Please find attached our banking sector update for 2023, in which we present: Sector Outlook, Hopes, Fears, and Picks * Sector Outlook, Hopes, Fears, and Picks * Valuation and Multiples Interbank Comparison * Market Share and Utilization * Balance Sheet * Income Statement * Capital Adequacy * Tax Law Calculation Individual Banks Fundamental Review * Commercial International Bank (COMI) * Qatar National Bank (QNBA) * Credit Agricole Egypt (CIEB)...
Higher RRR is negative, at face value, … On 22 September, the CBE hiked the reserve requirement ratio (RRR) on short-term LCY deposits by 4pp to 18.0% in effort to tighten liquidity and combat inflationary pressures. We calculate this should result in the absorption of cEGP150bn in excess liquidity from the system, which would be deposited at the CBE with no return. The RRR on FCY deposits was maintained at 10%. We expect banks will satisfy the higher liquidity requirement mainly through reducin...
Strong fundamentals coupled with a high yield. We continue to favour CAE and maintain our OW rating. CAE’s solid balance sheet and balanced credit exposure allow for the trickling down of the bulk of the impact from the potential margin expansion to total profitability. We expect RoE to stand at c23% over 2022-23e vs. 17.5%, as implied from the current market price. CAE offers a 2022e dividend yield of 12%, among the highest within our Egypt coverage. CAE trades on a 2022e P/BV of 0.83x and P/E ...
EARNINGS DRIVEN BY INTEREST INCOME, AND LOWER PROVISIONS, DESPITE GROWING OPEX CIEB 2Q22 consolidated bottom line recorded EGP524 million, pre minority interest and appropriations (+7% q/q, +35% y/y), 11% higher than Pharos estimates of EGP471 million, bringing 1H22 bottom line to EGP 1,015 million (+32% y/y). Sequential performance was limited by lower investment income which wiped out the effect of robust margins, while lower provisions supported earnings, coupled with slight growth in OPEX...
STRONG QUARTER DRIVEN BY INTEREST INCOME, OTHER INCOME, AND LOWER PROVISIONS, DESPITE GROWING OPEX CIEB 1Q22 consolidated bottom line recorded EGP492 million, pre minority interest and appropriations, (+14% q/q, +30% y/y), 4% lower than Pharos estimates of EGP511 million. Healthy sequential performance was driven by: 1) healthy net interest income, 2) strong ‘other income’ driven by reversals of other provisions, 3) lower booked provisions, and 4) slightly lower effective tax rate, despite gr...
HEALTHY QUARTER DRIVEN BY ROBUST TOPLINE COUPLED WITH A HEALTHY BALANCE SHEET GROWTH CIEB 4Q21 consolidated net profit pre-minority and appropriations recorded EGP429 million, pre minority interest and appropriations, 4% higher than Pharos estimates of EGP413 million and (+4% q/q, +28% y/y), bringing FY21 bottom line to EGP 1,609 million (+17% y/y, and 1% higher than Pharos estimates of EGP 1,593 million). Healthy sequential performance was driven by: 1) healthy operating income driven by int...
CREDIT AGRICOLE EGYPT (EG), a company active in the Money Center Banks industry, reduced its market risk and raised its general evaluation. The independent financial analyst theScreener awarded an improved star rating to the company, which now shows 3 out of 4 possible stars; its market behaviour has improved and can be considered as defensive. theScreener believes that this new assessment merits an overall rating upgrade to Slightly Positive. As of the analysis date January 25, 2022, the closin...
Please find attached our banking sector update for 2022, in which we present: Sector Outlook, Hopes, Fears, and Picks * Sector Outlook, Hopes, Fears, and Picks * Valuation and Multiples Interbank Comparison * Market Share and Utilization * Balance Sheet * Income Statement * Capital Adequacy * Tax Issue Individual Banks Fundamental Review * Commercial International Bank (COMI) * Qatar National Bank (QNBA) * Credit Agricole Egypt (CIEB) * Hou...
Non-interest income failed to support earnings; Healthy balance sheet growth reflects the positive performance CIEB 3Q21consolidated net profit pre-minority and appropriations recorded EGP413 million (+6% q/q, +23% y/y), in line with our estimates (1% higher than Pharos estimates of EGP 410 million), bringing 9M21 bottom line to EGP1,180 million (+14% y/y). Sequential earnings were supported by lower booked provisions and effective tax rate while opex growth coupled with a flat operating inco...
