Halyk Bank of Kazakhstan Joint Stock Company (HSBK) Earnings Call Transcript & Summary

Good afternoon, dear investors and stakeholders. We are happy to welcome you today to our first deep-dive session. Thanks, everyone, for joining us. My name is Mira Tiyanak, and I am Head of FI and IR at Halyk. Immediately after the presentation, we'll hold the Q&A session. Please note that the webcast is being recorded, and its video recording will be posted on our website, halykbank.com. Firstly, Mr. Zhumabek Mamutov, Deputy CEO, responsible for Retail Banking, will present to you our Halyk Super-App. After, Mr. Nariman Mukushev, Deputy CEO, responsible for Digital Government Services, Ecosystem and Customer Experience, will share details about Halyk's ecosystem and GovTech. Finally, Mr. Roman Maszczyk, Deputy CEO responsible for Compliance, Risk Management, Data Science and Collateral, will present to you our Data Factory and its progress during the past 3 years. And now I will give the floor to Mr. Zhumabek Mamutov. Please go ahead.

Thank you, Mira. Good afternoon everyone and welcome to Halyk's Deep Dive Session. My name is Zhumabek Mamutov. I am Deputy CEO for retail business. Let's start with our Super-App Halyk. Halyk team actively develops its customer proposition on ongoing basis to provide high-quality service and become more than a bank. We have created Super-App which offers financial and nonfinancial services for our clients, traditional banking products and daily usage products and lifestyle services. Today, everything is available through Halyk. Onboarding in Super-App is very simple. To start using Super-App, just download it and register online with our onboarding service. In less than 1 minute, anyone can remotely become a user for our Super-App at any convenient time. The customer's choice is the best and the fairest assessment for us. Today, more than 6.3 million customers are monthly active users of our Halyk app. MAU has grown by more than 5x since 2020. After registering, client can open a digital card with a full range of services, payments transfers, cardless cash withdrawals, purchases via QR code and payments using an Apple, Samsung, Garmin, Google Pay. If needed, customers can have a plastic card delivered or they can issue a card by themselves via using card issuing machine located in self service area in Halyk bank branch. The bank has already issued more than 6 million active cards that have at least 1 monthly transaction. I would like to note that in the first half of this year, 25% of all the new cards were opened online. While the share of non-cash transactions has grown from 36% in 2020 to 72%, we expect these numbers will increase further. The Super-App provides a complete list of payments and features, such as proactive notifications about upcoming payments and the ability to make repeat payments. You know that payment confirmation is sometimes important to our customers, so we have offered a function to save and send receipts. Our customers are pleased with the bonus points they receive for their purchases. In the second quarter, the volume of payments was KZT 195 billion, partly due to a wide range of more than 6,000 monthly active services. Each month, more than 1.6 million customers pay for services using our Super-App. Our multifunctional QR code system allows customers to make transfers without providing any details, like card and phone number, issue invoices with option to split a bill or collect money to buy a gift for friends, withdraw cash from ATM and make purchases in the POS without cards. Now, QR codes are used to make 21% of total payments. Actually, it's every fifth payment. This share will grow further. The bank directly processes all these types of transactions without the involvement of payment systems or other partners. We continue to develop more technologically advanced payment methods for our customers. Sometimes people find themselves in situations when their phone battery is running low, or they don't have their phone with them to make a payment. And we have created a service to solve these problems, that is unique in Kazakhstan. The ability to make purchases using face pay when you don't even need to have your phone with you. To use this service, all you need is to grant permission to make payments using your face in our Supreme and you are done. A pilot project for this service has already been conducted with employees in the Almaty Underground. Soon this service will be available to all customers and we also plan to expand the ability to use the service with other partners. Money transfer is one of the most popular service. The following types of transfers are available in our Super-App, international transfers which enable customers to make card to card transfers without opening an account as Western Union, and allows for direct transfers to a local card in Uzbekistan; transfers to another card by a phone number to any bank in the country; sending money by manually entering the account numbers of any individual or organization, all the different types of transfers can be made 24/7 or also using the Face and Touch-ID that is unique to [ Kazakhstan now]. Customers can conveniently manage their transfers at any time, with the ability to view their transfer history, share receipts for completed transfers or repeat the previously made transfers if necessary. For instance, in June, more than 3.3 million customers made 18 million transfers for approximately KZT 1 trillion. Volume of transfers increased by 50% in the second quarter of this year compared with the same period for the last year. Our customers like our digital product in this Super-App and one of them is our time deposit. The clients are already opening 72% of new deposits online, while our wide range of smartphone based deposit management services, enables them to carry out all their transactions online. The bank [ sourced ] 1.2 million depositors who trust us more than KZT 5 trillion of their savings. The amount is constantly rising as well. Our Super-App allows our customers to get online loans, as well as refinance loans from the other banks within just a few minutes. Wide range of loans are available in our Super-App, such as online loan without no collateral, refinance loans at other banks, digital auto loans at the partner car dealership network, getting an online mortgage decision to buy a new home. Furthermore, we provide the following loan service through Super-App; ability to make monthly payments, early payments, payment due date reminders and et cetera. And now I would like to present you our BNPL product. The customers can make purchases via BNPL both offline and online. It allows our customers to make installment purchases using Halyk QR code and on our marketplace as well, and do shopping at the network with the major partners. The digital loans in our Super-App very popular. In the first half of this year, 82% of the loans were issued online. During 3 years, the share of digital loans has grown from 12% to 82%. Our number of borrowers has increased to 1.6 million people. We are proud of our success in e-commerce. Since launching Halyk market, total purchases on our online platform have grown by more than 15 times, and its GMV reached KZT 7.3 billion in the second quarter. We have more than 3,500 partners and our SKU reached more than 670,000 products. The most popular categories among our customers are electronics, various accessories and jewelry. We will continue to develop our platform and create even more opportunities to make our customers feel comfortable with us. For our partners, we will create an open platform and enable them to connect to it online with a full range of services, for both existing business customers and startup entrepreneurs. Our largest branch network is becoming one of our main success factors, since it is crucial for us to be closer to the customers and we develop our multi-category marketplace. To date, we have already opened 25 pickup points in our branches and 190 parcel stations are available for our customers right now. We intend to develop the pickup points and this parcel station network further. I would like to pass the floor to Mr. Nariman Mukushev. He will present GovTech and Ecosystem.

