Halyk Bank, Kazakhstan's second-largest lender by assets, raised its forecast for 2014 net profit on Friday after reporting a jump in first-half earnings. Halyk, the most profitable of the Central Asian nation's 38 banks, now sees full-year net profit at 95 billion to 100 billion tenge ($522-549 million), up from an earlier estimate of 90 billion tenge, it said in a presentation for investors.
The bank's net profit was 72.4 billion tenge in 2013. Halyk said earlier on Friday that first-half net profit soared 87.4 percent year-on-year to 64 billion tenge, mainly thanks to a rise in net interest income and debt repayments. Net interest income, before impairment charges, rose 32.0 percent from a year earlier to 64.8 billion tenge. The bank said its impairment charges plunged 79.2 percent during the period. The decrease was mainly due to repayments of overdue debt by some corporate clients in the first quarter, which led to the release of money set aside to cover the loans. Halyk's assets grew 12.1 percent in the first half of 2014 while net loans to customers rose 2.9 percent.
The bank left its earlier forecast for this year's net interest margin (NIM), an indicator of a bank's efficiency, unchanged at 5 percent. Its NIM in 2013 was 4.9 percent. In March, Halyk transferred the assets of its pension fund to a state-run pension fund. The move was in line with Kazakhstan's pension reform ordered by President Nursultan Nazarbayev last year, under which the assets of all private pension funds were corralled into a single state-run fund in a bid to accumulate cash to help stimulate economic growth through more active investment.
"Starting from 26 March, the bank does not earn income from managing pension assets," Halyk said. In February, Halyk bought the Kazakh subsidiary of HSBC for $176 million in cash and expects to complete the transaction this year. Halyk's largest single shareholder is Almex, a holding company owned by Nazarbayev's middle daughter, Dinara, and her entrepreneur husband Timur Kulibayev.