Cairo – Mubasher: Renaissance Capital on Thursday estimated the fair value (FV) of Commercial International Bank – Egypt’s (CIB) stock at EGP 95.7, up from EGP 83.2, with a “Buy” recommendation.

The expectations hint at CIB’s capability of achieving a profit growth of 20%-25% in the medium-term, according to a study.

The growth in profits will be achieved through improving allocations’ cash coverage, low-cost financing, and high operational efficiency, Renaissance Capital said on Thursday.

The CIB is expected to achieve a 35.6% mixed annual growth surge from 2016 to 2021, bolstered by the reduction in cost of risk, alongside economic recovery and issuing some extra allocations.

The Egyptian bank’s consolidated profits rose 35.6% in the first quarter of 2017 to EGP 1.75 billion, compared to EGP 1.29 billion in Q1-16.

Renaissance Capital believes that the quality of assets is challenging after the amount of non-performing loans reached 7%, expected to drop to 5% by 2020.

By 12:26 pm Cairo time on Thursday, CIB’s stock edged up 1.72% to EGP 87.02 with a trading volume of 522,700 shares at EGP 45.6 million.