Top banks: Stable results

FFA sees Syrian
crisis effect contained

No major surprises are expected for the top three banks in the second quarter of the year, according to FFA Private Bank’s equity research published on July 9.

Bank Audi, BLOM Bank, and Byblos Bank should continue to weather a challenging operating environment with pressures on earnings and slower balance sheet expansion.
In Q1 2013 Bank Audi’s year-on-year net earnings had fallen by ten percent and those of Byblos Bank had fallen by eight percent. By contrast, the earnings of BLOM Bank grew by four percent.

Banks are still operating in a low-interest environment with provisioning levels still high. FFA expected provisioning levels to remain elevated yet contained, due to downsized Syrian operations.
While BLOM Bank and Byblos Bank are expected to sustain a moderate balance sheet growth, Bank Audi could outperform its peers due to its expansion in Turkey.

FFA reiterated a ‘Marketweight’ rating on Bank Audi shares with a fair value of $7 per share. The price for Bank Audi listed shares last closed at $6.1 per share. It reiterated ‘Overweight’ rating on BLOM shares with a fair value at $10 per share. BLOM’s listed share last closed at $8.3. It also kept ‘Marketweight’ rating on Byblos Bank shares with a fair value of $1.6 per share. Byblos Bank's share price was $1.5 at last closing.

FFA said it sees no upcoming catalysts that can trigger the appetite of investors and drive current share price levels up.