md. monirul islam, aca - brac · pdf filemd. monirul islam, aca (bank analyst) ... bank asia...
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Md. Monirul Islam, ACA (Bank Analyst) [email protected]
Md. Ashfaque Alam (Associate) [email protected]
BANK ASIA LIMITEDBANK ASIA LIMITED DSE; CSE Ticker: BANKASIA; Bloomberg Ticker: BKASIA:BDDSE; CSE Ticker: BANKASIA; Bloomberg Ticker: BKASIA:BD 02 August 201002 August 2010
Rating: OUTPERFORMRating: OUTPERFORM
Bank Asia Limited is one of the third generation private commercial banks, incorporated in Bangladesh in 1999. In 2001 the bank acquired the business of Bank of Nova Scotia (incorporated in Canada), Dhaka. The bank also acquired the Bangladesh operation of Muslim Commer-cial bank Limited (MCBL), a bank incorporated in Pakistan, having two branches in Bangladesh in 2002. Currently it has 44 branches, 30 own ATM booths and 33 shared ATM booths all over Bangladesh. The bank also operates Islamic banking and off–shore baking units. Re-cently the bank has started capital market operation through its bro-kerage house. Currently the bank has three brokerage branches.
Bank Asia has managed impressive growth in loan portfolio, total as-sets and fee income while maintaining capital adequacy, asset quality, sound management and profitability. Bank Asia has diversified its business over the years and offers different types of commercial bank-ing, retail, treasury and capital market services. The bank has signifi-cant non-funded income (33% of total operating income in 2009). Bank Asia has achieved six years Cumulative Annual Growth Rate (CAGR) of 35.30% in loans & advances and 31.90% deposit growth. The bank achieved average ROE and ROA of 28.23% and 1.86% re-spectively in the last six years, which is quite impressive in the indus-try. We expect the bank to continue these levels in future years. We initiate coverage of Bank Asia Limited with an OUTPERM-FORM rating and a 12-month fair value of BDT 800. Our rating takes into account the impressive growth and profitability the bank has achieved over the years. We also considered the asset quality and the management practices of the bank, addition of new lines of business and investment mix. The Fair Price implies a forward P/E ratio of 12.5x with expected 2010 EPS of BDT 59.70.
Table 1: 10 largest banks by M cap, BDT MM
Graph 1: Close price and volume traded over a year
Growth 2009 2010 E 2011 E
Growth in Assets 28.65% 23.24% 26.06%
Growth in Loans and advances 25.75% 28.00% 25.00%
Growth in Deposits 29.22% 25.00% 28.00%
Earnings growth 93.27% 35.06% 27.53%
Per Share 2009 2010 E 2011 E
EPS 44.2 59.7 76.1
BVPS 165.0 224.5 300.8
Cash flow per share 125.2 35.9 57.7
Cash dividend per share 0 0 0
Company Summary
52-week Price Range (BDT) 291 - 700
Current Price (as on 01 August 2010) 621
12-month Fair Price 800
Cash Dividend 0.00
Total Return 29%
Number of Shares MM 30.0
Market Cap BDT MM 18,647.0
Float (% of shares) 74.82%
Operating Income BDT MM 2009 2010 E 2011 E
Net Interest Income 1,749.5 2,199.8 2,393.3
Investment Income 1,013.0 1,362.5 1,800.2
Commission, fees, brokerage 1,177.5 1,766.3 2,561.1
Other operating income 189.5 265.3 358.2
Total 4,129.5 5,593.9 7,112.8
Profitability 2009 2010 E 2011 E
Interest Income/Total Income (%) 72.41% 69.73% 66.79%
Non Interest Income/Total Income (%) 27.59% 30.27% 33.21%
Reported Net Profit/Total Income (%) 15.38% 15.99% 16.09%
Operating ratio 20.28% 19.62% 16.84%
Net Interest Margin (%) 4.12% 3.92% 3.68%
0
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Name Mcap, MM Total Assets Loans and advances
Islami Bank 46,109.6 278,302.8 214,615.8
AB Bank 45,627.7 84,053.6 70,879.9
Pubali Bank 43,375.9 107,579.6 74,203.3
National Bank 38,164.9 91,980.6 65,129.3
Prime Bank 36,160.1 124,984.7 89,946.0
EXIM Bank 30,745.2 86,203.9 68,609.9
Dutch-Bangla Bank 30,700.0 81,480.5 48,411.0
Southeast Bank 28,485.8 112,676.9 77,497.6
Bank Asia 18,647.0 68,663.2 50,267.9
