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Edited Transcript of HSBK.AL earnings conference call or presentation 15-May-19 1:00pm GMT

Q1 2019 Halyk Bank AO Earnings Call

Republic of Kazakhstan Oct 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Halyk Bank AO earnings conference call or presentation Wednesday, May 15, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Mira Kasenova

Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations

* Murat Uzakbaevich Koshenov

Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board

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Conference Call Participants

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* Andrew Keeley

Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst

* Conrad Scheurkogel

Artha Capital Management, Inc. - Research Analyst

* Ivan Kachkovski

Renaissance Capital, Research Division - Research Analyst

* Mikhail Shlemov

VTB Capital, Research Division - Equities Analyst

* Tolu Alamutu

Tellimer Research - Director & Credit Analyst of Financials

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to Halyk Bank First Quarter 2019 Results Conference Call. I will now hand you over to your host, Miss Mira Kasenova, Head of Investor Relations. Madam, the floor is yours.

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Mira Kasenova, Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations [2]

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Thank you. Good evening, ladies and gentlemen. Please accept our apologies for the delay with the beginning of the call.

Welcome to Halyk Bank conference call on the presentation of financial results for the first quarter of 2019. Participants on today's call on Halyk Bank side are: Ms. Umut Shayakhmetova, Chief Executive Officer of Halyk Bank; Ms. Aliya Karpykova, Deputy CEO, Chief Financial Officer; Mr. Murat Koshenov, Deputy CEO, Corporate Banking; Mr. Almas Makhanov, Chief Risk Officer; Mr. Viktor Skryl, Head of Strategic office, International Activities; and myself, Mira Kasenova, Head of Financial Institutions and International Relations.

During Q1 2019, the bank earned net income of KZT 74.5 billion, which is 20.1% higher compared to Q1 2018 due to higher net interest income and lower operating expenses in Q1 2019. Total assets decreased by 1.1% versus the end of 2018, mainly as a result of partial withdrawal of funds by the bank's customers in Q1 2019.

Compared with Q1 2018, net interest income increased by 21.7% to KZT 92.6 billion, mainly due to increase in average balances of interest-earning assets and due to continuous repricing of retail term deposits following the decrease of deposits interest rate cap by Kazakhstan Deposit Insurance Fund.

As a result of net interest income growth, net interest margin increased to 5% per annum for Q1 2019 compared to 4.4% for Q1 2018. Net interest margin decreased to 5% per annum for Q1 2019 compared to 5.6% in Q4 2018, mainly as a result of accelerated amortization of discount on the bank's Eurobonds in the amount of KZT 7.4 billion due to its earlier partial prepayment on the 1st of March 2019 as well as decrease in average rates on loans to customers. The adjusted net interest margin for Q1 2019, excluding the effect of accelerated amortization of discount on the bank's Eurobond, was 5.4%.

Fee and commission increased by 2.3% compared to Q1 2018. Starting from Q1 2018 (sic) [2019], the portion of fees related to payment card operations, which was previously accounted within cash operations and bank transfers, is represented as fees derived from payment card operations. Figures for all proceeding 2018 quarters were recalculated accordingly.

Prior to the merger, the transfers within legal entities current account in Halyk and KKB were treated as external transfers and relevant fees were applied. After the integration, the transfers between those current accounts are being treated as internal and therefore are free of charge. As a result, fees derived from bank transfers settlement decreased in Q1 2019 versus Q1 2018.

Fee and commission expense increased by 19% compared to Q1 2018, mainly due to increased number of transactions of other banks' cards in the acquiring network of the bank. The decrease in fee and commission income in Q1 2019 versus Q4 2018 was mainly as a result of seasonal effect.

Operating expenses decreased by 15.6% to KZT 30.1 billion versus KZT 35.7 billion for Q1 2018. This was mainly a synergy effect on the back of cost optimization during and following the merger process of KKB into Halyk. The bank's cost-to-income ratio decreased to 24.1% compared to 30.7% for Q1 2018 on the back of lower operating expenses and higher operating income in Q1 2019 versus Q1 2018. Operating income increased by 7.1%, mainly due to increase in net interest income.

