Earnings Report- BOP FY2015 - Sahem Trading .... Maher J. Farah Member Dr. Hani H. Nijm Member Mr....

1

Bank of Palestine (BOP)

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0

S ec t or : B an ki n g & F i n anc i a l

S er v i c es

T rad in g C ur r enc y: U SD

K ey M ar k e t Da t a

D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5

Free Float at 85.29%

M. Cap: $505,750,000

O. Shares: 175,000,000

Company Background

Earnings Report FY2015

March 22, 2016

Sahem Trading and Investments Co. a registered member at PEX, regulated by PCMA. Ramallah. Palestine- Tel: 02-2965710 P.O. Box 2187

www.sahem-inv.com

Overview

Bank of Palestine is the first and the largest national bank. It

was founded in 1960 and commenced its operations on

February 21, 1961 by giving small loans to projects and

businesses and giving limited short-term personal loans.

Bank of Palestine is the most geographically distributed

bank with a banking network of 57 branches and

sub-branches spreading in the West Bank and Gaza Strip.

The Bank provides both personal and corporate banking

services and is also engaged in retail, SME and micro

banking operations. Its shares were listed on the

Palestinian Exchange (PEX) in 2005. Bank of Palestine

employs more than 1,400 employees and serves more than

750,000 customers. BOP supports many project and

activities in various fields to help in raising the Palestinian

society.

BOP created the first and only network of point of sale (POS) machines in Palestine, to enable clients to use their cards at

6,000 different retailers across the country. It was recognized by several prestigious institutions as “The Best Bank in

Palestine” and “ The Fastest Growing Bank in Palestine”. These institutions include: Euromoney, Global Finance, EMEA

Finance, CPI Financial/Banker Middle East and The Middle East Investor Relations Society. In the year 2014, BOP won

CITI’s Performance Excellence Award for outstanding achievement in straight through processing and “Best CSR Program

in the Middle East Award” by EMEA Finance, besides other awards. It also was recognized by The Middle East Investor

Relations Society for best company in Palestine in Investor Relations 2015 and best Investor Relations professional in

Palestine 2015. One of the best achievements of BOP in 2015 is opening its first representative office in Dubai, UAE to

provide services to Palestinian Diaspora communities in the region and working with corporate entities to meet their

expanding financial services’ needs domestically and abroad. The bank continues its social responsibility by providing 5% of

its net profit for social responsibility projects, covering the following sectors: youth and sports, education, health, arts,

culture, tourism and other humanitarian work. During 2015, BOP constituted 31.67% of the total traded value in Palestine

Exchange (PEX) and 59.62% of the total banking & financial services sector , 21.48% of the total traded volume of the PEX,

while 40.23% of the banking & financial services sector . 15.72% of the market capitalization of the PEX, whereby, 51.96%

of the banking & financial services sector .

Board of Directors

Mr. Hashem Hani Shawa Chairman General Manager

Mrs. Lana Abu Hijleh Member

Mr. Tarek Aqqad Member

Mr. Faysal G. Shawa Member

Mt. Abdullah Al-Ghanem Member

Mr. Maher J. Farah Member

Dr. Hani H. Nijm Member

Mr. Mohammad Nafiz Hirbawi Member

Mr. Tarek Taher Al-Shaqaa Member

John Khoury Member

2


www.sahem-inv.com



Major Shareholders

As of December 31, 2015, the number of BOP’s shareholders reached 4,087 compared to 4,000 shareholders at the end

of 2014. The following shareholders own 4% or more - as of the end of 2015:

Name % of ownership

Qais Abdullah Thunayan Al-Ghanim 6.51%

International Finance Corporation 4.98%

Blakeney Management 4.25%

Item/Year 2011 2012 2015

Number of Branches 46 48 57

Paid up Capital (USD) 120,000,000 134,000,000 175,000,000

Total Net Income (USD) 33,980,673 38,410,797 43,167,433

Credit Facilities (USD) 720,173,048 976,394,928 1,388,805,441

Customers' Deposits (USD) 1,296,568,931 1,554,493,702 2,242,782,298

Total Deposits (USD) 1,378,083,099 1,690,904,784 2,403,045,555

2008 2009 2010

32 40 42

81,404,137 100,000,000 100,000,000

23,610,956 26,929,168 30,119,469

285,337,011 343,311,230 545,026,391

840,497,297 1,016,683,776 1,253,834,303

882,395,677 1,084,480,992 1,315,628,345

2013

50

150,000,000

40,438,831

1,103,641,018

1,745,563,265

1,978,169,922

2014

54

160,000,000

40,222,506

1,151,825,644

2,062,524,075

2,087,364,053

CAGR

7.48%

10.04%

7.83%

21.87%

13.05%

13.34%

Growing Figures

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

882,395,677 1,084,480,992

1,315,628,345 1,378,083,099

1,690,904,784

1,978,169,922 2,087,364,053

2,403,045,555

2008 2009 2010 2011 2012 2013 2014 2015

Total Deposits Trend

2008

2009

2010

2011

2012

2013

2014

2015

285,337,011

343,311,230

545,026,391

720,173,048

976,394,928

1,103,641,018

1,151,825,644

1,388,805,441

Credit Facil ities

3


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Financial Performance 2015

An increase in BOP’s bottom-line figure following the bank’s continuous growth and expansion

Bank of Palestine BOP recorded a bottom-line figure of $43.17

million at the end of 2015 compared to $40.22 million in the

corresponding period of 2014. Net income attributable to the

shareholders of the parent company rose by 7.27% to settle at

$43.09 million in 2015 and reports earnings per share EPS of

$0.25. This reflects the bank’s continuous ability to manage risks

and maintaining another year of growth and expansion.

The major contributor to gross profit by 84.55%- net interest and

commissions’ income- grew by 12.78% to aggregate at $115.66

million at the end of 2015, supported by an increase of 16.45% in net interest income and 2.56% in net commissions’

income.

Net interest income grew from $75.47 million in 2014 to $87.89 million in 2015. This followed a growth of 14.59% in interest

income to amount for $105.31 million in 2015. This was attributable to BOP’s strategy to target all segments of the

Palestinian community by increasing its financial services and direct credit facilities, whereby, direct credit facilities

witnessed an increase of 20.57% during 2015. The principal growth came from interests on loans granted by 34.84% to hit

$59.84 million in 2015; majorly constituting 56.82% from interest

income.

Furthermore, interest expenses grew by 6.04% to aggregate at

$17.42 million at the end of 2015. This was supported by an

increase of 15.12% in total deposits and cash margins. Interest

expenses of customers’ deposits, which constitutes 97.00%

from total interest expenses, increased by 25.58%. On the other

hand, interest expenses on PMA and other financial institutions

decreased by 82.42%; constituting 3.00% from interest

expenses.

Net commissions’ income stood at $27.77 million at the end of 2015 compared to $27.07 million in 2014. This mainly came

from an increase of 3.35% in commissions’ interests which consists of direct credit facilities’ commissions, indirect credit

facilities’ commissions and other commissions. On the other hand, commissions’ expense also increased by 21.69% in

2015.

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

2014 2015

40,171,813

43,091,915

Net Income Attributable to the Shareholders of the Parent Co.

2014 2015

102,545,209 115,655,568

17,743,448 21,131,666

Net Interest and Commissions Income

Non-interest and Commissions Income

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Non-interests and commissions’ income stood at $21.13

million at the end of 2015; up by 19.10% than the year 2014;

constituting 15.45% from gross profits. This mainly followed

an increase of 101.85% in foreign currency exchange gains,

to settle at $7.86 million in 2015. BOP’s share of profit from

associates also increased by 36.98% to amount for $1.12

million in 2015; adding another reason for the increase in

non-interests and commissions’ income.

