First Gulf Bank PJSC advanced to the highest level in more than four years on bets the Abu Dhabi-based lender’s full-year profit and dividend will exceed expectations.
Shares of the bank, which is controlled by Abu Dhabi’s ruling family, rose 0.9 percent to 11.45 dirhams, the highest level since August 2008, at the close in Abu Dhabi. The shares led a gain of 0.3 percent for the benchmark ADX General Index. The stock has gained 5.1 percent in the past four days, bringing this year’s rally to 48 percent, outpacing the 9.8 percent advance for the Abu Dhabi gauge. That makes it the second-best performing bank on the index so far this year after Commercial Bank International PSC.
First Gulf Bank will probably post the fastest loan growth in the United Arab Emirates in 2013, helping boost profit, EFG-Hermes Holding SAE said earlier this month. Net income this year is set to grow 6 percent to 3.94 billion dirhams (1.07 billion), according to the average estimate of 11 analysts compiled by Bloomberg.
“The bank has reported excellent results and investors are anticipating a handsome combination of cash and stock dividends,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. Farhat estimates 2012 profit will rise 8 percent.
First Gulf Bank will offer a 7 percent dividend yield, JPMorgan Chase & Co. estimated in October, raising its price estimate for the bank to 13.5 dirhams. That compares with a dividend yield of 4.4 percent for the ADX Banks Index.
Sixteen analysts recommend investors buy the shares, and one has a hold rating on the stock, according data compiled by Bloomberg. The lender’s price-to-earnings ratio is 8.53 times, compared with 7.44 times for Emirates NBD, the biggest U.A.E bank, and 12.04 times for the Bloomberg GCC 200 Financial Index.