On the balance sheet, compared with the year-end 2018, loans to customers decreased by 1.5% on a gross basis and 1.7% on a net basis. The decrease in loan portfolio was mainly on the back of [decrease] in SME and retail portfolio due to seasonality.

Halyk Bank's 90-day NPL ratio increased to 9.1% from 8.2% as at the end of 2018. The increase was mainly as a result of some indebtedness of previously impaired corporate borrowers became overdue. The provision rate increased to 10.8% from 10.5% as at the end of 2018. The 90-day NPL coverage ratio was 120.7%. Cost of fees from loans to customers for Q1 2019 was 0.6%. The increase of Stage 3 loans in Q1 2018 was related to the transfer of problem indebtedness of some corporate borrowers to the subsidiary SPVs, which was previously classified as Stage 2 loans. In April 2019, this indebtedness started to be recognized as an investment property of the bank.

On liabilities side, deposits of legal entities and individuals decrease by 0.9% and 3.4%, respectively, compared to the year-end 2018, mainly due to partial withdrawal of funds by the bank's customers to finance their ongoing needs. It is important to note here that there was a decrease in the whole banking sector deposits due to the outflow of funds to repay the external debt obligation of national companies.

As at 31st March 2019, the share of corporate tenge deposits in total corporate deposits was 50.3% compared to 48.3% at the 31st of December 2018, whereas the share of retail tenge deposits in total retail deposits was 42.6% compared to 41% as at year-end 2018.

Debt securities issued decreased by 8.1% compared to year-end 2018, mainly due to earlier partial prepayment on the 1st of March 2019 of Eurobond due in 2022 for the amount of USD 200 million. Compared with year-end 2018, total equity increased by 7.9% due to net profit earned by the bank during Q1 2019.

On the 18th of April 2019, the Annual General Shareholders Meeting of the bank has approved to pay the dividend for 2018 financial year with 50% dividend payout ratio. It is important to mention that, as of the 1st of May 2018, after the accrual of the dividend, the bank still maintains a very high capital adequacy ratio.

This completes our presentation. Now we would like to open the floor for your questions, please.

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Questions and Answers

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Operator [1]

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We will now start the question and answer session. (Operator Instructions) Our first question is from Ivan Kachkovski, Renaissance Capital.

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Ivan Kachkovski, Renaissance Capital, Research Division - Research Analyst [2]

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I have a few questions. First of all, can I please ask on the rate dynamics? And particularly on corporate loan yields? They seem to have declined in the first quarter. What is the reason behind it? And how does it look going forward throughout the next few quarters? That's the first question.

My second question would be, overall, on the -- on your NIM outlook for the next few quarters and specifically, do you see any uses of FX liquidity that could potentially boost your net interest income?

And my third question would be on your NPL dynamics. What was the cost of the NPL ratio spike? Was it corporate loans? If you could share just some color on what industries, any particulars of what's happening there, and what we should expect going forward, that would be very helpful.

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [3]

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Ivan, this is Murat Koshenov. Thank you for your questions. With regards to your first question, the credit risk -- credit portfolio dynamics, yes, as you see, there was some decrease in the first quarter. That is actually -- the main reason is the seasonality effect. And the main areas where there was some reduction in the credit portfolio is SME as well as retail while the corporate portfolio largely remained flat.

In terms of -- and your question, I think, also was how it's translated into our guidance and what are projections for the year. We, at this point of time, speaking to outlook which we provided earlier, where we said that we anticipated -- we're anticipating roughly 7% growth for the loan portfolio this year.

With regards to net interest margin, we reported net interest margin according to our calculation at the level of 5%. It was to certain extent affected by accelerated amortization of discounts on bank's Eurobond for the amount of KZT 7.4 billion, which is related to earlier partial prepayments of 2022 issue, the amount of USD 200 million. Without that effect, net interest margin would be at the level of 5.4%. The guidance which we provided for the whole year is the area of 5%. But due to the fact that in this first quarter the actual was 5%, so we think that's -- this target is quite achievable.

