Good evening, ladies and gentlemen. Welcome to Halyk Bank Conference Call on Presentation of Financial Results for the First Half and Second Quarter of 2022. The session will start with the presentation by Halyk team and will be followed by a Q&A session. Please note that the call is being recorded. Participants to today's call on Halyk Bank side are Ms. Umut Shayakhmetova, Chief Executive Officer. Mr. Roman Maszczyk, Deputy CEO, Compliance, Risk Management, Data Science, and Collateral, Chief Compliance Controller. Ms. Olga Vuros, Deputy CEO, Corporate Banking. Mr. Dauren Sartaev, Deputy CEO, SME Banking, Transactional Banking, PR and Marketing. Mr. Zhumabek Mamutov, Deputy CEO, Retail Banking and Soft Collection. Mr. Nariman Mukushev, Deputy CEO, Digital Government Services, Ecosystem and Customer Experience. Mr. Anton Musin, General Managing Director responsible for IT and innovation. Mr. Almas Makhanov, Chief Risk Officer. Mr. Viktor Skryl, Financial Director, Finance and Subsidiaries.
Mr. Margulan Tanirtayev from IR team, and myself, Mira Kassenova, Head of FI and IR. We would like to start with the digital update for the first half and second quarter of 2022. Customer engagement growth within our core online platforms, Halyk Homebank and Onlinebank, continues to perform very well year-on-year. The number of MAU and DAU of Halyk Homebank increased by 47 and 59.4% year-on-year respectively. MAU reached 4.85 million in 2Q 2022. We see a continuous growth in the number of active users of Onlinebank app for businesses. MAU reached 202,000, increasing by almost 62% year-on-year. The bank is constantly developing its digital proposition to the clients.
In 2Q 2022, we launched additional services and functions within our online platforms, such as card issuance with a QR code through a self-embosser, cross authorization to the new insurance website, cash withdrawal by QR code in ATM in Halyk Homebank, and online onboarding for LLP, push notification about overdue tax debt, a debt payment schedule in Onlinebank. Next slide, please. The continuous increase in customer engagement within our digital platforms supported a strong growth in credit and non-credit products for retail clients and businesses. Online sales were one of the key drivers of retail loan growth. Share of digital loans issued equaled 73% in the first half of 2022, which is up 17 percentage points year-on-year.
Share of new online deposits increased by 15 percentage points in six months of 2022 and was at 41%. For SME business, we are demonstrating a sound growth in number of digital loans issued in 2Q of 2022, which is up 84.6% year-on-year. We see a strong growth in online KZT payments number and volumes in second quarter of 2022, which grew by 50% and 62% year-on-year respectively. Next slide, please. In the second quarter of 2022, the ecosystem verticals demonstrated a healthy year-on-year growth. Moreover, Halyk team is continuing to develop clients' proposition. Halyk Travel was the first on the market who launched the sale of tickets for intercity buses at the end of May.
kino.kz launched the sale of tickets to concerts and theaters. The premiums written within our online auto insurance service increased by 14.8% year-on-year, while in 2Q of 2022, GMV of Halyk Travel and kino.kz have expanded 4x and 5.8x year-on-year respectively. Development of our marketplace platform, Halyk Market, remains a key priority for us. In the second quarter, our total marketplace GMV equaled KZT 30 billion, which is up 46.5% year-on-year. Now let me switch to the business segments update. Turning to the retail segment, we would like to highlight a solid performance across key dimensions. We continue to see a strong customer engagement, an increasing digital footprint with our Halyk Homebank, and growing transactional activity. The transactions volume has increased by 31% year-on-year.
