ibbl 2012
TRANSCRIPT
Analysts: Farjad Siddiqui
[email protected] Sajid Huq
Enduring Remittance Market Share & Loan-Deposit Spread to Drive
Record Earnings Growth
We forecast YoY IBBL’s 2011 Loan & Advance (L&A) growth rate (GR)
of 18% and deposits GR of 23% . We further expect 2011-LDR of 88%,
lower than 2010-level of 90%. LDR is expected to fall owing to 2011E
multi-year high deposits GR driven by a slowing stock market as well as
significant M2 GR contraction. We anticipate 2011 net interest income
(NII) GR of 29.6%, NIM of 4.54%, and loan-deposit rate spread of 5.07%.
IBBL also has the largest trade finance and remittance operations in the
industry, and thus high 2011E non-NII GR. We estimate 2011
commission & fees income GR of 37% YoY, sharp rise from 2010 GR of
16% YoY, and 4-year average of 13% YoY. Its industrial clients are
Bangladesh’s largest business groups. IBBL’s pricing power and the non
-significant correlation between income GR and Inflation rate are borne
out by regression analysis (please see enclosed report).
We anticipate IBBL will avoid portfolio losses otherwise expected to cut
2011 earnings of domestic banks. In 2010, it had a minimal market
exposure of 0.62% of deposits. This is 6.51 times lower than 4.05%
average exposure of the next 7 banks by end-2010 aggregate L&A.
Further, Bangladesh’s 2011E remittance GR of 10% (our internal
estimates) will lead to IBBL’s FX gains GR of 40% YoY, as it manages
28% of the country’s annual inflow.
Last but not least, worth noting that IBBL has lower P/E ratio and higher
ROE than leading banks in other frontier markets (e.g., Sri Lanka, and
Oman). Comparative price multiples and trading liquidity are illustrated in
enclosed report for select frontier market banks via scatter plot.
Rating: We estimate EPS of BDT 7.70 and BVPS of BDT 34.60 for the
year ending December 2012, and set a target price of BDT 69.00 per
share with an OUTPERFORM rating. This implies a 30.00% price return
on current share price of BDT 52.60 (as on 8th January 2012). High
deposit collection, loan-deposit rate spread, nominal 2010 stock market
exposure, and market leadership in trade and remittance operations will
cumulatively drive EPS growth.
Islami Bank Bangladesh Ltd DSE: ISLAMIBANK Bloomberg: ISLAMI:BD
Rating: Outperform Dec-2012 Fair Value Estimate: BDT 69 per share
January 9, 2012
Sources: Company Annual Report, BRAC EPL Research
Price performance of IBBL in last 12 months
Sources: Dhaka Stock Exchange
Revenue BDT MM 2010 2011E 2012E
Net Interest Income 10,293 13,343 16,199
Investment Income 405 548 579
Commissions etc 3,997 5,485 6,886
Other income 929 959 1,353
Total revenue 15,624 20,335 25,017
Margin and efficiency (%) 2010 2011E 2012E
Operating efficiency 39% 36% 36%
Loan/Deposit 90% 88% 88%
ROE 20% 23% 24%
ROA 1% 2% 2%
Other Key Indicators (%) 2010 2011E 2012E
Loan-Dep Rate Spread % 4.7% 5.1% 5.1%
Net Interest Margin (%) 4.2% 4.5% 4.5%
Cost-to-Income 39.0% 36.3% 36.0%
NPL 1.8% 1.6%
Company Summary
Ticker ISLAMIBANK
Sector Bank
Date of Incorporation 13-Mar-83
Date of Listing 1985
Financial Year End December
Number of Shares (mn) 1000
Current Market Capitalization (BDT bn) 53.3
DSE Market Capitalization (BDT bn) 2,632.3
% of DSE Market Capitalization 2.0%
52 Week High (BDT) 78.8
52 Week Low (BDT) 50.5
YTD Return (%) -3.5%
Trailing EPS (BDT) 4.4
Trailing P/E ratio (x) 8.8
.0
50.0
100.0
150.0
200.0
250.0
35.00
40.00
45.00
50.00
55.00
60.00
Turnover (Million BDT) Price (BDT)
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
2
Growth in Loans and Advances (L&A): We estimate 2011 L&A growth of 21% YoY, lower than 2010 L&A GR of 22%
YoY, and 4-year L&A CAGR of 23%, on 2H11 M2 GR of -5.2% (21.3% to
19.6% June-Nov11) driven by inflationary pressures and FX depreciation. BB
raised repo rates multiple times and allowed large loans very selectively.