In terms of NPL, there was indeed some increase in NPL level in the first quarter and basically there are reasons. Reason number one, as I said, there was some seasonal reduction of the portfolio. So whereby the credit portfolio is reduced and it should naturally increase the NPL percentage.

And secondly, those few corporate customers, which actually wasn't paid in previous periods and they were not following their payment schedule whereby they fall in overdue situation. But it doesn't affect the credit report of the portfolio because that customers already considered by the bank as impaired, and there is adequate provisions created against these customers. So from the quality -- a quality perspective, we think that is a neutral change.

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Ivan Kachkovski, Renaissance Capital, Research Division - Research Analyst [4]

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Can I also ask about your rate outlook on the key rate [of being] National Bank? And how do you see corporate loan rates evolving over the next few quarters?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [5]

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Yes. Just a moment, please. Yes, basically, National Bank is following their own policy on targeting the inflation. And the corridor of which National Bank is targeting is actually 4% to 6%. And inflation is actually gradually decreasing in Kazakhstan. So if the dynamic will continue to be -- to follow, I mean, the inflation will pay us or go down within that corridor, there might be potential for some reduction in the National Bank base rates.

Saying that, we have to slow that. Last year, there was quite significant reduction in the base rate. So we started last year at the level, I think, 10.25%. And within the year, there was -- within certain period of time, there was 125 basis points cut. So -- and starting from this year, the National Bank already cut interest rates once by a 0.25 point. So the potential for reduction is in place. It's probably not that much. And to large extent, it will depend how the inflation dynamic will go throughout the year. And actually, there is a deep link between the base rate and trades on the loan. But typically, there is some lag for 1 to 3 quarters depending on type of the loans.

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Operator [6]

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(Operator Instructions) We have no other questions at this moment. Dear speakers, back to you for any points you wish to raise.

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Mira Kasenova, Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations [7]

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Dear ladies and gentlemen, it looks like there is a technical issue with the Q&A session. Could you please use the landline conference password, which have been provided by the operator via webcast chat, please?

(technical difficulty)

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Operator [8]

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(Operator Instructions)

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Mira Kasenova, Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations [9]

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Could you please use the phone line confirmation code in order to put the questions via landline conference, 37913792 and # tag? Thank you.

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Operator [10]

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(Operator Instructions)

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Mira Kasenova, Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations [11]

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Dear ladies and gentlemen, we'll give you several minutes to dial in. And please accept our apologies for technical issue. Thank you.

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Operator [12]

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We have a question from the participant. Please introduce yourself.

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Tolu Alamutu, Tellimer Research - Director & Credit Analyst of Financials [13]

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Can I just check that you can hear me?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [14]

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Yes, yes. We're hearing you.

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Tolu Alamutu, Tellimer Research - Director & Credit Analyst of Financials [15]

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My name is Tolu Alamutu, and I'm from Tellimer. I just have a few questions, please. The first is on the bond issue which you have partly redeemed. I just wanted to know whether there's any plans to do any further buybacks or redemption of that security. And linked to that, is there is also any plan for Halyk to return to the bond market anytime soon?

The second question is about the bank strategy going forward. Obviously. You're clearly #1 in Kazakhstan at the moment. I just want to know whether you see any further opportunities for M&A. Or if you see opportunities in certain businesses that you would like to build up going forward?

And the final question is about the release you put out regarding a potential sell down of the stake of your majority shareholder. Is there any update on the timing of that? And I know you said that the shareholder will maintain a majority stake. But how much could it fall -- could it fall to 50%? Or do you think it stays significantly above that?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [16]

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Thank you for your questions. Just a moment, please. Yes, thank you, again, for your questions. With regards to the partial prepayment which we exercised on the 2022 KZT 700 million Eurobond, at this point of time, there is no specific plans. But as you know, they might have arrived with a 30 days' notice to make a partial prepayment. So we might consider that in the future. But there is no specific plans in terms of the timing [on their side] as we speak now. We, also at this point of time, do not have specific plans with regards to going to the debt capital markets with the new issues. So this is regarding the bonds.