On the other hand, gains from financial investments declined

by 31.27% to settle at $0.66 million in 2015. Recovery of

impairment provision of direct credit facilities also decreased

by 4.51% to amount for $1.26 million in 2015 and other revenues, which mainly consist of Visa and Master Cards issuance

fees, also declined by 5.05% to stand at $10.16 million in 2015.

BOP remains the largest bank in terms of branches and ATM machines and opens its first representative office

abroad

Total expenses increased by 19.80% to aggregate at $82.22

million in 2015 coinciding with the bank’s continuous

development and expansion, whereby, number of branches

reached 57 at the end of 2015; to remain the largest bank in

terms of branches and ATM machines in Palestine. In the

year 2015, BOP opened its first representative office in Dubai,

UAE to provide services to Palestinian Diaspora communities

in the region and working with corporate entities to meet their

expanding financial services’ needs domestically and abroad.

The major contributor to total expenses by 49.68%-

employees’ expenses- increased by 17.23% to settle at

$40.84 million in 2015, coinciding with the bank’s branches expansion. During 2015, BOP pioneered a special program

“Felestineya” focusing on economic and social empowerment for women both at the bank and in the market place. The

program provided access to more women jobs at the bank including senior positions; raising the number of women employees

to 32%.


Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0

S ec t or : B an ki n g & F i n an-

c i a l S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

Foreign Currency

Gain37%

Gain from Financial

Investments3%Share of

Profit from Associates

6%

Recovery of Impairment Provision of Direct Credit

Facilitie6%

Other Revenues

48%

Non-interest and Commissions Income

Employees Expenses

50%

Other Operating Expenses

38%

Depreciation and

Amortization7%

Impairment Provision of Direct Credit

Facilities4%

Unallocated Bad Debts

1%

Palestine Monetary Authority

Fines0%

Total Expenses in 2015

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The second major contributor to total expenses by 37.71%- other operating expenses- settled at $31.00 million in 2015; up

by 22.69% than the year 2014. This followed an increase of 16.21% in the major contributor to other operating expenses by

17.84%- deposit insurance scheme of the bank’s operational expenses which was established by Palestine Monetary

Authority PMA and aims to safeguard small depositors, stabilize the banking system and therefore contribute in the

economic growth. On the other hand, Palestine Monetary Authority Fines declined from $0.06 million in 2014 to $0.005

million in 2014; down by 91.41%.

Income before taxes increased by 5.64%, to settle at $54.57 million in 2015. However, tax expenses slightly declined by

0.29% to hit $11.40 million and record effective tax expense of 20.90% in 2015 compared to 22.14% in 2014.


Item (USD) 2014 2015 ∆

Net Interest and Commissions Income 102,545,209 115,655,568 12.78%

Non-interest and Commissions Income 17,743,448 21,131,666 19.10%

Gross Profit 120,288,657 136,787,234 13.72%

Total Expenses 68,629,392 82,216,779 19.80%

Net Income 40,222,506 43,167,433 7.32%

Non-controlling Interests 50,693 75,518 48.97%

BOP records non-performing loan ratio of only 1.72% and credit facilities grow by 20.57%;constituting 49.86% from

total assets

Total assets increased to $2.78 billion at the end of 2015; up

by 14.86% than the year 2014. This was attributable to a

15.08% increase in the major contributor to total assets by

98.20%- current assets- to amount for $2.73 billion in 2015.

Moreover, the only non-current assets’ figure – property, plant

and equipment- also increased by 4.33% to settle at $50.06

million in 2015; constituting 1.80% from total assets. It is worth

mentioning that BOP maintains the top rank as the largest

Palestinian company in terms of financial assets.

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

2014 2015

47,981,522 50,059,029

2,376,792,4392,735,144,211

Total Non-current Assets Total Current Ass ets

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www.sahem-inv.com



The chief contributor to current assets by 50.78%- direct

credit facilities- grew from $1.15 billion in 2014 to $1.39

billion in 2015; majorly leading the soar of current assets.