Mandate to domestic private banks is to enable large loans to agriculture, SME,
and export-oriented sectors, but restrict them in case of capital markets, real
estate, and retail sectors.
M2 GR fell in March-Sep11 nearing BB’s FY12 year-end target of 18%. We
anticipate an M2 GR lower than BB-target, as BB tries to mitigate the
inflationary effect of a BoP deficit and FX depreciation. Government borrowing
is likely to drop in 1H12 with its impact becoming clearer in 2H12—on upward
revision of energy prices.
Deposit growth and loan-to-deposit ratio (LDR):
We project 2011-deposit GR of 23% YoY, compared to 2010 GR of 19.5%
YoY, and 4-year average of 21.87% YoY. Deposit GR was higher on low stock
market liquidity and retail investor confidence as well as high bank deposit rates
and declining savings certificate sales.
Figure 1: IBBL L&A Growth
Figure 2: IBBL L&A Composition
Sources: Company Annual Report, BRAC EPL Research
Sources: Company Annual Report (As on 2010)
28%24%
19%22% 21%
0%
5%
10%
15%
20%
25%
30%
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2007 2008 2009 2010 2011E
L&
A G
R (Y
oY
)
L&
A (B
DT
MM
)
L&A (BDT MM) L&A GR (YOY)
Industrial43%
Commercial
18%
Real Estate
4%
Agro5%
Trnsport2%
SME28%
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
3
Further, our projection for 2011 assumes 88% gross LDR, slightly lower than
2010 LDR of 90%. IBBL’s projected LDR performance is noteworthy in light of
multi-year high deposit GR and contractionary monetary policy.
Net Interest Income (NII) We project 2011 loan-deposit spread to be 5.1%, higher than the 4-year
average of 4.83%. Net Interest Margin (NIM) is projected at 4.54% compared to
a 4-year average of 4.21% and 2010 NIM of 4.19%. NIM grew on higher deposit
GR and high loan-deposit spread. Deposit rate increments can thus be passed
on to borrowers. IBBL’s institutional-clients-dominated portfolio enables easier
re-pricing of outstanding loans. Given above L&A and deposit GR-we project
2011 NII GR of 29.6% YoY—higher than 2010 NII GR of 24.11% YoY, and 4-
year CAGR of 24.81%
Figure 3: IBBL Deposits Composition and GR
Sources: Company Annual Report, BRAC EPL Research
Figure 4: IBBL Loan-Deposit Ratio (LDR)
Sources: Company Annual Report, BRAC EPL Research
26%
20%22%
20%
23%
0%
5%
10%
15%
20%
25%
30%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2007 2008 2009 2010 2011E
Dep
osit
s G
R
Dep
osit
s (B
DT
MM
)Mudaraba Savings Mudaraba Term
Other Mudaraba Current A/C & Others
Deposits GR
87%
90%
88%
90%
88%
85.5%
86.5%
87.5%
88.5%
89.5%
90.5%
2007 2008 2009 2010 2011E
LD
R
LDR
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
4
Loan-deposit spreads over 5 years show positive correlation with Inflation rates
(annual average). This is a strong signal of IBBL’s pricing power and the low
susceptibility of their spread income to inflationary pressures. As discussed
above, IBBL can pass on higher inflationary costs to its borrowers.
Given strong NIM in a particularly difficult year for banks—IBBL’s core earnings
driver is clearly its enduring loan-deposit spread and deposit GR. Spread
income contributed 66% to 2010 operating income. In fact, we think that over
times, NIMs will endure longer for Shariah-compliant banking than for
conventional commercial banks.
Figure 5: IBBL Net Interest Income & NIM
Figure 6: IBBL Loan-Deposit Spread, NIM and Inflation
Sources: Company Annual Report, BRAC EPL Research
Sources: Company Annual Report, BRAC EPL Research
4%
4%
4%
4%
5%
3.60%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
4.40%
4.50%
4.60%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2007 2008 2009 2010 2011E
NIM
(%
)
Net In
tere
st In
co
me (B
DT
MM
)
Net Interest Income (BDT MM) NIM (%)
-10%
-6%
-2%
2%
6%
10%
14%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2007 2008 2009 2010 2011E
Avg
Infl
ati
on
Rate
Lo
an
-Dep
osit S
pre
ad
& N
IM
Loan-Deposit Spread NIM Average Inflation Rate
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
5
Non-Interest Income Non-interest income constitutes 32.17% of IBBL’s 2011E Total Operating
Income. As per 4-year average, its proportion was 35.72% of Total Operating
Income, with investment income at 2.56% and commissions & fees income at
27.00%.
