19th May 2014 08:21
JSC Halyk Bank / 1st Quarter Results 19.05.2014 08:21 Dissemination of a Regulatory Announcement, transmitted byEquityStory.RS, LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- 19 May 2014 Joint Stock Company 'Halyk Savings Bank of Kazakhstan' Consolidated financial resultsfor the three months ended 31 March 2014 Joint Stock Company 'Halyk Savings Bank of Kazakhstan' and its subsidiaries(together 'the Bank') (LSE: HSBK) releases its condensed interimconsolidated financial information for the three months ended 31 March2014. 1Q 2014 financial highlights - Net income is up by 96.8% to KZT 37.9bn, YoY; - Net interest income before impairment charge is up by 36.5%; - Impairment charge is down by 77.6%; - Net interest income is up by 48.6%; - Fees and commissions from transactional banking are up by 13.7%; - Fees and commissions from pension assets under management are up by 3.4 times; - RoAE is up to 38.7% p.a. (23.0% p.a. for 1Q 2013); - RoAA is up to 5.6% p.a. (3.2% p.a. for 1Q 2013); - Total assets are up by 16.5% YTD; - Net loans to customers are up by 2.8%; - Amounts due to customers are up by 22.9%; - Amounts due to credit institutions are down by 64.7%; - Total equity is up by 9.4%. Income statement review Interest income increased by 18.7% for 1Q 2014 vs. 1Q 2013 mainly due toincrease in average balances of loans to customers by 15.5% and in averageinterest rate on loans to customers to 11.8% p.a. for 1Q 2014 from 11.5%p.a. for 1Q 2013. Interest expense decreased by 2.6% for 1Q 2014 vs. 1Q2013 mainly due to 32.2% decrease in average balances of debt securitiesissued and in average interest rates on amounts due to customers to 3.0%p.a. for 1Q 2014 from 3.2% p.a. for 1Q 2013, partially offset by 15.9%increase in average balances of term deposits. As a result, net interestincome before impairment charge increased by 36.5% to KZT 32.1bn for 1Q2014 vs. 1Q 2013. Decline in 90-day NPLs in 1Q 2014 led to release of provisions andcorresponding decrease of impairment charge by 77.6% for 1Q 2014 vs. 1Q2013. 90-day NPLs decreased mainly due to one-off repayment of overdueindebtedness of some corporate clients. Recalculation of KZT value of FXdenominated loans at new exchange rate after devaluation led to increase instock of provisions on balance sheet by KZT 27.1bn or 8.4% which resultedin increase of provisioning level to 18.7% of the gross loan portfolio asat 31 March 2014 compared to 17.9% of the gross loan portfolio as at 31December 2013. Provisions against letters of credit and guarantees recovered by KZT 4.1bnas at 31 March 2014 mainly due to expiry of several large-ticket LCs andguarantees during 1Q 2014. Fee and commission income from transactional banking (i.e. excludingpension fund and asset management) increased by 13.7% for 1Q 2014 vs. 1Q2013 as a result of growing volumes of transactional banking business. Net pension fund and asset management fees increased 3.4-times for 1Q 2014vs. 1Q 2013 due to 5-time increase in performance fees from investmentincome from revaluation gains on FX-denominated pension assets due toone-off devaluation of KZT in February 2014. Asset management feesincreased by 10.5% for 1Q 2014 vs. 1Q 2013 as a result of growing size ofassets under management. Other non-interest income (excluding insurance) increased by 52.7% for 1Q2014 vs. 1Q 2013 mainly due to increase in income from translationaldifferences to KZT 4.1bn for 1Q 2014 vs. KZT 30mln for 1Q 2013 thanks tothe Bank's net long FX position at the time of devaluation of KZT inFebruary 2014 . Insurance underwriting income (net of reinsurance) decreased by 53.6% for1Q 2014 vs. 1Q 2013 due to lower volumes of pension annuities business inconnection with the ongoing pension system reform. The decrease ofinsurance underwriting income was partially offset by 42.0% increase ininsurance underwriting income in non-life insurance business. Insuranceexpense decreased by 54.5% for 1Q 2014 vs. 1Q 2013 mainly