Equity Analysis /
Global

Four banks offering great value

  • DFC, ICBC, Sberbank, Banco Bradesco are household names for BRIC emerging market equity investor...

  • ...but these are the next generation of banks in less mainstream markets of Bangladesh, Vietnam, Egypt and Nigeria.

  • We look at BRAC Bank, Credit Agricole Egypt, Vietnam Prosperity Bank and Zenith Bank.

Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

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Tellimer Research
6 February 2020
Published byTellimer Research

HDFC, ICBC, Sberbank, Banco Bradesco are household names for BRIC emerging market equity investors, but what are the next generation of banks in the less mainstream developing markets of Bangladesh, Vietnam, Egypt and Nigeria?

BRAC Bank, Bangladesh (BRAC BD):
Best-in-class management, margins, asset quality, funding and capital strength, together with a meaningful stake in the country’s largest mobile money platform, bKash. The stock is fully pricing in an aggressively implemented loan rate cap, which we think is unlikely.

Credit Agricole Egypt (CIEB EY):
Most profitable listed Egyptian bank with superior margins, good cost control, disciplined risk management; complemented by a high dividend. Less exposed to withholding tax changes. Given COMI EY’s strong run, we see scope for investment inflows to this name.

Vietnam Prosperity Bank (VPB VN):
Market-leading consumer credit arm (FE Credit) helps VPB generate class-leading ROE, which in turn keeps capital ratios healthy. We think volume growth will recover from H1 18’s slowdown, while a potential listing of FE Credit will help to improve transparency.

Zenith Bank, Nigeria (ZENITHBA NL):
Second-largest Nigerian bank, with strong capital ratios, good provisions coverage and high profitability, supporting an attractive double-digit dividend yield. We think these positive attributes can be sustained, despite regulatory uncertainty and a weak macro environment.

Four financials stocks with great potential 
Coverage medianMkt cap (US$mn)ADV (USk)RatingLCYShare priceTarget priceETR2020 PE2020 PB2020 ROE2020 DY 

BRAC BD

704

712

Buy

BDT

48.5

82.6

70%

9.9

1.39

14.3%

6.2%

CIEB EY

851

306

OW

EGP

43.3

57.5

43%

6.3

1.72

29.0%

9.2%

VPB VN

2,428

1,913

Buy

VND

23,150

28,000

21%

4.8

1.06

24.5%

0.0%

ZENITHBA NL

1,716

1,846

Buy

NGN

19.9

37.0

100%

3.6

0.63

18.3%

14.1%

Median






57%

5.6

1.23

21.4%

7.7%

Overall coverage median






19%

5.7

0.97

16.3%

5.3%

Source: Tellimer Research. Note: Share price as of 3 February 2020.

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