On consolidated basis, the retail gross loan portfolio has expanded by 56.7%, partially thanks to Sberbank Kazakhstan's loan portfolio acquisition, while the customer deposits increased by 14.9% year-on-year. We see a sound growth in retail active clients number and products penetration by 9.3% and 10% respectively. Next slide, please. We continue to develop Halyk Homebank super app, which is at core of our retail customer proposition. We already see notable results in customers' activity. Moreover, the MAU's penetration rate in retail's active clients base has risen from 15% to 51% during the recent years, showing a further potential for growth. Next slide, please. On unconsolidated basis, our retail portfolio grew by 54.7% year-on-year, while the loan issuance volumes in the first half of 2022 increased by almost 9%.
The growth has been primarily driven by digital sales, which increased by 82.8% year-on-year and reached 37% of total retail loan sales in six months of 2022. We'd like to observe improvement in the asset quality with NPL ninety days plus at 3.8%, while we continue to maintain conservative provisioning policy with almost 164% NPL coverage ratio. Next slide, please. Halyk Marketplace remains one of our top priorities as we develop comprehensive service proposition both for retail clients and merchants. In the second quarter of 2022, the GMV of our e-com platform, Halyk Market, increased by 2.3x year-on-year. Our network expanded to more than 1,500 merchants offering over 330,000 SKUs, and we're focused to expand our footprint further.
Next slide, please. Over the second quarter of 2022, we continued to develop our retail platform and focus greatly on GovTech. We are the first bank on the market who launched a birth certificate application, registration in the place of residence, and car history. Moreover, these services are available exclusively in Halyk Homebank. The number of GovTech MAU is up 76.3% since January 2022 and equaled almost 708,000. Furthermore, in 2022, the government services were used over 6 million times. Turning to corporate segment, we would like to highlight that on consolidated basis, our loan book has expanded by 24.3% year-to-date. Our corporate portfolio remains well diversified across industries, while local currency loans comprise 73% of the loan book.
As of 1st July , 2022, the segment NPL ratio stayed flat at 0.9%, while the provisioning coverage decreased to circa 513%. We see a sound growth in our active corporate client base as it reached over 2,200 customers in the second quarter of this year. Essentially, the products penetration and transactional activity have been notably increasing as well. Next slide, please. Now let me turn to the SME banking performance achievements. On consolidated basis, SME gross loan portfolio grew by 11.6% year-to-date, while the number of borrowers increased by 3.3 times year-on-year. The segment NPL ratio decreased to 5.3%.
In June 2022, we have almost 200,000 SME MAU, which is up 35% since January, reflecting our continuous efforts in development of online daily banking and transactional services. The segment products penetration and transactional activities showed a notable increase as well. Next slide, please. We achieved 24.6% increase in SME loan issued volumes year-on-year. It has been primarily driven by digital loans, which already comprise 20% of our SME loan portfolio. The number of SME borrowers has shown a very strong growth by 2.5x . In the first half of 2022, we onboarded 91% of new IE clients online.
Following the launch of digital tender guarantees in October last year, we issued 3.8x more blank tender guarantees in the first half of 2022 compared with the first half of last year. Now let me turn over the call to my colleague, Margulan Tanirtayev from IR team. Thank you.
Thank you, Mira. Now let me switch to the overview of Halyk Group consolidated financial results for the first half and second quarter of 2022. During the first half, the bank generated KZT 281.4 billion of net income. The year on year increase by 24.8% was mainly due to significant increase in lending business, including acquisition of Sberbank loan portfolio and in net gain on foreign exchange operations. Net dealing gain in the first half of 2022 refers mainly to increased volatility and increased activity in the foreign exchange markets. Net insurance income for the first half of 2022 significantly decreased versus the first half of 2021. Let us remind you that previously, the bulk of income from insurance on unsecured loans were recognized on the side of the bank.
Starting from 2022, this income has been transferred from the bank to its subsidiary, Halyk-Life. Halyk-Life, in turn, has created an insurance reserve for the full amount of insurance on consumer loan. Consequently, there was increase in insurance reserve expenses. In the first half of 2022, we demonstrated 34.3% return on average equity and 4.4% return on assets. Next slide, please. Total assets of the group increased by 13.6% versus the year end of 2021 as a result of growth in amounts due to customers to support the expansion of lending business. Customer deposits increased by 17.8% as a result of the client's inflow due to changes in the operating landscape. Next slide, please.