Figure 7: IBBL Operating Earnings Composition
Source: Company Annual Report, BRAC EPL Research
Figure 8: Comparative Analysis of Operating Income Composition
Sources: Company Annual Report, BRAC EPL Research
52%62% 61% 67% 66% 66%
41%31% 28%
28% 26% 27%
2% 3%3%
1% 3% 3%
5% 3%8% 4% 6% 5%
0%
20%
40%
60%
80%
100%
120%
2006 2007 2008 2009 2010 2011EC
om
po
sit
ion o
f O
pera
ting
Incom
e
Net Interest Income Commission & Fees
Investment Income Other Income
36% 40%29%
43%35%
68%
32% 24% 42%24% 38%
1%
26%
18%
23% 28%22% 28%
6%18%
6% 6% 5% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prime Bank National Bank Southeast Bank
Eastern Bank NCC Bank Islami Bank Bangladesh
Net interest Income Investment Income Fee Income Other Income
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
6
Strong Performance in Commission & Fees Income IBBL has the largest trade finance and remittance operations in the sector. We estimate 2011 commission and fees income GR at 37% YoY, compared to 16% YoY in 2010 and 4-year average of 13%. Trade finance is expected to grow 35% YoY, exchange gain 40% YoY, and ATM operations by 50%. Commission income and exchange gains are driven by import, export, and
remittance GR which we estimate will grow at 40%, 22%, and 10% respectively
by FY12-end.
.
However, we expect 2H11 RMG export GR to slightly decelerate on US and
Eurozone economic slowdown (accentuated by high base in 2010 which saw
40% GR YoY). IBBL’s large RMG exposure (42.30% industrial loans on
31Dec11) is 16.27% expected to translate in downward pressure in fees &
commission income. That said these are large RMG clients with the advantage
Figure 10: IBBL Commission & Fees Income Growth
Sources: Company Annual Report, BRAC EPL Research
Figure 9: IBBL Non-Interest Income Composition
Sources: Company Annual Report, BRAC EPL Research
5%
29%
3%
16%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2009 2010 2011E
GR
(Y
oY
)
Co
mm
issio
n &
Fees In
co
me (B
DT
M
M)
Commission & Fees Income (BDT MM) GR (YOY)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011E
BD
T M
M
Commission Income Exchange Gain Investment Income Other Income
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
7
of economies of scale. They can take cut on margins and still be competitive vis-à-vis smaller players. The bank’s remittance flow grew at a compound rate of 34% over the last 4
years. We estimate 12% growth in remittance flow YoY in 2011. Its primary
remittance-generating markets—Saudi Arabia and the UAE—are politically
stable. In fact, 50% of IBBL’s remittance is channeled from the KSA in alliance
with Al-Rajhi Bank, a leading Saudi financial institution. IBBL supplies the
highest FX to the local market, owing to its substantial dollar inflow from
remittance operations. It is expected to profit BDT2470 million from FX gains in
2011.
Meager impact of Government borrowing As a Shariah-compliant non-PD, IBBL is not expected to be substantially
affected by recent government borrowing. Higher government borrowing (BDT
69.3 billion in July-Sept11, a 23x rise YoY) is not expected to directly affect
IBBL’s 2011 treasury investment portfolio. However, increased Statutory
Liquidity Reserve (SLR) requirements since December 2010 are expected to
raise IBBL’s treasury investments by 25% in 2011 compared to 4-year
compounded GR of 15.75%. We project 4.35% investment yield for 2011 and
investment income GR of 23.50% YoY.
Figure 11: Portfolio Investments as % of Deposits (2010)
Sources: Company Annual Report, BRAC EPL Research
Figure 12: IBBL Investment Income
3.6%
2.3%
8.9%
1.6%
5.3% 5.2%
0.6%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
AB Bank Prime Bank National Bank
Southeast Bank
Eastern Bank City Islami Bank Bangladesh
Po
rtfo
lio
Investm
en
t as %
of D
ep
osit
107%
44%
-72%
326%
24%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
-
100
200
300
400
500
600
700
2007 2008 2009 2010 2011E
GR
(Y
oY
)
Investm
en
t In
co
me (B
DT M
M)
Investment Income (BDT MM) GR (YOY)
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
8
Lower cost-to-income ratio in comparison to historical average
Cost-to-income ratio was 31.25% up to 9M11, lower than 4-year average of
38% and 39% in 2010, on improved employee productivity and business
restructuring. We expect 2011 cost-to-income to be 32%. IBBL’s IT-driven
automation expected to lead to significant overhead cost savings.
