reports
- Rayhan Ahmed
Equity Note on BRAC Bank PLC. (BRACBANK)
BRAC Bank PLC. (BRACBANK) is one of the largest private commercial banks in Bangladesh, operating through 187 branches, 40 sub-branches, 457 SME offices and over 1000 agent banking outlets. The third-generation bank is sponsored and majority-owned (46.2%) by BRAC, the world's largest NGO and a pioneer in microfinance that provides BRACBANK a competitive advantage in the SME segment. Moreover, the bank is a market leader in the mobile financial services industry through its subsidiary, bKash Limi...
- Md. Ifrat Khan
BRAC Bank: c60% YoY earnings growth in Q2 CY23
Investment income of the banking business increased by c98% YoY in the quarter. The breakdown of this particular item revealed that the capital gain on government securities was the main driver of the investment income growth. In Q2 CY2023 BRAC bank reported BDT 787mn capital gain on G-sec, which is roughly 10 times of the amount recorder in the same quarter of the previous year. Though the interest rate spread (calculated) slightly declined by 6bps, the c26% YoY growth in loan portfolio incr...
- Shopnil Paul
- Tanay Roy
BRAC Bank: BRAC Q1 CY23: c24% YoY earnings growth driven by profit fro...
BRAC Bank, our only recommended bank stock in Bangladesh, reported BDT 1,437mn consolidated NPAT exc. minority interest (undiluted EPS BDT 0.96) in Q1 CY2023 against BDT 1,158mn (undiluted EPS BDT 0.77) reported in Q1 CY2022, implying c24% YoY growth. The main driver of earnings was BDT 359mn profit reported by its mobile money subsidiary bKash. Meanwhile, the bottom-line of its core banking business was almost flat as the positive impact stemming from c27% YoY loan book growth was offset by ...
- Shopnil Paul
- Tanay Roy
BRAC Bank: Q3 22: bKash’s BDT 465mn quarterly profit aids BRAC’s 12% Y...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 1,590mn NPAT (excluding minority interest) in Q3 CY22 against BDT 1,417mn reported in Q3 CY21, implying c12% YoY growth. However, the 9M CY22 earnings is down by c5% YoY (EPS BDT 2.53 in 9M CY22 vs EPS of BDT 2.67 in 9M CY21). bKash’s positive bottom-line after a hiatus of 13 quarters, 67% YoY increase in commission, exchange and brokerage income and c38% YoY growth in consolidated lending portfolio helped BRAC boost its earning...
- Shopnil Paul
- Tanay Roy
BRAC Bank: Q2 22 – 22% NPAT decline on spread contraction & subsidiari...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 1,041mn NPAT (excluding minority interest) in Q2 CY22 against BDT 1,340mn reported in Q2 CY21, implying c22% YoY decline. Though the consolidated lending portfolio increased by c32% YoY, 38bps drop in interest rate spread (calculated) and BDT 79mn loss incurred by its two stock market subsidiaries in Q2 CY22 vs BDT 134mn profit reported in Q2 CY21 were attributable to the decline in BRAC’s earnings. KEY POSITIVES * The lending ...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: CY21 — Spread improvement and higher commission income led ...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 5465mn consolidated NPAT (excluding minority interest) in 2021 against BDT 4,418mn reported in 2020, implying c24% YoY growth. The bottom-line of its core-banking business (solo) increased by c22% in 2021. Interest rate spread which improved by 24bps in a year because of the bank’s conscious effort to bring down the cost of funds. Besides, higher commission and brokerage income owing to increased international trade in the count...
- S.M Galibur Rahman
- Shopnil Paul
Bangladesh: SoftBank to acquire 20% stake in bKash
SOFTBANK VISION FUND (SVF) TO BUY 20% STAKE SoftBank Vision Fund (SVF), the world’s largest tech investment fund, will acquire a 20% stake in bKash Limited. There will be both primary and secondary transactions. Hence, bKash will be issuing new shares in addition to secondary stake sales by the existing shareholders. However, the deal value and the modality of investment are yet to be disclosed. BKASH WILL REMAIN THE SUBSIDIARY OF BRAC BRAC Bank, the parent company of bKash, has informed that...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Q3 CY21: Growth in core banking business; bKash dragged gro...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 1,417mn NPAT (excluding minority interest) in Q3 CY21 against BDT 1,497mn reported in Q3 CY20, implying c5% YoY de-growth. Please note that the earnings of BRAC bank’s core banking business increased by c8% YoY in the quarter. The decline in consolidated earnings of the company is attributable to loss from bKash, which incurred BDT 295mn loss in Q3 CY21 vs BDT 147mn loss in Q3 CY20. If we adjust our bKash valuation (USD 942mn) f...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: NIM recovering from rate cap hit; bKash reports record reve...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 1,341mn NPAT (excluding minority interest) in Q2 CY21 against BDT 298mn reported in Q2 CY20, implying c350% YoY growth. Please note that the Q2 CY20 earnings of BRAC bank dipped because of – i) the lending rate cap; and ii) the first wave of the COVID-19 pandemic on the economy. In Q2 CY21, earnings have recovered riding on higher net interest income and normalized commission & exchange income. At BDT 49.3, the shares trade at 1...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Q1 2021 – 42% NPAT growth owing to 125% YoY increase in inv...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 1.2bn NPAT in Q1 2021 against BDT 0.9bn of Q1 2020 implying c42% growth (excluding minority interest). The growth is driven by a 125% increase in investment income. Our unchanged target price of BDT 66 represents a c36% expected total return (ETR). Risk to our valuation includes: i) continuation of pandemic lockdown for a prolonged period; ii) continuation of SME loan rate cap for a long period (we assumed no rate cap for SME fr...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Well-positioned to overcome pandemic and rate cap challenge...
