Halyk Bank AO reported a 15.3% year-over-year decline in first-half 2026 net profit to KZT 447.6 billion, as net interest margin compression and higher credit losses weighed on results. The bank, which trades under ticker HSBK, presented its H1 2026 financials on August 18, 2026, reaffirming its full-year profit guidance of approximately KZT 1 trillion despite the challenges.
Net interest income rose 2.6% to KZT 657.6 billion, but net interest margin (NIM) narrowed to 6.8% from 7.3% a year earlier, with management noting the figure had reached a "stabilization point" after absorbing reserve requirement increases. Adjusted NIM was estimated at around 7.2% excluding regulatory reserve impacts. Interest income grew 12.2% to KZT 1.45 trillion, while interest expense surged 21.6% to KZT 789 billion, reflecting tighter funding conditions.
Credit costs escalated sharply, with expected credit loss (ECL) expense jumping 69.1% year-over-year to KZT 104 billion. The cost-to-income ratio rose to 19.2%, up from 17.2% in the prior-year period, as operating expenses increased 5.5% to KZT 154.6 billion. Return on average equity (ROAE) fell to 23.5% annualized in Q2, down from 32.2% a year earlier, though full-year guidance remains around 29%. Return on average assets (ROAA) stood at 3.9%.
The bank’s balance sheet expanded, with total assets up 5.4% year-to-date to KZT 22.04 trillion and gross loans growing 13.2% year-over-year to KZT 13.96 trillion. Deposits increased 8.2% to KZT 14.87 trillion, while the loans-to-deposits ratio climbed to 89.2% from 85.4%. Liquidity remained robust at 23.3% of total assets, and capital adequacy ratios (k1, k1-2, k2) were steady at 19.0% across all measures.
Asset quality deteriorated, with non-performing loans (NPLs) over 90 days rising to KZT 715 billion, or 5.3% of the portfolio, up from 3.0% a year earlier. The Stage 3 coverage ratio declined to 58.0% from 73.4%, though corporate NPL coverage remained strong at 122.6%. Provisioning levels increased to 5.0% of gross loans from 4.4% at year-end 2025.
Digital adoption continued to accelerate, with the Halyk Super-App reporting 8.6 million monthly active users and 2.8 million daily active users. The platform processed 234.7 million payments and transfers in H1, totaling KZT 10.5 trillion in volume, up 8.1% and 14.1% year-over-year, respectively. Retail loan issuance reached KZT 730 billion in Q2, with 88% issued digitally, while SME digital lending surged 51.9% to KZT 413 billion.
Halyk maintained its market leadership, holding a 40.2% share of net income, 34.5% of net interest income, and 28.6% of total assets in Kazakhstan’s banking sector. The bank’s stock closed at $34.05 on August 18, 2026, down 2.99% from the prior session, with a 52-week range of $22.90 to $36.20. Credit ratings remain at Baa1 (Moody’s) and BBB- (Fitch and S&P).
