Halyk Bank SWOT & PESTLE Analysis

Strength

1. Market leader in Kazakhstan: Halyk Bank is a leading bank in Kazakhstan and neighboring countries. It has the largest clientele and personnel in the nation. It is the largest agency to process pensions and other social payments. Being the largest service provider in various parameters in Kazakhstan, the bank has 626 branches, 4459 ATMs with 39% market share. The bank has 34.7% of current accounts, which has 0% interest rate and commands the highest market share of such accounts among peers. The company has over 4.2 million users of online banking portal and 162.3 thousand corporate users of advanced online banking portal, as of 2020. Among Global 2000 banks, rank of Halyk Bank shifted from 1599th to 1522nd. It won several awards in 2019, most noteworthy being the “Best Bank in Kazakhstan.”

Weakness

Opportunity

1. Poised to benefit from the digital transformation: Digitization in banking has become vital for the survival of the sector. It gives a lean structure in the workforce, reduces corruption, increases convenience to customers, enhances accuracy, minimizes miscalculations, scales profitability by trimming down transportation of cash and fits with the changing customer journey hierarchy, like shopping through e-commerce, paying through cards, etc. Halyk Bank is massively investing in the digital transformation of its services. The bank has hired external consultants to revamp the digital infrastructure of the bank through the inputs of its 'Go Digital' division. The clients of the bank can order cards through the bank's website. The bank is boosting automation significantly. It is installing automatic embossing machines, so that customers could get their debit or credit cards printed themselves on providing necessary proof without any requirement of manual intervention. The bank has its own chat-bot, which provides a medium of interaction with consumers and helps the bank to mitigate grievances in an analytical way.

Threats

Political

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Economic

1. Stressed banking sector of Kazakhstan after decline in oil price: Kazakhstan is mainly dependent on the export of mineral and oil. The oil producing nations are under distress since 2015. After decline of oil process in 2015 by more than 100%, Kazakhstan economy was distressed. The currency of Kazakhstan, Tenge fell about a quarter of its value in 2015 added with increased inflation. Kazakh banking system is flooded with non-performing assets and newer loans are sanctioned with little expectation of payback. Since then, the Central Bank of Kazakhstan is supporting the economy by expending from the budget, known as budgetary stimulus, so that consumption could increase. To some extent the government has been successful also. The inflation in 2015 was 13.6% and in 2019, it dropped to 5.4% gradually along the time. The budget stimulus, which was 20.4% of GDP in 2019 resulted in growth of wages by 8.3% in real terms and raised minimum wage by 50% but brought a budgetary deficit of 1.9%. With higher earnings of working class, consumption would increase, which would benefit the banking sector. Still, the President stated that the banks have to attract foreign investment to get rid of decline. Concerning this, Halyk Bank has worked immensely on digital transformation of its platform and increased the physical presence substantially. Halyk Bank has maximum number of current accounts in Kazakhstan. It is revamping its infrastructure, so that it could provide top-notch services to retail as well as industrial customers.

Social

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Technological

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Legal

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Environmental

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