This followed a growth in the contributors to BOP’s direct

facilities: granted loans, current accounts, credit cards and

current overdrafts. According to the bank, BOP records

non-performing loan ratio of only 1.72%.

The major contributor to direct credit facilities by 72.29%

-granted loans- soared to $1.00 billion in 2015 ;up by

23.43% than 2014. Current accounts, which represent

20.27% from direct credit facilities increased by 14.21% to settle at $281.52 million in 2015. Moreover, credit cards and

current overdraft grew by 13.79% to amount for $121.02 million in 2015; constituting 8.71% from direct credit facilities.

Cash and balances with Palestine Monetary Authority PMA; the second major contributor to current assets by 25.04% also

soared by 97.78% to settle at $684.75 million in 2015. This primarily was due to a significant increase of 193.73% in cash

at PMA to stand at $469.88 million in 2015.

On the other hand, balances at banks and financial institutions declined by 45.10% to amount for $319.37 million in 2015.

This followed a decrease in balances at both local and foreign banks and financial institutions.

Financial assets at amortized cost grew by 11.99% to settle at $253.82 million in 2015. This item represents: treasury bills

and listed and unlisted bonds both in the local or foreign markets.

Investments in associates slightly increased by 0.45% to

amount for $18.78 million in 2015. In 2015, BOP had 21%

ownership in the Arab Islamic Bank AIB, 21% ownership in

Abraj Company for Development and Investment (Abraj) and

has raised its ownership in the Palestinian Company for Mon-

ey Transportation and Valuables Banking Services (Aman)

from 25% in 2014 to 30% in 2015. However, it is worth men-

tioning that the Board of directors of BOP approved the pur-

chase of an additional share of 31% in the Arab Islamic

Bank AIB, where BOP's stake will reach 51.98% accordingly.

BOP's board of directors also approved to merge with Palestine Commercial Bank PCB by allocating every three shares in

PCB equivalent to one share in BOP. The final approval will be taken from the bank's extraordinary General Assembly at

its meeting on 25/03/2016.


Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000 AIB, 21%

Aman, 30%

Abraj, 21%

BOP's Ownership in 2015

2014

2015

1,151,825,644

1,388,805,441

Direct Credit Facilities

7


www.sahem-inv.com



Projects in progress increased from $2.27 million in 2014 to $2.98 million in 2015. Furthermore, the expected cost to

continue projects in progress is $36.08 million as for the end of 2015.

Other assets grew to $35.13 million in 2015; up by 81.67% than 2014. This chiefly resulted from a significant increase of

155.87% in trade receivables from subsidiaries’ customers; which represent 45.67% from other assets.


Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

Total deposits and cash margins increases by 15.12%; representing 96.92% from total liabilities

Total liabilities increased from $2.14 billion in 2014 to $2.48

billion in 2015. This followed an increase in total deposits by

15.12%; representing 96.92% from total liabilities.

BOP’s total deposits- PMA’s, banks and financial institutions’,

customers’ and cash margins- increased from $2.09 billion in

2014 to $2.40 billion in 2015. Customers’ deposits excluding

cash margins increased by 12.84% to settle at $2.15 billion and

constitute 89.62% from total deposits and cash margins.

However, cash margins declined by 42.12% to settle at $89.16

million at the end of 2015 due to a decrease in the cash margins

on direct credit facilities.

PMA’s deposits increased by 144.91% to aggregate at $58.99 million at the end of 2015, while, banks’ and financial

institutions’ deposits significantly grew to $101.27 million in 2015 from $0.75 million in 2014.

Sundry provisions, which consist of employees’ end of service provisions and lawsuits provisions, grew by 18.60% to settle

at $21.73 million at the end of 2015. Moreover, tax provisions increased by 184.90% to amount for $2.93 million in 2015.

