Rashmi Kwatra presented her in-depth investment thesis on BRAC Bank (Bangladesh: BRAC) at Asian Investing Summit 2017.
BRAC Bank is the banking affiliate of Bangladesh Rural Agricultural Credit, one of the leading microfinance institutions in Asia. BRAC Bank was established by BRAC to serve the underserved market of small businesses in Bangladesh where traditional banks are focused on large ticket loans, and micro lenders on smaller ticket loans.
BRAC Bank holds 46% of BKash, Asia’s largest and most successful mobile payments platform (comparable to Safaricom’s M-Pesa in Kenya), an impressive business in its own right. While Rashmi expects BRAC to eventually dilute its ownership in BKash, she believes this investment is not reflected in the market valuation of the bank; this business alone may be worth more than BRAC Bank’s recent market cap. Mobile payments is a key aspect of financial inclusion, and a direct application of financial technologies to the developing world. Rashmi believes BRAC represents one of the best ways to invest in this theme.
Investors recently paid less than 2x 2017 book value for a bank that is growing earnings at 20+% and should reach 2% ROA in 2019, with the best retail franchise and corporate governance in Bangladesh (these metrics do not include the stake in BKash).
About the instructor:
Rashmi Kwatra is a Partner at Prince Street Capital Management and the Portfolio Manager of the Prince Street Asian Gems Fund, which will launch in May 2017. Prince Street was founded in 2001 with the goal of providing risk-adjusted return through investment in frontier and emerging markets equity. The Prince Street Asian Gems fund will be focused on providing long-term equity exposure to the highest growth frontier and emerging markets within South and Southeast Asia, and managed by Rashmi Kwatra who currently is responsible for the region for the global funds. Rashmi is a Thai national, of South and Southeast Asian decent and speaks English, Thai, Hindi, and Punjabi.
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