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NBP: NIT & tax credit drive earning growth

NBP posted upbeat bottom-line growth of 18% YoY in 2009 to PRs16.92/sh with cash dividend of PRs7.5/sh and stock dividend of 25%.

Earnings were primarily driven by gain from NIT (PRs4.0bn) and tax credit of prior years. Adjusting for these two, core net profit declined ~19% YoY to ~11.6/sh.
 Pre-prov op profit (PPOP) was down 1% YoY, despite NIT gain, mainly due to decline in net interest margin (NIM) and higher operating expenses (up 24% YoY).
 While divergence in op. performance between NBP and peers is evident, the stock has rallied +24% in 2010 vs +1.1% for sector. Trading at 36% discount on P/B as compared to historical discount of 30% we maintain underperform on NBP.
 KASB Securities and Economics Research
March 5, 2010



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