BAHL: 'Buy' stance maintained, (AKD Daily, Dec 12, 2019)
- We reiterate our Buy stance on Bank Alhabib Limited (BAHL) while incorporating management guidance on branch network (800 branches by CY20-end) and rolling over our TP to Dec’20 — Current TP: PkR93.3/sh vs. PkR97.6/sh previously.
- Our liking for the stock is premised upon, i) ROE remaining ~20% over the medium term vs. 18.8% of our universe, ii) new branches beginning to roll deposits, and iii) cost efficiency with cost to income falling to historical avg. of <50% in the longer run vs. 56.6% in 9MCY19.
- Earnings growth of the bank is likely to remain healthy in the medium run (CY20/21F: 15.4%/30.8% - peaking in CY21) driven by the dual impact of, i) volumetric growth (as new branches cross breakeven stage), and ii) recent interest rate hikes on asset yield. Moreover, while not incorporated, we do not rule out bank realizing capital gains on bonds in the medium term in order to boost CET-1 Capital.
- BAHL posted NPAT of PkR7.0bn (EPS: PkR6.3), +18.6%YoY in 9MCY19. On a quarterly basis, 3QCY19 NPAT stood at PkR2.5bn (EPS: PkR2.29), +49.4%YoY driven by strong NII growth of 38.3%YoY. The management stated that PkR1.4bn credit provision is attributable to loss classification of certain telecom company loan.
Bank AL Habib Limited is a banking company. The Bank operates through Retail banking, Commercial banking, Retail brokerage and geographical segments. Its Retail banking consists of retail lending, deposits and banking services to private individuals and small businesses. The retail banking activities include provision of banking and other financial services, such as current and savings accounts, and credit cards to individual customers, and small and medium enterprises (SMEs). Its Commercial banking represents provision of banking services, including treasury and international trade-related activities to corporate customers, multinational companies, and government and semi government departments and institutions. Its Retail brokerage activities include the business of equity, money market and foreign exchange brokerage, equity research, and corporate financial advisory and consultancy services. It operates in four geographic regions: Pakistan, the Middle East, Asia Pacific and Africa.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.