EFG-Hermes Ups NSBG’s FV At EGP 50 On QNB’s Buyout Deal

EFG-Hermes issued a report on National Societe Generale Bank (NSGB) (NSGB.CA) upping its fair value by 60% to hit EGP 50. Hermes also recommended in its report to maintain “Buy” on the NSGB stock.

This was after National Societe Generale Bank-Egypt had announced that Qatar National Bank (QNB) offered to acquire Societe Generale’s stake in the bank amounting to 77.17%.

Hermes noted that NSGB stock should trade at a P/B ratio of 2.5-3x at minimum. It trades at 1.8x in FY12, reflecting a stock price of EGP 43-51.6.

Société Générale said it will not sell its unit in Egypt only upon receiving an attractive price, given that NSGB – Egypt is one of the highest profit-yielding units.
Hermes expected QNB’s bid to boost Egypt’s banking stocks in the short term, especially those seen as acquisition targets.