reports
- Dalia Bonna
ADIB: Management Meeting Key Takeaways
Call Highlights * Deposit growth for the bank was not affected by the 25% CD issued by public banks supported by the 16% (monthly interest) and 17% (annual interest) CD issued by ADIB during 4Q22, which clients could not break during the first six months of purchasing. * Financing continues to receive a high allocation from deposits in line with the bank's strategy to maintain a financing-to-deposit ratio around the 60% level, with the excess funding parked in sovereign fixed-income ins...
- Bassma Bakry
- Dalia Bonna
Egypt Banking Sector 2023: Attempting to counterbalance macro factors
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)...
HDBK HOUSING & DEVELOPMENT BANK
CIEB CREDIT AGRICOLE EGYPT
EGBE EGYPTIAN GULF BANK
CANA SUEZ CANAL BANK
ADIB ABU DHABI ISLAMIC BANK EGYPT
SAUD AL BARAKA BANK EGYPT
QNBA QATAR NATIONAL BANK ALAHLY
FAIT FAISAL ISLAMIC BANK OF EGYPT
EXPA EXPORT DEVELOPMENT BANK OF EGYPT
- Maryam Saleh
- Monsef Morsy
- Sherif Eletr
Egypt banks | Higher RRR: A manageable headwind; flag CAE
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...
- Dalia Bonna
ADIB Egypt: 2Q22 – Outstanding quarter
EARNINGS BOOSTED BY STRONG MARGINS AND NON-INTEREST INCOME COUPLED WITH LOWER OPEX DESPITE SURGING PROVISIONS; LDR IMPROVES ADIB 2Q22 consolidated net profit pre minority interest recorded a robust EGP578 million (+29% q/q, +65% y/y) reaching EGP1,017 million (+51% y/y) in 1H22. The strong sequential and annual performance was driven by: 1) improved margins, 2) strong non interest income, 3) lower OPEX, 4) lower sequential effective tax rate despite surging provisions annually and sequentiall...
- Maryam Saleh
- Monsef Morsy
- Sherif Eletr
ADIB EY | A strong valuation call; Resume at OW
Trading at a deep discount. We resume coverage on ADIB-E with an OW recommendation and a TP of EGP22.0/share. ADIB-E trades on a 2022e P/BV of 0.5x (P/E of 2.8x), a 61% discount to its five-year average and 55.5% to the average valuation of tier-1 peers. Trading at a discount to CIB – the sector’s proxy – could be attributed to size and capitalisation, but the magnitude is not justified, given ADIB-E’s 2022e RoE of 22.7% and 2022-24e EPS CAGR of 18.7%, broadly in line with peers. Phase 1 of capi...
- Dalia Bonna
ADIB Egypt: 1Q22 – Robust quarter driven by controlled OPEX and lower ...
MARGINS WANE SEQUENTIALLY BUT GROW ANNUALLY; LOWER BOOKED PROVISIONS SUPPORT THE BOTTOM LINE ON IMPROVED NPLS; LDR IMPROVES ADIB 1Q22 consolidated net profit pre minority interest recorded a robust EGP444 million (+16% q/q, +34% y/y). The strong sequential performance was driven by: 1) lower OPEX, 2) lower provisions, while 3) non-interest income expansion failed to wipe out the effect of lower sequential margins, and effective tax rate remained stable sequentially. On an annual basis, strong...
- Dalia Bonna
ADIB Egypt: 4Q21 – Strong year on robust margins and lower provisions
STRONG OPERATIONS MUTED BY HIGH OPEX, PROVISIONS, AND SOARING EFFECTIVE TAX RATE, DESPITE IMPROVING MARGINS AND NON-INTEREST INCOME ADIB 4Q21 consolidated net profit pre minority interest recorded EGP381 million (-2% q/q, +8% y/y). The effect of strong margins and non-interest income during the quarter was muted by high opex, booked provisions, and soaring effective tax rate, bringing the bottom line to a marginal decline of 2% q/q, while lower annual provisions coupled with strong top-line p...
- Dalia Bonna
ADIB Egypt: Management webinar key takeaways
BALANCE SHEET * Total financing growth went down to a single digit in 9M21, since a significant increase happened within the contingent facilities (LCs and LGs) by almost EGP 7 billion, which did not reflect on lending numbers. * ADIB launched this year a new product which is sharia-compliant mortgage financing, which should add good numbers to the loan portfolio. * SMEs financing in 2021 increased by 1.3 billion, and the bank is on track to reach 25% of the total financing portfol...
- Bassma Bakry
- Dalia Bonna
Egypt Banking Sector 2022: Supported by macro backdrop
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...
HDBK HOUSING & DEVELOPMENT BANK
CIEB CREDIT AGRICOLE EGYPT
EGBE EGYPTIAN GULF BANK
CANA SUEZ CANAL BANK
ADIB ABU DHABI ISLAMIC BANK EGYPT
SAUD AL BARAKA BANK EGYPT
QNBA QATAR NATIONAL BANK ALAHLY
FAIT FAISAL ISLAMIC BANK OF EGYPT
EXPA EXPORT DEVELOPMENT BANK OF EGYPT
- Dalia Bonna
ADIB Egypt: 3Q21 – Strong quarter on healthy topline; lending grows
STRONG OPERATING INCOME TRICKLES DOWN TO PROFITS SUPPORTED BY CONTROLLED OPEX AND LOWER PROVISIONS; LDR RATIO DECLINES ADIB 3Q21 bottom line recorded EGP389 million (+12% q/q, +24% y/y) bringing 9M21 bottom line to EGP1,069 (+27% y/y). The annual and sequential improvement came on the back of strong interest and non-interest income growth. Controlled opex further supported sequential growth, while lower provisions supported annual growth despite a soaring effective tax rate of 34% in 3Q21 (+6...
