15 March 2024
Joint Stock Company 'Halyk
Bank of Kazakhstan'
Consolidated financial
results
for the year ended 31
December 2023
Joint Stock Company 'Halyk Bank of
Kazakhstan' and its subsidiaries (together "the Bank")
(LSE: HSBK) releases consolidated financial
information and independent auditors' report for the year ended 31
December 2023.
Consolidated income
statements
KZT
mln
|
|
12M
2023
|
12M 2022
|
Y-o-Y.%
|
4Q 2023
|
4Q 2022
|
Y-o-Y,%
|
|
Interest income
|
1,669,782
|
1,247,648
|
33.8%
|
463,498
|
360,129
|
28.7%
|
|
Interest expense
|
(859,285)
|
(578,182)
|
48.6%
|
(258,335)
|
(171,597)
|
50.5%
|
|
Net
interest income before credit loss expense
|
810,497
|
669,466
|
21.1%
|
205,163
|
188,532
|
8.8%
|
|
Fee and commission income
|
200,060
|
180,066
|
11.1%
|
49,533
|
51,404
|
(3.6%)
|
|
Fee and commission expense
|
(99,704)
|
(96,099)
|
3.8%
|
(28,617)
|
(25,154)
|
13.8%
|
|
Net
fee and commission income
|
100,356
|
83,967
|
19.5%
|
20,916
|
26,250
|
(20.3%)
|
|
Net insurance
income(1)
|
52,265
|
27,630
|
89.2%
|
25,918
|
35,620
|
(27.2%)
|
|
Net foreign exchange gain
|
90,114
|
177,893
|
(49.3%)
|
28,919
|
46,226
|
(37.4%)
|
|
Net gain/(loss) on financial assets
and liabilities at fair value through profit or loss
|
72,594
|
(525)
|
(X138.3)
|
32,012
|
(10,264)
|
(X3.1)
|
|
Net realised loss from financial
assets at fair value through other comprehensive income
|
(4,055)
|
(1,275)
|
(X3.2)
|
(1,681)
|
(160)
|
X10.5
|
|
Other income/expense, share in
profit of associate and income from non-banking
activities
|
(1,490)
|
13,850
|
(110.8%)
|
(47,127)
|
(25,476)
|
85.0%
|
|
Expected credit loss
expense
|
(90,665)
|
(106,929)
|
(15.2%)
|
(18,267)
|
(12,286)
|
48.7%
|
|
Recovery of other credit loss
expense
|
1,563
|
78
|
X20.0
|
(42)
|
528
|
(108%)
|
|
Operating
expenses(2)
|
(216,405)
|
(188,959)
|
14.5%
|
(62,257)
|
(48,735)
|
27.7%
|
|
Income tax expense
|
(121,338)
|
(105,718)
|
14.8%
|
(27,411)
|
(41,608)
|
(34.1%)
|
|
Net
profit
|
693,436
|
569,478
|
21.8%
|
156,143
|
158,627
|
(1.6%)
|
|
Non-controlling interest
|
1
|
1
|
0.0%
|
-
|
1
|
100.0%
|
|
Net
profit attributable to common shareholders
|
693,435
|
569,477
|
21.8%
|
156,143
|
158,626
|
(1.6%)
|
|
|
|
|
|
|
|
|
|
Net
interest margin, p.a.
|
6.2%
|
5.6%
|
|
6.1%
|
5.9%
|
|
|
Return on average equity, p.a.
|
32.5%
|
32.4%
|
|
27.1%
|
33.4%
|
|
|
Return on average assets, p.a.
|
4.8%
|
4.3%
|
|
4.2%
|
4.5%
|
|
|
Cost-to-income ratio
|
19.2%
|
19.0%
|
|
23.2%
|
17.2%
|
|
|
Cost of risk on loans to customers, p.a.
|
1.0%
|
1.2%
|
|
0.7%
|
0.4%
|
|
(1) Insurance revenue less insurance
service expense and net reinsurance
expense;
(2)
Including reversal of/(loss from) impairment of non-financial
assets and reversal of impairment loss of property, plant and
equipment
Starting from 1 January 2023, Halyk
Group's financial statements have been transited to IFRS 17
"Insurance Contracts" from IFRS 4.