Thank you, Zhumabek. Hello everyone and thank you for joining us. My name is Nariman Mukushev. I'm a Deputy CEO for Digital Government Services, Ecosystem and Customer Experience. Today I will share insights about Halyk ecosystem. Halyk team is actively developing 2 directions of digital ecosystem, our propositions for retail and corporate customers. Our ecosystem products cover all daily services, from financial products and government services to entertainment markets and so on. Today, I would like to focus on 2 of them GovTech and Kino.kz. I would like to highlight the importance of digital ecosystem. We boost customer engagement with our products by providing services for daily needs. We improve service quality on usual basis, which leads to growth in customer loyalty. This includes bank products integrated with nonfinancial services. For example, we offer customers the ability to open a special bank account for childbirth benefit from government. We aspire to simplify the customer journeys through automation of government services. For example, a mortgage loan; before, a customer had to visit a public service center to register the loan collateral and provide paper documents. Now we can do this for them because of integration with government data, during the customer application for the loan. After approval, the customer just signs the required documents. This is convenient, because the customer is already interacting with us. In this way, we eliminate the need for customer to visit the public service center. While also promoting attractiveness usability and speed of our service. And we take a targeted approach to each of our customer and it allows us to understand their needs and wants. So we offer the most customer oriented products, flights or movie tickets, government services or any other bank products. As a result, the rate of engagement with our bank's products grows, as well as the average check and income of our customer. The first project within the digital ecosystem I would like to talk about is GovTech. We started development of GovTech in late 2021. GovTech MAU reached 750,000 in June of this year, which is up 25 times versus beginning of the last year. We are the leading provider of online government services in the market. Our customers have access to 48 government services, while the nearest competitor provides only 32 services. However, more important KPI for us is the usage of our customer. As you can see, usage of our GovTech is 5.7 million users, which is up 3.4 times. This year Kazakhstan had a campaign to encourage people to register foreign cars, who had not yet done so. Many citizens applied for foreign car registration as part of this campaign. We are so happy to announce that more than 36% of applications were sent via the Halyk Super-App. In addition to growing engagement with our digital ecosystem, we also helped the government to reduce the crowd flow at public service centers. We have medical information that customers need when applying for a job, driver's license issues, or to attend university. Our customers can quickly provide this information through a request in our Super-App. Halyk issued this information more than 200,000 times in the first half of this year. We are proud of providing information on pension and social contributions. They function within our ecosystem [ also ] are very popular among our customers. Nationwide, Halyk issued 15% of information requests for pension contributions and 20% for social contributions. These numbers demonstrate that our customers value their usability and public services at Halyk. We also have a service for social support payment information which customers can request to use educational, health and other services at private organizations for free. Nationwide, Halyk issues 21% of these information requests. Next, I would like to quickly demonstrate a service launched in February of this year that has proven to be quite popular. Each month, more than 1,000 couples apply for a marriage registration online in our Halyk ecosystem. I have already talked about the family section and government services, which also include services for receiving birth certificates and childbirth benefits. Now I want to highlight the Childbirth Benefit Service. Nationwide, in terms of childbirth benefit, Halyk issues 18% every month and Halyk accounts for 38% issued among all online platforms. The birth certificate service is highly popular. Let me illustrate this simple process. [Presentation]

