Report
EUR 9.28 For Business Accounts Only

UAB: Q3 earnings review: Balance sheet de-risking continues

​Balance sheet de-risking continues..

  • ​UAB ─ 40% owned by CBQ in Qatar ─ misses our expectations on higher than expected OpEx and credit costs.
  • However, the lender remains on track to meet >25% cost savings for FY 16e as it closes down branches and focuses on cost rationalization.
  • NPL formation continues to improve with the worst behind us (peaked in H2 15A). However, its “transformation strategy” will keep credit costs elevated and revenue growth subdued as it takes another few quarters to near completion. RoE stood at 2.5% based on Q3 earnings, while higher at 4.3% on 9M numbers.
  • The move to a structurally lower risk banking model supports capital health and offers better loan loss absorption capacity with TI ratio of >15%.

Underlying
United Arab Bank

Provider
Arqaam Capital
Arqaam Capital

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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