Moreover, in preparing the
consolidated financial statements 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, accordingly, were measured at historical
cost. As a result, the Group revalued these financial instruments
and recognized prior period adjustments.
All above mentioned resulted in
recalculation of certain balance sheet items as at 31 December 2022
and 1 January 2022 and P&L items for 12M 2022 and retained
earnings of prior years. All of the ratios were also recalculated
accordingly.
For more detailed information please
refer to Halyk Group's Consolidated Financial Statements and
Independent Auditors' Report for the Year Ended 31 December 2023,
note #4b.
Net
profit attributable to common shareholders
increased to KZT 693.4bn in 12M 2023, up 21.8%
compared with KZT 569.5bn in 12M 2022 mainly due to significant
increase in lending and transactional businesses despite one-off
negative effect from the accelerated amortization of discount (net
of tax effect) in the amount of KZT 24.8bn on the deposit of
Kazakhstan Sustainability Fund (KSF), which was partially
prepaid by the Bank in December 2023 (partial prepayment of state
support funds received by KKB in the form of a deposit from KSF in
2015).
Interest income for 12M 2023
increased by 33.8% vs. 12M 2022 mainly due to increase in average
rate and balances of loans to customers.
Interest expense for 12M 2023
increased by 48.6% vs. 12M 2022 mainly as a result of the growth in
average rate on amounts due to customers and increase in the share
of KZT amounts due to customer, as well as one-off negative effect
from above mentioned accelerated amortization of discount in the
amount of KZT 24.8 bn on the deposit of KSF. Consequently, net interest income for 12M 2023 grew by 21.1%
vs. 12M 2022.
In 12M 2023, net interest margin was affected by the
increase in average rates on both loans to customers and amounts
due to customers following increase in the market 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 6.2% p.a. for 12M 2023 compared to
5.6% p.a. for 12M 2022.
Moreover, net interest margin in 12M
2023 and 4Q 2023 was negatively affected by the above mentioned
accelerated amortization of discount in the amount of KZT 24.8bn on
the deposit of KSF. Excluding this effect, net interest margin
would have amounted to 6.5% p.a. for 12M 2023 and 7.0% p.a. for 4Q
2023.
In 12M 2023 compared to 12M 2022,
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 12M 2023 increased by
19.5% vs. 12M 2022 due to increase in net transactional income of
both legal entities and individuals(3) as well as in fees on
letters of credit and guarantees issued.
Net
fee and commission income for 4Q
2023 decreased by 20.3% vs. 4Q 2022 due to increased expenses on
loyalty program bonuses and deposit insurance fees payable to the
Kazakhstan Deposit Insurance Fund.
Other non-interest income (4) decreased by 17.3% for 12M
2023 vs. 12M 2022 mainly due to lower net foreign exchange gain
amid higher volatility of exchange rates and interest rates in 12M
2022.
Net
insurance income (5) for 12M 2023 improved by 89.2% vs. 12M
2022, due to overall life and general
insurance business growth.
Operating expenses for 12M 2023
increased by 14.5% vs. 12M 2022 mainly due to the indexation of
salaries and other employee benefits starting from 1 March 2023, as
well as increase in
IT investments and expenses for card business
development.
Cost of risk on loans to
customers for 12M 2023 was at normalized level within the scope of
our full year guidance and was at the level of
1.0%.
The cost-to-income ratio equalled 19.2% in
12M 2023, compared with 19%
in 12M 2022 due to higher operating
expenses for 12M
2023.
