Burgan Bank Group (BURG) - Amazon S3...2 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 0 2 4 6 8 10 12 14 16 18...
Transcript of Burgan Bank Group (BURG) - Amazon S3...2 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 0 2 4 6 8 10 12 14 16 18...
Monday, 3 December 2018 1
Burgan Bank Group (BURG) Recommendation ACCUMULATE Risk Rating R-4
Share Price KWd 285 Target Price KWd 335
Implied Upside +19.2%
Cheapest Bank in Kuwait; Initiating with an Accumulate Burgan Bank is the cheapest bank in Kuwait trading at a 10% discount to its book value (29%
discount to its historical P/B) and a 2019e PEG of 0.6x. Moreover, the market is pricing in a
sustainable RoE of 10% vs. 12% based on our estimates. The stock has significantly
underperformed its peers over the last 12 months and we believe downside risk is low. We initiate
coverage with an Accumulate rating and a PT of KWd (Fils) 335/sh.
Highlights Strong earnings growth on the horizon. We pencil in a bottom-line (attributable) CAGR
of 14.5% in 2017-2022e vs. flat earnings (2012-2017). This accelerating growth forecast
in net income should be driven by net operating income, which we model to grow by
9.3% and flat credit provisions. Having said this, there could be further upside to our
estimates if BURG reduces provisions more than our model expectations. Like all Kuwaiti
banks, general/precautionary provisions (imposed by the Central Bank) are much
greater than specific provisions. As such, hefty reversals or netting these built up
reserves against impairments (when IFRS 9 is applied) can unlock value, boosting
profitability (RoE should markedly increase).
Geographically diversified bank. Due to limited growth in Kuwait, BURG has ventured
into Turkey (material subsidiary), Algeria (material subsidiary), Iraq (insignificant) and
Tunisia (insignificant). Turkey contributes ~23% (total loans) and ~20% (to total
revenue), while Algeria contributes 10% and 14% to total loans and revenue,
respectively. These subsidiaries generate strong margins for the bank as Kuwait
operations yield tight margins.
Clarity on IFRS 9 and lower CoR key to stronger profitability. BURG, along with all other
banks in Kuwait, has been booking excessive precautionary provisions since 2012 at the
request of the Central Bank. With IFRS 9, rather than booking a one-time impairment
charge against equity, banks have been using the buffers built to write off Stage 2 loans
that are expected to be impaired. Going forward, we are of the view that BURG would
not have to book general provisions, resulting in a significant drop in CoR. It should be
noted that so far the central bank has not updated the banks on IFRS 9 implementation.
Efficiency ratio requires improvement. The bank is operating at an optimal level in
Kuwait with a C/I ratio of 30.0% (past 3 years) given that it is corporate focused which is
not cost-intensive. On the other hand, international operations have been inefficient
(Turkey being the main contributor). Having said this, the efficiency ratio from
international operations has improved from 64.5% in 2016 to 55.8% in 2017 (47.4% in
9M2018). We do not expect the efficiency ratio to drop below the ~40% level in our
forecast horizon as the bank needs to grow revenue significantly vs. opex.
Asset quality markedly improved; write-offs/reversals along with prudent risk control
contributed positively. BURG’s NPL ratio receded to 2.73% in 2017 from an all-time high
of 11.5% in 2011, while the coverage ratio jumped to 144% vs. 35% (2012). We pencil in
steady improvements in the NPL ratio.
Strong capitalization position following KWD60mn rights issue. BURG’s rights issue is
expected to bolster CET1 ratio to 12.1% (vs. 10.8% in 9M2018) and Total Tier-1 ratio to
14.8% (vs. 13.5% in 9M2018) and CAR to 17.5% (vs. 16.5% in 9M2018) in 2018.
Catalysts 1) Clarity on implementation of IFRS 9 on loan book, 2) Possible FTSE EM inclusion in
2019 & 3) Stabilization of Turkish Lira.
Recommendation, Valuation and Risks Recommendation and valuation: We assign a Price Target of KWd 335 and an Accumulate
rating. BURG is trading at a 2019e P/TB and P/E of 0.9x and 9.4x, respectively. The stock
is cheap trading at a PEG of 0.6x (below 1.0x) based on earnings of CAGR 14.5% (2017-
2022e).
Risks: 1) Geo-political factors, 2) Unexpected asset quality deterioration, 3) CoR does not
improve & 4) Volatility in Turkish lira.
