Last checked at 17 Mar 2015 06:45
JSC Halyk Bank / Miscellaneous 17.03.2015 07:45 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.--------------------------------------------------------------------------- 17 March 2014 Joint Stock Company 'Halyk Savings Bank of Kazakhstan' Consolidatedfinancial results for the year ended 31 December 2014 Joint Stock Company 'Halyk Savings Bank of Kazakhstan' and its subsidiaries(together 'the Bank') (LSE: HSBK) releases its consolidated financial statementsfor the year ended 31 December 2014 prepared in accordance with InternationalFinancial Reporting Standards, audited by Deloitte, LLP, and subject to furtherapproval by the Bank's Annual General Shareholders' Meeting. KEY FINANCIAL HIGHLIGHTS 12 months 2014 * Net income is up by 58.0% to KZT 114.4bn, YoY; * Net interest income before impairment charge is up by 24.9%; * Impairment charge is down by 71.6%; * Net interest income is up by 56.0%; * Fees and commissions from transactional banking are up by 11.7%; * Net interest margin is up to 5.8% p.a. (4.9% p.a. for 12m 2013); * Cost-to-income ratio is down to 29.6% p.a. (31.4% p.a. for 12m 2013); * RoAE is up to 27.1% p.a. (20.8% p.a. for 12m 2013); * RoAA is up to 4.1% p.a. (2.9% p.a. for 12m 2013); * Total assets are up by 12.1%, YTD; * Net loans to customers are up by 11.2%; * Total equity is up by 21.2%; * NPLs 90-day+ ratio is down to 12.9% (18.0% as at 31 December 2013); * Cost of risk is down to 0.4% p.a. (1.5% p.a. for 12m 2013). 4 quarter 2014 * Net income is up by 38.8% to KZT 22.4bn, YoY; * Net interest income before impairment charge is up by 19.9%; * Impairment charge is down by 45.7%; * Net interest income is up by 70.4%; * Fees and commissions from transactional banking is up by 13.1%; * Net interest margin is up to 6.2% p.a. (5.4% p.a. for 4Q 2013); * Cost-to-income ratio is up to 34.2% p.a. (30.3% p.a. for 4Q 2013); * RoAE is up to 19.6% p.a. (17.5% p.a. for 4Q 2013); * RoAA is up to 3.2% p.a. (2.6% p.a. for 4Q 2013); * Total assets are down by 1.2%, QoQ; * Net loans to customers are up by 8.7%; * Total equity is up by 2.8%; * NPLs 90-day+ ratio is down to 12.9% (14.1% as at 31 October 2014); * Cost of risk is down to 1.5% p.a. (2.9% p.a. for 4Q 2013); Statement of profit or loss review Interest income increased by 15.4% for 12m 2014 vs. 12m 2013 mainly due toincrease in average balances of net loans to customers by 10.9% and in averageinterest rate on net loans to customers to 12.1% p.a. for 12m 2014 from 11.7% p.a.for 12m 2013. Interest expense increased by 2.0% for 12m 2014 vs. 12m 2013, mainlydue to increase in average balances of FX term deposits. The increase in interestexpense was partially offset by decrease in average balances of KZT term depositsand debt securities issued as well as decrease of average interest rates on debtsecurities issued to 7.5% p.a. for 12m 2014 from 8.1% p.a. for 12m 2013. As aresult, net interest income before impairment charge increased by 24.9% to KZT133.1bn for 12m 2014 vs. 12m 2013. Interest income increased by 12.0% for 4Q 2014 vs. 4Q 2013 mainly due to increasein average balances of net loans to customers by 7.0% and in average interest rateon net loans to customers to 12.3% p.a. for 4Q 2014 from 11.7% p.a. for 4Q 2013.Interest expense decreased by 0.4% for 4Q 2014 vs. 4Q 2013 mainly due to decreasein average interest rate on term deposits to 2.7% p.a. from 3.3% p.a. The decreasein interest expense was partially offset by increase in average balances of FXterm deposits and debt securities issued. As a result, net interest income beforeimpairment charge increased by 19.9% to KZT 35.4 for 4Q 2014 vs. 4Q 2013. Impairment charge decreased by 71.6% for 12m 2014 vs. 12m 2013, mainly due torepayment of indebtedness overdue by some corporate clients in the first threequarters of 2014. During 3Q 2014 and 2Q 2014 the Bank wrote-off (transferred offbalance sheet) fully provisioned non-performing loans for KZT 14.3bn and