Egypt Banks | Rerating hinges on potential risk compression
Remain Overweight on Egyptian banks due to better outlook of FX liquidity. We view the IMF loan as a key to flag the recovery of foreign inflows. We expect the revival in demand for long-term corporate credit to drive growth in consolidated loans starting 1H17 (CAGR of 17% during 2017-20) at the expense of lower exposure to government securities. Banks’ total profitability is expected to decline under this scenario but the higher earnings quality should warrant higher multiples. We take a conservative approach and do not factor into our forecasts the above-average growth in SME lending and retail penetration, representing an upside risk to our valuations.
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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