Efiiciency & return 2009 2010 E 2011 E
Operating efficiency 37% 36% 36%
Loan/Deposit 92% 94% 92%
ROE 32% 31% 29%
ROA 2.2% 2.3% 2.4%
Source: BRAC EPL Research and DSE web as on 2 August 2010
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Source: Company Annual Report
Source: Company Annual Report
Source: Company Annual Report
Balance sheet growth
In the last six years, assets, loans and advances, and deposits grew on average by 32.7%, 35.30% and 31.9% respective-ly. The bank’s total assets stood at BDT 78.3 billion at period ended 31 March 2010. In the first three months of 2010, assets increased by BDT 9.6 billion or 14.00%. Loans and advances increased by BDT 8.13 billion and stood at BDT 58.40 billion at period ended on 31 March 2010. Three months’ growth rate was 16.18%. Total deposit grew by BDT 7.7 billion at the period ended 31 March 2010 with a three months growth rate of 14.00%. We are expecting a 28% growth in loans and advances in 2010.
Loan portfolio distribution
Bank Asia has a well diversified loan portfolio. Currently 36% of loan portfolio is exposed to industrial sector. Retail,
SME and consumer altogether constitute about 57% of the loan . Loan portfolio of the bank is well diversified to more
than 14 various industrial sectors.
Outstanding deposits growth: though interest rates decline
The bank achieved a six-year CAGR of 31.9% in deposits.
Deposit growth was 29.22% in 2009. Customer deposits
consist over 90% of total deposits. Scheme deposits of
the bank showed a growth of 23.% in 2009.We expect
25% growth in next three years. Currently about 1/5 of
total deposits is low cost (CASA).
Investment income: contributing to the bottom line
The bank’s investment consist 85% in government secu-
rities and 15% in others including investment in capital
markets. investment income is increasing over the years.
Income from investment for the first quarter of 2010 was
BDT 216.4 million which was 31% higher from the same
quarter of last year. Considering the capital market sce-
nario, we are expecting the bank to increase their portion
of investment income. Recently the bank has started capi-
tal market operation through opening a brokerage house.
.0
50,000.0
Significant concentration grouping (Million, BDT)
2009 2008 2007
57%
36%
7%
Loan portfolio composition(as at 31.12.09)
Consumers Industries Infrastructural
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009
Deposit mix
Term/Fixed deposits
Savings deposits
Bills payable
Current deposits and other accounts
85%
15%
Investment mix
Government Others
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Source: Company Annual Report
Source: Company Annual Report
Operating income per employee has been increasing for the last five years and it was 2.5 million in 2009. Operating expenses
per employee is also increasing because of recruiting of new employees, opening up new branches, booths etc. Operating ex-
penses as a percentage of total revenue remained stable at a very low level of 14%-17%. This shows efficient control over
operating expenses.
Operating efficiency has remained at moderate level of 31%-37% over the last three years. Though loan portfolio has been
increasing but operating expenses as a percentage of loans and advances remaining at a same level of 2.5%-3.5%. It implies
management efficiency on operating expenses.
Non-funded income as a % of total operating income
Non funded income arises mainly from commission, ex-
change, brokerage and other operating income. Recently
the bank has started brokerage operation through setting
up brokerage house. It has also competitive advantages
over other banks due to their trade and foreign remittance
related business. The bank has BDT 31.12 billion off bal-
ance sheet exposure as on 31 March 2010 which was
11.22% higher than last reporting date (31 December
2009). Currently the bank’s 55%-60% operating income is
non funded income. We are expecting same level of non-
funded income in coming years.