Key Financial Data and Estimates
FY2017 FY2018e FY2019e FY2020e
EPS (KWd) Reported 25.40 28.46 30.34 35.08
EPS Growth (%) -5.9 12.0 6.6 15.6
P/E (x) 13.1 10.0 9.4 8.1
Tangible BVPS (KWd) 255.0 281.7 328.9 356.6
P/TB (x) 1.1 1.0 0.9 0.8
DPS (Fils) 7.00 7.00 9.00 15.00
Dividend Yield (%) 2.1 2.5 3.2 5.3
Source: Company data, QNBFS Research
Key Data
Current Market Price (KWd) 285
Dividend Yield (%) 2.5
Bloomberg Ticker BURG KK
ADR/GDR Ticker N/A
Reuters Ticker BURG.KW
ISIN KW0EQ0100077
Sector Banks &
Financial Svcs.
52wk High/52wk Low (KWd) 309/241
3-m Average Volume (‘000) 2,426.2
Mkt. Cap. ($ bn/KWD bn) 2.3/0.7
Shares Outstanding (mn) 2,493.0
1-Year Total Return (%) (0.7)
Fiscal Year End December 31
Source: Bloomberg (as of December 2, 2018)
Shahan Keushgerian
+974 4476 6509
Saugata Sarkar, CFA, CAIA
+974 4476 6534
Monday, 3 December 2018 2
We Expect BURG to Generate RoE of 11.2% in 2018e; Significant Improvement from 8.9% (2017)
Source: Company data, QNBFS Research
International Operations In-Efficient; Kuwait Efficient at C/I of 30%
Source: Company data, QNBFS Research
13.3%
12.3%
10.7% 10.4%
9.7% 9.2%
8.9% 8.4%
7.0% 6.6%
0.0%
4.0%
8.0%
12.0%
16.0%
NBK Boubyan AUB KFH Average CBK Burg GBK KIB ABK
30.9% 32.0% 32.3%
35.4% 37.7%
42.1% 42.9%
45.6%
51.0%
0%
20%
40%
60%
CBK AUB NBK GBK ABK Boubyan KFH Burg KIB
Cost-to-Income
Monday, 3 December 2018 3
NPL Ratio Highest Among Peers but has Drastically improved from 11.5% (2011)
Source: Company data, QNBFS Research
3rd Largest Market Share in Loans....................... …….. And Deposits
Source: Company data, QNBFS Research
0.53%
0.80%
1.39% 1.42%
1.74% 1.79%
2.52% 2.57% 2.73%
0.0%
1.0%
2.0%
3.0%
CBK Boubyan AUB NBK GBK ABK KFH KIB Burg
5%
6%
6%
33%
9%
7%
21%
10%
3%
CBK Boubyan AUB NBK GBK
ABK KFH Burg KIB
5%
8%
5%
31%
8%
6%
25%
9% 3%
CBK Boubyan AUB NBK GBK
ABK KFH Burg KIB
Monday, 3 December 2018 4
Valuation We value BURG using 2 variations of the Residual Income Model (RI) -- 1) Warranted Equity Valuation (WEV) and 2) RI based on a
fundamental P/B:
a) We utilize a WEV technique derived from the Gordon Growth Model: P/B = (RoAE-g)/(Ke-g). This model uses sustainable
return on average equity (RoAE) based on the mean forecast over the next seven years, cost of equity (Ke) and expected long-
term growth in earnings (g) to arrive at a fair value for this stock. We consider this method best suited to arriving at an intrinsic
valuation through the economic cycle.
b) We derive BURG's fair value by employing the RI valuation technique (based on a fundamental P/B), which is calculated based
on the sum of its beginning book value, present value of interim residuals (net income minus equity charge) and the present
value of the terminal value (we apply a fundamental P/B multiple based on the Gordon Growth Model to the ending book value
at the end of our forecast horizon). We derive the P/B from the Gordon Growth Model: P/B = (RoAE-g)/(Ke-g). This model uses
sustainable return on equity (RoE) based on the median over our forecast period, cost of equity (Ke) and expected long-term
growth in earnings (g) to arrive at fundamental/justified P/B. Based on this method we arrive at a fundamental P/B of 1.2x.
c)
d) The RI model is suitable for the following reasons: 1) when the company does not pay dividends or the pattern of dividend payments
is unpredictable; 2) the company is expected to generate negative free cash flows for the foreseeable future and 3) as the traditional
free cash flow to equity (FCFE) formula does not apply to banks. A major advantage of RI in equity valuation is that a greater portion
of the company's intrinsic value is recognized from the beginning BVPS as opposed to the terminal value (common in traditional
FCFE methodology).
e)
We add Kuwait’s 10 year swaps rate of 1.08% to the 10 year US government bond yield (3.01%) to arrive at a risk free rate of 4.1%.
