Halyk Bank - Capital Markets Day: Staying in Good Shape

Halyk Bank gave us the rare pleasure of a capital markets day earlier this week in London. The presentation enabled the bank to remind investors of its strengths, from its broad dominant market position following the Kazkommertsbank (KKB) acquisition and sustainable high profitability, to robust capital and abundant liquidity. While there were no major new announcements, the management presented an upbeat medium-term outlook and appeared committed to paying out more excess capital through dividends over the next few years, and we anticipate a step-up in the dividend payout from 2020, which would be very positive. Next up, we hope Almex's mooted partial stake sell-down will happen soon, removing the near-term stock overhang and hopefully kick-starting improvements in stock liquidity. We continue to like the bank's solid fundamentals and expect it to maintain ROE comfortably over 20% (following stronger than expected recent quarters, we have raised our 2019-21 EPS projections by 14-18%). We reiterate our BUY rating and raise our target price to $18.00 per GDR.