HMB_Core fundamentals improving, (AKD Daily, Dec 17, 2019)
- Habib Metropolitan Bank (HMB) held its analyst briefing yesterday. To highlight, the bank reported earnings of PkR5.3bn (EPS: PkR4.81) in 9MCY19, +12%YoY with Net Interest Income (NII) registering growth of 10.4%YoY.
- The bank's hallmark fee and FX income reported 30.1%YoY and 2.4xYoY growth in 9MCY19. The management expects normalization in FX income going forward given stability in FX rate and is confident that outstanding provisions inc. general provisions is sufficient to absorb implications under IFRS 9.
- The bank’s Net Interest Income (NII) is likely to register a CY20-22F CAGR of 11.2% (lower than our universe) as repricing of asset yield along with growth emanating from branch expansion (~30 branch addition assumed pa. over the medium term) and accumulation of better yielding PIBs, counters a negative impact of holding of low yielding PIBs.
- Reiterating our medium term estimates we roll over our TP to Dec’20 – revised TP stands at PkR47.2/sh – offering an upside of 26.7%. Taking cue from management guidance, we expect the bank to announce dividend of PkR2.25/sh for CY19 translating into a dividend yield of 6.3%. The stock is currently trading at a CY20F P/B of 0.72x.
Habib Metropolitan Bank Limited is a Pakistan-based company, which is engaged in providing commercial banking, brokerage services and modaraba management services. The Company's segments include Trading and sales, Retail banking and Commercial banking. The Trading and sales segment undertakes the Company's treasury, money market and capital market activities. The Retail banking segment provides services to small borrowers, such as consumers, and small and medium enterprises (SMEs) and borrower's agriculture sector. It includes loans, deposits and other transactions with retail customers. The Commercial banking segment includes loans, deposits and other transactions with corporate customers, and SME customers other than those included in the Retail banking segment. The Company operates approximately 240 branches, including approximately 20 Islamic banking branches and approximately 40 sub branches in Pakistan. The Company is a subsidiary of Habib Bank AG Zurich.
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.