Interest income for the first half of 2022 increased by 35.3% year-on-year, mainly due to rise in average rate and balances of loans to customers. Interest expense for the first half of 2022 increased by 53.5% versus the first half of the last year, mainly as a result of the growth in average rate and balances of amounts due to customers and increase in interest expense on amounts due to credit institutions owing to the growing volumes of repo transactions attracted to provide current cash flows in KZT within the bank's operating activities. As a result, net interest income for the first half of 2022 grew by 22.9% versus the first half of the last year.
In the first half of 2022, net interest margin was affected by the increase in average rates on both loans to customers and amounts due to customers following the base rate hike from 10.25% to 14% in the first half of 2022. Moreover, the structure of placement of interest-bearing liabilities into interest earning assets continued to improve with increased share of high yielding retail and SME loans. As a result, net interest margin remained flat at 5.2%. Next slide, please. In the first half of 2022, the overall dynamics of fee and commission income and expense was driven by the increased transactional activity as a result of the client's inflow due to changes in operating landscape.
Consequently, the previous trend of net fee and commission income dynamics turned positive in the first half of 2022, increasing by 5.5% year on year and by 27.5% in the second quarter of 2022 versus the second quarter of the last year. Contribution of merchant fees under BNPL loans to the fee and commission income has decreased in the first half of 2022 due to temporary suspension of BNPL in the first quarter of 2022, and further reopening with tightened underwriting conditions. Next slide, please.
Operating expenses for the first half of 2022 increased by 23.3% year-on-year, mainly due to the indexation of salaries and other employee benefits starting from first March of 2022 and due to employee premiums reserve accrued in the second quarter. The bank's cost to income ratio decreased to 18.9% compared to 22.1% for the first half of 2021 due to high operating income for the first half of this year. Next slide, please. On the balance sheet, compared with the year-end of 2021, loans to customers increased by 23.1% on a gross and 23.6% on a net basis.
The increase in the gross loan portfolio was attributable to a rise of 24.3% in corporate, 11.6% in SME, and 27.4% in retail loans. During the second quarter of 2022, the bank acquired from Eximbank Kazakhstan part of high quality commercial portfolio of Stage 1 loans for a total amount of KZT 568 billion and RUB 2.7 billion, where KZT 136 billion and RUB 2.6 billion are corporate loans, KZT 102 billion and RUB 44 million are SME loans, and KZT 333 billion are retail loans. We also have to mention here that the share of foreign currency loans was at historically low level of 19.2% as at the end of the second quarter of 2022.
Next slide, please. 90-day+ NPL ratio decreased to 2.4%. Cost of risk on loans to customers for the first half and second quarter of 2022 was at 1.5%, reflecting more normalized credit loss expenses on corporate and SME loan portfolio and high credit loss expenses on retail loan portfolio. The provisioning rate stood at 5.7%. The Stage 3 coverage ratio slightly decreased to 74.5%. Next slide, please. Despite some increase in absolute terms, Stage 3 ratio reduced to 7.6% as at the end of second quarter of 2022, mainly due to increase of Stage 1 loans and acquisition of high-quality Eximbank's loan portfolio. Next slide, please.
On liability side, the corporate and retail deposits increased by 28.3% and 8.2% respectively, compared with the year-end of 2021 as a result of the client's inflow due to changes in the operating landscape. As at the end of second quarter of 2022, the share of KZT deposits in total corporate deposits was 55% compared to 52.9% as at the year-end of 2021. While the share in total retail deposits was 50.1% compared to 50.6% as at the year-end of 2021. Next slide, please.
