KEY THEMES
Last Thursday, Al Baraka Bank Egypt [SAUD] published its 2021 figures. The bank was able to achieve net earnings of EGP1.1bn (-9% y/y). The results sent the stock price flying on the last trading day of the week, gaining 7.2% by close. We note that the bank’s bottom line was dented during 2021 on the back of higher CoR of 236bps vs. 176bps a year ago. Management indicated in their annual report its intention to spur lending growth in the coming years, as it was considered suboptimal in the previous years. Moreover, management suggested increasing the bank’s paid-in capital by EGP742mn through a 25% stock dividend, after considering the amount paid under capital increase as of 31 December 2021 (i.e. EGP1.4bn). This will bring SAUD’s total paid-in capital to EGP3.7bn distributed over 530.2mn shares at a par value of EGP7.0/share. SAUD is currently traded at 2022e P/E and P/B of 2.2x and 0.46x, with ROAE of 20.5%. We note that SAUD has rallied 8% since our banking sector note in December 2021. We have an Overweight rating on SAUD with our 12MPT at EGP25.60/share (ETR +67%).