Halyk Bank has announced its financial results for the second quarter of 2025. Quarterly interest income and net profit showed significant year-over-year growth. Interest income once again reached a record high. However, we note a slowdown in the growth of certain financial indicators. In our valuation model, we updated financial metrics in line with the report and improved our forecast for non-interest income. On the other hand, we increased the cost of equity. As a result, the target price of Halyk Bank’s share was set at KZT 460, implying a 23% upside potential. Recommendation – “Buy.”
(+) Strong growth in revenues and profit. Interest income for Q2 2025 reached a record KZT 660 billion, up 28% YoY and 4.9% QoQ. Meanwhile, interest expenses rose 33% YoY and 14% QoQ. Fee and commission income accelerated, growing 16% YoY and 1% QoQ, while other non-interest income increased 18% YoY and 26% QoQ, driven by a sharp rise in FX trading gains. Credit loss provisions decreased 17% YoY but rose 41% QoQ. As a result, net interest income after provisions grew 31% YoY but fell 7.5% QoQ. Cost of risk increased from 1.2% to 1.5%. Non-interest expenses rose 4.5% YoY, mainly due to a 31% increase in operating costs. However, insurance payouts decreased 32% YoY. Quarterly net profit amounted to KZT 254 billion, up 26% YoY but down 7.8% QoQ. The number of active clients grew 0.9% YoY, while daily active users (DAU) of the Halyk app rose 22%. Meanwhile, monthly active users (MAU) decreased by 5.9%. The loan portfolio grew 18% YoY and 2.3% QoQ.
Changes in the valuation model and our view. The report was moderately positive, maintaining substantial YoY growth in interest income and net profit. On the other hand, a slowdown in QoQ growth was observed. In our valuation model, we updated all key financial indicators. At the same time, we improved the forecast for non-interest income and revised certain balance sheet items, which added to interest income at the end of the forecast period. We also increased the risk-free rate due to higher government bond yields. As a result, the target price of Halyk Bank’s share stands at KZT 460, with a 23% upside from the current level. Recommendation – “Buy.”