Earnings growth
Bank Asia achieved a CAGR of 35.20% in operating income in the past six years. In the first six months of 2010, total income
increased by 33.50% from the same period of previous year. EPS for the first half of the year 2010 was BDT 34.85, which was
137% higher than the same period of previous year. We are expecting 37.30% earnings growth in 2010 .
Asset Quality
Bank Asia had a NPL ratio of 1.56% at the end of 2009. NPL ratio has been decreasing over the years because of management efficiency in managing non-performing loans.
NPL ratio 2003 2004 2005 2006 2007 2008 2009
NPLs to total loans and advances 1.75% 3.30% 2.77% 2.27% 2.44% 2.68% 1.56%
Industry average NPL ratio 12.34% 13.00%
Source: Company Annual Report
30.00%
35.00%
40.00%
45.00%
2003 2004 2005 2006 2007 2008 2009
Non funded income as % of total operating income
Non funded income as % of total operating income
0.5
1
1.5
2
2.5
3
2005 2006 2007 2008 20009
Employee productivity (in Million, BDT)
Operating profit per employee
Non-interest income per employee
Operating cost per employee
40
42
44
46
48
50
52
54
2005 2006 2007 2008 20009
Employee productivity (in Million, BDT)
Deposit per employee Loans and advances per employee
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Capital adequacy position and Basel II
Basel II accord has effectively implemented by the Bank Asia and submitted system generated quarterly report to Bang-ladesh bank on time. The bank has also provided disclosure in accordance with pillar-III of Basel-II. This disclosures are intended for the market participants to assess key information about the bank’s exposure to various risks. The bank’s total risk weighted assets (RWAs) and core capital stood BDT 45,150.3 million and BDT 4,644.4 million re-
spectively as at 31 December 2009. The bank attained adequate capital level of 12.27% (regulatory requirement is 10%)
as at 31 December 2009. Total Capital Adequacy Ratio under Basel– II was 10.01% at year end 2009.
Capital adequacy
Source: Company Annual Report
Comparative analysis of four third generation banks
Banks 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Bank Asia 31% 30% 26% 39% 29% 37% 37% 19% 41% 29%
Mutual Trust Bank 21% 36% 23% 21% 35% 22% 38% 11% 36% 25%
Premier Bank 13% 19% 20% 19% 22% 13% 19% 12% 18% 17%
Exim Bank 38% 24% 23% 33% 26% 48% 24% 19% 39% 26%
Asset growth Deposit growth
Banks 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Bank Asia 30.56% 24.05% 38.68% 4.08% 93.27% 50.66% 24.54% 27.86% 40.48% 25.75%
Mutual Trust Bank 36.00% 42.27% -55.92% 44.70% 169.02% 22.92% 29.35% 22.01% 25.77% 18.77%
Premier Bank -61.55% 103.77% -78.64% 726.28% 67.24% 17.22% 14.67% 14.31% 28.27% 11.03%
Exim Bank 45.45% 17.10% 43.14% 17.81% 53.47% 34.73% 25.32% 23.14% 33.44% 27.99%
Earnings growth Loan Growth
Bank Asia Limited
Particulars 2005 2006 2007 2008 2009
Loan & Advance 17869.8 22255.6 28456.9 39975.0 50267.9
Total Assets 23380.0 30478.4 38436.1 53371.2 68663.2
Deposits 18500.1 25289.4 30004.1 42435.2 54832.8
Equity 1474.0 1949.7 2577.4 3333.0 4954.1
0.0
10000.0
20000.0
30000.0
40000.0
50000.0
60000.0
70000.0
80000.0
2005 2006 2007 2008 2009
Bank Asia
Loan & Advance
Total Assets
Deposits
Equity
Capital position 2006 2007 2008 2009
Tier 1 1,949.7 2,667.2 3,317.2 4,644.4
Tier 2 273.6 380.2 670.5 893.8
Total Capital 2,223.3 3,047.4 3,987.8 5,538.2
Total risk weighted assets 19,800.0 27,019.1 35,461.6 45,150.3
Required ratio 9.00% 10.00% 10.00% 10.00%