We factor in a beta of 1.0x. Finally, we add a local equity risk premium of 6.5% to arrive at a Ke of 10.60%.
Valuation Methodologies
Fundamental P/B (WEV) RI Based on Fundamental P/B
Sustainable RoE (%) 11.6 Beginning BVPS (2018e) (KWd) 270
Estimated Cost of Equity (%) 10.60 Present Value of Interim Residuals (KWd) 7
Terminal Growth Rate (%) 5.0 Present Value of Terminal Value (KWd) 46
Fundamental P/B 1.2x Fundamental P/B 1.2x
Intrinsic Value (KWd) 347 Intrinsic Value (KWd) 323
Current Market Price (KWd) 285 Current Market Price (KWd) 285
Upside/(Downside) Potential (%) +21.8 Upside/(Downside) Potential (%) +13.3
Source: QNBFS Research
Methodology Equity Value (KWd) Weight (%) Weighted Fair Value (KWd)
Residual Income 323 50 161
WEV 347 50 174
Target Price 335
Closing Price 281
Upside/(Downside) +19.2
Source: QNBFS Research
Monday, 3 December 2018 5
Trading at a 29% Discount to its Historical P/B…
Source: Bloomberg, QNBFS Research
…And a 46% Discount to its Historical P/E
Source: Bloomberg, QNBFS Research
Consistently Pays Dividends (KWd), However Erratic Do Not Expect Generous Dividends After Recent Rights Issue
Source: Company data, QNBFS Research
0.25
0.5
0.75
1
1.25
1.5
1.75
2
Oct-14 Oct-15 Oct-16 Oct-17 Oct-18
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
Oct-14 Jun-15 Feb-16 Oct-16 Jun-17 Feb-18 Oct-18
Historical Average Average - 18.5x Current P/E 2018e - 10.0x
18.00
5.00
7.00 7.00
9.00
15.00
56%
18%
28% 25% 30%
43%
0%
25%
50%
75%
100%
0.0
5.0
10.0
15.0
20.0
2015 2016 2017 2018e 2019e 2020e
DPS (LHS) Payout Ratio (RHS)
1.4%
2.1%
2.5%
3.2%
5.3%
0.0%
2.0%
4.0%
6.0%
2016 2017 2018e 2019e 2020e
Historical Average – 1.4x
P/B 2018e – 1.0x
Monday, 3 December 2018 6
Key Forecasts
Loan Portfolio
BURG is a diversified bank in Kuwait and has a 10% market share in loans and 9% market share in deposits; we pencil in a loan book
CAGR (2017-22e) of 5.0%. BURG is generally focused on corporates and has insignificant exposure to mass retail which contributes
10% to the loan book through a small domestic banking network of 29 branches (not retail focused as previously mentioned). Turkey
and Algeria contribute 23% and 10% to BURG’s loan portfolio, respectively. The Turkish subsidiary mainly caters to mid-corporates
and some retail while Algeria is focused on trade finance.
Loans (KWD mn) to Exhibit 5.0% CAGR vs. 5.5% (2012-17)
Source: Company data, QNBFS Research
Retail Book Decreasing in Size; Corporate Oriented With Decent Contribution from International Operations
Source: Company data, QNBFS Research
4,012 4,224
4,408 4,199
4,429
4,738
5,159
5,633
0
1,000
2,000
3,000
4,000
5,000
6,000
2015 2016 2017 2018e 2019e 2020e 2021e 2022e
20% 18% 13% 13% 12% 12% 11% 10%
80% 82% 87% 87% 88% 88% 89% 90%
0%
25%
50%
75%
100%
2010 2011 2012 2013 2014 2015 2016 2017
Retail Corporate
67% 63% 66%
33% 37% 34%
0%
25%
50%
75%
100%
2016 2017 9M2018
Kuwait International
The decrease is
mainly due to
Turkish Lira
depreciation
Monday, 3 December 2018 7
Operating Performance
We pencil in a bottom-line CAGR of 14.5% in 2017-2022e vs. flat performance (2012-2017). The growth in net income is expected to be
driven by net operating income which we model in a growth of 9.3% and flat credit provisions. Having said this, there could be further
upside to our estimates if BURG reduces provisions more than our model expectations. Like all Kuwaiti banks, general/precautionary
provisions (imposed by the Central Bank) are much greater than specific provisions. As such, hefty reversals or netting these built up
reserves against impairments (when IFRS 9 is applied) can unlock value, boosting profitability (RoE should markedly increase).
