Strongly positioned to outperform; initiate at OW
Deserves a premium on superior EPS growth, visibility. We initiate on CIB with an Overweight rating and a TP of EGP102/share. CIB trades at 2018e P/E of 9.7x (in line with MENA peers) and P/BV of 2.8x, a 15% premium to Crédit Agricole-Egypt but on par with MENA banks on a risk-adjusted basis. We argue that our valuation (2018e implied P/BV of 3.5x) is justified as CIB: i) provides the top exposure to the potential recovery of Egypt’s underpenetrated market (EPS CAGR of >25% in 2017-19e vs. single-digit for MENA peers), ii) has the strongest corporate foothold to capitalise on the progression of Egypt’s credit cycle in 2017-18e, and iii) is expected to record a sustainable RoE of 32-35% (vs. c15% for MENA banks).
Commercial International Bank (Egypt) is a financial institution based in Egypt. Co. is engaged in the business of commercial banking. Co.'s principal activity is the provision of banking and financial services to private and corporate customers. Services provided include deposits, checking and savings accounts, credit cards, letters of credit, commercial, mortgage and personal loans, and custody of securities. Co. maintains branches throughout Egypt and Qatar. Co.'s principal shareholder is the National Bank of Egypt which maintains a 99.9% investment.
CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.
Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.
CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.
The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.
CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.
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