Capital adequacy ratios of the bank decreased in second quarter of 2022 as a result of significant increase in risk-weighted assets, including acquisition of Eximbank Kazakhstan's loan portfolio by 20.2% versus the year-end of 2021. In the first half of 2022, total equity of the bank increased by KZT 191.1 billion or by 12.1% compared to the year-end of 2021. Whereas net income for the first half of 2022 amounted to KZT 281.4 billion. This was due to loss on revaluation of debt financial assets at fair value through other comprehensive income, which totaled KZT 114.7 billion in the first half of 2022.
The loss mainly relates to the treasury bills of the Ministry of Finance of the Republic of Kazakhstan, which have decreased in price due to base rate hike from 10.25% to 14% in the first six months of this year. Next slide, please. Based on our six months financial results, we have updated the outlook for the full year of 2022. Retail net loan portfolio growth is expected to be in the area of 30%. Corporate and SME net loan portfolio growth is expected to be around 30%. Total net loan portfolio growth is expected to be circa 30%. Growth of net fee and commission income is expected to be more than 10%. Cost of risk is expected to be in the area of 1.5%. Consolidated net income is to be more than KZT 500 billion.
Return on average equity is to be around 30%. Net interest margin is expected to be circa 5.3%, and cost to income ratio is expected to be in the area of 20%. Dear ladies and gentlemen, this completes our presentation. Now we would like to open the floor for your questions. Please, just quick instruction to state a question, you can raise your hand in Zoom, or if you joined via the cell phone, please press star nine to raise your hand. You can also enter your question in the written form via chat, and while stating your question, please also mention your name and company. The first question comes from Elena Tsareva. Elena, please go ahead.
Good afternoon. Thank you very much for the presentation and very strong results. My first question is a bit more on guidance. Given, like, current elevated level of interest rates, given the recent hike of base rate, and I understand elevated inflation provides expectations of these interest rates to stay high for the time being. Why do you expect your margin to widen? I understand you expect your, like, organic loan growth to decelerate. What's the implications of this high base rate on margin and on loan growth going forward? The next question is about your dividends decision for 2021.
As I understand, this decision was delayed towards second half of this year and given we are in fourth quarter. What is the next steps towards your dividend decision? If any ideas of payouts you mean properly given, like, your dividend policy suggests 50%-100% payout ratio. Thank you.
Hello, Elena. This is Viktor Skryl. Let me answer your first question regarding NIM dynamics and guidance. We see that despite increase in base rate, we are able to reprice our loans relatively quickly in part of corporate loans, which are mostly working financing, and we are able to do that quickly. With respect to retail deposits, which are stickier, we are repricing them relatively slowly, but we're also doing that. On deposit side, we see that those are also repriced not as fast as could. We see that rates on interest-earning assets and interest-bearing liabilities are increasing in the same manner.
Like, you can see that during second quarter, these rates improved and increased by 1%. This on one side. On the second side, we also see that on net interest margin dynamics, we have higher effect, not from the interest rate dynamics by themselves, but also from the structure of our assets and liabilities. We see that share of loans is increasing, and we also see that share of higher yielding retail loans and SME loans is also improving. Overall, we see that margin for this year should be stable.
We also see that during first and second quarter, it's at current level of 5.2% and may improve slightly further to 5.3%.
On dividend question, I would like to hand over the floor to Ms. Umut Shayakhmetova.
Good evening, everybody. I understand that the question regarding the dividend is maybe the main question today from all of our investors and analysts. I would like just to say the history why the dividend payment decision was delayed in the second quarter due to the potential risks which we saw in terms of the economy development and sanctions in Russia and also the potential loss on the provision side. We were waiting for development how the economy will be developing in Kazakhstan. The other reason was that we were also considering the potential on the business increase. Actually we realized that opportunity, and as you know that some of our capital was consumed by the growth on the lending side.