Live these moments. Halyk will take care of everything. Let me switch to proactive services as childbirth benefits. Traditionally, customers would have to send a request to governmental body to obtain this benefit. Now, through proactive service, the government itself sends a notification offering childbirth benefits, when a record about a baby's birth appears in government data. All the customer needs to do is open notification and choose [ the special ] bank account where they want to receive the benefit. That's it. I'm sure this proactive approach represents the future of public services. We are already doing it today in Halyk. Let me highlight a few areas where we will be concentrating our force in GovTech. We have already started working for such services as filling tax returns, customer declarations, digital letters of attorney and so on. We are also working actively to develop services for corporate customers. Let me present another project Kino.kz. The word Kino translates as a cinema. Historically, this service was a place for people to find cinema schedules and buy tickets for the cinema. We have transformed this service, adding new businesses such as theaters, concerts and sports events. Let me show you a short video. [Presentation]

These are popular local and international artists who have promoted and sold out their concerts exclusively on Kino.kz. Here you can see the project's growth trends. Kino.kz MAU reached 2.2 million, which is up 1.6 times. Today we occupy 61% market share in online cinema tickets and have grown by 9% during the last year. But as I said before, we have great ambitions that have entered the broader entertainment market. We started working in the entertainment market last year, initially working actively only with cinemas. In that period of time, our market share of all entertainment was only 18%. Today we have 28% market share, which represents a rapid growth. We are also working to incorporate our customers' feedback and enhance service quality. This has driven growth in our rating in App Store by 2 times and in Play Market by 1.3 times. CSI is at the level of 95%. Our team is working so hard to increase the number of venues to offer our customers an even wider choice of events to visit. We have 47 cinemas, which is 65% market share of cinema halls. We already work with all major cinemas in Kazakhstan and now we are launching small cinema halls in regional cities. As you can see, we now also have 91 concert halls and 22 theaters. Our core audience from 18 to 34 years old, they are interested in entertainment, leisure, constructions, clothes, finance, and travel. Analyzing this information helps us to suggest various types of events and improve our services, as well as provide a personal approach to every customer. As I mentioned, we are working to launch our service for small cinema halls, some of which continue to use paper tickets because they don't have digital ticket system. For these types of venues, we are offering our software, cash register and accounts for the front and back offices. We are going to launch installments and credit as new forms of payments, because some events have high prices. We also plan to launch the Kino.kz card, which will allow our customers to gain not only bank benefits, but also entertainment. And of course, we will continue to offer our customer new exclusive events. But what do our customer look like? Of course, it is quite useful to know the numbers and statistics, but what if we visualize the customer base? [Presentation]

I would now like to pass the floor to Mr. Roman Maszczyk. He will present our data factory.