.
Persistent growth in EPS in spite of macro shocks The year 2011 has been severe on the bank sector. High inflation and
government borrowing cut spread income whereas a 44%-market correction
eroded portfolio gains from 2010 DGEN appreciation of near-94%. We expect
EPS stream and GR to be as follows.
Figure 13: IBBL Operating Efficiency
Sources: Company Annual Report, BRAC EPL Research
1.7%
1.7%
1.8%
1.8%
1.9%
1.9%
2.0%
2.0%
2.1%
31%
32%
33%
34%
35%
36%
37%
38%
39%
40%
2007 2008 2009 2010 2011E
Co
st-
to-A
ssets
(%
)
Co
st-
to-I
nco
me (%
)
Cost-to-Income (%) Cost-to-Assets (%)
1.43
2.67
3.40
4.43
6.05
2%
87%
27% 30%37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
100%
200%
300%
400%
500%
600%
700%
2007 2008 2009 2010 2011E
GR
(Y
oY
)
EP
S (B
DT
)
EPS (BDT) GR (YoY)
Sources: Company Annual Report, BRAC EPL Research
Figure 14: IBBL EPS Trend
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
9
financing GR, high NII GR, lower costs, and steady remittance flows. FX gains
should also be at historical high levels as discussed in earlier sections. We
project 2011 EPS to be BDT6.00, against BDT4.39 in 2010, 36% higher YoY.
EPS 4-Year average GR is 29.14% as of Dec10. EPS grew 32% YoY in 9M11.
Inflation and IBBL’s profit growth EPS growth YoY averaged 29% in 2007-2010. Inflation and net profit growth
rates exhibit very weak correlation. Below graph depicts higher net profit YoY
growth rate despite rising average inflation rate. Below graphs indicate Inflation
to NII GR correlation coefficient (CC) of 0.51. This is unexpected since negative
correlation is more common between Inflation and NII GR. Therefore, graph
below is testimony to IBBL’s considerable pricing power. Meanwhile, inflation to
non-interest income CC is -0.07, which though negative is quite low. We
conclude that IBBL’s profitability is more or less immune to inflationary
pressures.
Figure 16: Inflation and IBBL Net Profit Growth Rate
Sources: Company Annual Report, BRAC EPL Research
Figure 15: Correlation Between IBBL Income Components & Inflation
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
-20%
-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
2007 2008 2009 2010 2011E
GR
in In
co
mes (%
)
Avera
ge In
flati
on
Rate
Average Inflation Rate GR in Net Interest Income
GR in Non Interest Income
24.5%
2.0%
87.3%
27.2% 30.1%36.6%
7.2%
9.9%
6.7%7.3%
8.8%
10.0%
0%
2%
4%
6%
8%
10%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011E
Avg
In
flati
on
Rate
Net P
rofi
t G
R
Net Profit GR (YOY) Average Inflation Rate
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
10
Comfortable capital adequacy ratio (CAR)
Given that IBBL has been maintaining CAR above regulatory requirement since
2005, we expect the trend to continue. The minimum CAR prescribed by the
Bangladesh Bank is 5% for Tier-I and 10% for total capital. IBBL exceeded
these minimum ratio thresholds with a Tier-I capital ratio of 7.23% and total
capital ratio of 11.06% in 2010. We expect that total CAR will remain around
11.25% in 2011 with Tier-I capital ratio of 8.00%.
Relatively minor improvement in asset quality
We expect 2011 NPL ratio to improve to 1.60% in 2011, lower than 1.77% in
2010 (which was a sharp drop from 2.36% in 2009).
6.54% 6.50% 7.23% 7.23% 8.00%
4.64% 4.22%3.83% 3.83%
3.25%
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011E
Tie
r-I &
Tie
r-II C
ap
ital
Tier-I Tier-II
Figure 17: IBBL Regulatory Capital Decomposition
Sources: Company Annual Reports
Asset Quality 2009 2010
NPLs to total loans and advances 2.39% 2.36%
Provision for classified loans,MM 1134.88 125.41
Table 2: Asset Quality
2.93%
2.39% 2.36%
1.77%1.60%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2007 2008 2009 2010 2011E
Gro
ss N
PL
Rati
o
Gross NPL Ratio
Figure 18: IBBL Gross NPL Ratio
Sources: Company Annual Report, BRAC EPL Research
Sources: Company Annual Report, BRAC EPL Research
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
11
Increasing return: ROE and ROA are both increasing We project ROE and ROA for 2011 to be 24.44% and 1.76%, respectively, up
from 20.56% and 1.47% in 2010. Higher profitability ratios are driven by high
earnings growth and ROA by enduring loan-deposit spread.
