Renaissance Capital: UAE banks are a bright spot in EMEA
Renaissance Capital initiate coverage on First Gulf Bank (FGB), Dubai Islamic Bank (DIB) and National Bank of Ras Al-Khaimah (RAK Bank) with a BUY rating and respective TPs of AED 17.7, AED 9.5, and AED 11.2.
“Of the three banks, we believe RAK Bank has the most attractive consumer franchise today, but FGB has the most potential to drive innovation and change. Near term, DIB has the best growth outlook, in our opinion, and is our top sector pick.
“The UAE continues to show a relatively attractive macro picture, in our view, comprising large fiscal savings, strong population growth, and the GCC’s strongest non-oil economic base. We see limited risk of system shocks, while the IMF expects real GDP growth to average 3.2 per cent in 2015-16, (4.5 per cent for non-oil growth).We forecast avg. y/y deposit and asset growth of 13.6 per cent and 12.2 per cent, respectively, over 2015-17. The peg to the dollar provides some defence against adverse FX moves, while Fed action should, on balance, benefit bank margins [ Read Full Article ]
