Yesterday Halyk bank published its consolidated 2015 financial results. Net interest income increased by 12.9% to KZT 150 bn. Net profit rose by 5.2% yoy, to KZT 120 bn, whereas RoAE decreased by 2.7pp yoy to 24.4%. Net interest margin expanded from 5.8% to 6.2%.
Interest income increased by 21.0% mainly because of increase in average balances of loans to customers by 19.6% due to KZT devaluation in August 2015, and overall increase in interest rates on interest-earning assets during the year. Interest expense increased by 35.0% yoy due to increase in average balances of interest-bearing liabilities, partially driven by KZT devaluation in August 2015, and overall increase of interest rates on interest-bearing liabilities for 12m 2015. As a result, net interest income before impairment charge increased by 12.9% yoy to KZT 150 bn.
Operating expenses grew by 13.5% yoy mainly as a result of revision of salaries of the Bank’s employees starting from 1 July 2014 and consolidation of Altyn Bank in 4Q 2014.The Bank’s cost-to-income ratio decreased to 29.2% for in 2015 from 29.6% in 2014.
Net Loans increased by 32.0% yoy to KZT 2 176 bn (by 12.3% yoy considering KZT devaluation). Deposits increased by 64.7% yoy to KZT 3 044 bn (by 6.7% yoy considering KZT devaluation). The net loans-to-deposits ratio declined by 17.7 pp to 71.5% in 2015.
Loans from credit institutions increased by 57.0% yoy mainly because of the loans from from government entities DAMU and DBK within the framework of state programs in the 1Q 2015, as well as due to an increase in volumes of REPO transactions made through the Kazakhstan Stock Exchange in 3Q and 4Q 2015.
Share of non-performing loans dropped from 12.9% to 10.3% during 2015 due to repayments and restructuring of several corporate loans overdue by more than 90 days, bad loan write-offs and the Bank’s loan portfolio growth during 4Q 2015. As at 31 December 2015, the Bank has created IFRS-based provisions covering 90-day NPLs by 118.5%.
As of 1 January 2016 Basel Tier 1 capital adequacy ratio and total capital adequacy ratio were at 18.0% and 18.2%, respectively, compared to 20.7% and 21.0%, respectively for the beginning of 2015.
In 2016, Halyk Bank anticipates increase of credit portfolio by 12-15%. Net income for 2016 is forecasted within the range of KZT 60 bn to KZT 80 bn, while net interest margin is expected to be 5.0-5.5%.
Disclosure: Halyk Finance is a fully-owned subsidiary of Halyk Bank.