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Q3-2011 Banking Sector Update: P/E Comparisons, Liquidity Insights, and Net Income Projections

This report provides a comprehensive update on the banking sector for Q3-2011, highlighting crucial metrics such as Price-to-Earnings (P/E) ratios across regional and sector comparisons at the ASE. It delves into liquidity sector comparisons to assess liquidity levels among banks and presents net income projections based on our thorough forecast methodology. This analysis is vital for stakeholders seeking to understand the current financial landscape and make informed decisions regarding investments in the banking sector.

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Q3-2011 Banking Sector Update: P/E Comparisons, Liquidity Insights, and Net Income Projections

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  1. Nov 2011 Banking Sector Q3-2011 Update
  2. P/E Regional Comparisons
  3. P/E Sector Comparisons at ASE
  4. Liquidity Sector Comparisons at ASE
  5. Net Income Projections Our Forecast Methodology of Net Income: Over 90% of the revenue of banks comes from core activities, thus figures are usually predictable Natural growth of loans, deposits and general and administrative expenses are forecasted - taking into account economical outlook. Credit provisions to be taken each year, is the one expense at banks which can largely impact the net income projections. Accordingly extensive research and fundamental methodologies are being applied by Al- Hekma to better forecast the needed credit provisions to be taken by individual banks.
  6. Credit Provision Projections Methodology Annually banks include in their financial reporting information on: Non-performing loans Interest in suspense Under supervision loans Security Credit provisions
  7. CBJ Regulations on Credit Provisioning Banks to fully provide for unsecured NPLs within 1 year. Banks to provide 20% for secured NPLs within 1 year.
  8. 2011 Estimated Provisions as of 2010
  9. 2011 Provisions as of Q3 *Mid-year numbers. ** Provisions for the year revised upwards based on mid-year provisions *** Provisions increased from 12.9 to 25 to cover Syrian Exposure
  10. Financial Strength
  11. Financial Strength
  12. Financial Strength
  13. 2011 Net Income & P/E Projections
  14. Testing Criteria on Selected Banks
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