Today, the capital ratio is almost at the level of 17%, which we target as the lowest level of capitalization of the bank. At the same time, we see that the bank is generating very good results. In our guidance for the year-end, you see that we did the upside on our numbers for the year-end results on net profit. As a management, we think that yes, it's possible to consider to pay out dividend in the second half of this year.
However, the decision will be made at the board meeting in the middle of September, and at this point of time, I cannot tell you what the decision will be made, and we have to wait till the middle of September.
Yeah. Thank you very much for detailed answers. Thank you.
The next question comes from Mikhail Batkov . Mikhail, please go ahead.
Good day. Thank you very much for the presentation. My first question is on guidance, and can you maybe provide any indication on CET1 ratio for the full year, excluding the dividends, what outlook could be? More specifically, could you from the accounting standpoint reclassify part of your securities portfolio, for example, as held to maturity, which could theoretically help your CET1 ratio? Also on the guidance, do you bake in any gains from fixed transactions and deals which were quite substantial contributors in the first half of the year in your full year guidance? That's the first part of the questions.
Mikhail, thank you. One moment, please. Mikhail, thank you. At this point of time, we think we should look on how our loan portfolio growth would be evolving, how RWAs would be developing, and the combination of retail loans, which typically have higher risk weightings compared to other parts of the loan portfolio. At this stage, we are not able to provide guidance for the full year for CET1.
With respect to your other question, whether we can reclassify some securities at fair value to held-to-maturity, this is typically done at the beginning of the year according to IFRS, so it is not possible to reclassify a portion of the securities to held-to-maturity. With respect to your third question, yes, we included results for FX gains from our first half into our full year guidance. Of course, we do not expect the same volume of gains in the second half because during first and second quarters, they were mostly one-off. For second half of the year, we plan to have much lower volume compared to actual results.
Okay. Thank you very much. Another question is on dividends and target CET1 ratio. You mentioned 17% as the target. Can you maybe provide some color on which this target capital ratio is based at, and what conditions for paying dividends do you see other than the good sufficient level of CET1 ratio? Maybe something on the macro side or anything on the asset quality, or any comments on conditions for dividends. Thank you.
Mikhail, yes. First, we are looking at CET1 ratio. With respect to your second part of your question, we are looking at a number of factors. First factor is our strategy, how we plan to grow our business and how effectively we can utilize our equity in order to support growth, profitability, and stability of the bank. Second factor, as we mentioned, is the general stability of the economy, any potential risks and uncertainties. Of course, third factor, which is very important for us, for our business model, is the ratings from international credit rating agencies. It's very important to maintain current level of ratings which we have.
Our ratings were recently confirmed and improved earlier. Maintaining our credit ratings is like big task for the bank. We would be looking at those three factors in combination when decision on dividends would be considered.
Thank you. Just a small clarification. If you could provide some comments on what the target of 17% for CET1 ratio is based, if any color you can provide, and this is the last question from me. Thank you very much.
Sorry, Mikhail. I think I do not understand your question.
Basically, why 17% was mentioned at the target-
Mm-hmm. Mm-hmm.
minimum level, not, for example, 16.5 or 18?
Mm-hmm. Mm-hmm. I see.
Yeah.
I see. Uh-huh. Yes, 17 is a historical level below which I think we didn't go. We also understand this is the least comfortable level which correspond to the level of capital adequacy ratio of rating agencies. This like historical level at which we can maintain our like ratings. This is our analysis and understanding. I think also we mentioned this number maybe a few years ago during our capital markets day which we held in London. I think we even have this presentation on our website.
Thank you. Thank you very much for very detailed answers.
The next question comes from Simon Nellis. Simon, please go ahead.
Oh, hi. Thanks very much for the opportunity. Most of my questions have been answered, just one left, which is on the cost of risk. You seem to now be forecasting much lower cost of risk than you had initially forecast. Can you tell me what's changed on the risk environment to lead you to lower that guidance? Then just, you know, given all of the uncertainties, where do you think risk cost will go, you know, be into next year or the year after? Where do you see through the cycle risk costs going forward? Thank you.
