CBD 1Q16 First Glance: Provisioning and weak revenue drive miss
Earnings down 18% Y-o-Y, miss estimate: CBD reported a net profit of AED241 million, -18% Y-o-Y and +60% Q-o-Q. Earnings missed our AED295 million estimate owing to higher-than-expected provisioning and lower revenue. Other takeaways: Loan growth: -1% Q-o-Q and +15% Y-o-Y; Provisioning: -37% Q-o-Q and +35% Y-o-Y. Investment perspective: CBD trades at rich multiples - 2016e P/E of 12.1x and P/B of 1.9x – relative to UAE banks – 2016e P/E of 8.9x and P/B of 1.5x. We have a sell rating on the stock. (Shabbir Malik, Company disclosure)
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