Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

The <a href="https://www.smartkarma.com/entities/23052" target="_blank" data-smartkarma-citation="entities:23052:1">Jamuna Bank Ltd (JAMUNABA BD)</a> narrative is underpinned by a quintile 1 global PH Score™ and a low franchise valuation as well as a high Earnings Yield by global standards.Established by a group of local entrepreneurs in 2001, experienced in  trade, commerce, and industry, Jamuna Bank Ltd is the only Bengali named 3rd generation private commercial bank. JBL. has exhibited vibrant growth over 18 years. The Credit Rating Agency of Bangladesh  classifies JBL as AA2 [very strong capacity and very high quality] for Long Term and ST-2 for Short Term.JBL offers both conventional and Islamic banking. The Bank provides diverse services, encompassing trade, commerce, and manufacturing. The traditional focus has been on the corporate sector (especially textiles and manufacturing services) though SME lending and retail are fast-expanding. JBL is engaged with entrepreneurs in setting up enterprise ventures and BMRE of existing industrial units. Operations are centred on Dhaka and Chittagong though Rajshahi is an important market too.All 122 branches are running with real-time online capacity while  the bank has 243 ATMs, sharing with other partner banks and consortium throughout Bangladesh. In addition, JBL is a Primary Dealer of government. securities.While the economy is in a relatively stable state, the Banking Sector presents a highly mixed picture. Funding and liquidity are adequate in the Banking System in general. At the main listed entities, ROA and ROE stand at around 1% and 12%. Capitalisation targets are moving in the right direction though there is a shortfall at a number of lenders. The sector is weighed down by SOCB asset quality and poor governance which needs to be addressed as it exerts a distortionary impact across the system. SOCB NPL Ratio stands at around 30% and is probably worse than this versus around 10% for the system in general. The system stressed Loan/Investment Ratio is probably double this level. Worryingly, private sector bank defaults are rising at a fast clip as LDRs climb at the same time.<div class="content-highlight">Shares of JBL stand on an Earnings Yield of 17.7%, a P/B of 0.94x, and a FV at 9%, below EM and global medians. A quintile 1 PH Score™ of  7.9 captures value-quality attributes. Combining franchise valuation and PH Score™, Jamuna Bank stands in the top decile of opportunity globally. Recent strong share performance is not unrelated to the clearing of electoral uncertainty. And there seems  a real tailwind behind these shares of late.</div>

The Jamuna Bank Ltd (JAMUNABA BD) narrative is underpinned by a quintile 1 global PH Score™ and a low franchise valuation as well as a high Earnings Yield by global standards.Established by a group of local entrepreneurs in 2001, experienced in  trade, commerce, and industry, Jamuna Bank Ltd is the only Bengali named 3rd generation private commercial bank. JBL. has exhibited vibrant growth over 18 years. The Credit Rating Agency of Bangladesh  classifies JBL as AA2 [very strong capacity and very high quality] for Long Term and ST-2 for Short Term.JBL offers both conventional and Islamic banking. The Bank provides diverse services, encompassing trade, commerce, and manufacturing. The traditional focus has been on the corporate sector (especially textiles and manufacturing services) though SME lending and retail are fast-expanding. JBL is engaged with entrepreneurs in setting up enterprise ventures and BMRE of existing industrial units. Operations are centred on Dhaka and Chittagong though Rajshahi is an important market too.All 122 branches are running with real-time online capacity while  the bank has 243 ATMs, sharing with other partner banks and consortium throughout Bangladesh. In addition, JBL is a Primary Dealer of government. securities.While the economy is in a relatively stable state, the Banking Sector presents a highly mixed picture. Funding and liquidity are adequate in the Banking System in general. At the main listed entities, ROA and ROE stand at around 1% and 12%. Capitalisation targets are moving in the right direction though there is a shortfall at a number of lenders. The sector is weighed down by SOCB asset quality and poor governance which needs to be addressed as it exerts a distortionary impact across the system. SOCB NPL Ratio stands at around 30% and is probably worse than this versus around 10% for the system in general. The system stressed Loan/Investment Ratio is probably double this level. Worryingly, private sector bank defaults are rising at a fast clip as LDRs climb at the same time.Shares of JBL stand on an Earnings Yield of 17.7%, a P/B of 0.94x, and a FV at 9%, below EM and global medians. A quintile 1 PH Score™ of  7.9 captures value-quality attributes. Combining franchise valuation and PH Score™, Jamuna Bank stands in the top decile of opportunity globally. Recent strong share performance is not unrelated to the clearing of electoral uncertainty. And there seems  a real tailwind behind these shares of late.

Jamuna Bank: Clearing Electoral Uncertainties