Hello everyone, and thank you for joining us today. My name is Roman Maszczyk, and I'm Deputy CEO for Compliance, Risk Management and Data Science. Today, I'm going to tell you about how we have built our Data Factory over the past 3 years. I will focus on the history of Data Factory in Halyk Bank, our business goals we set for Data Factory, and the tools we use to achieve those business goals. Let me start with a little of history. The history of Data Factory in Halyk Bank started in 2020, as an IT project with the preparation of IT infrastructure and hiring key people. During 2021, we built the first propensity to buy lifecycle management and uplift models. Additionally, we continued connecting external and internal sources of information, and launched marketing campaigns for testing the behavior of our clients. The year 2022 brought a massive increase in the application of the developed approaches, by expanding them to new products and business segments. In 2023, we focused fine tuning of the models, to make marketing campaigns even more efficient. The first significant progress was reached in expanding external and internal sources of information. As illustrated, in 2021, we had access to only 3 external databases. As of this year, that access has increased massively, including government portals, external commercial sources, and the entire Halyk ecosystem. As a result, the amount of data used by Data Factory has increased exponentially, which boosted our capabilities to cross use this information in an ever increasing number of ways. Let me move to business goals we set for Data Factory. Our primary business objectives are increase interest, fee and commission income, decrease customer churn, increase cross selling, identify supply chains, increase the share of products in client's wallet, attract new customers to Halyk ecosystem, reinvigorate inactive customers, improve and expand personalized offerings. Now, let me give you a glimpse of Data Factory tools we use to achieve our business goals. We define customer lifecycle as a cyclical value creation process, in which we start with understanding clients' needs, further segmentation and testing their reactions to personal offerings. An integral part of that process, are measuring profitability and communication with clients that both play important roles in achieving commercial product and marketing goals. Let's have a more detailed look at how we do it. The first 3 steps of customer lifecycle consists of segmentation, test and learn, and application of predictive analytics. After segmenting our customers, we then launch testing campaigns to measure client's feedback, the results of which are then used in building predictive models, to optimize conversion rates and profitability. The next phase of customer lifecycle, consists of generating value from clients' relationship, offering ever improved personalized recommendations and communication. At this stage, we combine all key factors like propensity to buy customer service needs and customer lifetime value to optimize profitability for the bank. As an illustration of the identified potential, let me highlight average fee income per small business that increased by 98% for those clients who accepted our personalized offerings. Finally, customer lifecycle management is a way Halyk Bank cares for clients' relationship much beyond 1 particular product or an individual transaction. This process constantly assesses potential for business growth, by analyzing clients' needs, familiarizing them with new products, and providing them with needed services. It also includes, on our part, working hard on keeping clients engaged, by identifying cross selling opportunities and flexible pricing for their basic needs, like service packages. Technology within Data Factory enables us to elevate personalization to a completely new level. What required a lot of time and effort only a year ago, today may be done much deeper and on a truly massive scale. To illustrate how we have been growing the level of personalized offers in both retail and SME segment, let me point to the number of leads generated by our predictive models. At the beginning of 2022, we started with a total of less than 100,000 of leads. Still, we finished that year with more than 2 million of personalized offers for small businesses and more than 14 million of retail customers up to date. Thanks to the work of Data Factory, we see a significant improvement in SME and corporate customers' key year on year business metrics. The number of products per SME customer is up 10%. The average commission income per SME customer is up 14%. The volume of B2B payments for goods and services within Halyk Bank for SME and corporate customers, is up 87%. The share of B2B payments for goods and services within Halyk Bank for SME and corporate customers is up 7%. Similarly, for retail customers, the key business metrics also improved, thanks to Data Factory. The number of products per customer is up 7% year-on-year, the number of active users of Homebank is up 29%. The number of active transactional customers in Homebank is up 30%. The monthly number of transactions per active customer in Homebank is up 20% year on year. All those advances illustrate the potential that can be realized by applying Data Factory tools to our customer base. By developing Data Factory further, we hope to tap in this potential even faster. Thank you. I would like to pass the floor to Zhumabek.