- Dalia Bonna
ADIB Egypt: 2Q21 – Provisions reversal drives bottom line growth, desp...
HEALTHY TOPLINE GROWTH OVERSHADOWED BY A SURGE IN OTHER OPEX WHILE PROVISIONS REVERSAL SAVES THE SCENE; LDR RATIO WANES ADIB 2Q21 consolidated net profit pre-minority interest and appropriations recorded EGP349 million (+5% q/q, +16% y/y), with annualized ROAE of 24%. 2Q21 bottom line growth was mainly caused by provisions reversals of EGP15 million in 2Q21 coupled with lower effective tax rate and healthy growth of topline that was wiped out by a decline in non-interest income and a surge in...
- Dalia Bonna
ADIB Egypt: 1Q21| Profits decline sequentially despite strong top-line
TOPLINE SEQUENTIAL IMPROVEMENT WIPED OUT BY HIGHER OPEX, PROVISIONS AND EFFECTIVE TAX RATE; LDR RATIO IMPROVES ADIB 1Q21 consolidated net profit pre-minority interest and appropriations recorded EGP332 million (-6% q/q, +44% y/y), with annualized ROAE of 22%. 1Q21 bottom line declined sequentially on higher OPEX, booked provisions on rising NPLs, and higher effective tax rate. Profits grew annually despite stable top line, mainly on lower OPEX which recorded an exceptionally high figure in 1Q...
- Dalia Bonna
ADIB Egypt: FY20 bottom line declines on higher provisions and effecti...
QUARTER PROFITS RISE ANNUALLY AND SEQUENTIALLY MOSTLY ON CONTROLLED OPEX AND LOWER PROVISIONS; LDR RATIO DECLINES ADIB 4Q20 consolidated net profit pre-minority interest and appropriations recorded EGP352 million (+12% q/q, +35% y/y), ending the year with EGP1,196 million (-3% y/y), with a ROAE of 22%. 4Q20 bottom line grew annually and sequentially on controlled opex and lower provisions after a decline in NPL ratio, while net interest income grew marginally. Lending activity paused in 4Q af...
- Dalia Bonna
Management webinar key takeaways
2021 management guidance * Capital increase initial plan was to reach EGP 5 billion in 2020 then got postponed due to the pandemic. As per management, the CBE gave ADIB one year to increase the paid in capital to close the gap. ADIB UAE is committed to enter (transfer from the EGP1.86 billion reserved under capital increase) with equal amount of fresh capital raised from market to maintain its current stake in the bank of 49.6% to avoid any dilution for minorities. * Precautionary provi...
- Bassma Bakry
- Dalia Bonna
Egypt Banking Sector – 2021 update
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...
HDBK HOUSING & DEVELOPMENT BANK
CIEB CREDIT AGRICOLE EGYPT
EGBE EGYPTIAN GULF BANK
CANA SUEZ CANAL BANK
ADIB ABU DHABI ISLAMIC BANK EGYPT
SAUD AL BARAKA BANK EGYPT
QNBA QATAR NATIONAL BANK ALAHLY
FAIT FAISAL ISLAMIC BANK OF EGYPT
EXPA EXPORT DEVELOPMENT BANK OF EGYPT
- Dalia Bonna
ADIB Egypt: 3Q20 bottom line stable sequentially on lower OPEX; annual...
MARGINS AND NON-INTEREST INCOME CONTINUE TO WEAKEN; LENDING EXPANDS ADIB 2Q20 consolidated net profit pre-minority interest and appropriations recorded EGP314 million (+4% q/q, +2% y/y), bringing 9M20 profits to EGP844 million (-13% y/y), with an annualized ROAE of 23% and EPS contraction of 8% in 2020. The bottom line marginally grew sequentially on lower opex, which allowed the bank to slightly increase provisions, while topline and non-interest income weakened. Annual growth came on the ba...
- Dalia Bonna
ADIB Egypt: Controlled opex drive earnings amid weak margins; maintain...
Bottom line grows on controlled opex and lower provisions amid weak margins and non-interest income; lending slightly contracts ADIB 2Q20 consolidated net profit pre-minority interest and appropriations recorded EGP300 million (+30% q/q, -21% y/y), bringing 1H20 profits to EGP531 million, with an annualized ROAE of 22%. Bottom line grew sequentially despite weaker topline and non-interest income. Growth was mainly attributed to 1) a very low comparable base burdened by other provisions and a ...
- Dalia Bonna
ADIB Egypt: 1Q20 – High OPEX overshadows strong operational quarter;...
Bottom line declines on surging OPEX despite strong financial indicators ADIB 1Q20 consolidated net profit pre-minority interest and appropriations recorded EGP230 million (-12% q/q,-18% y/y), with an annualized ROAE of 18%. The declinein profits was mainly mostly attributed to a spike in ‘other operating expenses’ coupled with a higher effective tax rate, while operating income and balance sheet witnessed solid growth. 1Q2020 results key takeaways were: * NIM remained sequentially stable a...
- Dalia Bonna
Egypt banks: On the ground update
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.....
- Please Change Name Nitish Bhojnagarwala
Abu Dhabi Islamic Bank: Update to credit analysis
FINANCIAL INSTITUTIONS CREDIT OPINION 29 November 2017 Update RATINGS Abu Dhabi Islamic Bank Domicile United Arab Emirates Long Term Issuer Rating Not Available Type Not Available Outlook Stable Please see the ratings section  at the end of this report for more information. The ratings and outlook shown reflect information as of the publication date. Contacts Nitish Bhojnagarwala +
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