BRAC Bank, our only recommended bank in Bangladesh, reported BDT 4.4bn NPAT in 2020 against BDT 4.9bn of 2019 implying c11% decline (excluding minority interest). However, the decline in earnings is attributable to mainly two factors – i) squeezed interest spread stemming from the lending rate cap and ii) higher provision in anticipation of bad loans surge due to the ongoing pandemic. At BDT 42.6, the shares trade at 1.1x PB. If we adjust our bKash valuation (USD 942mn) from the current marke...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: c11% de-growth in annual earnings; BDT 1/share dividend and...
ANNUAL EPS OF BDT3.33 BEATS OUR EXPECTATIONS, IMPLYING C11% DE-GROWTH BRAC reported BDT 4.4bn consolidated NPAT in 2020 compared to BDT 4.9bn of 2019 implying c11% de-growth. On a solo basis (banking business) banks reported BDT 4.5bn NPAT compared to BDT 5.6bn of the same period the previous year. Please note that during Q2 2020 the central bank imposed a lending rate cap which impacted the bank’s earnings substantially. Besides, during 2020 (Apr-Jun 2020) Bangladesh went under a 66-day loc...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Treasury investment gain and stock market subsidiaries prof...
BRAC Bank, our only recommended bank in Bangladesh, reported a 76% YoY growth in Q3 20 net profit to BDT 1,492.3mn, largely because of a 243% increase in the investment income due to capital gain from government securities and BDT 215.7mn profit contribution from stock market subsidiaries. At BDT 41.3, the shares trade at 1.2x PB. If we adjust our bKash valuation (USD 942mn) from the current market price, BRAC is trading at 0.4x of its banking business NAV. Our unchanged target price of BDT 6...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: bKash leaps two years ahead amid rush to digital during the...
Mobile financial services (MFS) monthly transactions touched BDT 630bn in July 2020 posting 40.5% MoM growth according to Bangladesh Bank. Of this BDT 630bn, bKash had close to 80% market share (our estimation). Please note that the transaction data of Nagad, a post office subsidiary, is not included in this MFS data reported by Bangladesh Bank. bKash, the digital financial services arm of BRAC Bank, has been investing heavily in customer acquisition and creating a financial ecosystem for mob...
- S.M Galibur Rahman
- Shopnil Paul
Bangladesh Banks: Q2 20 profits fell due to ratecap, but not the same ...
The imposed rate cap has lowered banks' profitability. Bangladesh Bank imposed a rate cap from March 1 2020. Hence, Q2 2020 was the first quarter with this rate cap. Our coverage NPAT has decreased by 30% YoY in this quarter driven by a 34% fall in net interest income (excluding government securities interest income). Among our coverages, Prime Bank reported an 88% YoY fall in NPAT followed by BRAC (75% YoY fall) and CITY (71% YoY fall) in Q2 2020. DUTCH NPAT fall was lowest (2% YoY) followed...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Q2 20 review – Rate cap hits bank hard; pandemic acts as ...
BRAC Bank, our only recommended bank in Bangladesh, reported a 75% YoY decline in Q2 20 net profit to BDT 298.1mn, largely because of a 37% fall in the interest income due to rate cap. At BDT31.9, the shares trade at 20.0x 2020 PE and 1.0x PB. If we adjust our bKash valuation (USD 942mn) from current market price, BRAC is trading at 0.13x of its banking business NAV. Our unchanged target price of BDT 60 represents a 91% expected total return. Key downside risks relate to the continuation of c...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Digital nano-lending is a keystone for bKash growth and its...
bKash, the digital financial services arm of BRAC Bank, has recently launched a pilot project for digital lending of collateral-free loans in collaboration with City Bank. The credit risk will be borne by City Bank while bKash will receive a share of net revenue. Customer due-diligence will be handled by bKash using its advanced AI-based credit assessment facilities for digital loans of Ant Financial. Details can be found in our published report here. In this report, we want to discuss why th...
- S.M Galibur Rahman
- Shopnil Paul
- Tanay Roy
Bangladesh – Economic activities resume; we prefer Telco, Consumer, ...
No more general holiday from 31 May On May 31, 2020, Bangladesh will mark the end of 66-day long ‘General Holiday’ (38 days lockdowns, 20 weekends, and 8 public holidays) as the economic activities resume on a ‘limited scale’. For the next 15 days, all private and public offices and factories are allowed to remain open, complying to the health rules, from 6am to 4pm. However, people are requested to stay home from 8pm to 6am without emergency needs. The stock market was also closed for t...
- S.M Galibur Rahman
- Shopnil Paul
BRAC Bank: Slow banking business; bKash in line with our expectations ...
Higher opex and loan provision resulted in NPAT fall:BRAC Bank reported consolidated NPAT of BDT 871mn (-32% YoY) in Q1 2020. This quarter’s consolidated earnings are 16% lower than our expectation. On Solo basis, BRAC NPAT was down by 14% YoY in Q1 2020 though operating income was up by 4% YoY. We estimate that in full-year BRAC consolidated NPAT will fell by 43% in 2020 driven by 41% fall in banking business earnings. We reiterate BUY with unchanged TP of BDT60.0:Our 2020f TP of BDT 60.0 (b....
- S.M Galibur Rahman
Bangladesh: Central bank restricts dividends to maintain banks' liquid...
To maintain liquidity for executing the stimulus package declared by the government and to strengthen the capital base, Bangladesh Bank (BB - the central bank of Bangladesh) has introduced some conditions for disbursing dividend of the year 2019 by scheduled banks. Table 1: Summary of the regulation CAR (inclusive of Conservation Buffer)Deferral FacilityMaximum DividendCAR ≥ 12.5% Not Availed 15% Cash (BDT 1.5); 30% Total 11.25%≤ CAR
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.