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Outlook upgrade boost for NBB

MANAMA: TAIB Bank research has upgraded its outlook on National Bank of Bahrain (NBB) from underweight to neutral.

In a research note the analysts said: "Amidst a challenging macroeconomic environment, NBB witnessed marginal improvement in its financials in the first half of 2009.

"The bottom-line growth was mainly supported by a rise in net interest income. Despite the tough market conditions during the second half of 2008 and first few months of 2009, the bank reported an increase of over six per cent in its overall business volumes.

"NBB's continued focus on expanding its core business led to a nearly 8pc rise in its loan book, while its deposits registered a growth of almost 5pc.

"Furthermore, the lender did not account for any impairment provision for loans as no major credit deterioration was registered during the period."

"NBB's stock has declined 17.3pc since the beginning of this year as against a loss of 17pc in the Bahrain Stock Exchange," the report adds.

"Currently, the bank is trading at a price earnings multiple of 8.35 and a price to book value multiple off 1.98.

"Considering its performance in the first half of 2009 and anticipations for improvement in the regional economies in coming months, we revise our opinion on the stock."



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