In terms of other -- looking at the other businesses, we do not have any plans at this point of time. We can't plan out considering acquiring any new business. But I want to highlight that at this point of time, we are in the process of obtaining the license in Uzbekistan for the banking -- the banking license for Uzbekistan, which is a greenfield operation. So we would be building the bank from the beginning. So we're not acquiring the business. So it will be the new bank which we'll be establishing in Uzbekistan.

With regards to your third question, yes, those announcement done by major shareholder, Almex, with regards its intention to partially sell its stake in the market with the aim to improve liquidity situation with Halyk Bank shares. We, as Halyk Bank, do not know details of their intention, including any potential amount or timing of that potential event. We only can refer to their press release which says that they intent to do that subject to favorable market condition and the intention is to remain as a controlling shareholder of Halyk Bank.

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Operator [17]

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Our next question comes from (inaudible). Our next question is from Andrew Keeley, Sberbank.

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Andrew Keeley, Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst [18]

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I have a couple of questions. Sorry, Murat, I missed actually most of what you were saying on Uzbekistan. All I caught was that I think you're planning to launch a bank there, a greenfield operation. Could you just give us any more details about any metrics that you have for this? I mean how much you would be thinking about investing in building this business? And whether it will be kind of through branches or more through kind of digital channels? And any kind of comments about the respective kind of size of the business over the next kind of few years?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [19]

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Yes. Andrew, thank you for question. Yes, we -- as I said, we shortly expect to receive -- hopefully, shortly expect to receive the banking license for Uzbekistan and hope to start operations by [mid-October] in the second half of this year.

According to Uzbekistan legislation, the minimum capital level is USD 15 million. So we are starting from this position. And our main target is to become the main bank for the foreign international companies as well as Kazakh businesses which are willing to have -- which are already operating in Uzbekistan, which are willing to enter Uzbek market.

And yes, we would build the business on a gradual basis as we normally do as Halyk Bank. We aim to start with corporate customers, but we also wanted to work with the right individuals. Also, we would like to develop the digital platform. In Halyk Bank, we actually created this year the dedicated team, which the main task is to work on the digital proposition for our subsidiary banks, not only in future for Uzbekistan, but also in other countries where we are present. So for us, it's also important task.

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Andrew Keeley, Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst [20]

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Okay. And do you have any kind of an issue, ideas about the kind of -- the size of this business the next kind of few years? And any thoughts about what your plans are?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [21]

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Yes. Since this is, for us, the new market and also you might know that the country is rapidly developing its banking legislation and legislation platform. So the short-term priority would be to set operations and then to understand the operating model and what are the opportunities. So probably no hard -- later which we are able to share with yourself at this point of time.

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Andrew Keeley, Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst [22]

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Okay. I have a second question just on your fee income which was pretty weak in the first quarter. And I'm just wondering if you can just elaborate a little bit about why that was the case? And how we should think about this going forward? Is it -- was it more a kind of one-off bad quarter? If I look at, say, the fee expense there was very strong growth in the plastic cards fee expense. Probably good if you could just explain what happened there and just what your thoughts are on the outlook for fee income.

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [23]

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Thank you for your questions. Andrew, just a moment. Yes, the overall -- if we talk about fees and commissions, income and expenses, first, I would like to touch upon the fees and commission income. So one -- there are basically 2 reasons which explain dynamic in terms of -- if we talk about the income side. One is, typically, the first quarter is seasonally weak compared to the fourth quarter.

And secondly, there was effect of merging KKB into Halyk Bank. Before the merger, transaction between accounts or cards of KKB to Halyk Bank and vice versa was considered as external payment, whereby there was certain fees attached to them. After the merger, all these transactions became internal transactions within the bank whereby affecting the -- a reduction in the fees and commission income.

