Osb Share Discussion Threads

[jonnybig] 14/3/2024 08:15

The eir adjustment is far higher than the 160 to 180 million provided last year.so even though the results are healthy and the dividend well covered, this will get slammed.

[riverman77] 14/3/2024 08:14

Read the guidance for NIM this year - I think that explains it.

[eigthwonder] 14/3/2024 08:13

The horror story of “when temporary conditions become the new normal”. Gonna a need a reset of long term expectations .

[pugugly] 14/3/2024 08:09

LG Double ouch - Arm and a leg job.

[flyfisher] 10/3/2024 09:46

The recent acquisition by BGEO of Ameriabank at a p/e of 2.6 would seem to highlight the low p/e ratios in the region.

Kaspi bank is on a forward p/e of 8.6.
Halyk bank has a forward p/e of 3.

They are both US listed in GDR form.

How much of the difference is due to the family control at halyk.

[popit] 09/3/2024 21:04

BGEO is also good but the Price to Book is beginning to look very big at 1.6

STB or Barclays for example is less than 0.4

And most of the other UK listed banks are not much more

[flyfisher] 09/3/2024 08:53

Thanks for the replies.

Both TBCG and BGEO were on similar forward p/e's to Halyk a year ago, they have both had a strong re-rating, but they benefit from greater liquidity.

Were Halyk UK or European listed and more liquid, then i would show more interest.

[popit] 09/3/2024 06:05

apple53

Thanks for the reply

Yes there is a chat here on advfn for Halyk but there has only been one post from one poster last year and unfortunately there was no reply

They are probably off the radar for the vast majority of investors because of the location and geopolitical concerns

I read various Substack articles and recommendations on Halyk such as this one last year and the valuation seemed to be very good with a forecast PE of less than 3 and dividend of over 15%

Capital ratios also seem to be fine at over 18%

They dominate in their local Kazakhstan market with about half the population as customers and the economy should also benefit from huge future growth given the strategic location in Central Asia and good economic relations with all countries including western countries and BRICS countries

The share price has doubled since the lows of 2022 but I see no reason why it should not double again to about $40 and higher

I think OSB and STB also look great value but it is difficult to find a better value bank than Halyk

hxxps://moderninvesting.substack.com/p/halyk-bank

[apple53] 08/3/2024 21:57

Yep flyfisher. Essentially Nazarbayev, via son-in-law TK. It's a useful reminder - may impact preferences for dividends vs buybacks for example. Normally there is a risk of related-party lending in such situations, or of gov't-mandated lending. Pre-2009 Marchenko would have none of that, and hopefully Umut learned from her boss. Now the Nazarbayev family are no longer in direct control of the country, I guess there is less risk of gov't driven lending, but still worth keeping an eye on related party. This is a trip down memory lane for me but I'm missing most of the last decade.

[flyfisher] 08/3/2024 12:28

Halyk is majority owned by one family, they held in excess of 60% when i looked at it.

[apple53] 08/3/2024 10:31

Hi Popit

I used to look at Halyk very closely, but it was a long time ago. Massive benefit from cheap deposits (and from Marchenko's leadership). Also has benefited from rolling up the other large bust banks. I wanted to buy it during the turmoil in early 22, but first it was a falling knife, and then I kinda forgot.

I checked market screener for 1 min. It's incredibly profitable, it seems, especially given capital ratios these days. One reason may be that Kaz banks had to have higher capital ratios than normal Basel requirements previously, so the jump in capital has been less noticeable. Another might be lack of competition. In the old days high RoE was meant to translate formulaically into higher PE. Arguably such high RoEs are unsustainable, but I have no idea what would bring them down and when. Such a high RoE means massive cashflows to fund big dividends as well as any growth (are they able to buy back shares?).

There has to be political risk, of course, given the arbitrary nature of government and the reduced credibility of the central bank. How are the capital ratios?
But yes even so incredibly cheap despite the share price recovery.

Is there a share chat? It would be good to look into it more, but I would love to share the labour.

[popit] 07/3/2024 16:00

apple53

I agree that OSB and STB look very good value

Have you looked at Halyk Bank?

It also looks very cheap with a forecast PE of about 3 and a 15% yield

[thebutler] 07/3/2024 10:13

Great to see this recovering and well done to all those who had the balls to top up when it got bashed to £3.

With branches being closed and banking becoming much more streamlined and cost efficient I can see much consolidation with the small banks and Virgin is only the start imo, especially when they are so cheap.

[riverman77] 07/3/2024 10:03

STB a bit small, but might be of interest for its V12 retail finance division - seems to be well respected in this niche and might appeal as a bolt on for one of the bigger banks.

[apple53] 07/3/2024 09:36

I had sold a modest chunk on the initial pop. Switched them into STB which is down, presumably because people think it's too small for a deal.

[lord gnome] 07/3/2024 09:19

I think I might just be persuaded to take 780p. Where do I sign?

[apple53] 07/3/2024 08:57

I didn't get down as far as v in my watchlist before googling osb.
I normally own some virgin. This reminds me why I should always have a spread of holdings. v. annoying.
This is mixed news for the small banks. The takeout is at below 7x 2025 earnings (despite recent downgrade to forecast for 25 vs upgrade to 26). Takeouts in the old days were 12 to 15x. I guess this helps to fix the short term issues flyfisher mentioned - cheap Nationwide funding.
So on the same multiple OSB is 780p. I still think OSB is a superior business to VMUK, but certainly more synergies buying VMUK.

[orchestralis] 07/3/2024 08:38

Poss reaction to virgin money deal?

[eigthwonder] 07/3/2024 08:32

VMUK bid read across

[jonnybig] 07/3/2024 08:25

Results a week today. Maybe some good news ahead?

[lord gnome] 07/3/2024 08:10

I think this qualifies for a 'whoosh'. But what lies behind it?

[apple53] 07/3/2024 08:10

anyone see any news today?

flyfisher thanks for the additional detail. I was going to mention the covid repayments but didn't know the details.