Why Halyk Bank Could Be a Hidden Gem for Long-Term Investors
If you're looking for a mix of high dividends, strong profits, and big long-term potential, Halyk Bank deserves serious attention. As the largest bank in Kazakhstan, it offers much more than meets the eye—and right now, it looks like a major bargain.
Big Profits, Tiny Price Tag
Halyk is extremely profitable. Its return on equity (ROE) is around 33%, and it runs a very lean operation with one of the lowest cost-to-income ratios in the world (~16%). It pays out about half of its profits as dividends, which currently gives investors a 12–15% dividend yield—much higher than most banks globally.
Despite this, Halyk trades at just 3.5 times earnings. That’s extremely low. For comparison, even a conservative price-to-earnings (P/E) of 6.5 by 2030 would imply the stock tripling in value based on expected earnings growth.
Growth Beyond Kazakhstan
Halyk isn’t standing still. The bank is exploring expansion into new markets like Georgia and Uzbekistan—fast-growing economies with young populations and growing demand for banking. At home, Kazakhstan’s loan market is still growing quickly, especially in consumer and small business lending.
With strong digital platforms and capital to invest, Halyk is well-positioned to benefit from both domestic and regional growth.
What Could Go Wrong?
Of course, this isn’t a risk-free investment. Some key risks to watch:
- Currency risk – the Kazakh tenge can fluctuate, which affects returns for foreign investors.
- Political and regulatory changes – future taxes or instability could hit bank profits.
- Credit risk – while improving, Halyk still has more non-performing loans than EU banks.
But Halyk is well-capitalized, has managed through crises before, and continues to grow earnings despite the challenges.
The Bottom Line
If Halyk grows earnings by just 8–10% per year and keeps its 50% dividend payout, investors could earn back their initial investment in dividends alone by 2030—and still own a stock with major upside.
In short, Halyk Bank offers a rare mix of high income, strong growth, and deep value. For investors willing to accept some frontier market risk, this could be one of the most attractive bank stocks to hold for the next five years and beyond.
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Disclaimer
The user Enemy has a position in BATS-CHIXE:HSBKL. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.