Other liabilities, which mainly consist of accounts payables, certified checks and taxes payables, settled at $51.75 million in

2015; up by 36.34% than the year 2014.

2014 2015

2,087,364,053

2,403,045,555

Total Deposits & Cash Margins

Paid-up capital grows to $175 million in 2015

Total shareholders’ equity increased from $280.11 million in 2014 to $305.76 million in 2015. Non-controlling interests grew

by 11.07% to settle at $0.76 million in 2015, to record book value ratio of $1.74 in 2015 compared to $1.75 in 2014.

This mainly was attributable to an increase of 9.38% in paid-up capital, from $160.00 million in 2014 to $175.00 million in

2015 through distributing stock dividends for the year 2014. BOP also approved distributing 12% cash dividends for the year

2014.

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As for the year 2015, BOP’s board of directors raised a

recommendation to the general assembly, which will be holding

a meeting on 25/03/2016, to distribute 5.71% stocks dividends

and 10.29% cash dividends for the bank’s shareholders.

BOP’s reserves (statutory, voluntarily, general banking risks,

pro-cyclicality, and change in fair value) increased by 21.27%, to

hit $90.32 million in 2015; representing 29.54% from total

shareholders’ equity.

On the other hand, retained earnings declined by 14.67% to

aggregate at $30.65 million at the end of 2015.


Item (USD) 2014 2015 ∆

Direct Credit Facilities 1,151,825,644 1,388,805,441 20.57%

Total Assets 2,424,773,961 2,785,203,240 14.86%

Customers' Deposits & Cash Margins 2,062,524,075 2,242,782,298 8.74%

Total Deposits & Cash Margins 2,087,364,053 2,403,045,555 15.12%

Total Liabilities 2,144,667,383 2,479,446,936 15.61%

Retained Earnings 35,916,850 30,647,037 -14.67%

Paid-up Capital 160,000,000 175,000,000 9.38%

Total Equity 280,106,578 305,756,304 9.16%

Non-controlling Interests 682,432 757,950 11.07%

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

2014 2015

160,000,000

175,000,000

Paid-up Capital

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Key Financial Ratios

Item 2014 2015 ∆

Net Income Attributable to the Shareholders of the Parent Co./ Net Interest and Commissions Income 39.17% 37.26% -4.89%

Net Income Attributable to the Shareholders of the Parent Co/Gross Revenues 33.40% 31.50% -5.67%

