CBD 4Q15 first glance: Earnings drop as provisioning surges
Earnings slumped 50% Q-o-Q, cash DPS was AED0.20. CBD reported a net profit of AED151 million for 4Q15, down nearly 50% Q-o-Q and Y-o-Y (our estimate AED371 million). Provisioning rose c3x Q-o-Q and Y-o-Y as the NPL ratio rose to 6.9% from 6.3% in 3Q2015. Management attributed the increase in provisioning to the SME and commercial banking segment. The bank announced a cash DPS of AED0.20 (50% payout), which was in-line with last year. The stock trades at a 2015 P/BV of c2.1x. We have a Sell rating on the stock. (Company, Shabbir Malik)
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