Required capital 1,782.0 2,701.9 3,546.2 4,515.0
Surplus 441.3 345.5 441.6 1,023.1
CAR 11.23% 11.28% 11.25% 12.27%
Figures in million BDT
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Mutual Trust Bank Limited (MTBL)
0
10000
20000
30000
40000
50000
60000
2005 2006 2007 2008 2009
MTBL
Loan & Advance
Total Assets
Deposits
Equity
Premier Bank Limited
0
5000
10000
15000
20000
25000
30000
35000
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45000
50000
2005 2006 2007 2008 2009
Premier Bank
Loan & Advance
Total Assets
Deposits
Equity
Exim Bank Limited
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2005 2006 2007 2008 2009
Exim Bank
Loan & Advance
Total Assets
Deposits
Equity
Profit after tax of four third generation banks
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
2005 2006 2007 2008 2009
Profit After Tax
Bank Asia
MTBL
Premier Bank
Exim Bank
Figures in million BDT
Figures in million BDT
Figures in million BDT
Figures in million BDT
Particulars 2005 2006 2007 2008 2009
Loan & Advance 14,373.3 18,591.5 22,683.2 28,529.3 33,883.9
Total Assets 19,307.0 26,218.0 32,181.9 38,965.0 52,774.8
Deposits 16,098.5 22,264.0 24,776.9 33,820.4 42,354.1
Equity 1,547.5 1,904.8 2,044.3 2,483.1 3,684.5
Particulars 2005 2006 2007 2008 2009
Loan & Advance 18,032.5 20,677.7 23,637.6 30,319.5 33,664.6
Total Assets 22,767.9 27,170.5 32,573.2 38,723.5 47,343.2
Deposits 20,290.5 24,199.0 27,114.5 32,059.6 37,382.1
Equity 1,133.5 1,626.4 2,465.4 3,116.1 4,638.0
Particulars 2005 2006 2007 2008 2009
Loan & Advance 26,046.3 32,641.3 40,195.2 53,637.7 68,609.9
Total Assets 33,716.7 41,793.5 51,503.0 68,446.5 86,203.9
Deposits 28,319.2 35,032.0 41,546.6 57,587.0 73,835.5
Equity 1,912.4 3,111.7 4,042.5 4,989.2 6,706.1
Banks 2005 2006 2007 2008 2009
Bank Asia 383.5 475.8 659.8 686.7 1327.2
MTBL 336.17 478.27 210.80 305.03 820.60
Premier Bank 180.93 368.68 78.76 650.7 1088.3
Exim Bank 555.34 650.29 930.84 1096.63 1096.6
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Price and volume graph of four third generation banks
Bank Asia Limited (DSE,CSE Ticker: BANKASIA)
Mutual Trust Bank Limited (DSE,CSE Ticker: MTBL)
Premier Bank Limited (DSE,CSE Ticker: PREMIERBAN)
Exim Bank Limited (DSE,CSE Ticker: EXIMBANK)
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Company Summary
52-week Price Range (BDT) 291 - 700
Current Price (as on 01 August 2010) 621
Cash Dividend 0.00
Number of Shares MM 30.0
Market Cap BDT MM 18,647.0
Float (% of shares) 74.82%
Company Summary
52-week Price Range (BDT) 48.1-68.1
Current Price (as on 01 August 2010) 65.10
Cash Dividend 0%
Number of Shares MM 455.5
Market Cap BDT MM 29,653.05
Float (% of shares) 55.02%
Company Summary
52-week Price Range (BDT) 271-500
Current Price (as on 01 August 2010) 446
Cash Dividend 0%
Number of Shares MM 21.2
Market Cap BDT MM 9,455.2
Float (% of shares) 58.41%
Company Summary
52-week Price Range (BDT) 43.8-53.8
Current Price (as on 01 August 2010) 52.70
Cash Dividend 0%
Number of Shares MM 291.5
Market Cap BDT MM 15,362.05
Float (% of shares) 51%
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Table 1: Residual Income
Table 2: Comparative information of 10 largest banks
Residual Income Method
Our residual income method of valuation estimates a value of BDT
1,110.6. We assume 28% ROE for the years of 2013-2016(based on
historical ROE), risk free rate of 9 %(average Gov. Securities rate),
cost of equity of 16% and a terminal growth rate of 8%.