KZT57.8bn, respectively, without legally forgiving claims on the borrowers. As aresult, allowances for loan impairment decreased by 11.5% vs. 31 December 2013,whereas provisioning level decreased to 14.8% as at 31 December 2014 vs. 17.9% asat 31 December 2013. The Bank will continue collection of these written-off loansin accordance with its normal business procedures. Impairment charge for 4Q 2014 increased to KZT 7.0bn compared to KZT 0.9bnprovision recovery for 3Q 2014 mostly due to impairment revaluation for one of thecorporate borrowers. Allowances for loan impairment increased by 3.4% vs. 30September 2014, whereas provisioning level decreased to 14.8% as at 31 December2014 vs. 15.4% as at 30 September 2014. Provisions against letters of credit and guarantees recovered by KZT 4.2bnas at 31 December 2014 mainly due to expiry of several large-ticket LCs andguarantees during 1Q 2014. Fee and commission income from transactional banking (i.e. excluding pension fundand asset management) increased by 11.7% for 12m 2014 vs. 12m 2013 as a result ofgrowing volumes of transactional banking business. Net pension fund and asset management fees increased by 24.4% for 12m 2014 vs. 12m2013 mainly due to revaluation gains on FX-denominated pension assets as a resultof one-off devaluation of KZT in February 2014. On 26 of March 2014 JSC 'APF ofHalyk Bank of Kazakhstan' completed transfer of assets under management to the JSC'Single Accumulative Pension Fund'. Starting from 26 March the Bank does not earnany income from managing pension assets. Other non-interest income (excluding insurance) increased by 52.2% for 12m 2014vs. 12m 2013 mainly as a result of increase in net gain from financial assets andliabilities at fair value through profit or loss and increase in other income.Decrease in net gain on foreign exchange operations was offset by an increase innet gain on derivative operations in 4Q 2014 which was mainly attributable toincreased volumes of FX swaps with the National Bank of Kazakhstan and positiverevaluation gain on those as a result of change in KZT exchange rate in Q4 2014.Growth in other income from KZT 1.8bn for 12m 2013 to KZT 5.4bn for 12m 2014 wasmainly attributable to growing volumes of business at one of the Bank'ssubsidiaries. Insurance underwriting income (net of reinsurance) increased by 6.5% for 12m 2014vs.12m 2013 mainly due to the launch of a new life insurance product in 2Q 2014and increased volumes of pension annuity in 2H 2014 after release of earlierimposed regulatory restrictions on pension annuity contracts underwriting. Theincrease in insurance underwriting income was partially offset by severalcontracts in general insurance made in 2013 and not extended in 2014. Insuranceexpense (the sum of insurance payments, insurance reserves and commissions toagents) increased by 16.2% for 12m 2014 vs. 12m 2013 mainly as a result ofincrease in agency fees during 3Q 2014 and 2Q 2014 in life insurance due to thelaunch of a new life insurance product in May 2014. As a result, insuranceunderwriting income, less insurance expense, decreased by 18.2% for 12m 2014 vs.12m 2013. Operating expenses increased by 13.8% for 12m 2014 vs. 12m 2013 mainly due toincrease in salaries of the Bank's employees starting from 1 July 2014, as well asincentive bonuses paid to the Bank's employees in 4Q 2014. The increase inoperating expenses was partially offset by 12.6% decrease in depreciation andamortisation expenses due to increase of amortisation period for some classes offixed assets. The Bank's cost-to-income ratio decreased to 29.6% for 12m 2014 vs. 31.4% for 12m2013 and increased to 34.2% for 4Q 2014 from 30.3% for 4Q 2013. Statement of financial position review Total assets increased by 12.1% vs. YE 2013 mainly in property and equipment(25.1%), loans to customers (11.2%), cash and cash equivalents(11.2%) andavailable-for-sale investment securities (10.2%). Loans to customers increased by 7.1% on a gross basis and by 11.2% on a net basisvs. YE 2013. Gross loan portfolio increase was in corporate loans (3.6%) andretail loans (23.1%), partially off-set by decrease in loans to SME (-1.9%). Loans to customers increased by 7.9% on a gross basis and by 8.7% on a net basisvs. 