NON-INTEREST INCOME CAPS BOTTOM-LINE GROWTH, CONTROLLED OPEX AND STABLE MARGINS REFLECT POSITIVE PERFORMANCE CIEB 2Q21 consolidated net profit pre-minority and appropriations recorded EGP389 million (+3% q/q, +49% y/y). The top line witnessed a limited sequential growth of 5%, along with a 30% decline in non-interest income. However, the 49% q/q decline in booked provisions brought the bottom line to the green. The annual improvement is attributed to: 1) a top line growth of 9%, standing at E...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
CIEB 1Q21 consolidated net profit pre-minority and appropriations recorded EGP379 million (+13% q/q, -14% y/y). The sequential increase was mainly driven by 1) non-interest income (which included one-off items related to the sale of land, and tax differences released deducted from tax liability previously formed), and 2) controlled OPEX, despite lower margins. The annual decline in profits was mainly attributed to higher booked provisions (EGP126 million versus only EGP30 million last year, w...
HIGH COR WIPES OUT RECOVERY IN NON-INTEREST INCOME, LOWER OPEX AND TAXES CIEB 4Q20 consolidated net profit pre-minority and appropriations recorded EGP335 million (0% q/q, -33% y/y). Sequential stability was achieved despite high provisions which completely wiped out any growth from higher non-interest income, lower OPEX, and effective tax rate. The annual decline in quarterly profits was a result of 1) lower topline on rate cuts, 2) lower non-interest income on lower trade activity and cance...
In our 72-page banking sector update for 2021, we present: SECTOR OUTLOOK, HOPES, FEARS, AND PICKS * Sector Outlook, Hopes, Fears, and Picks * Valuation and Multiples INTERBANK COMPARISON * Market Share and Utilization * Balance Sheet * Income Statement * Capital Adequacy * Tax Issue INDIVIDUAL BANKS FUNDAMENTAL REVIEW * Commercial International Bank (COMI) * Qatar National Bank (QNBA) * Credit Agricole Egypt (CIEB) * Housing and Developme...
Healthy operating income, controlled opex and lower provisions drive sequential profits CIEB 3Q20 consolidated net profit pre-minority and appropriations recorded EGP336 million (+29% q/q, -40% y/y). Sequential increase came on 1) higher topline, 2) lower booked provisions as the previous quarter had the highest single quarter provisions in 6 years, and 3) controlled opex. On the downside, effective tax rate remained high at 34% (+5 pps q/q) with stable treasury exposure at 18% to total asset...
MARGINS WEAKEN ON LOWER TREASURY EXPOSURE AND OTHER INCOME FAIL TO PROVIDE SUPPORT AMID HIGHEST SINGLE QUARTER PROVISIONS IN SIX YEARS CIEB 2Q20 consolidated net profit pre-minority and appropriations recorded EGP261 million (-41% q/q, -57% y/y) with an annualized ROAE for FY2020 of 19%. Profits declined on 1) weak NIM due to lower treasury allocation and 300 bps rate cut, 2) a plunge of non-interest income partially affected by the CBE’s decision of removing all fees on bank transactions fro....
Earnings wane on lower margins, higher OPEX and provisions; Lending expands CIEB1Q20 consolidated net profit pre-minority and appropriations recorded EGP440 million (-11% q/q, -37% y/y) an annualizedROAE for FY2020 of 27%. The decline in profits was mainly attributed to lower NIM and non-interest income, higher OPEX and higher effective tax rate despite stable treasury investments. 1Q20 results key takeaways were: * Margins declined from 7.0% in the previous quarter to 6.8% in 1Q20 as lendin...
We made a round of calls with the banks under coverage to get some color on their operations amid rising concerns of the current lockdown. Here are the main takeaways. · At the beginning of the year, banks had a strong growth outlook for the year with many soft approvals for CAPEX lending, up until the escalation of covid-19 in March. CAPEX lending has come to a complete stop, even with the surprise cut in rates by 300bps on March 16th. Working capital financing also weakened due to the inter.....
The US Federal Reserve yesterday cut interest rates by 100bps, in addition to the 50bps cut announced on 3 March, and also announced a massive asset purchase programme and international co-ordination to protect USD-liquidity in the financial system. These moves highlight the central bank’s concern over the significant negative effect that Covid-19 will have on the US and global economies. This impact stems not just from the effect of the virus itself (in terms of lost output and consumption b....
Update TPs; Among top sectors in 2020. As 2020 unfolds, we look for a pick-up in private credit activity, in line with further monetary easing by the CBE (excess liquidity release of up to EGP220-250bn and another 2-3% cut in policy rates). We roll over our valuations to 2020, raising our average TPs for our coverage by c5%. Additionally, we account for a 1% net profit deduction, in accordance with the Banking Act amendments (pending Parliament approval). Our numbers account for the income tax a...
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.