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Eurasia
August 10, 2018 www.intellinews.com I Page 20
such significant achievements in multilateral diplomacy to be sacrificed in the name of American aspirations to settle political scores with Iran”, the statement added.
Iran’s semi-official Tasnim news agency quoted Iran’s parliamentary speaker, Ali Larijani, as saying the country could actually benefit from the
Halyk Bank formally completes merger with Kazkommertsbank
bne IntelliNews
Kazakhstan’s leading commercial bank Halyk announced the formal completion its merger with former rival Kazkommertsbank (KKB) on August 7, diluting the bank’s shares in the process.
“The final conversion terms imply a dilution of 7.6% for Halyk minorities, which is already in
the price given the stock’s 16% decline since the merger announcement on 20 March,” VTB Capital (VTBC) said in a note. “With fundamental factors staying strong, including solid retail loan growth, declining CoR and opex optimisation, we expect Halyk’s profitability to stay above 20%, which supports a stock price rerating, in our view.”
VTBC left its 12-month target price for the bank at $20 and a Buy recommendation on the ETR of 75% was reiterated.
Halyk and Kazkommertsbank signed the Transfer Act that completed the merger of both institutions on 28 July 2018. Two days earlier at the banks' EGMs shareholders also approved the exchange ratio for shares at 0.956552x, which implied the issuance of 759mn shares by Halyk.
new sanctions by focusing efforts on an internal renovation of the economy. “By focusing on the domestic economy, reforming its structure and facilitating investment, the enemies cannot talk to Iran like that from now on because Iran’s resilience is increasing and this situation offers a good prospect for the country,” he reportedly said late on August 6.
“On our calculations, this implies a minor dilution for Halyk minorities of 7.6%, which is priced in, in our view. With visibility over the merger now im- proved, we see limited bottom-up downside risks for the stock. Moreover, the solid macroeconomic factors and retail loan growth in the sector (14.8% y/y) mean that Halyk is in pole position to benefit from restarting credit cycle, while further nor- malisation of CoR and optimisation of costs on the back of the merger are likely to keep the bank's profitability above 20%,” VTBC said.
Kazakhstan is finally emerging from a very nasty banking crisis that nearly destroyed KKB and ana- lysts will be waiting attentively for the bank’s sec- ond quarter IFRS results, due to be released in late August, to see how fast the recovery is running.
The stock currently trades at 2019F P/BV of 1.0x and has a P/E of 4.9x vs. the 2019F ROE of 23%, which analysts say is cheap.
“At 2019F P/PPP of 3.3x, Halyk trades at a 2% dis- count to Sberbank, which we view as unjustified given the Kazakh economy’s greater potential for re-leveraging,” VTBC said.