Cavendish Proposes Treating Halyk Bank as a Fintech Company and Raises Its Valuation by 86%

The British investment bank Cavendish expects Halyk Bank’s stock price to rise by 86%—as it reported this week in an analysis titled “Compounding the ecosystem.”

Currently, the bank’s market valuation roughly matches its projected capital: analysts expect it to grow from 3.5 trillion tenge ($7.52 billion—here and below at the exchange rate as of July 24, 2026) at the end of 2025 to 4 trillion tenge ($8.67 billion) by the end of 2026 and assume a market capitalization of 3.98 trillion tenge ($8.55 billion) at a share price of 364.9 tenge ($0.783).

According to calculations by Cavendish analysts, taking into account long-term returns on equity (RoAE) of 24%, a cost of capital of 18.9%, annual capital and dividend growth of 3%, and a “fair” price-to-book (P/B) ratio of 1.3, the target price for the end of 2026 should be 679 tenge ($1.458).

“The Group offers a full range of banking services combined with robust digital capabilities across all its segments: retail, SME, and corporate. Over the past five years, Halyk Bank has demonstrated best-in-class RoAE, averaging around 32%, and we believe that these figures will remain within the mid-to-upper 20–30% range in the future," the note states. According to analysts, the group is benefiting from a favorable economic backdrop in Kazakhstan, as well as structural factors driving growth in investment banking, while maintaining its competitive positions in the corporate, SME, and retail segments.

In addition to historically high returns on equity, the authors expect the bank’s loan portfolio to grow by approximately 10–11% annually, provided that Kazakhstan’s economy continues to develop favorably and asset quality is maintained. In their view, the projected dividend yield of 13–15% and the share buyback program further enhance the securities’ yield.

Cavendish analysts also draw a comparison with the shares of another major Kazakh bank—Kaspi. Kaspi has a higher return on equity—38%—but its price-to-equity ratio is also many times higher: 2.9. So even if Halyk Bank’s valuation were to rise to a target P/E ratio of 1.8, its shares would still trade at a significant discount compared to its competitor. At the same time, they view Kaspi primarily as a fintech company focused on the mass market, whereas Halyk Bank has a comparable level of
of digitalization in its corporate, investment, and insurance businesses as well—a factor the authors view as grounds for narrowing the discount.

If Halyk Bank is viewed as a traditional universal bank, Cavendish’s valuation appears to be too high. For example, shares of the Kazakh bank “CenterCredit,” with a return on equity (RoE) of 31.61% for 2025, are trading at an even lower multiple—around 0.9. ForteBank’s shares, with an RoE of 24.7%, have a P/E ratio of 1.25—which is comparable only to the base level of 1.3 suggested by analysts.

At the same time, examples from other countries show that securities of financial institutions with similar fundamental criteria sometimes trade at significantly different valuations. For example, TBC Bank Group (Georgia, Uzbekistan) securities, with an ROE of 23.4%, trade at a multiple of 1.3–1.5—even though this is a rapidly growing fintech company. At the same time, shares of Lion Finance (Georgia, Armenia) have a P/E ratio of 1.96 with a return on equity of 26.2%, while Eastern European OTP Bank, with an ROE of 20.5%, is valued at a P/E ratio of around 2.

In early July, Freedom Broker projected a target price of 450 tenge ($0.966) for Halyk Bank shares—which at the time represented a 20.2% increase. In late May, Edison Investment Research cited a target price of $37 per GDR with an 18% upside potential—though, like Cavendish, the company noted that Halyk Bank is one of its clients.

As of 9:00 p.m. Almaty time on July 23, 2026, Halyk Bank shares on the KASE were trading at 379.96 tenge ($0.815), down 0.26% for the day. The bank’s depositary receipts on the London Stock Exchange (LSE) were trading at $31.75, down 1.09% from the previous close.

Halyk Bank is Kazakhstan’s largest bank. Its main shareholder is the ALMEX Holding Group, controlled by Dinara and Timur Kulibayev (62% of shares). As of April 1, 2026, assets totaled 21.2 trillion tenge ($44.3 billion), capital was 3.7 trillion tenge ($7.7 billion), and net income for the first quarter of 2026 was 234.8 billion tenge ($490.4 million). Market capitalization on the KASE at the close of trading on July 23, 2026, was 4.13 trillion tenge ($8.83 billion).

This article was AI-translated and verified by a human editor