Abu Dhabi's FAB set for asset growth as cost synergies improve | ZAWYA MENA Edition:
Bahrain-based investment bank SICO has raised its target price on First Abu Dhabi Bank, citing stronger conditions, but maintained its 'Neutral' rating on the stock, arguing that the benefits of the likely improvement in its performance has already been priced into its stock.
A note published on Tuesday by banking analyst Chiradeep Ghose increased SICO's target price on FAB to 15 UAE dirhams ($4.08) per share, up from 12 dirhams previously. The stock closed on Sunday down 8 fils to 14.40 dirhams per share.
Ghose's note stated that the reason for the uplift in its target price is that it expects the bank's balance sheet to continue its recent growth. It anticipates loan book growth of 8 percent for the bank this year, in line with management guidance. It also expects sustainable growth of around 7 percent over the next three years, which is marginally higher than the forecast rate of 5-6 percent for the rest of the United Arab Emirates' banking sector.
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