(3)
Transactional income of individuals, less transactional expenses of
individuals and less loyalty program bonuses;
(4) Other non-interest income (net
gain/(loss) on financial assets and liabilities at fair value
through profit or loss, net realised loss from financial assets at
fair value through other comprehensive income, net foreign exchange
gain, share in profit of associate, income on non-banking
activities, other expense, loss from impairment of assets held for
sales, loss on disposal of subsidiaries)
(5) Insurance revenue less insurance
service expense and net reinsurance
expense;
Statement of
financial position review
KZT
mln
|
|
31-Dec-23
|
|
30-Sep-23
|
|
Change
Q-o-Q,
%
|
|
31-Dec-22
|
|
Change, abs
|
|
Change
YTD, %
|
|
Total assets
|
15,494,368
|
|
14,249,649
|
|
8.7%
|
|
14,395,102
|
|
1,099,266
|
|
7.6%
|
|
Cash and reserves
|
1,622,181
|
|
1,010,078
|
|
60.6%
|
|
2,288,375
|
|
(666,194)
|
|
(29.1%)
|
|
Amounts due from credit
institutions
|
171,754
|
|
146,010
|
|
17.6%
|
|
135,655
|
|
36,099
|
|
26.6%
|
|
T-bills & NBRK notes
|
2,125,941
|
|
2,216,148
|
|
(4.1%)
|
|
1,920,189
|
|
205,752
|
|
10.7%
|
|
Other securities &
derivatives
|
1,614,666
|
|
1,678,962
|
|
(3.8%)
|
|
1,658,100
|
|
(43,434)
|
|
(2.6%)
|
|
Gross loan portfolio
|
9,774,798
|
|
9,062,263
|
|
7.9%
|
|
8,280,290
|
|
1,494,508
|
|
18.0%
|
|
Stock of provisions
|
(489,926)
|
|
(471,389)
|
|
3.9%
|
|
(422,388)
|
|
(67,538)
|
|
16.0%
|
|
Net loan portfolio
|
9,284,872
|
|
8,590,874
|
|
8.1%
|
|
7,857,902
|
|
1,426,970
|
|
18.2%
|
|
Other assets
|
563,412
|
|
575,246
|
|
(2.1%)
|
|
510,958
|
|
52,454
|
|
10.3%
|
|
Assets held for sale
|
111,542
|
|
32,331
|
|
X3.5
|
|
23,923
|
|
87,619
|
|
X4.7
|
|
Total liabilities
|
13,017,414
|
|
12,068,377
|
|
7.9%
|
|
12,382,860
|
|
634,554
|
|
5.1%
|
|
Total deposits,
including:
|
10,929,504
|
|
9,915,794
|
|
10.2%
|
|
10,512,048
|
|
417,456
|
|
4.0%
|
|
retail deposits
|
5,828,645
|
|
5,330,410
|
|
9.3%
|
|
5,243,764
|
|
584,881
|
|
11.2%
|
|
term deposits
|
4,808,592
|
|
4,421,606
|
|
8.8%
|
|
4,351,846
|
|
456,746
|
|
10.5%
|
|
current accounts
|
1,020,053
|
|
908,804
|
|
12.2%
|
|
891,918
|
|
128,135
|
|
14.4%
|
|
corporate deposits
|
5,100,859
|
|
4,585,384
|
|
11.2%
|
|
5,268,284
|
|
(167,425)
|
|
(3.2%)
|
|
term deposits
|
3,338,099
|
|
2,968,099
|
|
12.5%
|
|
2,898,924
|
|
439,175
|
|
15.1%
|
|
current accounts
|
1,762,760
|
|
1,617,285
|
|
9.0%
|
|
2,369,360
|
|
(606,600)
|
|
(25.6%)
|
|
Debt securities issued
|
653,393
|
|
677,452
|
|
(3.6%)
|
|
462,817
|
|
190,576
|
|
41.2%
|
|
Amounts due to credit
institutions
|
778,311
|
|
885,797
|
|
(12.1%)
|
|
878,665
|
|
(100,354)
|
|
(11.4%)
|
|
Other liabilities
|
656,206
|
|
589,334
|
|
11.3%
|
|
529,330
|
|
126,876
|
|
24.0%
|
|
Equity
|
2,476,954
|
|
2,181,272
|
|
13.6%
|
|
2,012,242
|
|
464,712
|
|
23.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at YE 2023, total assets were up 7.6% year-to-date
due to increase in amounts due to customers and debt securities
issued.