IBBL in comparison to leading frontier market banks
A quick look at the some of the largest listed banks in frontier markets such as
Pakistan, Sri Lanka, Nigeria and Oman indicates how IBBL fares in relation to
its frontier market peers.
With regards to profitability ratios IBBL outperforms most of the leading banks in
Pakistan, Sri Lanka, Oman and Romania. Among the 7 tabulated above, IBBL
is carrying the median P/E ratio. Considering its ROE (highest among the above
banks) and ROA, undoubtedly IBBL has further scope to appreciate in market.
13.5%
21.2%19.9% 20.3%
22.8%
0.8% 1.3% 1.3% 1.5% 1.6%
0%
5%
10%
15%
20%
25%
2007 2008 2009 2010 2011E
RO
E &
RO
A
ROE ROA
Figure 18: ROA and ROE trend
Sources: Company Annual Report, BRAC EPL Research
Frontier Market Banks Country MCAP
P/E P/B ROE ROA (USD
mn)
Bangla-desh 358.5 8.8x 1.9x 20.70% 1.70%
Islami Bank Bangladesh
Habib Bank Pakistan 1,317.10 7.1x 1.3x 19.20% 1.90%
National Bank of Pakistan Pakistan 822.60 4.1x 0.6x 14.60% 1.90%
Commercial Bank of Ceylon Sri Lanka 711.7 14.1x 2.2x 18% 2%
Banca Transilvania Romania 465.4 10.9x 0.8x 13.10% 1.20%
Bank Muscat Oman 3,037.20 10.1x 1.4x 12.60% 1.60%
Access Bank Nigeria 536.30 7.9x 0.5x 7.30% 1.60%
Table 3: Frontier market banks
Sources: CapitalIQ, Bloomberg, BRAC EPL Research
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
12
Rating Our rating considered 2012E EPS and BVPS, 2012-outlook for the banking
sector and other related factors. Considering the estimated EPS of BDT 7.70
and BVPS of BDT 34.60 for 2012, we estimate a fair value of BDT 69.00 per
share with an OUTPERFORM rating. This fair value implies a 9.0x potential P/E
and 2.00x potential P/B of the company’s Stock and 30.0% price gain over next
12 months investment horizon.
Islami Bank (Bangladesh)
Habib Bank (Pakistan)Comm. Bank
of Ceylon (Sri
Lanka)NBP
(Pakistan)
Banca Transilvania
(Romania)
Bank Muscat (Oman)
Access Bank (Nigeria)
0%
5%
10%
15%
20%
25%
1.0% 1.2% 1.4% 1.6% 1.8% 2.0%
RO
E (%
)
ROA (%)
Figure 18: ROA and ROE trend
Sources: Company Annual Report, BRAC EPL Research
Islami Bank Bangladesh Ltd (DSE: ISLAMIBANK; Bloomberg: ISLAMI:BD)
13
Balance Sheet, MM BDT 2008 2009 2010 2011E 2012E 2013E
Property & Assets:
Cash 31,330 37,486 39,053 49,250 52,649 66,686
Balance with Other Banks & F.I 2,043 834 7,115 10,672 13,340 15,341
Money at call
Investment 7,533 11,161 13,471 17,194 18,986 20,884
Loan & Advance 180,054 214,616 261,725 308,836 379,868 463,439
Fixed Assets 4,407 6,512 6,757 7,298 7,881 8,512
Other Assets 1,932 874 2,664 3,196 3,836 4,603
Total Assets 230,879 278,327 330,784 396,445 476,559 579,465
Liabilities & Equities:
Liabilities:
Borrowing from other banks and F.I 3,000 3,000 3,000 3,000 3,000 3,000
Deposits 200,343 244,292 291,937 350,325 423,893 517,150
Mudaraba Perpetual Bond 3,000 3,000 3,000 3,000 3,000 3,000
Other Liability 13,475 10,929 12,330 14,180 16,307 18,753
Total Liabilities 216,819 258,221 307,268 367,505 443,200 538,903
Shareholder's Equity: 14,060 20,106 23,516 28,941 33,359 40,563
Total Liabilities & Equities 230,879 278,327 330,784 396,445 476,559 579,465
Income Statement, MM BDT 2008 2009 2010 2011E 2012E 2013E
Interest/Investment Income 19,944 21,371 24,765 31,968 38,651 45,269 Interest/profit paid on deposit and borrowing etc 12,162 13,077 14,472 18,626 22,452 25,879
Net Interest Income 7,782 8,294 10,293 13,343 16,199 19,390 Income from investments in securities/Shares 409 115 405 548 579 455
Commission, Exchange & Brokerage 3,337 3,437 3,997 5,485 6,886 8,390
Other Income 940 480 929 959 1,353 1,471
Total Operating Income 12,467 12,326 15,624 20,335 25,017 29,706
Operating Expense 4,115 4,545 6,107 7,382 9,006 10,100
Profit Before Provision 8,352 7,781 9,517 12,953 16,011 19,606