Net Shareholders’ Equity/ Customers’ Deposits 13.55% 13.60% 0.38%

Net Shareholders’ Equity/Direct Credit Facilities 24.26% 21.96% -9.47%

Direct Credit Facilities/ Total Assets 47.50% 49.86% 4.97%

Direct Credit Facilities/ Customers’ Deposits 55.85% 61.92% 10.88%

Debt Ratio 88.45% 89.02% 0.65%

Equity Ratio 11.55% 10.98% -4.97%

Direct Credit Facilities/Net Shareholders’ Equity 412.21% 455.35% 10.46%

ROaA 1.68% 1.65% -1.73%

ROaE 15.10% 14.71% -2.57%

ROaE (Net Shareholders’ Equity) 15.14% 14.75% -2.57%

Current Ratio 1.108 1.103 -0.46%

Working Capital 232,125,056 255,697,275 10.15%

Working Capital Turnover 44.18% 45.23% 2.39%

Working Capital Ratio 9.57% 9.18% -4.10%

Key Market Ratios

Item 2014 2015 ∆

EPS 0.251 0.246 -1.93%

BV 1.75 1.74 -0.20%

P/ BV 1.60 1.72 7.36%

Earnings Yield 8.97% 8.21% -8.46%

Price to Sales 4.37 4.54 3.90%

Q Ratio 18.48% 18.85% 2.02%

Customers Deposits to Market Cap 4.60 4.27 -7.21%

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

10


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Stock’s Performance in 2015

Item 2015

Beta 0.70

High 3.01

Low 2.45

Closing 3.00

Discount to high -0.33%

Premium to low 22.45%

Moving average price MAP 2.67

Volume weighted price VWP 2.70

Closing to MAP 12.33%

Closing to VWP 11.30%

Trading Turnover 21.51%

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

y = 0.703x + 0.0002R² = 0.1166

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

-4.00% -3.00% -2.00% -1.00% 0.00% 1.00% 2.00%

0

0.5

1

1.5

2

2.5

3

3.5

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

01/0

4/20

1501

/14/

2015

01/2

2/20

1502

/01/

2015

02/0

9/20

1502

/17/

2015

02/2

5/20

1503

/05/

2015

03/1

6/20

1503

/24/

2015

04/0

1/20

1504

/09/

2015

04/1

9/20

1504

/27/

2015

05/0

6/20

1505

/14/

2015

05/2

5/20

1506

/02/

2015

06/1

0/20

1506

/18/

2015

06/2

8/20

1507

/06/

2015

07/1

4/20

1507

/27/

2015

08/0

4/20

1508

/12/

2015

08/2

0/20

1508

/30/

2015

09/0

7/20

1509

/15/

2015

09/2

8/20

1510

/06/

2015

10/1

4/20

1510

/25/

2015

11/0

2/20

1511

/10/

2015

11/1

9/20

1511

/29/

2015

12/0

7/20

1512

/15/

2015

12/2

3/20

15

Volume High Low Closing

11


www.sahem-inv.com



Item 2014 2015

Non-current Assets

Property , Plant and Equipment 47,981,522 1.98% 50,059,029 1.80%

Total Non-current Assets 47,981,522 1.98% 50,059,029 1.80%

Current Assets

Cash and Balances with PMA 346,222,324 14.28% 684,752,354 24.59%

Balances at Banks and Financial Institutions 581,758,608 23.99% 319,370,957 11.47%

Financial Assets at Fair Value Through Income Statement 7,367,695 0.30% 7,159,702 0.26%

Direct Credit Facilities 1,151,825,644 47.50% 1,388,805,441 49.86%

Financial Assets at Fair Value Through Other Comprehensive Income 22,671,941 0.94% 24,348,175 0.87%

