(5) Including (loss from)/reversal of impairment of non-financial
assets;
In preparing the consolidated financial information for the year ended 31
December 2023, the Group carried out an inventory of its financial
instruments. The inventory process identified financial instruments measured
at fair value through profit or loss that were previously restricted in use
and were incorrectly measured at cost. The Group revaluated these financial
instruments and recognized prior period adjustments.
The consolidated statement of profit or loss for the nine months ended 30
September 2023 has been reclassified to conform to the presentation for the
year ended 31 December 2023 because the presentation of the current year
report provides a clearer picture of the Group's financial performance. 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 nine months ended 30 September 2024, note #4b.
Net income attributable to common shareholders for 9M 2024 is up 18.3%
year-on-year thanks to notable increase in lending and transactional
businesses.
Interest income((1)) for 9M 2024 was up 30.3% vs. 9M 2023 mainly due to
increase in average rate and balances of loans to customers.
Interest expense for 9M 2024 increased by 27.9% vs. 9M 2023 mainly as a result
of the growth in average rate on amounts due to customers and growth in the
share of KZT amounts due to customers. Consequently, net interest income
before credit loss expense for 9M 2024 grew by 32.7% vs. 9M 2023.
In 9M 2024 net interest margin was affected by the increase in average rates
on both loans to customers and amounts due to customers. Furthermore, net
interest margin was positively impacted by the increase in the share of higher
yielding retail loans in total loan portfolio and 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 7.1% p.a. for 9M 2024 compared to 6.3% p.a. for 9M 2023.
Fee and commission income in 9M 2024 vs. 9M 2023 increased by 2.0%. It was
negatively impacted by base effect related to transition to amortization of
tariff packages for legal entities starting from November 2023. Moreover,
there was a revision of some retail tariffs in 2H of 2023. On top of that, the
amount of bonuses for the loyalty program significantly grew due to increased
transactional activity of retail clients and growing share of QR payments.
Fee and commission expense in 9M 2024 vs. 9M 2023 grew by 7.3% mainly due to
increase in service fees on payment cards and in deposit insurance fees
payable to the Kazakhstan Deposit Insurance Fund following the retail deposits
amount growth. As a result, despite the growth of clients' transactional
activity, the net fee and commission income for 9M 2024 decreased by 2.7% vs.
9M 2023.
Other expense/non-interest income ((4)) in 9M 2024 was negatively impacted by
a one-off recognized loss from the full prepayment of a deposit of the
Kazakhstan Sustainability Fund (KSF), which were made on April 8, 2024.
Operating expenses((5)) for 9M 2024 increased by 17.2% vs. 9M 2023 mainly due
to the indexation of salaries and other employee benefits.
The cost-to-income ratio equalled 17.6% in 9M 2024, compared with 17.9% in 9M
2023 due to higher operating income for 9M 2024.
Cost of risk in 9M 2024 was at normalized level within the scope of our full
year guidance and was at the level of 1.3%.
Interim Condensed Consolidated Statement of Financial Position
KZT mln
30-Sep-24 30-Jun-24 Change Change 31-Dec-23 Change YTD, abs Change YTD, %
Q-o-Q, abs Q-o-Q, %
Total assets 17,650,108 16,749,875 900,233 5.4% 15,494,368 2,155,740 13.9%
Cash and reserves((6)) 2,248,355 1,683,725 564,630 33.5% 1,622,181 626,174 38.6%
Amounts due from credit institutions 144,704 146,054 (1,350) (0.9%) 171,754 (27,050) (15.7%)
T-bills of MinFin & NBRK notes((7)) 2,784,832 2,626,122 158,710 6.0% 2,125,941 658,891 31.0%
Other securities & derivatives((8)) 1,539,503 1,802,581 (263,078) (14.6%) 1,614,666 (75,163) (4.7%)
Gross loan portfolio 10,884,432 10,433,521 450,911 4.3% 9,774,798 1,109,634 11.4%
Stock of provisions((9)) (556,743) (535,784) (20,959) 3.9% (489,926) (66,817) 13.6%
Net loan portfolio 10,327,689 9,897,737 429,952 4.3% 9,284,872 1,042,817 11.2%
Assets classified as held for sale 11,480 21,396 (9,916) (46.3%) 111,542 (100,062) (89.7%)
Other assets 593,545 572,260 21,285 3.7% 563,412 30,133 5.3%
Total liabilities 14,770,832 14,173,325 597,507 4.2% 13,017,414 1,753,418 13.5%
Amounts due to customers, including: 11,974,486 11,615,902 358,584 3.1% 10,929,504 1,044,982 9.6%
retail deposits 6,543,795 6,376,470 167,325 2.6% 5,828,645 715,150 12.3%
term deposits 5,581,796 5,304,080 277,716 5.2% 4,808,592 773,204 16.1%
current accounts 961,999 1,072,390 (110,391) (10.3%) 1,020,053 (58,054) (5.7%)
legal entities deposits 5,430,691 5,239,432 191,259 3.7% 5,100,859 329,832 6.5%
term deposits 3,500,441 3,634,420 (133,979) (3.7%) 3,338,099 162,342 4.9%
current accounts 1,930,250 1,605,012 325,238 20.3% 1,762,760 167,490 9.5%
Debt securities issued 818,756 657,236 161,520 24.6% 653,393 165,363 25.3%
Amounts due to credit institutions 1,203,263 1,012,134 191,129 18.9% 778,311 424,952 54.6%
Other liabilities 774,327 888,053 (113,726) (12.8%) 656,206 118,121 18.0%
Total equity 2,879,276 2,576,550 302,726 11.7% 2,476,954 402,322 16.2%
(6) Cash and cash equivalents and obligatory reserves;
(7) Treasury bonds of the Ministry of Finance of the Republic of
Kazakhstan and NBRK notes;
(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
bills of the Ministry of Finance of the Republic of Kazakhstan and NBRK notes;
(9) Allowance for expected credit losses;
As at end of 3Q 2024, total assets were up 13.9% year-to-date mainly due to
increase in amounts due to customers and amount due to credit institutions.