Provision 1,604 1,263 1,114 1,402 1,464 2,131
Pre-Tax Profit 6,348 6,518 8,403 11,552 14,546 17,474
Tax 3,672 3,113 4,005 5,545 6,910 8,300
Profit After Tax 2,676 3,405 4,398 6,007 7,637 9,174
GR of Key Financial Indicators 2008 2009 2010 2011E 2012E 2013E
Loan & Advances GR 24.24% 19.20% 21.95% 21.00% 23.00% 22.00%
Deposit GR 20.45% 21.94% 19.50% 23.00% 23.00% 22.00%
Net Interest Income GR 43.01% 12.35% 24.11% 31.37% 21.26% 18.57%
Operating Income GR 45.59% 2.14% 27.02% 31.49% 23.04% 18.04%
Net Profit GR 87.35% 27.21% 30.12% 36.59% 27.05% 19.34%
IMPORTANT DISCLOSURES
Analyst Certification: Each research analyst and research associate who authored this document and whose name appears herein certifies that the recommendations and opinions expressed in the research report accurately reflect their personal views about any and all of the securities or issuers discussed therein that are within the coverage universe. Disclaimer: Estimates and projections herein are our own and are based on assumptions that we believe to be reasonable. Information presented herein, while obtained from sources we believe to be reliable, is not guaranteed either as to accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any security. As it acts for public companies from time to time, BRAC-EPL may have a relationship with the above mentioned company(s). This report is intended for distribution in only those jurisdictions in which BRAC-EPL is registered and any distribution outside those jurisdictions is strictly prohibited. Compensation of Analysts: The compensation of research analysts is intended to reflect the value of the services they provide to the clients of BRAC-EPL. As with most other employees, the compensation of research analysts is impacted by the overall profitability of the firm, which may include revenues from corporate finance activities of the firm's Corporate Finance department. However, Research analysts' compensation is not directly related to specific corporate finance transaction. General Risk Factors: BRAC-EPL will conduct a comprehensive risk assessment for each company under coverage at the time of initiating research coverage and also revisit this assessment when subsequent update reports are published or material company events occur. Following are some general risks that can impact future operational and financial performance: (1) Industry fundamentals with respect to customer demand or product / service pricing could change expected revenues and earnings; (2) Issues relating to major competitors or market shares or new product expectations could change investor attitudes; (3) Unforeseen developments with respect to the management, financial condition or accounting policies alter the prospective valuation; or (4) Interest rates, currency or major segments of the economy could alter investor confidence and investment prospects.
BRAC EPL Stock Brokerage Capital Markets Group
Sajid Huq Amit Senior Research Analyst [email protected] 01755 541 254
Parvez Morshed Chowdhury Research Analyst [email protected] 01730 357 154
Ali Imam Investment Analyst [email protected] 01730 357 153
Khandakar Safwan Saad Research Associate [email protected] 01730 357 779
Aasim Tajwaar Matin Research Associate [email protected] 01730 727 913
M M Shahnewaz Kabir Shawon Research Associate [email protected] 01730 727 918
Farjad Siddiqui Research Associate [email protected] 01730 727 924
BRAC EPL Research www.bracepl.com 121/B Gulshan Avenue Gulshan-2, Dhaka-1212 Tel: +88 02 881 9421-5 Fax: +88 02 881 9426 E-Mail: [email protected]
Beximco Pharmaceuticals (DSE: BXPHARMA; Bloomberg: BXPHAR:BD)
Institutional Sales and Trading
Delwar Hussain (Del) Head of Institutional Sales and Trading
[email protected] 01755 541 252