With regard to fees and commission expense, we see increasing number of cards -- of third-party cards which are going through our [existing] network in the first quarter. And that actually increases the fee and commission expense through higher (inaudible) fees. So that was the main reason. We do not expect similar dynamic in future quarters. So we expect that situation would be gradual coming to more normalized situation.

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Andrew Keeley, Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst [24]

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Right. And by more normalized situation means, do you have any sense of what kind of growth you would be looking for?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [25]

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Andrew, we are not giving separate guidance for fees and commission income, either on gross or net basis. So probably you can look for the quarters before which we were reporting before that.

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Andrew Keeley, Sberbank CIB Investment Research - Head of Financial Institutions Research & Senior Analyst [26]

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Okay. And I guess the final question. On your costs, obviously, it was a much better quarter then, say, on the fee income side. And I'm just wondering whether you can give us any thoughts on whether this kind of year-on-year decline on costs that we saw in the first quarter, how sustainable this is? Or whether there were kind of really one-off factors in there that suggests that this won't be the kind of norm going forward?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [27]

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Yes. So sorry for the delay. Andrew, with regards to operating expenses, those actually the synergy effects, if you compare first quarter versus first quarter because there was some reduction in staff expenses. And also there was some other cost optimization as regard to cost synergy effects from the merger of KKB. And you can look for our first quarter report and then you see which particular cost lines also will reduce.

And versus the fourth quarter, the main change was the seasonality. So typically, the first quarter is the lowest in terms of expenses. So probably, [by the year] we will see somewhat increase in the cost to income. For the whole year, we provided the guidance. Cost to income was 30%. So we think that cost to income will not exceed that percentage.

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Operator [28]

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Our next question is from Mikhail Shlemov from VTB Capital.

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Mikhail Shlemov, VTB Capital, Research Division - Equities Analyst [29]

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If I may ask 2 questions. The first question is regarding the impaired loans, similar to the type of loans which has migrated for the impaired into NPL causing the NPL spike in the Q1. Perhaps you could share with us the size of this impaired portfolio which you think is in the watch list and which could further flow into the NPLs throughout the next couple of quarters?

And the second question is about your full year '19 guidance. I know it's early into Q1, but just like looking at the overall dynamics and those margin outperformance, perhaps would you be in a position to update your outlook for full year?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [30]

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Mikhail, thank you your question. I think it's probably better to look from the IFRS 9 perspective, and we are showing the Stage 2 and Stage 3 loans. If you would look at that particular data, so you will see that on combined basis, Stage 2 and Stage 3 loans actually reduced in nominal amounts in the first quarter. There might be sometimes flows between impaired but not-for-due loans into NPLs and backwards. And this new way represents the approach of Halyk Bank where we -- once we restructure the customer we try to set very tight repayment schedule in order to closely follow the situation with the customer. So the flip effect of that is -- obviously there are chances that the customer might on temporary basis would slip from their agreed schedule. But for us, it's again opportunity to sit down and discuss with the customer what is the next -- what are the next step in terms of working with them to improve the situation.

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Mikhail Shlemov, VTB Capital, Research Division - Equities Analyst [31]

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And could you perhaps elaborate what part of the Stage 2 loans you think are in this, let's say, flex to waiting list or watch list?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [32]

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We do not have, let's say, the specific rate which clearly says that these customers are, let's say, the major suspects for going to NPLs. But overall if you look at our Stage 2, at the end of the first quarter, Stage 2 loans comprised 3.1% of the gross portfolio.

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Mikhail Shlemov, VTB Capital, Research Division - Equities Analyst [33]

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Okay. That's helpful. And if you could elaborate on the full year guidance, please?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [34]

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With regards to what? I'm sorry.

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Mikhail Shlemov, VTB Capital, Research Division - Equities Analyst [35]

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Yes. '19 guidance. Basically, after the Q1, it seems like that the margin will be depending with a one-off. It's still holding up better. This is what you've been guiding of around 5%. However, the loan growth so far has been disappointing. I was wondering on whatever you'd be willing to tweak the full year guidance after the Q1?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [36]

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No. We typically are not revising the guidance at this point of time of the year. So at this point of time, we're keeping the guidance which we announced during our previous call.