Compared with the YE of 2023, loans to customers were up 11.4% on a gross and
11.2% on a net basis. The increase in the gross loan portfolio was
attributable to a rise of 25.0% in retail loans, while legal entities loan
portfolio were up 5.0%.
As at the end of 3Q 2024, Stage 3 loans decreased from the level of 7.5% to
6.9% year-to-date as a result of workout of problem loans and loan portfolio
growth.
Compared with the YE 2023, the deposits of legal entities and the deposits of
individuals were up 6.5% and 12.3%, respectively, due to fund inflow from the
Bank's clients.
As at the-end of 3Q 2024, the share of KZT deposits in total corporate
deposits was 73.2% compared to 72.9% as at the YE 2023, while the share in
total retail deposits was 67.9% vs. 63.4% as at YE 2023.
Amounts due to credit institutions increased by 54.6% vs. the YE 2023, due to
increase in loans under REPO agreements and syndicated term loan for USD
300mln attracted by the Bank in September 2024.
As at the end of 3Q 2024, debt securities issued were up 25.3% year-to-date
and the Bank's debt securities portfolio was as follows:
Description of the security Nominal amount outstanding Interest rate Maturity Date
Local bonds KZT 100bn 7.5% p.a. November 2024
Local bonds KZT 131.7bn 7.5% p.a. February 2025
Subordinated coupon bonds KZT 101.1bn 9.5% p.a. October 2025
Local bonds KZT 39.1bn 12.8% p.a. July 2031
Local bonds listed at Astana USD 191mln 3.5% p.a. May 2025
International Exchange
Local bonds listed at Astana USD 300 mln 3.5% p.a. May 2025
International Exchange
Local bonds listed at Astana USD 409.7 mln 3.5% p.a. July 2025
International Exchange
As at the end of 3Q 2024, total equity of the Bank increased by 16.2% compared
to the YE 2023, mainly due to net profit earned by the Bank during 9M 2024,
which was partially offset by the payment of dividends.
The Bank's capital adequacy ratios were as follows*:
30-Sep-24 30-Jun-24 31-Mar-24 31-Dec-23 30-Sep-23
Capital adequacy ratios, unconsolidated:
Halyk Bank
k1-1 19.2% 17.6% 19.0% 19.6% 18.6%
k1-2 19.2% 17.6% 19.0% 19.6% 18.6%
k2 19.4% 17.7% 19.2% 19.9% 19.0%
Capital adequacy ratios, consolidated:
CET 1 19.0% 17.4% 19.5% 19.3% 18.2%
Tier 1 capital 19.0% 17.4% 19.5% 19.3% 18.2%
Total capital 19.1% 17.5% 19.7% 19.6% 18.5%
* 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 financial information for the nine months
ended 30 September 2024, including the notes attached thereto, are available
on Halyk Bank's website: http://halykbank.com/financial-results
(http://halykbank.com/financial-results) .
A 9M and 3Q 2024 results webcast will be hosted at 2:00pm London time/7:00pm
Almaty time (UTC +05:00) on Tuesday, 19 November 2024. A live webcast of the
presentation can be accessed via Zoom link after the registration. The
registration is open until 19 November 2024 (including), for the registration
please click here.
(https://halykbank-kz.zoom.us/webinar/register/WN_RX-HcGonQwmivPdDIR-Fyg)
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 September 2024, Halyk Bank had total assets amounting to KZT
17,650.1bn, making it the largest lender in Kazakhstan. The Bank boasts the
country's largest customer base and the most extensive branch network, with
563 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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