19 August 2024
Joint Stock Company 'Halyk
Bank of Kazakhstan'
Interim condensed
consolidated financial results
for the six months ended 30
June 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 six months ended 30 June
2024.
Interim Condensed
Consolidated Statement of Profit or Loss
KZT
mln
|
|
1H
2024
|
1H
2023
|
Y-o-Y,%
|
2Q
2024
|
2Q
2023
|
Y-o-Y,%
|
|
Interest income(1)
|
1,012,008
|
780,462
|
29.7%
|
515,754
|
400,193
|
28.9%
|
|
Interest expense
|
(500,745)
|
(393,555)
|
27.2%
|
(258,727)
|
(205,378)
|
26.0%
|
|
Net
interest income before credit loss expense
|
511,263
|
386,907
|
32.1%
|
257,027
|
194,815
|
31.9%
|
|
Fee and commission income
|
99,730
|
98,689
|
1.1%
|
49,656
|
51,284
|
(3.2%)
|
|
Fee and commission expense
|
(48,277)
|
(46,970)
|
2.8%
|
(23,695)
|
(24,484)
|
(3.2%)
|
|
Fees and commissions, net
|
51,453
|
51,719
|
(0.5%)
|
25,961
|
26,800
|
(3.1%)
|
|
Net insurance income (2)
|
14,802
|
28,597
|
(48.2%)
|
5,126
|
9,249
|
(44.6%)
|
|
Net gain on foreign exchange
operations, financial assets and
liabilities(3)
|
90,049
|
59,653
|
51.0%
|
44,360
|
30,727
|
44.4%
|
|
Other expense/non-interest income
(4)
|
(41,921)
|
36,862
|
(213.7%)
|
8,944
|
15,668
|
(42.9%)
|
|
Expected credit loss expense and
recovery of other credit loss expense
|
(65,747)
|
(31,102)
|
x2.1
|
(46,753)
|
(17,535)
|
x2.7
|
|
Operating expenses
(5)
|
(115,858)
|
(99,578)
|
16.3%
|
(59,217)
|
(53,092)
|
11.5%
|
|
Income tax expense
|
(64,948)
|
(62,243)
|
4.3%
|
(34,319)
|
(28,271)
|
21.4%
|
|
Net income
|
379,093
|
370,815
|
2.2%
|
201,129
|
178,361
|
12.8%
|
|
Non-controlling interest
|
-
|
1
|
-
|
-
|
1
|
-
|
|
Net
income attributable to common shareholders
|
379,093
|
370,814
|
2.2%
|
201,129
|
178,360
|
12.8%
|
|
|
|
|
|
|
|
|
|
Net
interest margin, p.a.
|
7.0%
|
6.0%
|
|
6.9%
|
6.0%
|
|
|
Return on average equity, p.a.
|
29.9%
|
35.8%
|
|
31.7%
|
33.8%
|
|
|
Return on average assets, p.a.
|
4.8%
|
5.2%
|
|
5.0%
|
5.0%
|
|
|
Cost-to-income ratio
|
18.5%
|
17.7%
|
|
17.3%
|
19.1%
|
|
|
Cost of risk on loans to customers, p.a.
|
1.3%
|
0.9%
|
|
1.7%
|
1.0%
|
|
(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 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 six months ended 30 June 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
six months ended 30 June 2024, note #4b.
Net
income attributable to common shareholders
for 1H 2024 is up 2.2% year-on-year. It was
negatively impacted by one off effect for KZT 79.3bn (pre-tax) vs.
1H 2023 for KZT 14.5bn (pre-tax) related to accelerated repayment
of Kazakhstan Sustainability Fund (KSF) deposit. It was also
affected by the increase in credit loss expense.
Interest income(1) for 1H 2024 was up 29.7% vs.
1H 2023 mainly due to increase in average rate and balances of
loans to customers.
Interest expense for 1H 2024
increased by 27.2% vs. 1H 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 1H 2024 grew by 32.1% vs. 1H 2023.
In 1H 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.
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 increase of USD interest rates, as well
as increase in the share of KZT interest-earning cash and cash
equivalents. As a result, net interest margin has grown to 7.0%
p.a. for 1H 2024 compared to 6.0% p.a. for 1H 2023.
Fee
and commission income in 1H 2024 vs.
1H 2023 increased by 1.1%. 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 almost doubled due to
increased transactional activity of retail clients and growing
share of QR payments.
