Halyk Bank Saw a Decline in Profits but Regained Growth Momentum in Retail Lending

Halyk Bank, Kazakhstan’s largest bank, reported a 15.3% year-over-year decline in net income for the first half of 2026—to 447.6 billion tenge ($970 million; here and below, based on the National Bank’s exchange rate as of August 18, 2026) from 528.6 billion tenge ($1.15 billion). In the second quarter, compared to the same period last year, profit fell by 16.1% to 212.8 billion tenge ($461 million). Assets have increased by 5.4% since the beginning of the year, to 22.04 trillion tenge ($47.77 billion). Deposits from individuals rose by 10.5% year-over-year, while deposits from legal entities increased by 5.4%.

The bank cites the National Bank’s stricter reserve requirements, tighter regulation of retail lending, and an increase in the average cost of customer funds—while the average loan rate remained virtually unchanged—as the main reasons for the decline in profits. Halyk’s interest income for the first half of the year rose by 12.2% to 1.45 trillion tenge ($3.14 billion), while interest expenses increased by 21.6% to 788.5 billion tenge ($1.71 billion). As a result, net interest income before loan loss expenses rose by only 2.6%, amounting to 657.6 billion tenge ($1.43 billion).

The net interest margin (NIM) declined from 7.3% to 6.8%. According to the bank’s own estimates, excluding the impact of the new minimum reserve requirements, it would have been 7.2%. Return on average equity (ROAE) fell from 33.6% to 24.8%.

The decline in net fee and commission income by 19.6 percent—to 54.5 billion tenge ($118 million)—put additional pressure on the results. Halyk attributes this primarily to a decline in fee and commission income from consumer lending (installment loans) following the tightening of borrower requirements, as well as the “gradual passing on of VAT on certain banking services to customers.” Total credit loss expenses (including an increase in provisions) rose by 69.1% to 104 billion tenge ($225 million). The share of impaired loans (Stage 3) rose to 8.6%, compared with 8.2% at the end of the previous quarter and 7.7% at the beginning of the year. However, this is due to the continued moratorium on the sale of non-performing retail loans to collection agencies: old loans remain on the balance sheet, and their volume is growing relatively faster than the loan portfolio, although the current cost of risk remained at 1.4%.

The bank’s loan portfolio continued to grow: as of the end of June, its gross volume reached 13.96 trillion tenge ($30.26 billion)—13.2% higher than a year earlier, although growth since the beginning of 2026 amounted to only 1.8%. At the same time, the bank managed to overcome the effective stagnation in retail lending growth: while the portfolio had fallen by 0.05% at the end of the first quarter of 2026, by the end of the first half of the year it had grown to 4.8 trillion tenge ($10.40 billion) compared to the start of the year, that is, by 4.2%, which is practically equal to the growth rate of the first half of 2025 (4.3%).

Other major banks in Kazakhstan had previously reported similar results: Freedom Holding (including its non-banking business) increased its revenue by 40% year-over-year in the first quarter of fiscal year 2027, to $732.5 million, while net income fell by 15%—to $31.7 million from $37.4 million. Kaspi.kz reported less pronounced growth for the first half of the year: revenue increased by 23% to 2.19 trillion tenge ($4.75 billion), while net income decreased by 0.4% to 510.8 billion tenge ($1.11 billion).

At the close on August 18, 2026, Halyk Bank shares on the KASE fell 3.68% from the previous close to 392.02 tenge. On the London Stock Exchange, as of 6:00 p.m. Almaty time, the bank’s depositary receipts fell 4.99% to $33.35.

This article was AI-translated and verified by a human editor