Hello, everybody. Roman Maszczyk speaking. Our guidance for cost of risk at the end of this year is 1.5%, but you have to take it into account in the wider context why we're setting our guidance at the level from 2%-3% originally. When we were setting the previous guidance, the macro environment was completely different from what we see right now, especially given local developments in Kazakhstan. It was still very tricky situation locally with the events from January this year. Obviously, at the end of February, we had a very unfortunate event between Russia and Ukraine. Overall, we expect that the overall macroeconomic developments will be developing on a worse side.
Right now we see that all those negative developments haven't affected the climate in Kazakhstan. It is reflected in our profitability numbers and also in our individual analysis of individual portfolios, individual borrowers. Overall, if the situation doesn't deteriorate significantly, we think that we are going to keep that cost of risk level around 1.5%. Obviously, there is a caveat here that if in the second half the situation deteriorates significantly, the guidance may change. So far, we haven't seen such a deep and negative impact on our development. On the contrary, we have seen a stabilization. Our customers are changing the relationships with affected counterparties, for example, in Russia, that have been sanctioned.
Overall, we haven't seen such a negative impact both locally and internationally. If you add also the fact that the FX loans in our credit portfolio has reduced its percentage, we are looking at this environment in a positive way.
Thank you. Longer term, I mean, do you think cost of risk kind of stays at 1.5% or is it?
It's a $1 million question of course, because nobody knows how the situation will change over time, especially with further sanctions that we know are being prepared. As you probably know, the seventh package of sanctions from the EU is quite wide. The overall trend in the coverage and breadth of those sanctions is quite significant. Russia is still a very important partner for us, for Kazakhstan and the bank, and obviously for our customers. Depending on how severe those effects will be affecting Russia and our counterparties of our customers, we will update our guidance accordingly. Nevertheless, none of those sanction packages have affected in a blanket way all counterparties in Russia.
It is still more or less segment-focused, and they have been focused on individual companies. Overall, if we don't see such a wide and blanket sanction regime, we shouldn't be affected in a very negative way.
Okay. Thank you.
The next question comes from Ronak Gadhia. Ronak, please go ahead.
Good afternoon. Thanks for the presentation, and congratulations on the really good results. I have two or three questions. I think early in the year, management had referenced potential introduction of new regulations which could have a negative impact on the bank's growth trajectory and NPLs. Could you just highlight if those regulations have been implemented, and what impact, if any, they've had? The second question I have is on growth. Even taking out the inorganic growth from Sberbank, it seems the organic growth for the bank has been relatively strong for the last six or seven quarters in an environment of increasing uncertainty, increasing rate environment.
Isn't there a risk that the strong growth could eventually materialize into significant deterioration in asset quality, particularly from the retail side? Could you just also finally comment on the drop in insurance-related profits? I see the insurance-related expenses have increased quite substantially. Is this just a one-off for this year, or are we just seeing a lower base for that segment going forward? Thank you.
Thank you, Ronak. One moment, please. Mm-hmm.
Yes. Hello, Ronak. I'd like to answer your first question in regard to change in regulation. Yes, you're probably referring to a new law that introduces personal bankruptcy. It's the law is, the work has been done during these two quarters, and we expect in the near future a new law to be introduced. The impact, specific impact is quite hard to estimate, but of course, along with introduction, we expect that it might impact NPL levels on retail portfolio. Our guidance for this year include also possible impact from introduction of that new law, considering that the portfolio structure of retail clients include mostly clients with who are working with corporates and SME and receive salaries.
Okay, I'll take the second part of your question. How is this retail portfolio growth may affect asset quality? Well, as you probably know, and that's expected, retail loans are more risky than corporate loans, and we see that. Nevertheless, we are taking a very measured approach to the growth of this portfolio. We try to balance profitability with the risks we are taking, credit risk we are taking on those customers. Already taking into account our requirements for capital adequacy, we are starting cherry-picking those customers and those retail credit products that affect our growth in a positive way, generating a positive growth.
