BAKU, Azerbaijan, December 17. Kazakhstan’s digital banking sector has seen extraordinary growth in recent years, with near-universal adoption of online banking, a surge in digital transactions, and rapid development in the fintech industry, said Nariman Mukushev, Deputy CEO and Member of the Management Board of Kazakhstan’s Halyk Bank, in an exclusive interview with TurkicWorld
"The number of active online banking users in Kazakhstan has risen from 5 million in 2019 to 23.1 million in 2023, thanks to technological advancements and regulatory support," Mukushev said. He highlighted that the proportion of the population using online banking has increased from 25% in 2018 to nearly 100% in 2024, showcasing the widespread adoption of digital services.
Digital payment volumes have also skyrocketed. "Digital transactions now account for 89% of all transactions, up from just 7% in 2014," Mukushev noted. The per capita value of digital transactions has surged from approximately $20 in 2014 to $13,800 in 2023, underscoring the rapid evolution of financial habits in the country.
Public service digitization has further accelerated this transformation, with over 90% of Kazakhstan’s economically active population using the eGov platform to access government services.
Halyk Bank has played a key role in this digital shift. "At Halyk, the average time to open a bank account online is less than three minutes, and online lending approvals take about two minutes. This efficiency has earned us a loyal client base and consistent growth in active users of both our consumer SuperApp and our commercial OnlineBank," Mukushev explained.
As Kazakhstan’s largest financial institution, Halyk Bank is deeply integrated into the economy. "We finance nearly 50% of the country’s real economy through corporate lending and facilitate payments amounting to 83% of GDP," Mukushev said. "By supporting businesses, infrastructure, and cross-border trade, Halyk ensures that Kazakhstan’s growth story continues."
Mukushev also reflected on the country's economic resilience, noting that GDP growth reached 5.1% in 2023, recovering strongly from the pandemic’s impacts. Looking ahead, he expressed optimism about Kazakhstan’s prospects.
"We are optimistic about the upcoming year, with continued economic growth driven by key industries and government initiatives aimed at diversifying the economy. As global investors increasingly turn to emerging markets, both Halyk and Kazakhstan are well-positioned to benefit," Mukushev said.
He further noted that Halyk Bank continues to demonstrate strong fundamentals, blending disciplined risk management with cutting-edge technology to drive growth and profitability.
Mukushev highlighted that the bank's credit ratings reflect its robust position in the market. "We combine disciplined risk management with advanced technology to ensure strong fundamentals," he said, noting that Halyk Bank holds the highest credit ratings among privately-owned banks in Kazakhstan—Moody’s Baa1, Fitch BBB-, and S&P BB+. He also pointed out the bank's solid profitability, with a three-year average Return on Average Assets (ROAA) of 4.4% and Return on Average Equity (ROAE) of 31.5%, underscoring its financial strength.
"Our approach exemplifies the principle that Kazakhstan’s success is Halyk’s success: by remaining a reliable partner for our customers, we foster financial stability and growth opportunities for businesses and individuals alike," Mukushev added.
Halyk Bank's commitment to its shareholders is evident in its dividend policy. Over the past five years, the bank has paid out an average of 48% of its net profit to shareholders, offering investors both strong returns and growth potential. Mukushev explained, "We believe that Halyk Bank offers investors the dual advantage of being both a growth stock and one that offers industry-leading returns through dividends."
The bank's impressive financial performance continued in 3Q2024, with net income rising by 53.7% compared to the same period last year, reaching 259.7 billion Kazakh tenge (approximately $558 million). This growth is attributed to strong performance in digital banking and fintech innovations. "Our interest income rose by 31.5%, contributing to an impressive 7.3% net interest margin," Mukushev noted.
Looking ahead, Halyk Bank’s strategic vision is focused on expanding its digital ecosystem to meet the evolving needs of both retail and corporate customers. "We are leveraging AI and other advanced technologies to improve operational efficiency and customer satisfaction," Mukushev said, emphasizing the bank’s commitment to staying at the forefront of the digital transformation in banking.
Regionally, Halyk is focusing on expanding its presence in Uzbekistan and Georgia, reinforcing its role in fostering regional economic ties. "Our focus on Uzbekistan and Georgia underscores our commitment to exploring new growth avenues in the region," Mukushev explained. Domestically, the bank plans to deepen its engagement with small and medium-sized enterprises (SMEs) and retail clients to ensure that all sectors of Kazakhstan’s economy benefit from Halyk’s innovative services and financial expertise.
Moreover, Halyk Bank continues to redefine the digital banking landscape, offering innovative solutions that integrate finance with everyday life.
"For our retail customers, the Halyk SuperApp epitomizes our vision of an all-encompassing ecosystem, enabling customers to manage everything from banking and government services to education and entertainment, all in one place," Mukushev explained. "This seamless integration not only enhances convenience but also deepens customer relationships, making Halyk an indispensable partner in their lives".
The success of this approach is evident in user engagement metrics. "Our monthly active users were up by 11% year-on-year in the third quarter of 2024, and daily active users rose by 21.1%. We continue to see rapid adoption of our technology," he noted, adding that the platform’s speed and simplicity—allowing users to onboard digitally in under a minute—resonate with Kazakhstan’s tech-savvy population.
Halyk Bank has built its digital platform from the ground up, avoiding the limitations of legacy systems and achieving a level of flexibility and efficiency that enables rapid deployment of new services. "Our platform seamlessly integrates lifestyle and business services, enhancing user convenience. This adaptability ensures the bank remains competitive in a fast-evolving digital landscape," Mukushev said.
The bank’s focus on blending international best practices with cutting-edge technology has positioned Kazakhstan as a global leader in banking sophistication. "Our strategy to combine international best practices with state-of-the-art technology has made Kazakhstan a leader in banking sophistication. This advantage positions Halyk as a model for other developing economies, demonstrating how a forward-looking approach can leapfrog traditional banking limitations," Nariman Mukushev concluded.
