reports
- Rahul Shah
MCB Group (Mauritius): FY 20 results — The good and the ugly; a tale o...
MCBG reported a full-year net profit of MUR7,912mn, 16% lower yoy. The key driver of the downturn was a higher impairment charge (204bps cost of risk), reflecting the damage Covid-19 has wreaked on Mauritius’ economy. We think the outlook for the coming quarters will also be challenging. However, even during these difficult times the group has remained profitable, reflecting its strong core franchise (clear domestic leader), low operating gearing (35% cost/income ratio) and cautious risk cult...
- Rahul Shah
- Rohit Kumar
The EM and FM banks best able to cope with weaker loan quality
2020 global GDP is likely to decline by 3.0%,according to IMF, and the UN estimates 81% of the world’s workers are facing workplace restrictions. In this environment, banks’ loan books face a material deterioration. With the on-the-ground situation evolving rapidly, we employ sensitivity analyses and stress-testing to identify the best-positioned banks. Asset quality deterioration is likely to be broad-based. In the initial stages of the coronavirus outbreak we thought certain sectors (such ...
- Rahul Shah
- Rohit Kumar
FM and EM Banks: The 3-D threat from Coronavirus
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....
MCBG | Proving its mettle
MCBG's H1 '19 results were impressive with EPS increasing 17.7% yoy and net loans increasing 12.2% for the 6M to Dec ‘18. We expected robust growth however, the results were better than we expected. Therefore, we have increased our earnings and loan growth forecasts. Management continues to demonstrate its quality by delivering on growth objectives after a period of limited growth. The Group has grown its tangible NAV at a CAGR of 11.3% since FY '12 and trades at an attractive P/B multiple of ...
MCBG | An island of opportunity
MCBG's FY '18 results, where net loans increased 16.7% (Avior: +10.7%), compares favourably to the low loan growth environment experienced by banks in other African countries. In our view, MCBG has shrewdly navigated a period of limited loan growth and capitalised on a turn in the lending cycle due to their ability to grow low cost deposits, maintain strong liquidity and build sufficient capital buffers. In addition, the business friendly Mauritian economy has been relatively immune to global ...
- Bhavik Desai
MCBG "ACCUMULATE" Rating Maintained
Our consensusvaluation is computed to be 85 which represents an 11.9% upside on today’s closing price and therefore maintain an ACCUMULATE rating NII growth has slowed in FY-17 but picked up pace in H1-FY18 boosted by increased lending to customers in Q2-FY18. NFCI recouped its 5% dip in FY-16 back to Rs3.35bn wherein a growing Cards & Premiumised banking services offset the drop in trade finance income. We believe MCB’s PAT willcross the Rs7bn-mark in FY18 then gradual...
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