Institutional analysts pointed out that the bank is in a strong position in terms of financial performance in 2020
Kapital.kz Business Information Center reported that Fitch Ratings, an international rating agency, has raised Halyk Bank’s long-term issuer default rating (IDR) from BB+ to BBB-, and Stable forecasts are stable.
Therefore, the bank’s rating has changed from speculative grade to investment grade (from above BBB).
Please note that Halyk Bank’s designated financial strength rating is currently the highest among second-tier banks without foreign participation. Previously, this rating was only assigned to quasi-state banks or banks with foreign participation.
“The rating level assigned to banks is only one level lower than the sovereign rating of the BBB level. Raising the rating of Khalik Bank (the largest backbone bank in Kazakhstan) to the “investment” category is an important step in history, and not only in a single Within financial institutions, and across the country, the entire CIS market is an important positive signal. It indicates that the market is ready for recovery and growth,” said Umut Shayakhmetova, chairman of the Khalik Bank Management Committee.
According to her, the rating of the “BBB” category proves to companies and investors the issuer’s good credit quality, indicating that the current expectations for default risk are low and the solvency of financial liabilities is sufficient. Therefore, investment attractiveness and investor confidence increase.
According to Fitch, the rating assigned to Halyk Bank is influenced by its dominant market share, high-quality asset portfolio, high profit margins, and large capital and liquidity reserves. Therefore, international rating agencies pointed out Halyk Bank’s strong position in its 2020 financial performance and the effectiveness of the bank’s measures to improve asset quality in the context of continued pressure on the global COVID-19 operating environment. Pandemic. Despite the economic downturn, the proportion of non-performing assets in the third stage of 2020 has been drastically reduced from 16% to 12.3%. According to Fitch analysts, this shows that the bank has successfully survived the negative phase of the credit cycle.
However, Fitch rated Halik Bank as two levels of operating environment “BB”, believing that the bank’s strong financial performance before credit loss costs and capital/liquidity buffers allowed it to significantly reduce operating environment risks.
In the assessment, the rating agency’s experts also considered the bank’s continued good history of high financial performance, its liquidity and ability to operate effectively. Recall that even during the unfavorable period of the economic cycle, Halek Bank has earned considerable income.
At the same time, Fitch analysts attributed the advantages of Halyk Bank’s rating to funding and liquidity: by the end of 2020, the bank’s share of deposits in its funding base was 84%. In addition, Fitch’s credit rating agency believes that Halyk Bank’s deposit stability is higher than that of most local peer banks. This is also because it has the highest market share in customer deposits in the country-more than 30%.
Halyk Bank is a leading financial group in Kazakhstan. Its business covers multiple fields, including retail, SME and corporate banking, insurance, leasing, brokerage and asset management. The bank has been listed on the Kazakhstan Stock Exchange (KASE) since 1998, on the London Stock Exchange (LSE) since 2006, and on the Astana International Exchange (AIX) since October 2019.
The bank also operates in Georgia, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
Halyk Bank has the largest customer base and branch network-611 branches and offices across the country.
According to information from the National Bank of the Republic of Kazakhstan, as of January 1, Khalik Bank’s total assets were approximately 10 trillion tenge, with a loan portfolio of 4.9 trillion tenge and a deposit portfolio of 7.3 trillion tenge.