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Operator [37]

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(Operator Instructions) We have a follow-up question from Mikhail Shlemov, VTB Capital.

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Mikhail Shlemov, VTB Capital, Research Division - Equities Analyst [38]

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Sorry, coming back with another question but in total different topic. I think somebody was earlier asking about the plans of a major shareholder to dispose a part of the stake and on trying to improve liquidity and investment tracking of the Halyk stock. I wanted to ask, on whatever you, as a management, are recommending the shareholder to possibly change of listing on the paper, for example, to move from the current GDR-based listing into a premium listing on the London Stock Exchange? Or look at where alternative listing options as a part of this process?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [39]

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Basically, during our regular meetings with investors, we try to gather the feedback what they think we, as a bank, can improve. And we typically find this feedback as a very useful source for us to understand what the bank should take in order to improve its stability or to improve interest from shareholders -- from investors to improve their attractiveness of our stock.

Also during the last year, we made extensive non-deal roadshow in the beginning of last year and also we have quite large number of meetings also here in Almaty in Kazakhstan. And in many meetings, we receive the feedback that overall, investors see the value in the bank. They like the performance. And the main issue which they are facing with is lack of liquidity of the stock. And so on a regular basis, we consolidated that feedback and delivered that to the Board of Directors. And we think that the recent announcement from Almex is a result of these feedbacks which -- where the management was gathering during these meetings and delivering to our Board of Directors.

And with regards to your second question, regarding the changing the listing, we at this point of time are not considering change with that regard. So just how it is on London Stock Exchange. And so we are not recommending at this point of time a change to that setup.

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Operator [40]

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Our next question from the line of Conrad Scheurkogel, Artha Capital.

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Conrad Scheurkogel, Artha Capital Management, Inc. - Research Analyst [41]

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It's somewhat similar to the previous question. Your capital -- upcoming Capital Markets Day, you have alluded to the fact that you regularly visit investors, gather feedback, et cetera. You're trying to find alternative ways to talk about the franchise so that people can understand the value offering of Halyk Bank. Is that the premise? Is that the aim behind your Capital Markets Day? I mean obvious answer is I will have to wait and see. But can you give us some indication? What's the intent with your Capital Market Day?

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Murat Uzakbaevich Koshenov, Joint Stock Company Halyk Savings Bank of Kazakhstan - Deputy Chairman of the Management Board [42]

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Conrad, thank you very much for your question. I just want to remind for those who are not following us closely. Last year, in the first quarter, we made extensive non-deal roadshow. So we spent few days in London, in Frankfurt. We traveled to Stockholm, to Scandinavia. We visited New York and Boston. So we find that exercise as a very helpful and insightful for us as a management to be closer to our shareholding investment base.

As I said, we were gathering -- that was first of all opportunity to talk face-to-face in terms of what Halyk Bank is. And we appreciate that there is lot of change that was happening to Halyk Bank during last 2 years, including the large acquisition of KKB and the merger which we were engaged in 2018.

So this year, we decided that it would be good if we somewhat change the format. So we decided to make a capital day. But it's not entirely new. Few years ago, we also had the annual day in London. So we also made one day which was devoted to the analysts. And this time, we decided to have direct discussions with our investor base.

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Operator [43]

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(Operator Instructions) We have no other question at this moment. Dear speakers, back to you for the conclusion.

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Mira Kasenova, Joint Stock Company Halyk Savings Bank of Kazakhstan - Head of Financial Institutions & and International Relations [44]

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Yes. Ladies and gentlemen, thank you very much for participating our call today. As usual, our IR team remains open for any further questions. Thank you very much. Bye.

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Operator [45]

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Ladies and gentlemen, this concludes today's conference call. Thank you for your participating. You may now disconnect.