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 Q-o-Q, abs |
|
Change Q-o-Q, % |
|
31-Dec-23 |
|
Change YTD, abs |
|
Change YTD, % |
|
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 International Exchange |
USD 191mln |
3.5% p.a. |
May 2025 |
|
Local bonds listed at Astana International Exchange |
USD 300 mln |
3.5% p.a. |
May 2025 |
|
Local bonds listed at Astana International Exchange |
USD 409.7 mln |
3.5% p.a. |
July 2025 |
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.
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.
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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