Net Profit (KWD mn) Total Revenue (KWD mn)
Source: Company data, QNBFS Research
Net Interest Income (KWD mn)
Source: Company data, QNBFS Research
65
57 54
71 76
87
99
107
0
20
40
60
80
100
120
2015 2016 2017 2018e 2019e 2020e 2021e 2022e
14.5% CAGR
248 235 239
268 278 292
313
345
12%
-5%
2%
12%
4%
5% 7%
10%
-7%
0%
7%
14%
0
100
200
300
400
2015 2016 2017 2018e 2019e 2020e 2021e 2022e
Revenue (LHS) Growth (RHS)
157 156
171 186
203 217
234
5.9%
-0.6%
9.7%
8.7% 9.2%
6.8%
7.9%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0
50
100
150
200
250
300
2015 2016 2017 2018e 2019e 2020e 2021e
Net Interest Income (LHS) Growth (RHS)
Monday, 3 December 2018 8
NIMs to Further Expand With Expected Rate Hikes; International Operations Support NIM due to Higher Margin Environment
Source: Company data, QNBFS Research
NIMs to expand with further interest hikes and contributions from international operations. BURG’s Kuwait operations is corporate
banking based, as such margins are not as large vs. retail banks. The bank has maintained a NIM of 2% from Kuwait operations,
while margins are much wider in Turkey and Algeria given the operating environment in those countries. On a side note, Kuwait
has an advantage that allows it to instantly reprice corporate loans when interest rates go up. As such, BURG is a corporate oriented
bank can reprice loans in a rising interest rate environment allowing it to increase its margins.
RoE is Steadily Improving
Source: Company data, QNBFS Research
Room for further upside dependent on CoR. RoE is steadily increasing based on our estimates. However, clarity from the central bank
regarding IFRS 9 and precautionary provisions would determine the level of RoE. Hence, reversals or netting these built up reserves
against impairments (when IFRS 9 is applied) can boost RoE significantly.
3.28%
2.60%
2.79% 2.82% 2.95%
3.27%
3.55% 3.53% 3.57% 3.70%
3.14%
2.46% 2.59% 2.50%
2.58% 2.77% 2.90% 2.72%
2.60% 2.63%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2021e
NIM Spread
13.2%
9.7% 8.9%
11.2% 10.8% 10.7%
11.1%
1.3%
1.1%
1.0%
1.3%
1.4% 1.4% 1.4%
0.0%
0.5%
1.0%
1.5%
0.0%
4.0%
8.0%
12.0%
16.0%
2015 2016 2017 2018e 2019e 2020e 2021e
Tangible RoE (LHS) RoRWA (RHS)
Monday, 3 December 2018 9
Efficiency
Burgan Operating Inefficiently at Elevated C/I
Source: Company data, QNBFS Research
International operations are a drag on efficiency but has been improving. The bank is operating at an optimal level in Kuwait with a
C/I ratio of 30.0% (past 3 years) given that it is corporate focused which is not cost-intensive. On the other hand, international
operations have been inefficient (Turkey being the main contributor). Having said this, the efficiency ratio from international
operations has improved from 64.5% in 2016 to 55.8% in 2017 (47.4% in 9M2018). It is worth mentioning here that small banks in
Turkey generally have high C/I ratios. We do not expect the efficiency ratio to drop below the ~40% level in our forecast horizon as
the bank needs to grow revenue significantly vs. opex.
Asset Quality
Asset Quality Has Materially Improved
Source: Company data, QNBFS Research
Asset quality unlikely an issue going forward. BURG has cleaned up its books since 2011 when the NPL ratio reached a high of
11.52% to 2.73% in 2017, although we expect a small increase to 2.99% in 2018e. Moreover, as of 9M2018 the coverage ratio stood at
170%.
