reports
- 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
- Dalia Bonna
QNB Alahli: 3Q22 – Strong annual growth; sequentially stable due to pr...
ROBUST MARGINS FAIL TO BOOST EARNINGS AS OPEX, PROVISIONS, AND EFFECTIVE TAX RATE SURGE SEQUENTIALLY; LENDING GROWS QNBA 3Q22 bottom line came in at EGP2,577 million (+1% q/q, +35% y/y), bringing 9M22 bottom line to EGP 7,332 million (+22% y/y). Annual growth was supported by robust margins that trickled down to the bottom line supported by non-interest income and lower OPEX despite a surge in provisions and effective tax rate. Sequential limited growth was caused by: 1) lower investment inc...
- 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...
- Maryam Saleh
- Monsef Morsy
CIEB EY | Recent rally has more steam; Remain OW
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 ...
- Dalia Bonna
Housing and Development Bank: 2Q22 – Another strong quarter although s...
ROBUST MARGINS FAIL TO BOOST EARNINGS AS OPEX, PROVISIONS AND EFFECTIVE TAX RATE SURGE SEQUENTIALLY; LENDING GROWS HDBK 2Q22 standalone bottom line recorded a healthy figure of EGP564 million (-12% q/q, +48% y/y), bringing 1H22 bottom line to EGP 1,204 million (+20% y/y). Sequential decline was driven by: 1) lower investment income due to high comparable base, which limited the positive impact of strong margins, coupled with 2) higher OPEX, 3) higher provisions and 4) higher effective tax rat...
- Dalia Bonna
Credit Agricole Egypt: 2Q22 – Strong operational quarter; LDR expands
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...
- Dalia Bonna
Housing and Development Bank: 1Q22 – Strong quarter, annual performanc...
PROFITS SURGE SEQUENTIALLY ON IMPROVED MARGINS, LOWER OPEX, PROVISIONS, AND EFFECTIVE TAX RATE; LDR CONTRACTS HDBK 1Q22 standalone bottom line recorded EGP640 million (+62% q/q, +3% y/y). Limitedannualgrowth comes on the back of higher OPEX and booked provisions versus provisions reversals in the comparative quarter. Robust sequential performance is driven by 1) strong topline growth on improved margins, 2) support coming from dividends from subsidiaries and affiliate companies which compens...
- Dalia Bonna
Credit Agricole Egypt: 1Q22 – Healthy operational quarter; LDR expands
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...
- Dalia Bonna
QNB Alahli: 1Q22| Robust quarter driven by FX translation gains; Lendi...
Robust earnings and lower OPEX compensate for higher booked provisions; Strong balance sheet growth QNBA 1Q22 net profit pre-minority interest and appropriations recorded EGP2,208 billion (+28% q/q, +12% y/y), which is 3% lower than our estimates of EGP2,267 billion. 1Q22 bottom line strong growth came on the back of 1) a jump in 'other income' which is driven by translation gains of financials assets held in foreign currency, 2) healthy growth in net interest income and fees and commissions,...
- Dalia Bonna
Housing and Development Bank: 4Q21 – Growth capped by hefty provisions...
4Q21 PROFITS DRAGGED BY HIGH PROVISIONS AND LOWER MARGINS DESPITE ROBUST NON-INTEREST INCOME AND CONTROLLED OPEX HDBK4Q21 standalone bottom line recorded EGP396 million (-8% q/q, +5% y/y), bringing FY21 bottom line to EGP 1,830 million (+2% y/y, perfectly in line with our estimates of EGP1,840). 4Q21limited annual growth and sequential decline came on the back of sizable booked provisions during the quarter representing 94% of FY21 booked provisions. The sequential decline was further exacerb...
- Dalia Bonna
Credit Agricole Egypt: 4Q21 – Strong 2021 driven by lower provisions, ...
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 reduced its risk exposure resulting in an upgrad...
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...
- Dalia Bonna
QNB Alahli: 4Q2021 – ending 2021 on a weak note
HIGHEST SINGLE QUARTER PROVISIONS WIPE OUT HEALTHY OPERATIONAL PERFORMANCE; LDR DECLINES QNBA 4Q21 net profit pre-minority interest and appropriations recorded EGP1.62 billion (-15% q/q, -12% y/y), bringing FY21 bottom line to EGP7.63 billion (+1.8% y/y). The 4Q21 bottom-line annual and sequential decline was driven by record provisions ( more than tripling q/q to bring 2021 total provisions balance 6% higher than 2020 levels) and high effective tax rate, despite 1) solid maintained NIMs of 5...
- Dalia Bonna
Housing and Development Bank: Management Webinar Key Takeaways
MARGINS SUPPORTED BY STRATEGY * Net interest margin will continue to be strong, driven by: 1. Unchanged investment strategy of continued investments in government treasuries 2. High exposure to high-yield retail and SME segments 3. Continued participation in the government initiatives which provides the bank with cheaper cost of funds and yield and average spreads of around 3.5-4.5% BALANCE SHEET * The bank is not intending to list any of its subsidiaries * HDBK was one of the few...
QATAR NATIONAL BANK reduced its risk exposure resulting in an upgrade ...
QATAR NATIONAL BANK (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 2 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 December 21, 2021, the closing...
- 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
Housing and Development Bank: 3Q21 – Provisions reversal support earni...
HEALTHY TOPLINE GROWTH AND STABLE MARGINS WIPED OUT BY LOWER NON-INTEREST INCOME AND HIGH OPEX HDBK 3Q21 standalone bottom line recorded EGP433 million (+14% q/q, +2% y/y), bringing 9M21 bottom line to EGP 1,434 million (+1% y/y). Results were supported by: 1) healthy topline, 2) lower booked provisions, and 3) lower effective tax rate, despite opex expansion and non-supportive non-interest income. The balance sheet showed healthy growth where gross loans expanded by 7% q/q, bringing YTD grow...
- Dalia Bonna
Credit Agricole Egypt: 3Q21 – bottom line improves on lower provisions...
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...
- Dalia Bonna
QNB Alahli: 3Q2021 – earnings wane on higher expenses amid stable oper...
HIGHER EXPENSES WEIGH DOWN ON PROFITS AMID STABLE MARGINS AND LOWER PROVISIONS; LDR DECLINES QNBA 3Q21 net profit pre-minority interest and appropriations recorded EGP1.91 billion (-10% q/q, +6% y/y), bringing 9M21 bottom line to EGP6.07 billion (+6% y/y). 3Q21 bottom line sequential decline and limited annual growth came on the back of 1) lack of growth of non-interest income, coupled with 2) higher other operating expenses (driven by insurance and software costs), and 3) higher effective ta...
- Dalia Bonna
Credit Agricole Egypt: 2Q21 – Profits wiped out by lower non-interest ...
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...
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