Today we presented you our Super-App, Ecosystem and Data Factory. We continuously strive to improve our services to make our clients life better. We hope you enjoyed attending our event, as much as we enjoyed putting it together. Dear ladies and gentlemen, this completes our presentation. If you would like to participate in our Q&A session, please click on the Q&A button on the left hand side of the screen. Please follow the instructions provided there to join the Zoom Webinar. On the Zoom Webinar, you will be greeted by the moderator who will guide you on how to ask a question. [Break]

Good afternoon and welcome to the Q&A part of Halyk Bank's Deep Dive session. Please kindly note that only Deep Dive related questions will be accepted today. Just a quick technical instruction; if you would like to ask a question, please use the Raise Hand button at the bottom of your screen. When it is your turn to ask a question, you will be allowed to speak at that stage. Please unmute your microphone. If you joined with your phone, please press star 9 to raise your hand. Please do lower your hand if your question has been answered. While stating your question, please also mention your name and company. You can also enter your questions in the written form using the Q&A function of this Zoom Webinar. Now we would like to open the floor for questions, and the first questions come from Ronak Gadhia. Ronak, please go ahead.

Thank you, Mira and the rest of the team for that very useful presentation. A couple of questions maybe would you be able to share what the take rates on some of these products are? In particular, we've seen some pretty meaningful increase on the payments side? And also, it seems QR code is scaling up quite nicely. So could you just share what the take rates on these products are? Vis-a-vis, what Halyk used to earn on traditional payments channels? So that's one. The other one that I picked up on from the presentation, it seems the app is being used to apply and disperse a significant volume of digital loans. Could you maybe just tell us what the underlying yields on these loans are, and could that be potentially impacted by the regulation that might be introduced by the government, that might cap consumer lending rates at 44%?

Ronak, could you please elaborate a bit more what do you mean by take rate?

So how much fee income the bank is generating on these various transactions? So for example, on the payment side, how much revenue is the bank earning per transaction?

Sure. Yes. We will answer in a while, because we have consecutive translation. Hold on the line.

[Interpreted] Let me answer the question about the take rate for the bank. These numbers are now for the banks acquiring a network and currently it varies from 1.6 to 1.8%. And let me answer the second question regarding the interest rate generated by our digital loans effectiveness. The interest rate for our digital loans effective rate is in the range of 26% to 30% annualized. Now, in continuation discussing your question as to how the rates -- maximum rates that are currently being discussed by the regulator may impact our digital business going onward. I can answer you simply that they will have no impact on us. Should the regulator decide to reduce the effective maximum rate.

The next question comes from [ Dan Mikhailov ]. Dan, please go ahead.

So first of all, thank you so much for the deep dive session. It was very interesting. I just had kind of another question on the regulatory climate. I know that the agency for Regulation Development of Financial Markets also announced measures to tighten credit risk assessments and scrap issuance of micro loans of up to, I think, 45 days and something like KZT 170 per month. And I was wondering how you believe this could affect your digital loan portfolio on the Halyk app, and I would also really appreciate if you could provide us a breakdown of digital loans by maturity that are procured through the app?