Fee
and commission expense in 1H 2024
vs. 1H 2023 grew by 2.8% 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 increased number of
clients and the growth of clients' transactional activity, the
net fee and commission
income for 1H 2024 decreased by 0.5% vs. 1H 2023.
Other expense/non-interest income
(4) in 1H 2024
was negatively impacted by one off recognized loss for KZT 66.1bn in view of expected
early repayment of the deposit of KSF in accordance with the
IFRS.
Operating expenses(5) for 1H 2024 increased by
16.3% vs. 1H 2023 mainly
due to the indexation of salaries and other employee
benefits starting from 1 May 2024, and
payment of bonuses for high grades in
schools in the frame of strategic partnership with leading
educational platform 'Kundelik'.
The cost-to-income ratio equalled 18.5% in
1H 2024, compared with 17.7%
in 1H 2023 due to higher operating
expense for 1H
2024.
Cost of risk in 1H 2024
increased to 1.3% vs. 0.9% in 1H 2023, as a result of a greater
recovery and repayment of corporate problem indebtedness in 1H 2023
and recognition of higher provisions related to some loans to legal
entities in 1H 2024.
Interim Condensed
Consolidated Statement of Financial Position
KZT
mln
|
|
30-Jun-24
|
|
31-Mar-24
|
|
Change
Q-o-Q, %
|
|
31-Dec-23
|
|
Change, abs
|
|
Change
YTD, %
|
|
Total assets
|
16,749,875
|
|
15,910,944
|
|
5.3%
|
|
15,494,368
|
|
1,255,507
|
|
8.1%
|
|
Cash and
reserves(6)
|
1,683,725
|
|
1,873,511
|
|
(10.1%)
|
|
1,622,181
|
|
61,544
|
|
3.8%
|
|
Amounts due from credit
institutions
|
146,054
|
|
154,033
|
|
(5.2%)
|
|
171,754
|
|
(25,700)
|
|
(15.0%)
|
|
T-bills of MinFin &
NBRK notes(7)
|
2,626,122
|
|
2,264,214
|
|
16.0%
|
|
2,125,941
|
|
500,181
|
|
23.5%
|
|
Other securities &
derivatives(8)
|
1,802,581
|
|
1,595,270
|
|
13.0%
|
|
1,614,666
|
|
187,915
|
|
11.6%
|
|
Gross loan portfolio
|
10,433,521
|
|
9,811,644
|
|
6.3%
|
|
9,774,798
|
|
658,723
|
|
6.7%
|
|
Stock of provisions(9)
|
(535,784)
|
|
(512,352)
|
|
4.6%
|
|
(489,926)
|
|
(45,858)
|
|
9.4%
|
|
Net loan portfolio
|
9,897,737
|
|
9,299,292
|
|
6.4%
|
|
9,284,872
|
|
612,865
|
|
6.6%
|
|
Assets classified as held for
sale
|
21,396
|
|
125,807
|
|
(83.0%)
|
|
111,542
|
|
(90,146)
|
|
(80.8%)
|
|
Other assets
|
572,260
|
|
598,817
|
|
(4.4%)
|
|
563,412
|
|
8,848
|
|
1.6%
|
|
Total liabilities
|
14,173,325
|
|
13,246,474
|
|
7.0%
|
|
13,017,414
|
|
1,155,911
|
|
8.9%
|
|
Amounts due to customers,
including:
|
11,615,902
|
|
11,211,283
|
|
3.6%
|
|
10,929,504
|
|
686,398
|
|
6.3%
|
|
retail deposits
|
6,376,470
|
|
5,850,404
|
|
9.0%
|
|
5,828,645
|
|
547,825
|
|
9.4%
|
|
term deposits
|
5,304,080
|
|
4,962,819
|
|
6.9%
|
|
4,808,592
|
|
495,488
|
|
10.3%
|
|
current accounts
|
1,072,390
|
|
887,585
|
|
20.8%
|
|
1,020,053
|
|
52,337
|
|
5.1%
|
|
legal entities deposits
|
5,239,432
|
|
5,360,879
|
|
(2.3%)
|
|
5,100,859
|
|
138,572
|
|
2.7%
|
|
term deposits
|
3,634,420
|
|
3,809,577
|
|
(4.6%)
|
|
3,338,099
|
|
296,321
|
|
8.9%
|
|
current accounts
|
1,605,012
|
|
1,551,302
|
|
3.5%
|
|
1,762,760
|
|
(157,749)
|
|
(8.9%)
|
|
Debt securities issued
|
657,236
|
|
655,735
|
|
0.2%
|
|
653,393
|
|
3,843
|
|
0.6%
|
|
Amounts due to credit
institutions
|
1,012,134
|
|
669,815
|
|
51.1%
|
|
778,311
|
|
233,823
|
|
30.0%
|
|
Other liabilities
|
888,053
|
|
709,641
|
|
25.1%
|
|
656,206
|
|
231,847
|
|
35.3%
|
|
Total equity
|
2,576,550
|
|
2,664,470
|
|
(3.3%)
|
|
2,476,954
|
|
99,596
|
|
4.0%
|
(6)
Cash and cash equivalents and obligatory reserves ;
(7)
Treasury bills 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 2Q 2024, total assets were up 8.1% year-to-date
due to increase in amounts due to
customers.
