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Export Development Bank of Egypt robust quarterly earnings driven by hike in topline: report - Daily News Egypt

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Export Development Bank of Egypt robust quarterly earnings driven by hike in topline: report

Lender’s stock trading at attractive multiples compared to peers


Pharos Research has maintained ‘Overweight’ recommendation for Export Development Bank of Egypt’s (EBE) stock at a fair value (FV) of EGP 18.50 per share.

EBE is trading at attractive multiples compared to peers,” the research firm said in a recent report.

The bank’s robust quarterly earnings were driven by a hike in topline and “healthy balance sheet growth”, the report added.

The Egyptian lender reported a 45% year-over-year surge in bottom line for the fourth quarter of fiscal year (FY) 2017/2018, registering EGP 230m.

The increase in bottom line was mainly helped by a jump in net interest income by 24% quarter-over-quarter, as well as operating expenses that fell by 3% on a quarterly basis in Q4-17/18, Pharos highlighted.

On the other hand, the bank’s non-interest income slashed by 15% q-o-q as result of a sequential decline in investment income by 77%.

EBE last posted a net profit of EGP 790.32m in the July-June period of FY 2017/18, versus EGP 540.07m in the same period a year earlier.

Meanwhile, Pharos Research has set the fair value (FV) of 10 lenders listed on the Egyptian Exchange (EGX).

The FV of the heavyweight Commercial International Bank (CIB) was set at EGP 105 per share, with an ‘Equalweight’ recommendation, the research firm highlighted in a note on Wednesday.

The Cairo-based company has also recommended ‘Overweight’ on each of Abu Dhabi Islamic Bank – Egypt (ADIB), Al Baraka Bank Egypt, and Credit Agricole at FVs of EGP 29, EGP 18.5, and EGP 60, respectively.

Pharos recommended ‘Overweight’ on each of Export Development Bank of Egypt (EBE), and Housing and Development Bank (HDBK) at FVs of EGP 18.5 and EGP 75, respectively, and ‘Overweight’ on Suez Canal Bank and Qatar National Bank Al Ahli at FVs of EGP 18.5 and EGP 70, respectively.

Moreover, the Egyptian research firm endorsed an ‘Equalweight’ recommendation on Faisal Islamic Bank of Egypt and Egyptian Gulf Bank (EG Bank) at FVs of EGP 22.5 and $1.1 per share, respectively, according to the research noted.

All FVs exclude potential 5% industry development tax previously proposed by the Central Bank of Egypt (CBE),” Pharos noted.

In other researches, Capital Intelligence Ratings (CI) has raised the long-term foreign and local currencies rating of Egypt to “B+” from “B”.

Meanwhile, the Cyprus-based ratings agency has affirmed the North African nation’s short-term currency rating at “B”, CI added in a recent report.

The rating is being reviewed to ‘stable’ from ‘positive, the rating services agency indicated.

The most populous Arab county’s rating was driven by the above-expectation increase in foreign-currency reserves that allowed a better coverage of total overseas financing and the ability to face external obstacles, CI said.

Egypt’s more sustainable debt levels, in line with the improved financial landscape, have contributed to the rating, the agency highlighted, adding that short-term financing risks declined.

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