Cairo – Mubasher: Renaissance Capital said it raised its target price (TP) for Credit Agricole Egypt’s (CAE) at EGP29.3/share (EGP 28.8 previously), while reiterated its buy recommendation.
The research house raised CAE’s TP on higher interest income and lower provisions is based on a P/B multiple, with its key inputs being 28% RoE, 6% terminal growth and 15% CoE.
CAE reported a strong set of 2Q16 results supported by higher net interest income and lower provisions. NII rose by 22% supported by higher yields on loans and government securities following benchmark rate increases in Egypt, delivering a RoE of 39%. Loan growth was subdued, +4%YoY owing to the weak macro environment.