VALUATION
Relative valuation
In valuing Bank Asia, we compared ten largest banks listed on the
DSE and found average trailing P/E and P/B ratios of 13.87x and
3.05x respectively. At current price, Bank Asia trades at 10.04x P/E
(trailing) and 3.05x P/B (trailing). Using a 12.5x P/E multiple over
2010E earnings of BDT 59.70, we determine a fair value of BDT
746. Using a 2.50x P/B multiple over 2010E book value of BDT
224.69, we determine a fair value of BDT 562. We estimate a fair
value of BDT 800.00 for bank Asia that implies forward P/E
and P/B ratios of 12.50x and 2.5x respectively.
Table 3: Relative valuation
Domestic banks Price EPS P/E BVPS P/B
Islami Bank 584.25 45.9 12.73x 271.2 2.15x
Prime Bank 573.50 61.1 9.39x 255.3 2.25x
Pubali Bank 744.50 54.7 13.60x 248.8 2.99x
National Bank 805.00 47.2 17.06x 202.5 3.98x
Southeast Bank 387.00 40.5 9.56x 245.2 1.58x
NCC Bank 438.00 38.2 11.47x 134.1 3.27x
Eastern Bank 677.50 49.8 13.60x 288.6 2.35x
BRAC Bank 747.25 51.3 14.57x 329.9 2.27x
Bank Asia Ltd. 621.00 61.9 10.04x 231.0 2.69x
Dutch-Bangla Bank 1518.75 56.9 26.70x 217.6 6.98x
Average 13.87x 3.05x
Source: DSE web as on 01 August 2010
BANKASIA EPS BVPS
2010 estimates 59.70 224.69
Multiple 12.50x 2.50x
Fair value 746 562
Current Price 621
Average Valuation Price 806
*Fair value (12 months forward) 800
Cash dividend 0.00
Dividend yield 0%
Total return 29%
* Fair value (12 months forward )is determined
by considering the residual income and relative
valuation method.
RF 9%
Implied Beta 1.2
ERP 6%
Cost of Equity 16%
Terminal Growth 8%
Value/Share 1,110.6
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Table 4: Comparative Information of 10 South East Asian Banks
In conducting a valuation for Bank Asia, we have looked at the trading prices of some of the leading banks in the region. These banks are in mid-income countries with mostly mature banking markets, and have a slower growth prospect. Whereas Bangladeshi banks routinely achieve 30% growth in assets and deposits, growth rate in these markets have stabilized at around 10%. On the other hand, these banks are also better managed with superior asset quality and risk management practices. These group of peer banks trade at an average of 16.20x P/E and 2.15x P/B (trailing). Consequently, we feel that the group of Bangladeshi banks in Table 2 are trading at a fair valuation (except Dutch Bangla Bank).