Financial Assets at Amortized Cost 226,643,035 9.35% 253,816,907 9.11%

Investment in Associates 18,692,906 0.77% 18,776,355 0.67%

Projects in Progress 2,272,393 0.09% 2,982,306 0.11%

Other Assets 19,337,893 0.80% 35,132,014 1.26%

Total Current Assets 2,376,792,439 98.02% 2,735,144,211 98.20%

Total Assets 2,424,773,961 100.00% 2,785,203,240 100.00%

Shareholders’ Equity

Paid-up Capital 160,000,000 57.12% 175,000,000 57.24%

Additional Paid-in Capital 9,034,692 3.23% 9,034,692 2.95%

Statutory Reserve 32,023,745 11.43% 36,332,937 11.88%

Voluntarily Reserve 147,932 0.05% 205,523 0.07%

General Banking Risks Reserve 19,249,207 6.87% 22,655,293 7.41%

Pro-cyclicality Reserve 27,849,613 9.94% 34,232,752 11.20%

Change in Fair Value Reserve (4,797,893) -1.71% (3,109,880) -1.02%

Retained Earnings 35,916,850 12.82% 30,647,037 10.02%

Net Shareholders’ Equity 279,424,146 99.76% 304,998,354 99.75%

Non-controlling Interests 682,432 0.24% 757,950 0.25%

Total Shareholders’ Equity 280,106,578 100.00% 305,756,304 100.00%

Current Liabilities

PMA's Deposits 24,086,209 1.12% 58,989,649 2.38%

Banks' and Financial Institutions' Deposits 753,769 0.04% 101,273,608 4.08%

Customers' Deposits 1,908,480,620 88.99% 2,153,616,828 86.86%

Cash Margins 154,043,455 7.18% 89,165,470 3.60%

Sundry Provisions 18,320,233 0.85% 21,727,908 0.88%

Tax Provisions 1,027,063 0.05% 2,926,053 0.12%

Other Liabilities 37,956,034 1.77% 51,747,420 2.09%

Total Current Liabilities 2,144,667,383 100.00% 2,479,446,936 100.00%

Total Liabilities 2,144,667,383 100.00% 2,479,446,936 100.00%

Common size Balance Sheet

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

12


www.sahem-inv.com



Common Size Income Statement

Item 2014 2015

Interest Income 91,898,299 76.40% 105,308,242 76.99%

Interest Expenses 16,427,666 13.66% 17,420,310 12.74%

Net Interest Income 75,470,633 62.74% 87,887,932 64.25%

Net Commissions Income 27,074,576 22.51% 27,767,636 20.30%

Net Interest and Commissions Income 102,545,209 85.25% 115,655,568 84.55%

Foreign Currency Gain 3,894,867 3.24% 7,861,779 5.75%

Gain from Financial Investments 960,984 0.80% 660,465 0.48%

Share of Profit from Associate 868,648 0.72% 1,189,884 0.87%

Recovery of Impairment Provision of Direct Credit Facilities 1,319,424 1.10% 1,259,978 0.92%

Other Revenues 10,699,525 8.89% 10,159,560 7.43%

Gross Profit 120,288,657 100.00% 136,787,234 100.00%

Expenses

Employees Expenses 34,838,857 28.96% 40,842,825 29.86%

Other Operating Expenses 25,267,554 21.01% 31,001,357 22.66%

Depreciation and Amortization 4,997,087 4.15% 6,065,634 4.43%

Impairment Provision of Direct Credit Facilities 3,025,222 2.51% 3,782,218 2.77%

Unallocated Bad Debts 442,463 0.37% 519,745 0.38%

Palestine Monetary Authority Fines 58,209 0.05% 5,000 0.00%

Total Expenses 68,629,392 57.05% 82,216,779 60.11%

Profit Before Taxes 51,659,265 42.95% 54,570,455 39.89%

Tax Expense 11,436,759 9.51% 11,403,022 8.34%

Profit After Taxes 40,222,506 33.44% 43,167,433 31.56%

Attributable to:

Owners of the Parent Company 40,171,813 33.40% 43,091,915 31.50%

Non-controlling Interests 50,693 0.04% 75,518 0.06%

Qu o te s

PSE: BOP

Bloomberg: BOP.PS

IS I N : P S1 0 0 41 1 26 0 0


S er v i c es



D a t e : 2 2 / 0 3 / 2 0 1 6

C l o s i n g : $ 2 . 8 9

Y TD : - 3 . 6 7 %

P E : 1 1 . 7 4x

P /B V : 1 . 6 6x

5 2 H i gh / L o w: $ 3 .0 4 / $2 . 4 5


M. Cap: $505,750,000

O. Shares: 175,000,000

13

Disclaimer

This report is not an offer to buy or sell nor a solicitation to buy or sell any of the securities mentioned within. The information

contained in this report were prepared using information available to the public and sources Sahem Trading & Investment Co

believes to be reliable. Sahem Trading & Investment Co does not guarantee the accuracy of the information contained within this

report and accepts no responsibility or liability for losses or damages incurred as a result of investment decisions taken based on

information provided or referred to in this report. Any analysis of historical facts and data is for information purposes only and

past performance of any company or security is no guarantee or indication of future results .

Contact Details

Sahem Trading & Investment Co,

Ramallah, Palestine

P.O.Box 2187

Direct line: +970-2-2968830 or +972-2-2968830

[email protected]

Head of Research

Majd Khalifeh

[email protected]

Research Analyst Research Analyst

Dima Razzouk Maha Tarazi

[email protected] [email protected]


www.sahem-inv.com



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