Liberty Bank Research Note - Q4 2013 and 2013 Results

25 %
75 %
Information about Liberty Bank Research Note - Q4 2013 and 2013 Results
Finance

Published on February 24, 2014

Author: LibertySecurities

Source: slideshare.net

Description

Liberty Bank Research Note - Q4 2013 and 2013 Results

Georgia | Banks | Company Update 18 February 2014 GEL/US$ 1.7301 Liberty Bank Q4 2013 and Full-Year 2013 Results GSE: BANK | BLOOMBERG: BANK GG | ISIN: GE1100000300 Not Rated Current Price (GEL) 52 Week High (14/02/2014) 52 Week Low (18/02/2013) 1M Change 3M Change 12M Change Ordinary Shares Outstanding (bn) MCap (GEL mln) MCap (US$ mln) Free Float (Including ESOP) Free Float (US$ mln) % Of Free Float Traded in 2010 % Of Free Float Traded in 2011 % Of Free Float Traded in 2012 % Of Free Float Traded in 2013 Average Weekly Traded Volume in 2010-2013 (GEL '000) % Of Free Float Traded YTD Average Weekly Traded Volume YTD (GEL '000) Major Shareholder - Liberty Holding Georgia Ltd** GDR: Common Shares/GDR GDRs Fully Fungible? Current GDR Programme Ceiling (% Of Shares Outstanding) % Of Shares Outstanding Currently Converted Into GDRs Dividend Yield (Ordinary Shares) Convertible Preferred Shares Outstanding (mln) Placement Price Per Convertible Preferred Share (GEL) Convertible Preferred Dividend Yield/Placement Price RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT Market Data 0.0160 0.0160 0.0070 6.7% 44.1% 128.6% 5.5 88.0 50.9 19.6% 9.9 46.9%* 59.5%* 0.95%* 2.55%* 111.8 1.80%* 37.8 70.8% Reg S & 144A 500:1 Yes 30% 11.9% 0% 5.2 1.00 17.0% * By parties other than JSC Liberty Capital and Liberty Holding Georgia **Formerly Liberty Capital LLC; renamed to Liberty Holding Georgia in July 2012 Share Price Performance YTD Feb-14 Jan-14 Dec-13 Nov-13 Oct-13 Sep-13 Aug-13 Jul-13 Jun-13 May-13 May-13 Apr-13 Mar-13 Jan-13 Jan-13 300 280 260 240 220 200 180 160 140 120 100 80 60 BANK Closing Price (Rebased) GSE Index (Rebased) MSCI Emerging Markets Banks Index (Rebased) Source: GSE, Bloomberg Key Financials & Ratios GEL mln, unless otherwise noted Unaudited d Unaudited d Consolidated, IFRS-based Q4 2013 1,295 584 1,180 1,139 114 28.1 10.6 0.0010 0.0009 1.65%** 20.73%** 13.53% 66.97% RESEARCH ALERT RESEARCH ALERT Total Assets Net Loans Total Liabilities Client Balances & Deposits Shareholders’ Equity Revenue Net Income/(Loss) EPS Basic EPS Fully Diluted ROAA ROAE CAR (NBG) RWA/TA (NBG) Q3 2013 1,278 508 1,170 1,126 108 23.2 5.0 0.0009 0.0008 1.63%** 19.06%** 12.87% 63.87% Audited d Q4 2012 839 374 740 690 99 21.4* 3.2* 0.0006 0.0005 1.51%** 13.27%** 12.28% 68.48% Growth q-o-q 1.3% 14.8% 0.9% 1.1% 6.0% 21.1% 113.4% Growth y-o-y 54.3% 56.1% 59.5% 65.0% 15.8% 31.3% 234.6% Valuation Metrics T * Excluding Treasury Shares Total Operating Income in Q4 2013 reached GEL 28.1 million, an increase of 21.1% q-o-q and 31.3% y-o-y. Total Operating Income in 2013 reached GEL 90.1 million, down 1.9% y-o-y. Total Operating Income normalised for the loss of the State Fees increased by 6.4% y-o-y in 2013. Recurring Operating Costs increased by 12.0% q-o-q and 14.8% y-o-y to GEL 21.0 million, resulting in the positive Operating Leverage of 16.5% in Q4 2013. Normalised Cost/Income Ratio decreased to 82.0% in Q4 2013 from 83.1% in Q3 2013 and from 91.1% in Q4 2012. BANK reported Normalised Net Operating Income of GEL 7.1 million in Q4 2013, an increase of 59.8% q-o-q and a decrease of 129.2% y-o-y. Recurring Operating Costs increased by 10.3% y-o-y to GEL 73.7 