45.0% 46.5%
48.5% 45.6%
42.0% 41.6% 41.0% 41.6%
0%
10%
20%
30%
40%
50%
2014 2015 2016 2017 2018e 2019e 2020e 2021e
4.05% 4.28%
2.73% 2.99%
2.81% 2.73% 2.50%
92.6%
110.1%
143.8%
156.1% 157.1% 162.1% 156.7%
0%
60%
120%
180%
0%
1%
2%
3%
4%
5%
2015 2016 2017 2018e 2019e 2020e 2021e
NPL Ratio (LHS) Coverage Ratio (RHS)
Monday, 3 December 2018 10
CoR Significantly Improved but Still Remains on the High Side
Source: Company data, QNBFS Research
Cost of risk needs to significantly improve. Burgan’s high cost of risk is mainly driven from the central bank of Kuwait (CBK)
imposing excessive precautionary provisions on banks. CBK’s precautionary provisions contributed 52.9% to total credit provisions
in 2017, 57.8% in 2016, and 41.6% in 2015. Excluding these excess provisions, Burgan’s 2017 domestic CoR would have contributed
only 13bps to total CoR vs. 31bps from international operations in 2017. A reversal of these provisions would be earnings accretive
and would materially enhance profitability metrics (RoE, RoA, Net Profit Margin etc.) and thus value.
Capitalization
Capitalization Levels to Improve with KWD60mn Capital Increase
Source: Company data, QNBFS Research
KWD60mn rights issue to bolster CET1 ratio. BURG’s rights issue is expected to bolster CET1 ratio to 12.1% (vs. 10.8% in 9M2018)
and Total Tier-1 ratio to 14.8% (vs. 13.5% in 9M2018) in 2018.
42.6%
34.4%
31.9%
37.5%
32.0%
27.9%
24.1%
130
97
92
130
115
100
85
20
40
60
80
100
120
140
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2015 2016 2017 2018e 2019e 2020e 2021e
Provisions to PPP (LHS) CoR (RHS)
16.7% 16.2%
17.5% 18.4%
17.3% 17.1%
13.9% 13.5%
14.8% 15.7%
14.6% 14.4%
0.0%
5.0%
10.0%
15.0%
20.0%
2016 2017 2018e 2019e 2020e 2021e
CAR Tier-1
Monday, 3 December 2018 11
Company Description
Established in 1977 Burgan Bank is a diversified full service bank with a footprint across North Africa, Turkey and Iraq; BURG is a
corporate oriented bank in Kuwait and has a 10% market share in loans and 9% market share in deposits. BURG is a universal bank
offering services to corporates and retail customers, private banking, investment banking and brokerage. The bank operates across a
spectrum of 7 countries and has a network of 167 branches (29 branches in Kuwait).
Stable Shareholder base. Strong shareholder base as KIPCO is affiliated with the royal family.
Major Shareholders
Shareholders Investor Type Country Share (%)
KIPCO Private Kuwait 63.04
The Public Institution for Social Security Government Kuwait 8.43
73.47
Source: Company data
Subsidiaries
Company Country Share (%)
Algeria Gulf Bank Algeria 86.01
Bank of Baghdad Iraq 51.79
Tunis International Bank Tunisia 86.70
Burgan Bank A.S. Turkey 99.26
Burgan Bank Financial Services Dubai 100.00
Source: Company data
Monday, 3 December 2018 12
Detailed Financial Statements Ratios FY2017 FY2018e FY2019e FY2020e
Profitability (%)
RoE (Tangible) 8.9 11.2 10.8 10.7
RoAA 0.9 1.1 1.2 1.3
RoRWA 1.0 1.3 1.4 1.4
NIM (% of IEAs) 2.95 3.27 3.55 3.53
NIM (% of RWAs) 3.07 3.38 3.69 3.55
NIM (% of AAs) 2.33 2.57 2.82 2.86
Spread 2.6 2.8 2.9 2.7
Efficiency (%)
Cost-to-Income (Headline) 45.6 42.0 41.6 41.0
Cost-to-Income (Core) 48.3 44.5 43.3 43.0
Liquidity (%)
LDR 85.9 87.1 86.3 85.4
Loans/Assets 59.4 59.5 60.5 60.5
Cash & Interbank Loans-to-Total Assets 21.2 21.2 21.9 21.8
Deposits to Assets 56.0 55.5 56.7 57.2
Wholesale Funding to Loans 49.5 46.0 44.9 42.3
IEAs to IBLs 1.2x 1.2x 1.2x 1.2x
