Halyk Bank Reports 39.4% Surge in Net Income for First Half of 2025

Halyk Bank 1H 2025 results: net income jumps 39.4% to KZT 528.6bn

Halyk Bank has posted a punchy first half. Net income attributable to common shareholders rose 39.4% year-on-year to KZT 528,600 million in 1H 2025. That growth reflects stronger lending and transactional activity and a favourable base effect from a one-off loss booked in 1H 2024. There was also a drag this half from an excess profits tax on certain banking operations, applicable for 2025 only.

Stripping out the prior-year one-off and this year’s excess profits tax, management says underlying net income growth would be 19.8%. Either way, profitability metrics remain robust: net interest margin (NIM) climbed to 7.2% (from 6.9%), return on average equity (ROAE) to 33.6% (from 29.9%), and the cost-to-income ratio improved to 17.2% (from 18.5%).

At-a-glance financial highlights (KZT mln unless stated)

Metric	1H 2025	1H 2024	Y-o-Y change
Interest income	1,289,297	1,012,008	+27.4%
Interest expense	(648,564)	(508,125)	+27.6%
Net interest income (pre ECL)	640,733	503,883	+27.2%
Net fees and commissions	67,782	60,951	+11.2%
Net insurance income	25,840	14,802	+74.6%
Expected credit loss expense	(61,518)	(65,747)	-6.4%
Operating expenses	(146,607)	(115,858)	+26.5%
Income tax expense	(117,048)	(64,948)	+80.2%
Net income to shareholders	528,600	379,093	+39.4%
NIM (annualised)	7.2%	6.9%	+0.3 pp
ROAE (annualised)	33.6%	29.9%	+3.7 pp
Cost-to-income	17.2%	18.5%	-1.3 pp

What drove the profit surge in 1H 2025

Two main engines: volume and mix. Interest income rose 27.4% on the back of higher average loan balances. Funding costs also moved up as rates and balances on customer deposits increased, particularly within tenge (KZT) deposits, but the overall asset-liability mix improved.

That favourable mix – more interest-earning assets relative to interest-bearing liabilities and higher KZT cash balances – lifted the NIM to 7.2%. On the non-interest side, fees and commissions grew 11.2% as client numbers and activity stepped up, with legal entities’ transactional income and trade finance (letters of credit and guarantees) doing the heavy lifting.

Margins, fees, insurance and costs: the moving parts

NIM explained: it is the spread between yields on earning assets and the cost of funding. Despite pricier deposits, Halyk’s mix shift cushioned the impact and widened the margin.

• Net fees and commissions: up 11.2%. Individual client transactional income dipped slightly due to higher loyalty programme bonuses.
• Net insurance income: up 74.6%, adding useful diversification.
• Operating expenses: up 26.5% from salary indexation, long-term incentive costs, and IT development. Despite this, the cost-to-income ratio improved to 17.2% thanks to stronger revenues.
• Credit costs: expected credit loss (ECL) expense of KZT 61,518 million, down 6.4% year-on-year; cost of risk edged up to 1.4% (from 1.3%).

Note on comparatives: Halyk reclassified certain 1H 2024 deposit insurance service expenses from fees to interest expense. All ratios were restated accordingly, tidying up like-for-like comparisons.

Balance sheet trends: assets, loans and deposits in 1H 2025

Total assets grew 5.8% year-to-date to KZT 19,615,712 million, driven largely by customer deposits. The net loan book increased 2.4% to KZT 11,736,556 million (gross loans KZT 12,330,251 million; allowance KZT 593,695 million). Retail loans rose 4.3% while loans to legal entities were up 1.4% (gross basis).

Deposit momentum remained solid. Amounts due to customers were up 5.8% year-to-date to KZT 13,748,127 million, with legal entities’ deposits up 8.0% and individuals’ deposits up 4.1%. The deposit mix tilted further towards KZT: total KZT deposits reached 72.1% (from 69.1% at YE 2024), including 74.2% for corporates and 70.1% for retail.

Funding mix and debt securities: what’s in the stack

Amounts due to credit institutions increased 19.5% versus year-end 2024 to KZT 972,772 million. Debt securities issued rose 9.1% year-to-date to KZT 959,338 million.

The outstanding securities at 30 June 2025 include:

• Subordinated coupon bonds: KZT 101.1 billion at 9.5% p.a., maturity October 2025.
• Local bonds: KZT 146.6 billion at 13.61% p.a. (floating), maturity July 2031.
• Local bonds: KZT 20.0 billion at TONIA+1.25% (floating), maturity December 2027.
• Local bonds listed at AIX: USD 162 million at 3.5% p.a., maturity May 2027.
• Local bonds listed at AIX: USD 299.8 million at 3.5% p.a., maturity May 2027.
• Local bonds listed at AIX: USD 432.2 million at 3.5% p.a., maturity May 2027.
• Local bonds listed at AIX: USD 414.6 million at 3.5% p.a., maturity July 2025.

Observation: there are near-term maturities in 2025, including subordinated bonds due in October. The steady growth in deposits and access to multiple markets suggest flexibility, but investors will watch refinancing actions closely.

Asset quality and provisioning

Stage 3 loans (impaired) declined to 6.6% at end-2Q 2025 due to workouts and portfolio growth. The cost of risk on loans to customers was 1.4% (from 1.3%). In plain English: credit costs are contained, trending close to last year, with some improvement in the problem loan ratio.

Capital adequacy: comfortably above regulatory floors

Consolidated capital ratios at 30 June 2025 were CET1 18.1%, Tier 1 18.1% and Total capital 18.1%. Unconsolidated ratios were k1-1 18.5%, k1-2 18.5% and k2 18.5%.

For context, minimum requirements are 9.5% for k1, 10.5% for k1-2 and 12% for k2 (each including a 3% conservation buffer and 1% systemic buffer). Halyk sits well above these thresholds, supporting growth and providing a cushion against shocks.

Total equity increased 4.0% year-to-date to KZT 3,190,438 million, reflecting profits earned, though it was down 2.8% quarter-on-quarter.

Josh’s take: why this update matters for investors

• Strong topline engine: Loan growth and a better asset-liability mix expanded NIM to 7.2%. That is a clear positive for earnings quality.
• Operational leverage intact: Costs rose sharply, but revenues rose faster, pulling the cost-to-income ratio down to 17.2% – a very efficient level by regional standards.
• Credit cycle stable: Cost of risk at 1.4% and a lower Stage 3 ratio signal steady asset quality.
• One-offs in the mix: The 39.4% headline profit growth benefits from base effects and is dampened by the 2025 excess profits tax. The 19.8% adjusted growth is the cleaner guide to momentum.
• Funding watchlist: Deposit growth is healthy and more KZT-based, which helped margins, though higher KZT rates can keep funding costs lively. Upcoming 2025 bond maturities are worth monitoring.

Net-net, this is a confident set of numbers: elevated margins, disciplined efficiency, and solid capital. The key things to track into 2H are deposit pricing, refinancing steps around the 2025 maturities, and whether fee momentum from corporates stays strong.

Where to read more

The interim condensed consolidated statements for 1H 2025 are available on Halyk’s site: halykbank.com/financial-results. For company background, visit halykbank.com. A 1H 2025 results webcast was scheduled for 19 August 2025.