million in 2013. Normalised Cost/Income Ratio increased to 84.6% in 2013 as compared to 75.4 % in 2012. BANK reported Normalised Net Operating Income of GEL 16.4 million in 2013, down 34.5% y-o-y. Normalised Net Operating Income adjusted for the loss of State Fees decreased by 8.1% y-o-y. Pre-Provision Operating Profit increased by 61.5% q-o-q and 74.1% y-o-y to GEL 7.2 million in Q4 2013. As a result of the efforts of BANK’s management, BANK has recovered certain previously written-off loans, which resulted in the net provision recoveries of GEL 1.3 million in Q4 2013 as compared to Net Provision Expense of GEL 0.3 million in Q4 2012. Pre-Tax Profit increased by 11.1% q-o-q and 106.8% yo-y to GEL 6.5 million in Q4 2013. Net Income in Q4 2013 reached GEL 10.6 million, up 113.4% q-o-q and 234.6% y-o-y. Pre-Provision Operating Profit decreased by 36.4% y-o-y to GEL 16.3 million in 2013. Pre-Provision Operating Profit adjusted for the loss of the State Fees decreased by 11.6% y-o-y in 2013. As a result of BANK’s management efforts the BANK has reported the net recoveries of loans of GEL 0.2 million in 2013 as compared to Net Provision Expense of GEL 14.2 million in 2012. Pre-Tax Profit increased by 44.4% y-o-y to GEL 14.1 million in 2013. BANK is the third largest bank in Georgia (by Total Assets), with the consolidated Total Assets reaching GEL 1,294.6 mln, up 1.3% q-o-q and 54.3% y-o-y. BANK’s market share reached 7.7% by Total Assets as of 31 December 2013 (up from 6.3% as of 31 December 2012). Market share in Net Loans and Client Balances & Deposits reached 6.3% and 11.8% as of 31 December 2013, respectively (up from 4.7% and 9.0% as of 31 December 2012, respectively). BANK’s BIS (Basel I) CAR stood at 15.9% as of 31 December 2013 as compared to BIS CAR of 18.3% as at YE 2012. Capital Adequacy Ratio (as per the current NBG methodology) reached 13.5% as at 31 December 2013. BANK was compliant, as of 31 December 2013, with the prudential capital adequacy ratios. BANK’s Net Loans/Total Assets ratio increased to 45.1% as at 31 December 2013 from 39.8% as at 30 September 2013. Looking ahead, we expect BANK to remain focused on the further improvement of its balance sheet structure. We believe BANK could reach Net Loans/Total Assets of 52% by YE 2014, with the annual balance sheet growth reaching or exceeding 17%. *Unaudited ** Annualised P/E P/B BV Per Share P/Diluted EPS P/Diluted Book Value Diluted BV Per Share Liberty Bank (GSE: BANK, not rated) announced its Q4 2013 and 2013 consolidated financial results, reporting Net Income of GEL 10.6 mln in Q4 2013 (up 113.4% q-oq and 234.6% y-o-y) and Net Income of GEL 17.1 mln in 2013 (up 229.4% y-o-y). In 2013, BANK booked the current deferred tax benefit in the amount of GEL 5.1 million, resulting from the reversal of the previously impaired deferred tax asset. Adjusted for this one-off reversal of the impaired deferred tax asset (which has not resulted in the corresponding increase in the shareholders’ equity due to a concurrent change in the estimated contingent tax liability related to the revaluation of the fixed assets in earlier periods) BANK’s Net Income was GEL 12.0 million. We forecast the overall Cost of Risk to reach 2.3% in 2014. 2012A 7.96 0.42 0.018* 2013A 6.43 0.71 0.020* 2014F 5.76 0.71 0.022* 6.06 0.72 0.022* We forecast 2014 Net Income to reach GEL 15.3 mln, implying that ROAE (attributable to the ordinary shares) and ROAA will reach 12.3% and 1.0%, respectively.

