​Consensus still strongly underestimates banking sector revenues, with robust NII on strong translation gains and resilient NIMs, whilst non-NII driven by credit related fees as well as FX income (higher volumes with improved spreads), with QNBA NII +14.5% q/q) and CIB’s Q4 (+16.6% q/q) reinforcing our bullish stance.
JAWs should be double-digits in FY 17e despite wage drift of 15-20%, while bad debt charges are managed to cap EPS growth at c 30% y/y. Listed banks have very prudent with regards to FX loans ahead of the EGP devaluation.
We see on average 24.6% upside, even though banking stocks rose 50%+, but still underperformed the index by c.10%, despite being the clearest beneficiary of the devaluation and reform agenda.
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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