In This Article:
Release Date: May 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Halyk Bank of Kazakhstan JSC (STU:H4L1) reported a 30% year-on-year increase in net interest income for Q1 2025.
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The bank's digital ecosystem, particularly the Helix Superra app, saw significant growth with a 30% increase in transaction volume and 7.7 million monthly active users.
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Halyk Bank holds a strong market position with a 28.8% market share in deposits and a 20% market share in retail loans in Kazakhstan.
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The B2B segment showed robust performance with a 22.4% growth in the corporate loan book and a 29% increase in the number of payments processed.
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The bank's net interest margin improved to 7.5% in Q1 2025, up from 7% in Q1 2024, indicating efficient interest income management.
Negative Points
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There was a slight increase in non-performing loans (NPLs), which rose from 6.3% to 6.8% due to a moratorium on selling problem retail loans to collection agencies.
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The bank faces potential impacts from a new tax code, including a proposed 10% tax on excess profits, which could affect future earnings.
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Operating expenses increased by 22.2% year-on-year, driven by salary indexation and employee benefits, impacting the cost-to-income ratio.
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Retail loan growth was slower in Q1 2025 compared to previous years, partly due to economic challenges and inflationary pressures.
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The bank's ability to manage retail NPLs is constrained by regulatory restrictions, potentially affecting the NPL ratio and cost of risk.
Q & A Highlights
Q: Can you give us a sense of the impact of the new tax code on your SME loan book growth and quality? A: The new tax code discussions are ongoing, with some changes potentially affecting 2025 results, but most changes will impact from 2026. A proposed 10% tax on excess profits, including state securities and repo transactions, is being discussed. The exact impact is unclear, but it's expected to be immaterial in the context of overall bank results. (Unidentified_4)
Q: Do you see a need to revise your guidance for this year given the changes to the tax regime? A: We typically update guidance after publishing six-month results. Current tax code discussions are ongoing, and without final wording, updating guidance is premature. Broader tax code changes will be implemented from January 1, 2026, affecting operations from 2026, not 2025. (Unidentified_4)
Q: Why did the regulator impose a ban on selling retail NPLs to collection agencies, and how does it affect your NPL ratio and cost of risk? A: The moratorium was implemented on April 1, 2024, lasting until April 1, 2026, complicating NPL management by delaying cash flow realization. This has impacted the NPL ratio, but we do not see deterioration in portfolio quality. We expect future retail loans to have higher quality due to tightened credit policies. (Unidentified_9)