(MENAFN- Daily News Egypt) Mubasher Trade Research has maintained their 'Sell/Moderate Risk' rating for the stock of the Commercial International Bank - Egypt (CIB), setting the price target (PT) at EGP 76 per share, according to a recent report.
The research firm believes that the CIB's net fees and commissions' income, which leveled up 56% year-on-year, 'should improve further in the coming period, as the EGP flotation should reflect positively on customers' ability to open letters of credit for imports.'
Total banking income surged 43.4% year-on-year to EGP 4.187m, the report mentioned.
Net interest margin (NIM) fell 5.47% year-on-year in Q3 2017 from 5.75% in Q3 2016.
The CIB's stock 'has fallen by 13% from its peak in mid-July' and 'is currently traded at 3.3x book value, including interim earnings,' Mubahser Trade added.
The CIB's return on equity (ROE) stood at 31.4% year-on-year for the first nine months of 2017, the report indicated.
The CIB on Thursday posted a 22% year-on-year increase in consolidated profits for Q3 of 2017.
Net profits amounted to EGP 2.087m in Q3 2017, versus EGP 1.703m in Q3 2016, beating Mubasher Trade expectations of EGP 1.976m.
Net interest income (NII) and non-interest income went up 40.9% year-on-year at EGP 3.567m and 60% year-on-year at EGP 620m, respectively, pushing the CIB's annual earnings higher.
Moreover, loan loss provision (LLP) charge soared 744.6% year-on-year at EGP 623m.
Total cost rose 25.6% year-on-year at EGP 794m due to a 29% year-on-year increase in general and administrative expenses, as well as an increase of a 33% year-on-year in depreciation.
Meanwhile, the cost-to-income ratio dropped 19% in Q3 2017 from 22% in Q3 2016.
Mubasher Trade noted that CIB's total corporate loans declined by 4.4% quarter-on-quarter to EGP 82.9bn due to the current high-interest rates, which led to a slowdown in demand for credit.
On the other hand, CIB's total retail loans increased by 6.3% quarter-on-quarter, the report highlighted.
The research firm is forecasting loan growth to go up due to the expected increase in capital expenditure during 2018, pointing out that the CIB's net loans grew 44.8% year-on-year to EGP 88bn at the end of September 2017, while customer deposits accelerated by 39.1% year-on-year to EGP 247.7bn.
The bank's net loans-to-deposits (L/D) ratio increased slightly on an annual basis from 34.1% in September 2016.
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