Regional banks Country Currency Price EPS P/E BVPS P/B
ICICI India INR 904 41.93 21.56 466.3 1.94
HDFC India INR 2,073 68.82 30.12 470.3 4.41
State Bank of India India INR 2,429 184.82 13.14 1309.4 1.86
HABIB BANK LTD Pakistan PKR 102 13.36 7.60 83.2 1.22
BANGKOK BANK PUBLIC CO LTD Thailand THB 128 11.50 11.09 196.8 0.65
BANK OF AYUDHYA PCL Thailand THB 20 1.27 15.51 15.2 1.30
PUBLIC BANK BERHAD Malaysia MYR 12 0.76 15.76 3.2 3.80
HATTON NATIONAL BANK PLC Sri Lanka LKR 275 18.77 14.62 138.2 1.99
COMMERCIAL BANK OF CEYLON Sri Lanka LKR 179 11.20 15.96 81.5 2.19
Average 16.2 2.15
Source: http://investing.businessweek.com, as at 14/07/10
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Table 5: Balance Sheet
Source: BRAC EPL estimates and company annual reports
Table 6: Income Statement
Source: BRAC EPL estimates and company annual reports
Income Statement, MM BDT 2007 2008 2009 2010 E 2011 E 2012 E
Interest/Investment Income 3,662.4 4,973.1 6,247.5 7,817.0 9,490.9 11,843.5
Interest/profit paid on deposit and borrowing etc 2,705.0 3,739.0 4,498.0 5,617.2 7,097.7 9,066.7
Net Interest Income 957.3 1,234.1 1,749.5 2,199.8 2,393.3 2,776.8
Income from investments in securities/Shares 467.2 607.1 1,013.0 1,362.5 1,800.2 2,340.3
Commission, Exchange & Brokerage 700.2 850.6 1,177.5 1,766.3 2,561.1 3,457.4
Other Income 129.3 200.7 189.5 265.3 358.2 483.6
Total Operating Income 2,254.0 2,892.5 4,129.5 5,593.9 7,112.8 9,058.1
Operating Expense 679.3 987.7 1,512.5 2,018.0 2,557.9 3,262.5
Profit Before Provision 1,574.7 1,904.9 2,617.0 3,575.9 4,554.9 5,795.6
Provision 207.8 499.1 330.8 458.4 579.1 723.9
Pre-Tax Profit 1,366.9 1,405.7 2,286.2 3,117.5 3,975.8 5,071.8
Tax 707.1 719.0 959.0 1,324.9 1,689.7 2,155.5
Profit After Tax 659.8 686.7 1,327.2 1,792.6 2,286.1 2,916.3
Balance Sheet, MM BDT 2007 2008 2009 2010 E 2011 E 2012 E
Property & Assets:
Cash 2,210.5 3,018.8 3,760.4 1,076.8 1,733.7 2,933.1
Balance with Other Banks & F.I 344.1 1,404.8 1,346.4 1,346.4 1,346.4 1,346.4
Money at call 1,123.6 .0 .0 .0 .0 .0
Investment 4,211.4 6,133.8 9,663.1 13,045.2 16,958.7 22,046.4
Loan & Advance 28,456.9 39,975.0 50,267.9 64,342.9 80,428.7 100,535.8
Fixed Assets 498.4 644.2 1,018.4 1,422.0 1,805.7 2,295.0
Other Assets 1,591.2 2,194.6 2,607.0 3,389.1 4,405.8 5,727.6
Total Assets 38,436.1 53,371.2 68,663.2 84,622.4 106,679.1 134,884.3
Liabilities & Equities:
Liabilities:
Borrowing from other banks and F.I 1,554.0 1,615.8 2,178.4 2,178.4 2,178.4 2,178.4
Deposits 30,004.1 42,435.2 54,832.8 68,541.0 87,732.5 112,297.6
Other Liability 4,300.6 5,987.3 6,697.8 7,156.2 7,735.3 8,459.2
Total Liabilities 35,858.7 50,038.3 63,709.1 77,875.7 97,646.3 122,935.2
Shareholder's Equity:
Paid-up 1,395.0 1,743.8 2,144.8 3,002.7 3,002.7 3,002.7
Share premium .0 .0 .0 .0 .0 .0
Statutory Reserve 818.6 1,099.8 1,557.0 1,557.0 1,557.0 1,557.0
