Kaspi Bank - Fixed Income Analysis

We recommend to HOLD bonds denominated in US dollars, due to the low holding period return (3.6% p.a.) in the case of the bonds purchase at 103.73, and also we recommend to HOLD bonds denominated in Tenge, due to their low liquidity.

We note the significant reduction in consolidated income in 1Q2016 compared to the same period last year, the significant increase in interest expenses, and decrease in interest income and weak lending activity in the beginning of the year. However, commission income supports the bank's profitability, despite the weak operating environment.

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