[Foreign Language] Hello. I can take that question. This is Roman Maszczyk speaking. Okay, so to address your question, we have to underline the fact that we are not doing those short-term, as we call them, daily pay loans. So any restrictions on the maturities of those loans are not going to affect us in any way. On the other hand, as Zhumabek mentioned, also the maximum affected trades that are usually linked to those very short-term loans are not going to affect us in any way, because we do not exceed those thresholds they are discussing right now. The third aspect of this issue is that although those questions are being discussed right now, we haven't seen anything substantial in writing from the regulator, so we think that those final regulations may still be something different from what you have had or seen somewhere in certain sources.

And can I just quickly follow up. Could you also provide a breakdown of the digital loans portfolio by maturity?

[Foreign Language] Currently, this is not a subject of the session. We may disclose this information or even not, we have to think about that during the financial session, IR session, but not today.

Next question comes from Can Demir.

Can you hear me?

Yes, we can hear you.

Okay. No, I was just going to ask about this refinancing consumer loans that were originated at other banks. We know that some of your peers originate loans at higher rates, and I was wondering, how aggressive you are in refinancing those loans? How much marketing you're doing? And what portion of your portfolio is constituted of those refinanced loans?

[Interpreted] Thank you for the question. And now, regarding our digital product of refinancing consumer loans originated from other banks, I have to say the following. First of all, we have fully digitalized process, which for the product is available through our Super-App. The process in the app takes within 3 minutes time and generally, on average, the process takes 2 minutes. This product is quite popular, and we see that in new underwritings, this product stands for almost 1/3 of all [ sized ] digital loans.

Okay. That's very helpful. May I also ask a follow-up question? Actually, another follow-up to this, it's a separate question, but it's kind of interconnected. I was wondering if there's an opportunity to issue BNPL loans for the purchases that are done at merchants that you do not have a business relationship with. I mean, are those situations where you know the customer who is going to make the purchase, but you don't do business with the merchant? Do you have an opportunity to finance those purchase as well? Or is this -- is the BNPL product exclusive to the merchants that you do business with?

[Interpreted] Thank you for the question. Let me first explain how the product works. The product that we offer to our customer is an interest-free loan compensation for which is covered on the side of our merchants. To collect this compensation, we need to have a corresponding contract in place with each partner. Therefore, this digital product, a BNPL transaction is available only to the merchants in our digital network. At this time, the number of such merchants is over 21,000 throughout Kazakhstan, and is growing quite actively month-to-month. Secondly, should our customers be willing to acquire a product in an outlet or a merchant that is not part of our network, for that scenario, customer can always use the digital product that is also available to them in their digital app.

That's very helpful.

The next question comes from Beidi Gu.

Thank you so much for this very helpful Deep Dive. I may have missed a question earlier on the take rate. I'm just wondering kind of the commission rates, if you could give us a range in terms of the commission rates that you charge on products like Kino and GovTech and others? And the second question is regarding kind of your kind of your -- kind of a medium- to long-term goal in terms of user acquisition, and in terms of kind of any financial targets that you have for mid- to long-term, that would be very helpful.

[Interpreted] I will be taking it. Regarding the commissions we collect for such products as Kino.kz and eGov, they are quite raging. And at this time, we're not disclosing any details on the range of those commissions. We should also mention that for eGov, there are mandatory fees that we collect on behalf of the government, which we immediately pass on to the government, and we do not add any additional commission on top of that, that's for government services. Because government electronic services are the services that our customers get to enjoy through our app, while before, they had to go to a specialized brick-and-mortar building to receive those essential government services.

Beidi, could you please repeat your second question?

Yes. I was wondering if you have any mid- to long-term financial targets in terms of MOU or in terms of your user acquisition budget in the medium- to long-term?

[Interpreted] Now about amounts for Kino.kz, we currently have an amount of KZT 2 million to KZT 3 million, and we see a very serious growth in the last few months. We practically have doubled this number. For Government Services, MOU, we have grown 25x. Currently, it is KZT 1 million, and it will grow 25x.

Next question comes from Ronak Gadhia.