Liberty Bank Q4 2013 and Full-Year 2013 Results GSE: BANK | BLOOMBERG: BANK.GG | ISIN: GE1100000300 RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT RESEARCH ALERT Income Statement Consolidated, IFRS-based GEL '000, unless otherwise noted Interest Income Interest Expense Net Interest Income Fee And Commission Income Fee And Commission Expenses Net Fee And Commission Income Net Income From Documentary Operations Net Other Non-Interest Income Net Income From FX And Translation Operations Net Non-Interest Income Total Operating Income Recurring Operating Costs Normalised Net Operating Income Non-Recurring Costs/(Income) Pre-Provision Operating Profit Net Provisions Pre-Bonus Result Discretionary Bonus Pool Share Of Associates' Net Profit Pre-Tax Profit Accrued Or Paid Income Tax Benefit/(Expense) Impairment Of Deferred Tax Asset Current Deferred Tax Benefit Net Income Unaudited Q4 2013 47,384 27,581 19,803 6,772 852 5,920 131 333 1,910 8,294 28,098 21,022 7,076 (80) 7,156 (1,255) 8,550 2,015 (30) 6,506 (986) 5,093 10,612 Unaudited Q3 2013 40,759 25,960 14,798 6,812 822 5,990 136 248 2,033 8,407 23,206 18,777 4,428 (2) 4,430 (1,890) 6,329 500 24 5,853 (880) 4,973 Unaudited Q4 2012 32,324 18,418 13,905 6,140 743 5,396 181 315 1,597 7,490 21,395 18,308 3,087 (1,023) 4,111 309 4,373 1,190 (37) 3,146 26 3,171 Selected Ratios Consolidated, IFRS-based %, unless otherwise noted ROAA ROAE Net Interest Margin Net Spread Net Non-Interest Income/Total Operating Income Net Income (Loss)/Total Operating Income Net Fee & Commission Income/Total Operating Income Net Fee & Commission Income/Average Total Assets Cost/Income Ratio (Normalised) Costs/Average Total Assets (Normalised) Personnel Costs/Total Operating Income Personnel Costs/Average Total Assets Personnel Costs/Total Recurring Operating Costs Net Loans/Total Assets Total Deposits/Total Liabilities Net Loans/Total Deposits Net Loans/Total Liabilities Liquid Assets/Total Assets Leverage (Total Liabilities/Equity), Times Shareholders' Equity/Total Assets Average Shareholders' Equity/Average Total Assets Loan Loss Reserves/Gross Loans NPLs/Gross Loans LLR Coverage Ratio Cost of Risk Q4 2013 1.65% 20.73% 8.09% 8.92% 29.52% 37.77% 21.07% 1.77% 81.99% 6.88% 46.36% 3.89% 61.97% 45.08% 96.65% 51.16% 49.44% 41.03% 10.34 8.82% 8.29% 3.95% 5.56% 84.04% -1.17% Q3 2013 1.63% 19.06% 7.35% 9.38% 36.23% 21.43% 25.81% 1.97% 83.07% 6.32% 46.52% 3.54% 57.49% 39.79% 96.39% 45.08% 43.46% 46.67% 10.86 8.43% 8.90% 4.74% 6.51% 77.15% -1.87% Growth y-o-y 46.6% 49.7% 42.4% 10.3% 14.6% 9.7% -27.8% 5.6% 19.6% 10.7% 31.3% 14.8% 129.2% NMF 74.1% NMF 95.5% 69.3% -21.0% 106.8% NMF NMF 234.6% Unaudited 2013 159,697 99,076 60,622 24,078 3,067 21,012 494 1,163 6,823 29,492 90,113 73,742 16,371 64 16,307 (80) 16,628 2,515 12 14,126 (2,137) 5,093 17,081 Audited 2012 126,848 72,274 54,574 31,939 2,748 29,192 1,070 1,059 5,981 37,301 91,875 66,863 25,012 (639) 25,651 14,193 12,227 2,379 (63) 9,785 (66) (4,534) 5,185 Growth y-o-y 25.9% 37.1% 11.1% -24.6% 11.6% -28.0% -53.8% 9.9% 14.1% -20.9% -1.9% 10.3% -34.5% NMF -36.4% NMF 36.0% 5.7% NMF 44.4% NMF NMF NMF 229.4% Unaudited 2013 400,044 131,123 583,635 306 4,986 128,974 22,697 1,294,627 1,140,883 23,840 1,180,420 114,206 1,294,627 Balance Sheet Consolidated, IFRS-based GEL '000, unless otherwise noted Cash And Due From Banks Treasuries & CDs Other Fixed Income Instruments Net Loans Net Investments Investment Property Net Property, Plant And Equipment Net Other Assets Total Assets Total Balances & Deposits Borrowed Funds Other Liabilities Contingent Capital Participation Note Total Liabilities Shareholders' Equity Total Liabilities And Shareholders' Equity Growth q-o-q 16.3% 6.2% 33.8% -0.6% 3.6% -1.2% -4.0% 34.1% -6.0% -1.3% 21.1% 12.0% 59.8% NMF 61.5% NMF 35.1% 0.0% -221.6% 11.1% 12.1% NMF 113.4% Unaudited Q3 2013 419,932 176,364 508,381 322 4,793 127,142 22,766 1,277,587 1,127,607 23,542 1,169,848 107,739 1,277,587 Audited 2012 235,533 57,497 374,003 173 4,793 126,095 24,820 838,932 691,177 26,667 15,491 740,270 98,661 838,932 Growth q-o-q -4.74% -25.7% NMF 14.8% -5.0% 4.0% 1.4% -0.3% 1.3% 1.2% NMF 1.3% NMF 0.9% 6.0% 1.3% Growth y-o-y 69.85% 128.1% NMF 56.1% 77.1% 4.0% 2.3% -8.6% 54.3% 65.1% -100.0% 53.9% NMF 59.5% 15.8% 54.3% Q4 2012 1.51% 13.27% 9.61% 9.95% 35.01% 14.82% 25.22% 2.58% 91.13% 9.30% 48.72% 4.97% 56.94% 44.58% 93.37% 54.11% 50.52% 34.93% 7.50 11.76% 11.49% 5.01% 5.27% 98.99% -0.52% 2013 1.06% 11.78% 7.98% 9.91% 32.73% 18.96% 23.32% 19.86% 84.62% 6.72% 46.39% 3.68% 56.69% 45.08% 96.65% 51.16% 49.44% 41.03% 10.34 8.82% 9.32% 3.95% 5.56% 84.04% -0.30% 2012 0.62% 6.46% 9.03% 8.88% 40.60% 5.64% 31.77% 3.48% 75.37% 8.25% 40.85% 4.47% 56.14% 44.58% 93.37% 54.11% 50.52% 34.93% 7.50 11.76% 9.59% 5.01% 5.27% 98.99% 3.03% 2011 1.06% 13.29% 9.44% 9.78% 50.95% 9.15% 42.80% 4.96% 70.78% 8.21% 37.11% 4.30% 54.10% 43.74% 93.86% 51.73% 48.56% 35.35% 9.08 9.36% 7.99% 9.69% 11.66% 86.30% 6.21% 2010 1.11% 21.58% 11.89% 18.08% 62.43% 7.39% 51.29% 7.64% 73.16% 10.90% 40.12% 5.97% 54.83% 29.49% 80.52% 39.19% 31.54% 42.00% 15.25 6.15% 7.04% 12.67% 18.55% 59.84% 7.01% 2009 -1.70% -45.86% 3.16% 8.15% 89.85% -13.21% 71.49% 9.21% 103.44% 13.33% 48.99% 6.31% 47.36% 25.14% 81.38% 31.81% 25.88% 35.06% 33.80 2.87% 3.71% 22.38% 35.46% 60.35% 14.01% Quarterly ratios are annualised, where applicable 2

