According to the 2Q2015 results, released on August 17, Halyk Bank earned T28.3bn (RoAE 23.7%) of profit (21,5% above consensus), up 8.4% YoY. The rise in net income was mostly attributable to higher net interest income (+18,6% YoY) and non-interest income (+18,1% YoY). Net interest income increased thanks to the growth of net loans in the 1H2015 (+6.7%YtD and +15.3% YoY ) and higher average loan interest rates (12.5% in the 1H2015 against 12.0% a year earlier). Net interest margin was almost flat QoQ and a percentage point higher than YoY.
Asset quality indicators showed mixed results. The share of NPLs decreased slightly to 13.3% in June from 13.6% in March as a result of an increase of loan portfolio. Cost of risk was up to 0.2% (well below Halyk’s FY2015 forecast of 1.0%) from minus 0.3% in the 1Q2015. The share of provisions dropped to 13.8% (-0.6pp QoQ). The bank collected in cash 91.5% of interest accrued in the 1H2015, compared to 90.5% in the 1H2014.
Net fee and commission income rose by 12,1% YoY to T10.9bn, while insurance business income surged by 31,0% YoY to T6.0bn. Cost to income ratio increased to 30.3% in the 1H2015 from 26.8% a year earlier as a result of deconsolidation of pension fund and consolidation of Altyn Bank.
Deposits decreased by 0.5% YtD due to withdrawals of time deposits by both corporate and retail clients. The bank issued tenge bonds in the amount of T132bn to ENPF during 1H2015 and received T24bn loans from other government-related entities.
The bank reiterated its FY guidance on cost of risk (1.0%), net profit (T100bn) and growth of net loans of 10-12%.
Disclosure: Halyk Finance is a fully-owned subsidiary of Halyk Bank.