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ALMATY - Halyk Bank of Kazakhstan (LSE:HSBK; KASE:HSBK, HSBKd; AIX:HSBK, HSBK.Y), the country’s largest lender, announced a significant increase in its first-quarter net income, which soared by 54.5% compared to the same period last year. The results, released Monday, show a net income attributable to common shareholders of KZT 275,016 million for the three months ended March 31, 2025.
The bank attributed the robust growth in net income to an increase in lending and transactional businesses, as well as a base effect of one-off recognized losses from the previous year. Adjusted for this base effect, the net income growth would be 19.1%.
Interest income rose by 26.8% due to higher loan balances to customers, while interest expense increased by 23.4% as a result of growth in average balances of amounts due to customers and a larger share of KZT amounts. Despite this, net interest margin (NIM) improved to 7.5% from 7.0% a year earlier.
Fee and commission income also saw a 13.6% increase, driven by an increased number of clients and growth in client transactional activity. Net fee and commission income climbed 13.4% due to a rise in net transactional income of legal entities, as well as fees on letters of credit and guarantees issued.
A notable change in the bank’s income statement was the positive shift in other expense/non-interest income, which was significantly impacted by the previous year’s one-off losses.
Operating expenses went up by 22.2% primarily due to salary indexations and other employee benefits, including long-term incentive program costs. However, the bank’s cost-to-income ratio improved from 19.9% to 16.5%, reflecting higher operating income.
The bank’s total assets increased by 1.7% since the end of 2024, amounting to KZT 18,855.9 billion as of March 31, 2025. The gross loan portfolio showed a marginal increase, with retail loans growing by 2.3% and loans to legal entities decreasing by 1.0%. Stage 3 loans, which indicate the highest level of credit risk, rose from 6.3% to 6.8%.
In terms of liabilities, the amounts due to customers slightly decreased, influenced by the appreciation of the Kazakhstani tenge against the US dollar. Amounts due to credit institutions surged by 40.9% due to an increase in loans under repurchase agreements.
The bank’s total equity grew by 7.0% mainly because of the net profit earned in the first quarter of 2025. Capital adequacy ratios remained well above the minimum regulatory requirements.
The information in this article is based on a press release statement from Halyk Bank.
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