Liberty Bank Q4 2013 and Full-Year 2013 Results GSE: BANK | BLOOMBERG: BANK.GG | ISIN: GE1100000300 Liberty Securities Liberty Tower 74 I. Chavchavadze Ave Tbilisi, Georgia 0162 Tel: + 995 32 2555 500 research@libertysecurities.ge www.libertysecurities.ge Skype: liberty.securities Temur Iremashvili Director Liberty Securities +995 591 158 877 temur.iremashvili@libertysecurities.ge Skype: Temur Iremashvili Victor Meskhi Director of Research Liberty Securities +995 593 551 506 victor.meskhi@libertysecurities.ge Skype: v.meskhi Tengiz Lashkhi Asset Management Director Liberty Securities +995 591 709 280 tengiz.lashkhi@libertysecurities.ge This document has been produced by Liberty Securities Ltd (“Liberty Securities”). Liberty Securities and/or persons connected with it may effect or may have effected a transaction or transactions for their own account in the securities or instruments or strategies (collectively, the “Instruments”) referred to in this document or any related investment before the material is published to Liberty Securities’ clients, may have a position in the securities and/or any related investment and may make a purchase and/or sale, or offer to make a purchase and/or sale, of the Instruments and/or any related investment from time to time, in the open market or otherwise, in each case either as principal or as agent. Persons connected with Liberty Securities may provide or have provided corporate finance and other services to the issuer(s) of the Instruments and may seek to do so in the future. Accordingly, information may be available to Liberty Securities and/or persons connected with it which is not reflected in this document. This document is not, and should not be construed as an offer to sell or solicitation of an offer to buy any securities. The information and opinions contained in this document have been compiled or arrived at by Liberty Securities from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. All opinions and estimates contained in this document constitute Liberty Securities’ judgment as of the date hereof and are subject to change without notice. The information contained in this document is published for the assistance of the intended recipients, but is not to be relied upon as authoritative or be the basis for an investment decision. Liberty Securities accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its contents. This document may include estimates, projections and other forward-looking statements. Due to numerous factors, actual events may differ substantially from those presented. Liberty Securities assumes no duty to update any such statements. Any holdings of a particular Instrument discussed herein are under periodic review by the investment team and are subject to change at any time, without notice. Nothing contained herein should be considered a recommendation or advice to purchase or sell any security. This document may not be reproduced, distributed or published for any purpose. It is not intended for and must not be distributed to private customers. Further information may be obtained and for this purpose the intended recipients hereof should contact Liberty Securities at the address given above. This document is not to be distributed in the United States and the United Kingdom, and in any other jurisdiction where such distribution is unlawful. An investment in the Instruments has risks, including the risk of losing some or all of the invested capital. Performance includes reinvestment of all distributions. Past performance is not indicative of future results. Prior to investing, a prospective investor should carefully consider the risks and suitability of the Instruments based on his/her own investment objectives and financial position. Some of the Instruments described herein may not be a regulated financial instrument and, as such, may not require the publication of a prospectus or similar document. An investor should carefully review all the relevant information and factors and consult with his/her financial, legal and tax advisors.