Compared with the YE of 2023,
loans to customers were up
6.7% on a gross and 6.6% on a net basis. The increase in the gross
loan portfolio was attributable to a rise of 15.3% in retail loans,
while legal entities loan portfolio were up 2.7%.
As at the end of 2Q 2024,
Stage 3 loans decreased
from the level of 7.5% to 7.2% year-to-date as a result of workout
of problem loans and loan portfolio growth.
Compared with the end of 1Q 2024,
the deposits of legal
entities were down 2.3% mainly
due to one off negative effect of full
prepayment of the KSF deposit and partial withdrawal of funds by
the Bank's customers to finance their ongoing needs (including tax
payments). The deposits of individuals were up 9.0% due to fund inflow from the Bank's clients.
As at the-end of 2Q 2024, the share
of KZT deposits in total corporate deposits was 71.8% compared to
72.9% as at the YE 2023, while the share in total retail deposits
was 66.9% vs. 63.4% as at YE 2023.
As at the end of 2Q 2024,
debt securities
issued were slightly up 0.6%
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 listed at
Astana
International Exchange
|
USD 191mln
|
3.5%
p.a.
|
May
2025
|
|
Local bonds listed at
Astana
International Exchange
|
USD
298mln
|
3.5%
p.a.
|
May
2025
|
|
Local bonds listed at
Astana
International Exchange
|
USD
184.8mln
|
3.5%
p.a.
|
July
2025
|
As at the end of 2Q 2024,
total equity of the Bank
increased by 4.0% compared to the YE 2023, mainly due to net profit
earned by the Bank during 1H 2024, which was partially offset by
the payment of dividends.
The Bank's capital adequacy ratios
were as follows*:
|
|
30-Jun-24
|
31-Mar-24
|
31-Dec-23
|
30-Sep-23
|
30-Jun-23
|
|
Capital adequacy ratios, unconsolidated:
|
|
Halyk Bank
|
|
k1-1
|
17.6%
|
19.0%
|
19.6%
|
18.6%
|
18.1%
|
|
k1-2
|
17.6%
|
19.0%
|
19.6%
|
18.6%
|
18.1%
|
|
k2
|
17.7%
|
19.2%
|
19.9%
|
19.0%
|
18.4%
|
|
Capital adequacy ratios, consolidated:
|
|
CET 1
|
17.4%
|
19.5%
|
19.3%
|
18.2%
|
17.9%
|
|
Tier 1 capital
|
17.4%
|
19.5%
|
19.3%
|
18.2%
|
17.9%
|
|
Total capital
|
17.5%
|
19.7%
|
19.6%
|
18.5%
|
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 interim condensed consolidated
financial information for the six months ended 30 June 2024,
including the notes attached thereto, are available on Halyk Bank's
website: http://halykbank.com/financial-results.
A 1H and 2Q 2024 results webcast
will be hosted at 3:00pm London time/7:00pm Almaty time (UTC
+05:00) on Tuesday, 20 August 2024. A live webcast of the
presentation can be accessed via Zoom link after the registration.
The registration is open until 20 August 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, asset
management and lifestyle services. 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 16,749.9bn
as at 30 June 2024, Halyk
Bank is Kazakhstan's leading lender. The Bank has the largest
customer base and broadest branch network in Kazakhstan, with 568
branches and outlets across the country. The Bank also 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
|