Profit up 14.9% as lending and fees do the heavy lifting
Halyk Bank has reported net income attributable to common shareholders of KZT 1,058,417 million for 2025, up 14.9% year-on-year. The uplift was driven by stronger lending, increased client activity in payments, and a solid year for insurance. There was also a helpful base effect – 2024 included a one-off loss linked to the early repayment of a KSF deposit, which did not repeat.
The fourth quarter was softer, with net income of KZT 248,484 million, down 11.9% versus 4Q 2024. Even so, full-year returns stayed punchy, backed by disciplined costs and robust balance sheet growth.
Revenue engines: higher interest, healthy fees, steady insurance
Interest income rose 24.1% to KZT 2,694,957 million, mainly from bigger average loan balances as the Bank expanded its book. Interest expense climbed faster at 32.4% to KZT 1,407,219 million as funding repriced upward and KZT-denominated deposits grew their share. Net interest income before credit losses still advanced 16.2% to KZT 1,287,738 million.
Fee and commission income delivered another dependable year. Net fees rose 11.9% to KZT 140,149 million, reflecting more clients and higher transactional activity across both individuals and corporates. Net insurance income increased 26.1% to KZT 62,964 million for the year, though the fourth quarter was weaker year-on-year.
Other non-interest lines swung positive, helped by the lack of 2024’s KSF-related one-off loss. Trading and FX were modestly lower year-on-year.
Margins, costs and credit quality: the moving parts
Net interest margin (NIM) eased to 7.1% from 7.2%. Management cites new minimum reserve requirement coefficients and faster repricing of liabilities than assets after a higher base rate. In short, funding costs ran ahead of asset yields.
Operating expenses rose 16.9% to KZT 307,996 million, reflecting salary indexation, a long-term incentive programme, and IT development. Despite the investment, the cost-to-income ratio improved slightly to 17.5% from 17.6% thanks to stronger operating income. That is an excellent efficiency level by any standard.
Credit costs normalised higher: expected credit loss expense increased 21.6% to KZT 156,208 million, with cost of risk at 1.4% versus 1.2% in 2024. Stage 3 loans – essentially non-performing under IFRS 9 – increased to 7.7% by end-4Q 2025. Two factors were flagged: a moratorium on selling problem retail loans to collection agencies until May 2026 and a few corporates migrating from Stage 2 to Stage 3.
Returns remained strong. Return on average equity was 32.6% (2024: 34.0%), and return on average assets was 5.4% (2024: 5.5%).
Balance sheet: loans and deposits power ahead
Total assets grew 12.7% year-to-date to KZT 20,908,456 million. The loan book led the charge: gross loans were up 13.9% to KZT 13,714,721 million, with retail loans up 10.8% and corporate loans up 15.5% on a gross basis. Net loans rose 14.3%.
Customer funding stayed solid. Deposits increased 10.4% to KZT 14,338,804 million, with individuals’ deposits up 10.8% and corporate deposits up 9.9%. The mix tilted further to the local currency: KZT deposits were 71.7% of total, up from 69.1% at YE 2024. Within corporates, term deposits grew strongly while current accounts fell, signalling a shift to interest-bearing balances as rates moved.
Amounts due to credit institutions rose 56.0% year-to-date, driven by higher REPO borrowings. Debt securities issued increased 10.3%, with the portfolio including local floating-rate KZT bonds and several USD bonds maturing in 2027. Total equity climbed 14.1% to KZT 3,500,351 million, powered by retained profit.
Capital remains a high point. On an unconsolidated basis, Halyk’s k1-1, k1-2 and k2 ratios were all 18.9% at year-end, comfortably above minimums of 9.5%, 10.5% and 12% respectively.
Key numbers at a glance
| Metric | 12M 2025 | 12M 2024 | YoY |
|---|---|---|---|
| Net income attributable to common shareholders | KZT 1,058,417m | KZT 920,988m | +14.9% |
| Net interest income (pre-credit loss) | KZT 1,287,738m | KZT 1,107,910m | +16.2% |
| Net fee and commission income | KZT 140,149m | KZT 125,284m | +11.9% |
| Net insurance income | KZT 62,964m | KZT 49,932m | +26.1% |
| Operating expenses | KZT 307,996m | KZT 263,373m | +16.9% |
| Net interest margin (NIM) | 7.1% | 7.2% | – |
| Return on average equity | 32.6% | 34.0% | – |
| Cost-to-income ratio | 17.5% | 17.6% | – |
| Cost of risk on loans | 1.4% | 1.2% | – |
| Total assets | KZT 20,908,456m | KZT 18,548,414m | +12.7% |
| Gross loan portfolio | KZT 13,714,721m | KZT 12,038,868m | +13.9% |
| Amounts due to customers | KZT 14,338,804m | KZT 12,990,043m | +10.4% |
| Total equity | KZT 3,500,351m | KZT 3,068,049m | +14.1% |
| Stage 3 loans (year-end) | 7.7% | Not disclosed | – |
Definitions: NIM is the margin between asset yields and funding costs over average interest-earning assets. Cost-to-income measures efficiency. Cost of risk is the annualised impairment charge as a percentage of average loans. Stage 3 loans are non-performing exposures under IFRS 9.
My take: a high-quality growth year, with two caveats
On the positive side, Halyk delivered double-digit profit growth, broad-based revenue momentum, and excellent efficiency, all while growing loans and deposits at pace. Capital buffers are strong, giving ample loss-absorbing capacity and strategic flexibility. The rising share of KZT deposits also reduces FX sensitivity in funding.
On the watchlist: margin pressure and asset quality optics. NIM dipped as liabilities repriced faster than assets, and the jump in REPO-related borrowings and interest expense shows the cost tailwind has faded. Stage 3 at 7.7% will likely stay elevated until the retail NPL sale moratorium expires in May 2026, even though management describes credit costs as “normalised” at 1.4%.
Funding and capital: structure and pricing
Customer deposits remain the core of funding, with term balances growing particularly in corporates. Debt securities outstanding increased 10.3% year-to-date, including KZT-denominated floating-rate bonds (18.63% and 17.83% p.a. maturities in 2027 and 2031) and several USD bonds maturing in 2027 at 3.5% p.a. The blend provides duration and currency diversification.
Capital ratios at 18.9% across k1-1, k1-2 and k2 sit comfortably above regulatory minima. That underpins
