Cairo – Mubasher: Renaissance Capital reinitiated coverage of Egypt’s largest private-sector bank CIB, assigning ‘Buy’ recommendation on its global depositary receipt (GDR) and ‘Hold’ rating on the local stock.
Moreover, the target price is set at $4.7 for GDR as well as EGP 51.2 for the local stock, the research firm said in its report, “Commercial International Bank Egypt: Best exposure to Egypt’s structural growth story”.
The bank is forecasted to register a sector-leading return on equity (31%) and earnings per share (25%) over the upcoming three-year course with GDR pricing in an exchange rate at EGP 12.4 per dollar, Renaissance indicated.
Higher average of return on equity will be driven by accelerating loan growth to 24% during 2016-2018 from 16% currently, supported in this journey by private sector’s emerging investments, the firm pointed out, adding that earnings per share will be rising on the back of strong revenue growth and normalization of risk cost.
“We believe the GDR offers an attractive opportunity for high-quality exposure to Egypt,” the firm stated, adding “unlike some other Egyptian banks, CIB is unencumbered by political affiliations and foreign parent ownership.”
CIB is deemed the third largest bank owning assets in Egypt behind the state-owned National Bank of Egypt and Bank Misr.