30 September 2014. Gross loan portfolio growth was attributable to increase inloans across all types of businesses: corporate loans by 8.4%, SME loans by 2.8%and retail loans by 9.3%. 90-day NPL ratio decreased to 12.9% as at 31 December 2014 vs. 14.1% as at 30September 2014. The decrease in 90-day NPL ratio was mainly due to repayment ofseveral delinquencies in October and December 2014. The Bank's IFRS provisionscovered 90-day NPLs by 114.6% as at 31 December 2014. Term deposits of legal entities decreased by 31.6% and current accounts of legalentities increased by 32.6% vs. YE 2013, mainly as a result of partial transfer ofKZT funds into FX by the Bank's corporate clients as a result of turbulence onfinancial markets. Terms deposits and current accounts of individuals increased by 18.6% and by 4.6%,respectively, vs.YE 2013 mainly as a result of turbulence on financial markets andflight to quality. Amounts due to credit institutions remained almost flat vs. YE 2013 and decreasedby 17.6% vs. 30 September 2014 due to decrease in REPO-transactions with theKazakhstan Stock Exchange and partial withdrawal of funds by financialinstitutions in the normal course of their business activities. In 3Q 2014 theBank drew KZT 51.5bn loan from JSC National management holding 'KazAgro' toimprove loan quality of the borrowers operating in agricultural sector throughrefinancing existing loans at lower interest rates. In 2Q 2014 the Bank drew KZT20bn loan from JSC Entrepreneurship Development Fund 'Damu' to support small andmedium businesses operating in processing industries. Debt securities issued increased by 64.1% vs. YE 2013 mainly due to KZT 100bn 7.5%coupon rate senior unsubordinated local bonds issued by the Bank on 18 November2014 maturing in November 2024, as well as recalculation of USD-denominatedEurobond issues at new KZT exchange rate after KZT devaluation in February 2014. On 12 February 2015 and on 3 March 2015, the Bank placed with JSC SingleAccumulated Pension Fund two other tranches of senior unsubordinated local bondsfor KZT 21.1bn and KZT 30.0bn, respectively, both bearing 7.5% coupon rate andmaturing in February 2025. Total equity increased by 21.2% vs.YE 2013 mainly on the back of net profit earnedduring 12m 2014, partially offset by payment of dividends in amount of KZT18,547mln to common shareholders (or KZT 1.70 per common share) and dividends inamount of KZT 1,757mln to preferred shareholders (or KZT 9.28 per preferredshare). Regulatory Tier 1 capital adequacy ratios k1-1 and k1-2 and total capital adequacyratio k2 were at 12.4%, 15.0% and 21.2%, respectively, as at 31 December 2014 vs.11.8%, 15.0% and 20.3%, respectively, as at 30 September 2014 and vs. 9.5%, 11.2%and 18.2%, respectively, as at 31 December 2013. Basel Tier 1 capital adequacyratio and total capital adequacy ratio were at 20.4% and 21.1%, respectively, asat 31 December 2014 vs. 19.8% and 21.0%, respectively, as at 30 September 2014 and17.2% and 18.5%, respectively, as at 31 December 2013. The condensed interim consolidated financial information for the twelve monthsended 31 December 2014, including notes attached thereto, are available on HalykBank's website http://www.halykbank.kz/en/financial-reports andhttp://www.halykbank.kz/en/news ). For further information please contact: Halyk Bank Dauren Karabayev +7 727 259 68 10Viktor Skryl +7 727 259 04 27Mira Kasenova +7 727 259 04 30 17.03.2015 The EquityStory.RS, LLC 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: halykteam@halykbank.kzInternet: http://halykbank.kzISIN: US46627J3023Category Code: MSCTIDM: Sequence Number: 2564Time of Receipt: March 17, 2015 07:45:37 End of Announcement EquityStory.RS, LLC News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.