Add a comment

Related presentations

Related pages

L-3 Communications Holdings Management Discusses Q4 2013 ...

L-3 Communications Holdings Management Discusses Q4 2013 Results ... Deutsche Bank AG, Research Division.
Read more

Liberty Global's CEO Discusses Q4 2013 Results - Earnings ...

Liberty Global plc (NASDAQ:LBTYA) Q4 2013 Results Earnings ... LBTYA) Q4 2013 Results Earnings Conference ... where you carved it out of the bank ...
Read more

BLACKBERRY REPORTS FOURTH QUARTER AND YEAR–END RESULTS ...

RESULTS FOR FISCAL 2013 . ... Q4 Results . Revenue for the ... Note: Adjusted net loss ...
Read more

General Motors Earnings Releases | GM.com

Fourth Quarter Results ... Q4 2013; Q3 2013; Q2 2013; Q1 2013; ... Earnings Releases; Announcements & Events; Sustainability Report;
Read more

INFOSYS LIMITED Balance Sheet as at March 31, Note 2013 ...

Cash Flow Statement for the Note 2013 2012 ... Research and development ... 2013 2012 IDBI Bank 995 1,000 ING Vysya Bank 88 ...
Read more

The Customer Experience Index, 2013 - Forrester : Lead The ...

The Customer Experience Index, 2013 ... 2013, Forrester research, ... Q4 2011, Q4 2012 (US) US Bank (credit card provider) 16
Read more

The Goldman Sachs Group, Inc. 200 West Street New York ...

4 Investing & Lending Full Year Net revenues in Investing & Lending were $6.83 billion for 2014, 3% lower than 2013. Results for 2014 included net gains of ...
Read more

Earnings, Revenues, & Valuation: S&P 500/400/600

Earnings, Revenues, & Valuation: S&P 500 ... 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 50 75 100 ... Q1 Q2 Q3 Q4 Mar 24 28 ...
Read more