ADIB-Egypt disclosed a summary of its 3Q18 results. Net income came in at EGP254mn, up a very strong 58% Y-o-Y and 14% Q-o-Q and beating our estimate of EGP213mn by 19%. Based on the figures available in the press release, earnings growth was driven by net interest income, which increased 18% Y-o-Y and 8% Q-o-Q, in addition to reversal of provisions of EGP70mn in 3Q18 (vs. a charge of EGP72mn in 3Q17 and EGP39mn in 2Q18). Fee income fell 10% Y-o-Y and 2% Q-o-Q. Earnings in 9M18 increased 26% Y-o-Y. ADIB-E’s effective tax rate in 3Q18 fell further to 31% (vs. 52% in 3Q17 and 33% in 2Q18), as the bank completed the amortisation of its deferred tax asset in 4Q17, which we have previously flagged as a driver for higher ROE in FY18. Loan and deposit growth were both strong in 3Q18, with loans (including loans to banks), growing at 42% Y-o-Y and 7% Q-o-Q, while deposits increased 44% Y-o-Y and 13% Q-o-Q.

Elena Sanchez-Cabezudo, Ahmed El Shazly

  
Abu Dhabi Islamic Bank - Egypt: EGP13.72 as of 08 Nov 2018, Rating: Buy, TP: EGP17.50/share, MCap: USD154mn, ADIB EY/ADIB.CA