Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
10Activity
0 of .
Results for:
No results containing your search query
P. 1
Banks

Banks

Ratings: (0)|Views: 190|Likes:
Published by api-3838342

More info:

Published by: api-3838342 on Oct 18, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

03/18/2014

pdf

text

original

This report has been prepared by SC securities and is provided for information purposes only. Under no circumstances is to be used or considered as an offer to sell or solicitation of any offer to buy. While all reasonable care has been taken to ensure that information provided is not untrue however data has been collected from the reliable sources, we make no representation as to its accuracy

Research Department
Standard Capital
Securities (Pvt) Ltd.
705-706, 7th
Floor,Business Plaza, I .I
Cundrigar Rd, Khi.
Tel : 111-111-721

(Ext -107,108) Fax : 2473302 Website:

www.scsecurities.net
Email:
research@scsecurities.net
BAN KS AN ALYSI S

Our banks detailed analysis for CY05 has made us come up with four banks as our favourite picks for the sector. The sector has outperformed for the FY05 where the deposits have grown almost by 135% and the advances have increased by 40% for the FY05 as compared to FY04. Despite of the maintained ADR, the Net interest income has grown

by 79% whereas the average Return on Equity was26% for the FY05 and the averageP/ BV stays at2. 98.

(The above analysis excludes the smaller banks)
RO E
P/ BV
26%2.98
17%
1.95
40%
5
Relationship between ROE & P/ BV
Current Scenario \u2026\u2026
BOP
MCB
ACBL
& ABL
ABL @ 84
Accumulate for the target
price of Rs. 115
MCB @ 230
Buy on dips for the target
price of Rs. 300
ACBL @ 100
Buy on dips for the target
price of Rs. 145
BOP @ 92
Buy for the target price
of Rs. 128
A pril 3, 2006
Based on our projected earnings of R s. 10.20
f

or FY 06, assuming 40% growth in net interest income against 150% growth for FY 04-FY 05, the bank is trading at the PE of 8.24. A pplying the multiple of 11.5, which is at premium to the sector\u2019s average multiple o

f
11against 11.6 in the current scenario, as the
bank has out performed the sector in terms o
f
growth, the fair value may be computed to R s.
117, whereas applying the average P/ BV o
f
2.98, prospective ROE of 26% and th
e
earnings for FY 06, the fair value comes
around R s. 115.

Allied Bank Limited has posted its ever-highest profit after tax in its history. The PAT has increased from Rs 192 million in FY04 to Rs 3,033 million in FY05 showing phenomenal growth in its PAT by 1,482 percent. The profit before tax for FY05 is Rs 4,777 million that is an improvement of 892 percent over the profit before tax for the FY04. The diluted EPS for the FY05 is

6.89, though in its
last quarter of
FY05 it posted an
EPS of Rs 2.28
that is equal to the
EPS of 3Q05.
ABL is currently
trading at a PE
multiple of 12 that
is almost in line
with the banking
sector PE multiple
based on FY05
earnings.
The BV of ABL is
Rs 29.59, with that
PBV
multiple
comes to about
2.87 whereas the
sector
PBV
multiple stands at
2.98. In terms of
PBV,
ABL
is
currently trading
slightly below the
sector multiple.

ABL showed an increase in its advances by 87 percent against the sector\u2019s average growth of 40% whereas the deposits showed a growth of 128 percent. Its Advance/ Deposit ratio comes to 69 percent and he Net Interest Income of the bank has increased by 148 percent that constitutes to about 79 percent of the Gross Income of ABL

The short term - long term ratio for the FY05 is 68:32 which is in line with the sector\u2019s
average ratio of 68:32.
Recom m endation:
Based on our analysis above, we may recommend to accumulate the share for the target
price of Rs. 115.
SCS Bank A nalysis CY 05
ABL @ 84- Accumulate for the target price of Rs. 115

Our projected earnings for FY06 is Rs.13.2 assuming 28% growth in net interest income the bank is trading at the PE of 10.6, slight below the sector\u2019s averag

e
multiple of 11, the fair value may b
e
computed to Rs. 140 whereas, applying th
e
average P/ BV of 2.98, prospective R OE
of 26% and the earnings for FY 06, the fai
r
value comes around R s. 151.

The bank has posted the profit after tax of Rs 2,021 million in FY05 showing 5% growth from FY04 mainly due to the heavy provisioning. The diluted EPS for the FY05 is 10.08. ACBL is currently trading at a PE multiple of 9.9 which is at discount to the banking sector PE multiple of 11.6 based on FY05 earnings consequential to he lower growth as compared to the other banks in

the sector.
Coming to P/BV
multiple, as the
ROE for he bank is
slight below the
average ROE of the
sector, the bank is
currently trading at
the multiple of
2.32, which is also at
discount to the
sector\u2019s multiple of
2.98.
The ADR have been
reduced to 0.72 for
F05 from 0.84 for
the F04 which is in
line with the sector\u2019s
average, despite of
this fact the net
interest income of
the bank has been increased by 27.7%, constituting 71.5% of the Gross income.
The advances have grown b 23.1 percent whereas the deposits showed a growth of 142.6
percent.
Recom m endation:
Based on our analysis above, we may recommend to buy the share on dips for the target
price of Rs. 145.
SCS Bank A nalysis CY 05
ACBL @ 100- Accumulate for the target price of Rs. 145

Activity (10)

You've already reviewed this. Edit your review.
1 hundred reads
Josue2803 liked this
Atakelt Hailu liked this
Atakelt Hailu liked this
showrav017 liked this
ravirajjadeja liked this
vtttt liked this
Taslim Qureshi liked this
shsudhir liked this
aamit87 liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->