as a result of98.8% decrease in insurance reserves due to decline of pension annuitypayments in life insurance business. As a result, insurance underwritingincome, less insurance expense, decreased by 49.3% for 1Q 2014 vs. 1Q 2013. Operating expenses increased by 4.8% for 1Q 2014 vs. 1Q 2013 mainly due toexpenses related to project-specific professional services. The increase inoperating expenses was partially offset by 2.4% decrease in salaries andother employee benefits mainly as a result of decrease of the staff in theBank's Pension Fund in connection with the ongoing pension system reform. The Bank's cost-to-income ratio decreased to 24.2% for 1Q 2014 vs. 31.0%for 1Q 2013 and 30.3% for 4Q 2013. Statement of financial position review Total assets increased by 16.5% vs. YE 2013 mainly in cash and cashequivalents (70.6%), available-for-sale investment securities (6.5%) andloans to customers (2.8%). Loans to customers grew by 3.8% on a gross basis and by 2.8% on a net basisvs. YE 2013. Gross loan portfolio growth was attributable to increase incorporate loans and loans to SME by 4.5% and retail loans by 1.4%. 30-day NPL ratio increased to 19.9% as at 31 March 2014 vs. 18.2% as at 31December 2013, whereas 90-day NPL ratio decreased to 17.5% as at 31 March2014 vs. 18.0% as at 31 December 2013. The increase in 30-day NPLs wasmainly due to technical defaults by some corporate borrowers, though suchdelinquencies were mostly repaid in April and May 2014. The Bank createdIFRS provisions that covered 30-day NPLs by 92.4% and 90-day NPLs by 104.9%as at 31 March 2014. Term deposits of legal entities decreased by 11.9% vs.YE 2013 mainly due topartial withdrawal of funds by some corporate clients to finance theiron-going business needs, including tax payments to the state budget inMarch 2014. Current accounts of legal entities increased by 97.2% vs. YE2013 as a result of new fund inflow during 1Q 2014. Term deposits of individuals increased by 14.7% vs. YE 2013 due to growingvolumes of retail banking business. Current accounts of individualsdecreased by 7.1% vs.YE 2013 mainly as a result of seasonal fluctuations. Debt securities issued increased by 16.4% vs. YE 2013 mainly due torecalculation of USD-denominated Eurobond issues at new KZT exchange rateafter KZT devaluation in February 2014. As of the date of thispress-release, the Bank's debt securities issued mainly consist of twooutstanding Eurobond issues for USD 700mln and USD 500mln with bulletmaturity in May 2017 and January 2021, respectively, each bearing a couponrate of 7.25%. Total equity increased by 9.4% vs. YE 2013 mainly on the back of net profitearned during 1Q 2014. Regulatory Tier 1 capital adequacy ratios k1-1 and k1-2 and total capitaladequacy ratio k2 were at 12.3%, 15.6% and 17.9%, respectively, as at 31March 2014 vs. 9.5%, 11.2% and 18.2%, respectively, as at 31 December 2013.Basel Tier 1 capital adequacy ratio and total capital adequacy ratio wereat 18.0% and 19.2%, respectively, as at 31 March 2014 vs. 17.2% and 18.5%,respectively, as at 31 December 2013. The condensed interim consolidated financial information for the threemonths ended 31 March 2014, including notes attached thereto, are availableon Halyk Bank's website http://www.halykbank.kz/en/financial-reports andhttp://www.halykbank.kz/en/news). For further information please contact: Halyk Bank +7 727 259 68 10Dauren Karabayev +7 727 259 04 27Viktor Skryl +7 727 330 17 19Yelena Perekhoda +7 727 330 14 62Rassul Issayev +7 727 259 04 65Galymzhan Kuppayev 19.05.2014 EquityStory.RS, LLC's Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: JSC Halyk Bank 109V, Abay ave 050008 Almaty KazakhstanPhone: +7 727 259 04 27Fax: +7 727 259 04 64E-mail: [email protected]: http://halykbank.kzISIN: US46627J3023Category Code: QRFTIDM: Sequence Number: 2053Time of Receipt: May 19, 2014 08:21:23 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.
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