Cairo – Mubasher: Pharos upgraded the valuations of Commercial International Bank (CIB), Credit Agricole and HD Bank, maintaining an ‘Overweight’ recommendation their stocks, according to a research note issued on Sunday.

Starting with the best positioned bank in the market with a fair value at EGP86.83, the CIB can sustain a 25% bottom line growth over the forecast horizon on non-interest margin resilience as well as non-interest income surge.

Management further eyes a minimum of 30% lending growth in 2017, along with low cost deposit accumulation for setting up appropriate funding roots for growth.

Likewise, Credit Agricole (FV: EGP44.73) has been witnessing a remarkable turnaround since 2014 as its growth and profitability have picked up to catch up with larger private sector banks.

“The bank provides solid exposure to the under-penetrated retail sector in Egypt, as well as the medium-sized corporations in Egypt”, the research firm indicated.

The real estate-known bank has given indicators of impressive growth and solid margins with a fair value at EGP 33.20.

“The bank does not have any capital constraints due to the absence of foreign assets on its books and thus has high probability for maintaining high cash dividend distribution”, the report revealed.

Earlier, the agency indicated that The Egyptian pound’s free flotation boosted the US dollar liquidity in the Egyptian banking system, paving a smooth way for lending growth and higher non-interest income. But fears of asset quality shock, tight capital adequacy and cash dividend cuts may tremble the whole system.