Asset Quality (%)
NPL Ratio 2.73 2.99 2.81 2.73
NPLs to Shareholder's Equity 18.6 17.9 15.3 14.8
NPLs to Tier 1 Capital 20.1 20.6 17.3 16.8
Coverage Ratio 143.8 156.1 157.1 162.1
ALL/Average Loans 4.0 4.6 4.5 4.6
Cost of Risk 92 130 115 100
Capitalization (%)
Tier 1 Ratio 13.5 14.8 15.7 14.6
CAR 16.2 17.5 18.4 17.3
Tier 1 Capital to Assets 10.4 11.1 12.3 12.1
Tier 1 Capital to Loans 17.5 18.7 20.3 20.1
Tier 1 Capital to Deposits 18.5 20.1 21.6 21.2
Leverage (x) 11.0 9.6 8.6 8.6
Growth (%)
Net Interest Income 9.7 8.7 9.2 6.8
Non-Interest income -13.2 20.7 -8.9 -0.6
Total Revenue 2.0 12.1 3.6 4.8
Opex -4.0 3.2 2.7 3.1
Net Operating Income 7.7 19.6 4.3 6.0
Net Provisions & Impairments 12.5 14.2 -3.5 -8.1
Net Income (Reported/Headline) -4.3 25.6 5.7 13.6
Net Income (Attributable) -5.3 30.9 6.6 15.6
Loans 4.3 -4.7 5.5 7.0
Deposits 11.2 -5.8 6.0 8.0
Assets 2.0 -4.8 3.7 7.1
RWAs 5.2 -7.4 7.8 13.9
Source: Company data, QNBFS Research
Monday, 3 December 2018 13
Income Statement (In KWD mn) FY2017 FY2018e FY2019e FY2020e
Net Interest Income 171 186 203 217
Fees & Commissions 37 33 36 35
FX Income 10 18 16 17
Other Income 22 31 24 23
Non-Interest Income 69 83 75 75
Total Revenue 239 268 278 291
Operating Expenses (109) (113) (116) (120)
Net Operating Income 130 156 162 172
Net Provisions & Investment Impairments (50) (57) (55) (51)
Net Profit Before Tax & Minority Interest 80 98 107 121
Tax (11) (14) (15) (17)
Net Profit Before Minority Interest 69 84 92 104
Minority Interest (4) (3) (5) (6)
Net Profit (Headline/Reported) 65 82 87 98
Interest on Tier-1 Note (11) (11) (11) (11)
Net Profit (Attributable) 54 71 76 87
Source: Company data, QNBFS Research
Balance Sheet (In KWD mn) FY2017 FY2018e FY2019e FY2020e
Assets
Cash & Balances with Central Bank 937 901 926 1,000
Interbank Loans 632 596 673 711
Net Investments 1,097 950 1,045 1,114
Net Loans 4,408 4,199 4,429 4,738
Investment in Associates 15 16 17 18
Other Assets 188 252 76 95
Net PP&E 102 110 121 133
Goodwill & Intangibles 37 33 29 25
Total Assets 7,415 7,056 7,315 7,833
Liabilities
Interbank Deposits 884 668 643 552
Customer Deposits 5,130 4,822 5,130 5,550
Subordinated Notes 322 358 365 383
Other Liabilities 212 274 125 224
Tier-1 Notes 144 144 144 144
Total Liabilities 6,692 6,267 6,407 6,854
Shareholders’ Equity 672 735 849 914
Total Liabilities & Shareholders’ Equity 7,415 7,056 7,315 7,833
Source: Company data, QNBFS Research
Contacts
Saugata Sarkar, CFA, CAIA Shahan Keushgerian Zaid Al Nafoosi, CMT, CFTe
Head of Research Senior Research Analyst Senior Research Analyst
Tel: (+974) 4476 6534 Tel: (+974) 4476 6509 Tel: (+974) 4476 6535
[email protected] [email protected] [email protected]
QNB Financial Services Co. WLL
Contact Center: (+974) 4476 6666
PO Box 24025
Doha, Qatar
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14
OUTPERFORM
ACCUMULATE
MARKET PERFORM
REDUCE
UNDERPERFORM
Greater than +20%
Between +10% to +20%
Between -10% to +10%
Lower than -20%
R - 1
R - 2
R - 3
R - 4
R - 5
Significantly lower than average
Lower than average
Medium / In-line with the average
Above average
Significantly above average
Recommendations
Based on the range for the upside / downside offered by the 12 - month target price of a stock versus the current market price
Risk Ratings
Reflecting historic and expected price volatility versus the local market average and qualitative risk analysis of fundamentals
Between -10% to -20%