Compared with the end of 2022,
loans to customers were up
18% on a gross and 18.2% on a net basis. The increase in the gross
loan portfolio was attributable to a rise of 13.4% in corporate,
25.1% in SME and 22.7% in retail loans.
Despite some increase in absolute
terms, Stage 3 loans
decreased to 7.5% as at the end of 4Q 2023 due to loan portfolio
growth.
Compared with the end of 3Q 2023,
the deposits of legal
entities and the deposits
of individuals were up 11.2% and 9.3%,
respectively, due to fund inflow from the Bank's
clients.
As at the-end of 12M 2023, the share
of KZT deposits in total corporate deposits was 72.9% compared to
60.6% as at the YE 2022, while the share in total retail deposits
was 63.4% vs. 52.6% as at YE 2022.
As at the end of 12M 2023,
debt securities
issued were up 41.2% year-to-date,
mainly due to the issuance of bonds listed on AIX
with a coupon rate of 3.5% in May and July 2023. 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
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 listed at
Astana
International Exchange
|
USD
185.5mln
|
3.5%
p.a.
|
May
2025
|
|
Local bonds listed at
Astana
International Exchange
|
USD
299.9mln
|
3.5%
p.a.
|
May
2025
|
|
Local bonds listed at
Astana
International Exchange
|
USD
229.5mln
|
3.5%
p.a.
|
July
2025
|
In 12M 2023, total equity of the Bank increased by
KZT 464.7bn or by 23.1% compared to the YE 2022, mainly due to net
profit earned by the Bank during 12M 2023.
The Bank's capital adequacy ratios
were as follows*:
|
|
31-Dec-23
|
30-Sep-23
|
30-Jun-23
|
31-Mar-23
|
31-Dec-22
|
|
Capital adequacy ratios, unconsolidated:
|
|
Halyk Bank
|
|
k1-1
|
19.6%
|
18.6%
|
18.1%
|
20.2%
|
19.3%
|
|
k1-2
|
19.6%
|
18.6%
|
18.1%
|
20.2%
|
19.3%
|
|
k2
|
19.9%
|
19.0%
|
18.4%
|
20.6%
|
19.7%
|
|
Capital adequacy ratios, consolidated:
|
|
CET 1
|
19.3%
|
18.2%
|
17.9%
|
20.2%
|
19.2%
|
|
Tier 1 capital
|
19.3%
|
18.2%
|
17.9%
|
20.2%
|
19.2%
|
|
Total capital
|
19.6%
|
18.5%
|
18.3%
|
20.5%
|
19.5%
|
* 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 consolidated financial
information for the nine months ended 31 December 2023, including
the notes attached thereto, are available on Halyk Bank's
website: http://halykbank.com/financial-results.
A 12M & 4Q 2023 results webcast
will be hosted at 2:30pm London time/7:30pm Almaty time (UTC
+05:00) on Monday, 18 March 2024. A live webcast of the
presentation can be accessed via Zoom link after the registration.
The registration is open until 18 March 2024
(including), for the registration
please
click here.
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 15,494.4bn
as at 31 December, 2023, Halyk Bank is Kazakhstan's leading
lender. The Bank has the largest customer base and broadest branch
network in Kazakhstan, with 570
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
|
|
Rustam Telish
|
+7 727 330 15 66
RustamT3@halykbank.kz
|
|
Nurgul Mukhadi
|
+7 727 330 16 77
NyrgylMy@halykbank.kz
|