Just a couple of follow-up questions. Maybe a follow-up question from what Beidi was asking. You can't reveal the take rate on Kino.kz, but would you be able to reveal what the take rate is on marketplace? That would be helpful. And just related to the marketplace question, what incentives are you offering merchants to sign up to your marketplace? Because as things stand, the market leader already has quite a big head start. So what incentives are you offering them to maybe offer some of -- offer some other products on your ecosystem? And then the second question, again a follow-up from what Can was asking regarding refinancing of loans, it seems like an interesting product. But could you just talk about the credit standard on that? What measures are you taking to ensure that some of the poor quality borrowers on the other platforms are not transferring their loans to your platform? And obviously, then that could become problematic for the bank. So how are you mitigating that risk?

[Interpreted] Thank you for the question. I'll answer the part regarding our marketplace. Currently, we're actively working on development of this platform. We see high demand on the part of our partners, and there are a number of such partners in our network is on the rise. We're also actively correspondingly increasing the SKU base. According to our plans, we can definitely see it, and we have it in our plans to grow faster than the market. Therefore, at this time, we're not in a position to disclose the commissions and terms at which we signed with our partners. And could you please repeat your third question, your last question?

Yes. So I was just asking about the refinancing product, what measures are you taking to ensure that you're not attracting the poor quality borrowers from the other platform? So, there are borrowers who may be struggling to repay their loans and the other platforms. What measures are you taking to ensure that those problematic loans are not big transferred to your platform?

[Foreign Language] Let me address this part of the question. First of all, we have to underline the fact that Halyk Bank credit strategies are more conservative than the market -- the banking sector, especially microfinance organizations in general. So in a way, we refinanced only customers with good credit history and credit profile, and we mainly attract them not by offering them refinancing as such at any cost, especially at high cost to the customer, but we would rather choose and pick those customers with good credit profile, who are in some way tired of very high rate loans they have taken in other competitors of ours. In this way we, in our opinion, hit a sweet spot between a credit risk profile of those customers and the pricing. We still think that our scale offers us a possibility to find those customers, and those customers especially that are interested in our lending offerings are attracted by our moderate interest rates. And obviously, the opportunity to consolidate smaller loans from a number of our competitors. So this is, at this moment, our main competitive advantage, we think.

If I could just ask one final question. Again, to do with, I guess, potential regulations. As you continue to scale up, and obviously, as we know, your competitor already has built up significant market share, what is the risk that the regulator will eventually step in and ask the top 2 players to split up the businesses, the fintech from the marketplace, et cetera, or maybe open up the ecosystems to competitors?

[Foreign Language] Let me address this part of your question as well. First of all, our ecosystem is open, and it's not closed as in our main competitor. So, we are not afraid of any regulatory interaction to split those, because those businesses are all the split from our banking businesses, so we don't see any risks here. Second, we think that any actions on the part of the regulator that could target certain monopolistic practices in our competitors, again, would not affect us because we are much more relaxed in terms of commissions, opportunities to our customers, product offerings, et cetera. So in our opinion, all those actions that will be done with regards to, for example, a monopolistic position of our competitor will absolutely not affect us at all.

Next question comes from [ Stephen Girling ].

Thank you for this presentation. I have a couple of follow-up questions on QR codes. You mentioned earlier that your POS take rate is between 1.6% and 1.8%. I wonder, if you can say what is the take rate on the QR payments to merchants? And also, if you can let us know how has your market share of QR payments developed over the last few years, since you have introduced this product?

[Interpreted] Thank you for the question. First, the commissions on QR payments. First of all, I should note that QR payments go through our internal system of payments. These payments do not go through international payment systems. That puts us in a position to offer more attractive rates for our merchants, and in fact, the size of that can patient at this time is a little below 1%. Now the development of QR payments in our ecosystem, according to the material that was presented earlier in the deep dive session, you can see that in our network of over 21% already goes through the use of HalykQR. Speaking of our further development plans, we are progressing consecutively, and first of all, we're focusing on the payments that our customers are making through the use of our QR. We have launched a nationwide large-scale campaign for the development of HalykQR, which had firstly made our QR payments, our acquiring network much more attractive for our customers. And based on the year-end results, we'll be in a position to disclose the share of payments that went through HalykQR. Second important thing to note, we see that this campaign and this service is attracting new quality customers, which affects the rate of MAU for our customers in our Halyk Super-App, and also affects a further development of the bank's transaction business.

