Halyk Bank of Kazakhstan (HSBK) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 rose 54.5% year-over-year to KZT 275,016 million, driven by strong growth in net interest and non-interest income, increased lending, transactional business, and a favorable base effect from a one-off loss in Q1 2024; adjusted net income growth was 19.1% year-over-year.

• Digital engagement expanded, with Super App active clients reaching 11.1 million and 96% of retail loans issued digitally, reinforcing leadership in Kazakhstan's retail and corporate banking.

• The bank maintained its #1 market position in net income, assets, loans, and deposits in Kazakhstan.

• Total assets reached KZT 18,855.9 billion as of 31 March 2025, up 1.7% from year-end 2024.

• Capital adequacy remained strong, with CET1, Tier 1, and total capital ratios at 19.3% as of 31 March 2025.

Financial highlights

• Net interest income rose 30.1% year-over-year to KZT 325.9 billion; net fee and commission income increased 13.4% to KZT 56.9 billion; net insurance income grew 59.8% year-over-year.

• Net interest margin improved to 7.5% from 7.0% year-over-year; average rate on interest-earning assets reached 14.4%.

• Operating expenses increased 22.2% year-over-year to KZT 69.2 billion, mainly due to salary indexation and employee benefits.

• Cost-to-income ratio decreased to 16.5% from 19.9% year-over-year.

• Total assets reached KZT 18.86 trillion, up 1.7% year-to-date; gross loan portfolio stood at KZT 12.05 trillion, up 22.8% year-over-year.

Outlook and guidance

• No change to 2025 guidance; updates expected after six-month results as tax and regulatory changes are clarified.

• Management is focused on digitalization, ecosystem expansion, and maintaining market leadership, with growth in digital channels expected to drive further revenue and client base expansion.

• Excess profit tax (10%) on certain banking activities expected for 2025 only, with limited material impact; broader tax changes effective from 2026.

• Minimum reserve requirements likely to increase, with details and timing pending regulatory decisions.

• Management is monitoring macroeconomic and geopolitical risks, including inflation and fiscal reforms, and expects to maintain a tight monetary policy environment.