Other reserve 348.8 3.3 3.3 3.3 3.3 3.3
Revaluation Gain/(loss) on Investment -32.1 .0 .0 .0 .0 .0
Revaluation Reserve .0 12.4 306.4 306.4 306.4 306.4
Retained Earning 47.1 473.7 942.6 1,877.2 4,163.3 7,079.6
Total Equity 2,577.4 3,333.0 4,954.1 6,746.7 9,032.8 11,949.1
Total Liabilities & Equities 38,436.1 53,371.2 68,663.2 84,622.4 106,679.1 134,884.3
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
Table 7: Cash Flow Statement
Source: BRAC EPL estimates and company annual reports
Table 8: Growth indicators
Table 9: Growth indicators & other information
Source: BRAC EPL estimates and company annual reports
Margins and Efficiency 2006 2007 2008 2009E 2010E 2011E
Loan/Deposit 87.68% 93.66% 98.78% 95.43% 99.58% 102.13%
Return on investments 8.08% 10.64% 10.02% 12.00% 13.00% 13.00%
Net interest Margin (rate of int inc - rate of int exp) 4.07% 3.76% 3.38% 3.73% 3.82% 4.13%
Interest spread (lending rate - borrowing rate) 5.36% 5.03% 5.95% 5.18% 5.09% 5.14%
Indicators 2006 2007 2008 2009E 2010E 2011E
Growth
Assets growth 24.89% 30.22% 35.07% 18.77% 16.39% 17.80%
Loans and advances growth 20.19% 32.46% 41.74% 14.00% 20.00% 20.00%
Deposits growth 31.05% 24.00% 34.39% 18.00% 15.00% 17.00%
Earning growth 36.11% 41.31% 30.29% 61.65% 22.72% 13.02%
Equity growth 28.81% 38.59% 37.07% 35.17% 31.93% 27.35%
Provisions growth -36.19% 98.48% 34.76% 35.67% 24.14% 20.00%
Other information 2006 2007 2008 2009E 2010E 2011E
Operating efficiency (Ops exp/Ops income) 32.07% 29.85% 29.06% 28.66% 29.89% 33.08%
Operating income / employee (MM BDT) 1.7 2.1 2.4 3.1 3.4 3.5
Operating income/ branch (MM BDT) 38.9 47.7 58.2 80.6 94.8 107.3
Cashflow statement 2007 2008 2009 2010 E 2011 E 2012 E
Operating cash
Net income 1,792.6 2,286.1 2,916.3
Non-cash items 660.2 834.9 1,050.1
Operating cashflow 1,281.0 1,930.3 1,690.7 2,452.8 3,121.0 3,966.4
Increase/decrease in operating assets and liab.
Investments (3,382.1) (3,913.6) (5,087.6)
Loans and advances (14,075.0) (16,085.7) (20,107.2)
Deposits and other accounts 13,708.2 19,191.5 24,565.1
Operating cashflow 416.3 981.6 2,746.4 (4,531.0) (1,824.5) (1,951.4)
Investing cashflow
Investment in fixed and intangible assets (605.4) (639.5) (815.6)
Investing cashflow (1,258.5) (2,119.1) (3,672.6) (605.4) (639.5) (815.6)
Financing cashflow
Increase/(reduction) in debt .0 .0 .0
Dividend payment .0 .0 .0
Financing cashflow .0 (47.0) (81.2) .0 .0 .0
Beginning cash balance 1,783.7 2,210.5 3,018.8 3,760.4 1,076.8 1,733.7
Other Adjustments (11.9) 62.4 58.3 .0 .0 .0
Change in cash 438.7 745.8 683.3 (2,683.6) 657.0 1,199.3
Ending cash balance 2,210.5 3,018.8 3,760.4 1,076.8 1,733.7 2,933.1
BANK ASIA LIMITED (DSE, CSE: BANKASIA; Bloomberg Ticker: BKASIA:BD)
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BRAC EPL Investments Capital Markets Group
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