And my question on QR market share was slightly different. It wasn't the market share of QR payments out of total POS payments for Halyk, but the market share of the QR payments in the country, QR merchant payments in the country, if we take into account the offering from [ Caspian Wealth ] has that in the market. That's what I was trying to find out.

[Interpreted] Thank you. Speaking of market share for QR payments, we currently do not see these numbers for the market as they are part of the general report for cashless payment settlements.

Understood.

We also have some questions in our Q&A chat. The first question comes from [ Arman Patnaik ]. Why don't you use your app to actively promote your SME products and services to help with marketing and promotion?

[Interpreted] Arman, thank you for the question. First of all, I'd like to tell you how our Halyk Super-App is developing. And I am confident that you see the development of our ecosystem that's adding new services and new products as it progresses in development. One of the most recent developments is government services that were recently launched through the Halyk Super-App that are in high demand. Also, we can note different recreation services where Kino.kz is taking a major part, as it is being very actively developed. Also, you can see the development of our e-commerce platform Halyk Market, and we shall continue offering and adding on new services to satisfy different needs of our customers. Secondly, actively developing customer data management, and we are speaking here of the data factory that has relatively recently been launched in Halyk Bank. We naturally there can see our customers that use the app as individuals, but we also see same people that also use it for business. And given that, we have plans to develop further additional SME products through development of different B2B platforms, these are planned directions that we're deliberating on. And considering our development strategy, we'll be developing potential synergies in B2B and B2C.

There are also a couple of questions which came from [ Andre Stefan Novazyk ]. The first one is, how are you planning to monetize government services? Are you charging a commission for each service? How big are the revenues at the moment? And how big can they be in, say 3 years?

[Interpreted] Thank you, Andre, for your question. I will take it. First of all, earlier I have commented that we did not charge commission for government services per se, but however, there are government services that are related to different banking services. A bright example of such would be different government welfare benefits or products such as a one-off payment at the time of the birth of a child, or for families with multiple children, or benefits related to loss of employment. And while receiving these benefits, such customers use their existing accounts with us, lagging which they open up an account with us, which they used to collect those benefits. As an example, speaking of a childbirth benefit, I must say that 38% of all mothers process their benefits through Halyk Bank, and that practically is every second mother in the country. And generally, the use of government services through our app is doubling year-on-year.

And then maybe distinguish Halyk Travel [ on this ]. I couldn't see much on Halyk Travel. How do you find competing with [ Caspian ] in this segment? And what are your competitive advantages, please?

[Interpreted] Thank you for the second question, let me also comment on that. With the second part, first of all, we have some of the most competitive ticket price offers for air travel, and we have quite a unique BNPL program we call it [ 006 ], which is basically paying in installments over a period of 6 months. And about how we feel in the market, despite the fact that it's quite a new product for us, we have grown year-on-year by 63%. And of course, we're targeting and aspiring further active growth. Thank you.

There is another question from chat from [ Adil Bugov ]. Halyk already has a big market share in the banking system, and it is growing and getting more relevant in other areas, the entire ecosystem. Do you see any risk by government interventional regulations to reduce ability of Halyk Group of becoming an even more relevant part of the economy? Let me comment on this question. We do not see any such risk, as the competition on the local market is quite high, and we do not keep the first positions on all banking products. Yes. Ladies and gentlemen, it's seeing that there are no questions remaining, so this concludes our Deep Dive session. Thank you very much for participation on our event today. As usual, our IR remains open for any of your further questions. Please take care, and goodbye. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]