Taking into account the fact that the growth is strong and we can cherry-pick those customers, we think that on a profitability basis, it will be positive for the bank. As far as asset quality is concerned, still the majority of our loan book is in corporate segment and SME segment. Retail is growing, but still the majority of that portfolio is to a base of customers that are safer, that have stayed with us for a longer period of time, and whose risk profile we understand better. We do not expect any significant growth in NPLs from the retail portfolio because of those cherry-picking.
Plus, we have initiated a number of measures to address those issues with growing NPLs in those portfolios by improving the efficiency of our soft collection, hard collection, and massive processes that can make the whole process of managing quality of the portfolio much more effective.
I will take third part of the question. With respect to insurance-related profits, as Margulan mentioned earlier, starting from February, we changed accruals for bank insurance income, and now it is booked mostly on our life insurance company, which means that reserves for the full amount of income is created when we accrue income. Mechanics works as following that, going forward, this reserve is starting to amortize through profits. Thus, the first quarter and second quarter, we were creating reserves, which came through insurance expense. Going forward, those expenses would be like reversed back to income line.
We expect for the second half of the year growth of insurance income, and this will be supported by amortization of bancassurance premiums and also some new business which will be generated by life insurance and general insurance companies.
Understood. Just one more on NPLs, asset quality. As you mentioned, you know, your cost of risk has gone up to 1.5%, but what we're seeing from an NPLs perspective, NPLs are actually declining, the visibility on the macro is improving. The macroeconomic activity has remained robust. So when I look at the provision levels, it seems like management are just building up provisions on the Stage 1 and Stage 2 side. So could there be a scenario where if the macro continues to remain strong, the disruption from regulations is not as significant as expected? Could we see a potential reversal in provisions by the end of the year or next year?
Obviously, we wouldn't like to comment how we are going to manage those provisions we have already allocated for the assets, because that would be too early in our opinion. What we have seen in the past, like for example, the second quarter of 2001, was the releases of those provisions. Right now, we see 1.5 level as more normalized and reflecting the current environment. I wouldn't agree without any conditions that we are building those provisions for worse times, if I got your suggestions right. No, it's more related to how we manage the portfolio, how we assess the risks going forward.
Obviously, there may be both potential on the upside and downside, depending on those macroeconomic trends. I wouldn't rush to any conclusions on any side at this moment.
Understood. Thank you.
The next question comes from Olga Naidenova. Olga, please go ahead.
Hello. Sorry. Thank you very much for taking my question, and I just have one question left. Basically, it's on your tax rate, which proves continuously much lower than the statutory level. Obviously, I would like to understand how do you see it developing in the near term, and what would be the indications that it's coming closer to statutory level or whatnot?
Olga, thank you for your question. Our tax rate is affected by portion of interest income, which we gain from state securities, which are tax-deductible, and thus, effective tax rate is lower to statutory. We had different dynamics during first and second quarter with respect to tax rate because of unrealized gains in first quarter of 2022 and unrealized losses in the second quarter this year.
Overall, for the full year, we expect that effective tax rate would be higher compared to the rate for 2021 because we are growing share of loans and the interest income on those loans is taxed at 20% interest rate, thus effective tax rate would be higher.
Okay. Thank you very much. Thank you.
We also, I think, have one question in chat which remained unanswered. What about small dividend if ratios are not good enough for the full payout? We'd like to comment that different options may be considered provided the situation and results which we will have for like, let's say seven months and environment and overall situation at the time when decision will be taken. To summarize, different scenarios may be considered by the management and by the board of directors. Dear ladies and gentlemen, it seems that there is no questions remaining. This completes our presentation. Thank you very much for your participation. As usual, our IR team remains open for any of your further questions. Take care and goodbye.