RORWAReturn on Risk Weighted Assets
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We reiterate our Core Sell on the bank, and we only like to play growth in Qatar through QNB (high RORWA maintained at 4.7 per cent in FY12 despite lower capital gains and NIM compression)
an ROE of 12.3%, RORWA of 3.7%) which already fully factors in the bank's strong liquidity, decent RORWA and high capital base allowing for high payout and solid growth without the need of a capital hike.
CBQ is currently trading at P/E14e 12.4 & P/tNAV13E 1.3x and we believe the multiples are full given its low structural returns (RoRWA of 1.36 per cent and ROE of 10.5 per cent) and poor capital position
QNB is trading at a P/E13e of 9.5x and P/tNAV12e of 2.0x vs RORWA of 5%.
We prefer to play UAE through CBD (cheap, and potential for DPS hike), FGB (despite its YtD performance), UNB (very deep value, strong capital, potential for higher pay-out) & Rakbank (sky high RORWA, very low P/E & solid dividend paying capacity).